I'm hosting Royalty Pharma, Terry Coyne, TFO, Marshall Jurist, EVP of Investments.

Gentlemen, welcome. Thank you so much for making time to be with us at this conference. Before we get into Q&A, we'd just love to hear your kind of state of the union of the business and what we could look forward to in the next 12 months.

Yeah, so thanks, Mike, and Humer, and Evercore for having us. I think 2025 has been a pretty amazing year for Royalty Pharma, a transformational year. We started the year off with a bang when we announced a major strategic transaction where we internalized our external manager, kind of put the company together as sort of one consolidated business, which was really important from a strategic and from a financial perspective. And then we've had a lot of great deals throughout the year, returned a record amount of capital to shareholders, and have performed really well financially. So overall, I feel like there's a ton of really positive momentum, pipeline's really strong, and we're super excited to wrap this year up and get into 2026. Fantastic.

Terry, there's a lot of fundamental questions to go through, but maybe just at a very high-level macro question for folks because this comes up in some conversations. Could you remind us, I think you've been on certain high-profile indices like Russell 1000 growth, et cetera, in the past, and I think the stock was in there, it's not in there, but now the cap is back. Is there any conversations you've had on anything along, any meaningful index-like changes coming?

That's a good question. I'll be honest.

Do you get notified ahead of time, or do they just do it?

I think we find out at the same time that everyone asks us. But this stuff correlates with CAP, right? I think that's right. Yeah, I'm definitely not an expert on that. But I think, yeah, I mean, we're really happy with how the stock has performed this year.

Right. And just to level set also for everyone, can you remind us the leverage where it's at right now?

So, yeah, it's around three times total debt to EBITDA. And so, you know, fairly low, fairly conservative. It's super important for us to maintain our investment grade credit rating. It's sort of critical to our cost of capital. We're, you know, but we have a lot of financial flexibility. So if we, you know, if we need, if a lot of deals come along, we can easily take leverage up to four times. We have, you know, cash on the balance sheet, access to a revolver. So for us, having access and dry powder is critical because you never know when that big royalty is going to come along and we need to always make sure that we're in a position to jump on it if it does.

And one more sort of higher level question also. I recall one of the themes that was starting to occur a couple of years ago was across a range of deals you guys were signing up, there was like this 1.6 to 2x cap on when those returns happened, the royalty stopped, which was starting to happen more frequently. leap, but I noticed in the last 12 months or so, almost last two years of deals, I was like hand compiling, I noticed it kind of stopped happening. Now, maybe that correlates with how the market environment was as well, but is that something that was sort of very intentional and deliberate on your end?

I wouldn't say it's necessarily been a priority, right? We've talked about before, we use caps when we need them, right, or think they're appropriate for the deal. I think you're right, though, this year, that has not been a characteristic of the deals we've done, which is, you know, I think exciting. Will we certainly see them in the future on some deals as it makes sense? Absolutely. So it's probably more a more reflection of deal mix and type of seller, et cetera, more than anything else.

We try to approach it. We try to approach every deal with sort of being pretty open minded.

So the right product over the right.

Yeah, and it's a discussion. They have different goals, and so partners have different goals. We obviously are trying to generate attractive returns, and so it's trying to find the right balance.

Makes sense. As we think about just portfolio receipt growth during the next five years, at your investor day, you got it to $4.7 billion plus in 2030, which reflects roughly a 9% annual CAGR from now until then, and also assume steady annual capital deployment of around $2, $2.5 billion. So what are the macro pushes and pulls that are kind of baited into that guidance? Can you just give us an idea of that?

Yeah, so what we said at the time, and the portfolio has evolved a little bit since then, but we said that around half of that growth would come from things that we already owned, that are already in the portfolio. And then the other half of that growth would come from new investments, that $2 to $2.5 billion per year. I think we would characterize that $2 to $2.5 billion as kind of a conservative modeling assumption. I think there's a lot of reasons to believe that we can do better than that. But I think we also want to make sure that we're comfortable that we can at least do that. And then within the existing portfolio, we look at a lot of different scenarios we have a lot of products that are that are growing um with a lot of great growth ahead a few a few over that time period a few potential uh you know loes but pretty small in the grand scheme of things um and we look at different scenarios for for for commercial outcomes for the different products as well so um feel really good about that number um at the time of our investor day we pointed out that consensus was only at around $4.1 billion, I believe, was what we said. And we're very comfortable that that $4.7 billion plus is very doable. I think consensus has moved up a little bit, but it still hasn't gotten all the way there.

Got it. Okay, considering that 50% of growth of portfolio receipts will come from the existing portfolio, that implies around $800 million, give or take. What products do you expect to mostly drive this?

So it's going to be a mix. We have 45 products. And so the approved products that have a lot of growth ahead are products like Voronego, Trimphia, Trilogy, Kobenfi, Tridelvi, and then Indeltra was one that we recently added a couple of months ago. so and then within the pipeline we think we could get some contributions although some of that could be more we have a lot of things that are that are going to kind of read out in the the next couple years and some approvals that could happen in the next couple years and could play into those numbers but a lot of the pipeline will probably be you know more things that will drive beyond

2030 yeah okay sorry on the pipeline is that I mean I was just trying to map out like where the largest revenue streams might come from and um it felt like revmed perhaps is one of them definitely lp little a is perhaps one absolutely um what else marshall i put on that list um we did a deal last year for a sanofi product for ms called right which is a yeah which is a you know it's a nice size royalty double digit royalty as well so that and a drug that Sanofi has talked about having five billion dollars plus of peak sales potential that's one and then you know I guess the other one on the list is Trontinimab you know depending on how that market develops we have a mid single-digit royalty on Roche's brain shuttle that could be a big product as well.

Oh fascinating so maybe just touching up on a couple I want to kind of go through a little bit on each of those because they all have very interesting risk profiles and interesting data sets so I'll do it a little quickly, perhaps starting with Frexalamab. We had Sanofi here yesterday, and we were going through this in detail with them. So Paul Hudson brought up what you just pointed out in Frexalamab. I remember he, I, I, the way I asked him was, I was like, Ocrevus has pretty meaningful relapse reduction. What does Frexalamab add on top? And his point was twofold. One was on the sort of commercial infrastructure they have, which obviously supports a certain launch profile. But also he said, outside of relapse, you got to think about disability. And I wasn't necessarily aware that prexelumab has data both on disability and on relapse reduction side, is that right?

They do, and I think commercially our thesis too is, you know, the CD20s have been an incredible, are an incredible class, right? But there are, you know, there are a significant population of patients who have been through those drugs and are either off because of infection side effects or other things. And so, you know, there's a big population of patients out there that need something else but isn't it the same thing mechanistically so it is a different mechanism sort of broader than just than just the B cells for CD20 so CD40 is a broader is a broader mechanism at kind of a different point in the immune system so definitely has the potential to offer you know offer differentiated efficacy I see okay got it when is the phase three readout for this it's ongoing is my understanding it's ongoing and I think it's a 2027 event okay got it so that was first one yep um the second one was on lp little a um there's an um there's an and you you guys have economics on two of them if i remember correctly right yep um which one is it where was the economics more indexed to yeah we definitely have so we have two royalties as you mentioned the pellet carson is novartis that'll read out next year that's a smaller royalty that's a single digit royalty we have a larger royalty kind of high single low double on Amgen's all-passeran, which is, you know, sounds like that will be a 2027 plus event based on Amgen's latest guide.

Marshall, I gotta believe you and your team have been doing work on trying to understand why the event rate has been slow to accrue, but also why the endpoints didn't deliver and the understanding is that the event rate is slow, but also in the low cutoff it's even slower. Any feedback you could share on that broadly?

I mean, we don't know much more than we don't know much more than the world does. I think the observation that event rates have been lower in cardiovascular outcomes trials is a pretty general observation, not just across LP little a, but other areas as well. And then we're not surprised that this trial is going to the final analysis.

It was always our base assumption that given, one, given that it's a new class and you want as much safety information as possible to you know we've seen that time is your friend in terms of effect size in these studies that you know there there was a pretty strong bias to see this through the end okay got it and then as it relates to sort of LP little and the effect size I guess one thing that is unique about GLYPS has been the CRP lowering outside of weight loss, et cetera, which drove some of the outcomes benefit, but that logic over to LP little a's and lack of CRP benefit, do you think that biases the maximum possible outcomes benefit towards closer to 0.8 or so?

That's a super hard question to answer, Umar. I think we are going to learn what is the benefit in patients who have, in the population of patients whose cardiovascular disease is presumably really driven by their high LP little a. So what that means in that population of patients, particularly the patients who have the highest levels of LP little a, you know, we're going to see. So I don't know that I'd conclude that, you know, because you don't have that sort of acute inflammatory effect, like we see with GLP one, you're somehow fundamentally limited. You know, I think we're going to learn what LP little a disease really means.

Excuse me. Got it. Got it. RevMed, I think you guys did the deal right around ASCO this year, if I remember correctly. Yeah, it was in the middle of the summer. So I'm assuming you saw some of the data. Because RevMed has data in lung and pancreatic, but the data focus has been on pancreatic. Within pancreatic, they have data both with Fulfirinox combo and gemcitabine combo. And they've only focused on sort of the gemcitabine, NABPAC, ataxel combos, and not so much on Fulfirinox in external disclosures. For your diligence, did you see all of that? And were you comfortable that with the profile they're showing and the type of mutations the responses are coming from, that it's very competitive versus what's out there?

So, you know, one of the things that differentiates us when we do deals with companies like RevMed is that we are able to sort of see all of the available data at that time. So we got to do very, very, you know, as we normally do, very fulsome diligence. And, yes, we're kind of confident in the profile and its competitiveness. We probably shouldn't get into details. That's RevMed's to talk about. but we had a lot of resolution and insight into what the data were.

Go ahead, I'm sorry.

I was just going to follow up with a question which I've had some confusion around. I don't really know the answer, but because it's so relevant commercially. So when we think about the type of construct RevMeds is, and it could apply to G12D, it could apply to G12V, it could apply to a range of mutations, one thing we don't see in their disclosures is the responses they do have, are they driven by G12D patients or G12V patients, et cetera? because if they're primarily driven by G12D, then I gotta start comping it versus G12D data sets as well. So I guess, should we be worried about the G12D emerging drugs as we think about the commercial opportunity and the implied royalties, or it's not a big concern?

The way we thought about it was there were kind of multiple ways to win, right? We were very, you know, we were very convinced about the lead program directs on Rasib, the pan-ras inhibitors activity in pancreatic cancer. I think the fact that RevMed has a portfolio and can do combinations as well is another interesting angle for them in what is a competitive market. But yes, that was something we thought a lot about was a competitive landscape and really like being partnered with RevMed.

Got it, and sorry, just one or two more on this just because it's relevant. Terry, I remember there was this table you put out a fair amount of detail on this RevMed transaction, I was just curious, how do we figure out and get comfortable on how many of those tranches they'll draw on or some of those are set in stone on how many they have to draw on as long as the data keeps developing a certain way?

So they have to draw on the second tranche.

Okay, that's the positive phase three data.

The third through fifth tranches are at their options. Approvals and sales driven. approval sales and then the first line so those are up to them so if they don't draw is it possible they don't draw beyond it's certainly possible it's tough to say I think it shows this deal shows the creativity of how we can help our partners and it's there for them if they want it if they need it and if they decide that they don't need it then And, you know, they don't have to draw on it.

So the first and second tranche being triggered is sub-5% royalty, correct?

Yeah, the first tier, I think, together, it's like just over four and a half, maybe. Right, okay, got it.

So it's still a real royalty. It's still a real royalty for what we think could be a very large drug, for sure.

Just while we're on the subject of revolution medicine, it's such a creative and unique structure. I mean, could this have established a new precedent for future deals? I remember, I think it was on your pre-Q call, You said that after this deal, you kind of received inbound from potential partners asking if they can get the same thing. You said it's not for everybody. Maybe could you please elaborate on that?

Yeah, you know, we definitely think there's lots of elements of this that, as we mentioned, you know, got people's attention about a new way to fund at scale in a way that's flexible. So, you know, we're going to, you know, I think you'll definitely see us, you know, partner with companies using elements of what we did with RevMed. And we'll also continue to innovate and think in new ways. But, you know, definitely I think it caught a lot of people's attention about what was the art of the possible with synthetic royalty funds.

I mean, before, you know, there wasn't a true alternative to a pharma partnership, right? You know, you could do equity, but to do $2 billion of equity would be really hard. And so for the first time, we think that we've shown that this is a viable alternative to that pharma partnership. It allows companies to, you know, to develop, to turn those cards over, to realize more value and to give and to still retain all the optionality that they that they otherwise would have.

Fascinating. Just one more thing. Marshall, I was surprised because normally when you structure this, you put in all the all the obvious clinical unlocking events. You always somehow reflect that in the way the structure is made. But you didn't put lung in any of this. Why was that? Or is that not in your model?

No, no, no. We think the drug has real potential in lung. You know, at the end of the day, you know, like Terry mentioned, when we start talking to companies, right, it's a real conversation about, you know, how much capital, you know, is ideally available to the company at what stages, by what dates. And it just so happened that in this transaction, it lined up really nicely on the pancreatic side for when, you know, the cadence of the draws would come for them. And that's kind of where we ended up. So I wouldn't read anything negatively about our view on lung.

Maybe just a quick one on China. Again, at your Investor Day, you said that you've been cultivating relationships in China for the past 10 years. And I think on your pre-Q call, you said you made multiple trips to China alone just this year.

That was shopping. That was for shopping.

Given the fact that capital raising is much more challenging over there, how might future deal structures differ than what you've historically done in the past? Will synthetics play a bigger or less role, perhaps, in China?

Yeah, I can start. You know, what we see that's exciting is, you know, everyone has been talking a lot about the volume of licensing transactions that have left a lot of royalties in the hands of Chinese biopharma companies. And so, you know, the royalty monetization market there doesn't exist. I think we're certainly focused on being part of developing that as sort of the stage one of this and the timing of when that's going to happen. You know, who knows? But we want to be there and, you know, be a part of developing that market. and could it evolve to be, you know, synthetic royalties and other opportunities beyond that? You know, absolutely. Got it.

Well, would the Royalty Department need to establish operations locally in China in order to do business there?

It's something that we're exploring seriously and trying to, you know, trying to get our arms around what approach makes the most sense. But we recognize that it's a huge market and we absolutely need to be there and be very focused on it.

Last question, Terry, just to level set everyone. Can you just remind us just the timelines on Vertex resolution, RevMed Phase 3 data, LP little a's next year. But just remind us, like, some of the key events just so that we could, like, think of the room.

Yeah, so Vertex, we've said that we expect that to be resolved by around the end of 2026.

End of 26? I don't know why I thought 25.

That would be very soon. Yeah, and then RevMed.

Data is next year sometimes. I don't think RevMed's refined the timing. And then LP little a, same thing, is next year, tracking for next year as well. So it should be an exciting year. Pell Carson. Yeah, Pell Carson.

And then the other LP and Frexalamab is the following year. Okay, fantastic. Thank you so much. It was great, thank you.