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Item 1. Business

2022-02-15 compared with 2021-02-24 · 293 added, 212 removed, 290 unchanged (64% of the section changed)

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Since our founding in 1996, we have been pioneers in the royalty market, collaborating with innovators from academic institutions, research hospitals and not-for-profits through small and mid-cap biotechnology companies to leading global pharmaceutical companies.

We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 45 commercial products, including AbbVie and J&J’s Imbruvica, Astellas and Pfizer’s Xtandi, Biogen’s Tysabri, Gilead’s HIV franchise, Merck’s Januvia, Novartis’ Promacta, Vertex’s Kalydeco, Orkambi, Symdeko and Trikafta, and five development-stage product candidates.

We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 35 commercial products, including AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Biogen’s Tysabri, Johnson & Johnson’s Tremfya, Gilead’s Trodelvy, Merck’s Januvia, Novartis’ Promacta, Vertex’s Kalydeco, Orkambi, Symdeko and Trikafta, and ten development-stage product candidates.

We fund innovation in the biopharmaceutical industry both directly and indirectly - directly when we partner with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when we acquire existing royalties from the original innovators.

Our capital-efficient business model enables us to benefit from many of the most attractive characteristics of the biopharmaceutical industry, including long product life cycles, significant barriers to entry and non-cyclical revenues, but with substantially reduced exposure to many common industry challenges such as early stage development risk, therapeutic area constraints, high research and development costs, and high fixed manufacturing and marketing costs.

Our capital-efficient business model enables us to benefit from many of the most attractive characteristics of the biopharmaceutical industry, including long product life cycles, significant barriers to entry and noncyclical revenues, but with substantially reduced exposure to many common industry challenges such as early stage development risk, therapeutic area constraints, high research and development costs, and high fixed manufacturing and marketing costs.

We have a highly flexible approach that is agnostic to both therapeutic area and treatment modality, allowing us to acquire royalties on the most attractive therapies across the biopharmaceutical industry.

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We acquire royalties on approved products, often in the early stages of their commercial launches, and development-stage product candidates with strong proof of concept data, mitigating development risk and expanding our opportunity set.

From 1996 through 2020, we have deployed more than $20 billion of cash to acquire biopharmaceutical royalties, representing approximately 50% of all royalty transactions during this period.

From 1996 through 2021, we have deployed more than $22 billion of cash to acquire biopharmaceutical royalties, representing more than 50% of all royalty transactions during this period.

From 2012, when we began acquiring royalties on development-stage product candidates, through 2021, we have deployed more than $17 billion of cash to acquire biopharmaceutical royalties, representing approximately 60% of all royalty transactions during this period.

In 2021, we generated cash from operating activities of $2.0 billion, Adjusted Cash Receipts (as defined in “—Non-GAAP Financial Results”) of $2.1 billion and Adjusted Cash Flow (as defined in “—Non-GAAP Financial Results”) of $1.8 billion.

We deployed $2.3 billion of cash in 2020 for royalties and related assets.

We deployed $2.7 billion of cash in 2021 for royalties and related securities.

Portfolio Overview

Our current portfolio includes royalties on more than 45 commercial products and five development-stage product candidates.

Growth Products are defined as royalties with a duration beyond December 31, 2020.

We define all other royalties on approved products as Mature Products.

Our portfolio consists of royalties on more than 35 commercial products and ten development-stage product candidates.

We believe that end market sales of the therapies in our portfolio are important drivers of our financial performance as a substantial portion of our royalties are based on end market sales.

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The following table provides an overview of our current portfolio of royalties:

Product(s) Marketer(s) Product Detail 2020 Royalty Receipts (in millions) 2020 End Market Sales (in millions) (1)

Growth Portfolio (Approved Products)

Cystic fibrosis

franchise (2)

Vertex Portfolio of therapies for the treatment of cystic fibrosis $ 551.3 $ 6,203

Tysabri Biogen Therapy for the treatment of relapsing forms of multiple sclerosis 345.8 1,946

Imbruvica AbbVie,

Johnson & Johnson Therapy for the treatment of hematological malignancies and chronic GVHD 322.1 6,612

HIV franchise (3)

Gilead, others Portfolio of therapies for the treatment and prevention of HIV 293.8 16,890

Xtandi Pfizer, Astellas Therapy for the treatment of prostate cancer

Januvia, Janumet, Other DPP-IVs Merck, others Portfolio of therapies for the treatment of diabetes

Promacta Novartis Therapy for the treatment of chronic ITP and aplastic anemia 143.7 1,738

Farxiga/Onglyza AstraZeneca Therapies for the treatment of diabetes 25.0 2,434

Prevymis Merck Therapy for prophylaxis of CMV in adult recipients of stem cell transplant 21.5 281

Emgality Eli Lilly Therapy for the treatment of migraine prevention & episodic cluster headache 9.5 363

Crysvita Ultragenyx, Kyowa Kirin Therapy for the treatment of X-linked hypophosphatemia 9.5 398

Erleada Johnson & Johnson Therapy for the treatment of prostate cancer 7.9 760

IDHIFA Bristol Myers Squibb Therapy for the treatment of relapsed/refractory AML with an IDH2 mutation 6.1 Not Disclosed

Trodelvy Gilead Therapy for the treatment of metastatic triple-negative breast cancer 3.0 137

Nurtec ODT Biohaven Therapy for the treatment of migraine 0.7 64

Tazverik Epizyme Therapy for the treatment for epithelioid sarcoma and follicular lymphoma 0.5 12

Evrysdi Roche Therapy for the treatment of spinal muscular atrophy 0.3 61

Orladeyo BioCryst Therapy for the treatment of hereditary angioedema prophylaxis

Approved Dec 2020

Other Growth Products (4)(5)

Total Royalty Receipts - Growth Products $ 2,277.4 $ 60,924

Mature Portfolio (Approved Products)

Letairis Gilead, GlaxoSmithKline Therapy for the treatment of pulmonary arterial hypertension $ 40.2 $ 493

Lyrica Pfizer Therapy for the treatment of neuropathic pain 22.9 1,425

Other Mature Products (6)

Total Mature Portfolio (Approved Products) $ 67.0 $ 1,983

Product(s) Marketer(s) Product Detail 2021 Royalty Receipts

(in millions) 2021 End Market Sales (in millions) (1)

Approved Products

Cystic fibrosis franchise (2) Vertex Cystic fibrosis $702 $7,573

Tysabri Biogen Relapsing forms of multiple sclerosis 369 2,063

Imbruvica AbbVie, Johnson & Johnson Hematological malignancies and chronic graft versus host disease 353 6,943

Promacta Novartis Chronic immune thrombocytopenic purpura and aplastic anemia 174 2,016

Xtandi Pfizer, Astellas Prostate cancer 158 4,582

Januvia, Janumet, Other DPP-IVs Merck & Co., others Diabetes 151 5,288

HIV franchise (3) Gilead, others Human immunodeficiency virus (HIV) 78 16,315

Nurtec ODT/Biohaven payment (4) Biohaven, Pfizer Migraine 70 455

Prevymis Merck & Co.

Prophylaxis of CMV in adult recipients of stem cell transplant 38 370

Farxiga/Onglyza AstraZeneca Diabetes 36 3,365

Tremfya Johnson & Johnson Plaque psoriasis and psoriatic arthritis 36 2,127

Cabometyx/Cometriq Exelixis, Ipsen, Takeda Kidney, liver and thyroid cancers 34 1,590

Crysvita Ultragenyx, Kyowa Kirin X-linked hypophoshatemia 17 179

Evrysdi Roche Spinal muscular atrophy 16 659

Emgality Lilly Migraine prevention & episodic cluster headache 15 577

Erleada Johnson & Johnson Prostate cancer 14 1,291

Trodelvy Gilead Metastatic triple-negative breast cancer 13 380

IDHIFA Bristol Myers Squibb Relapsed/refractory AML with an IDH2 mutation 12 Not disclosed

Orladeyo BioCryst Hereditary angioedema prophylaxis 7 117

Tazverik Epizyme Epithelioid sarcoma and follicular lymphoma 3 32

Oxlumo Alnylam Primary hyperoxaluria type 1 1 60

Other products (5)(6) 311 —

Total royalty receipts $2,609

Development Stage Product Candidates

Zavegepant Biohaven Potential therapy for the treatment and prevention of migraine (Phase III) — —

PT027 Astrazeneca Potential therapy for the treatment of asthma (Phase III) — —

Seltorexant (7)

Johnson & Johnson Potential therapy for the treatment of MDD with insomnia symptoms (Phase III) — —

Omecamtiv mercarbil (8)

Cytokinetics Potential therapy for the treatment of heart failure (Phase III) — —

BCX9930 BioCryst Potential therapy for the treatment of PNH (Phase I) — —

GVHD is Graft Versus Host Disease, ITP is Immune Thrombocytopenic Purpura, CMV is Cytomegalovirus, AML is Acute Myelogenous Leukemia, MDD is Major Depressive Disorder and PNH is Paroxysmal Nocturnal Hemoglobinuria.

(1) Represents end market sales for calendar year 2020 as reported by respective product marketers or based on EvaluatePharma projections where marketers have not reported.

Sales shown for Crysvita represent EMEA only.

Royalty receipts lag product performance by one quarter and can be estimated by applying our publicly disclosed royalty rate to the preceding quarter’s marketer-announced net revenues on a product-by-product basis.

Aficamten (7) Cytokinetics Obstructive hypertrophic cardiomyopathy (Phase 3) — —

BCX9930 BioCryst Paroxysmal nocturnal hemoglobinuria (Phase 3) — —

CPI-0209 MorphoSys Hematological malignancies and solid tumors (Phase 2) — —

Gantenerumab Roche Alzheimer’s disease (Phase 3) — —

Omecamtiv mecarbil (8) Cytokinetics Heart failure (Phase 3) — —

Otilimab GlaxoSmithKline Rheumatoid arthritis (Phase 3) — —

Pelabresib MorphoSys Myelofibrosis (Phase 3) — —

PT027 AstraZeneca Asthma (Phase 3) — —

Seltorexant Johnson & Johnson MDD with insomnia symptoms (Phase 3) — —

Zavegepant Biohaven Migraine (Phase 3) — —

CMV is Cytomegalovirus, AML is Acute Myelogenous Leukemia, IDH2 is isocitrate dehydrogenase-2 and MDD is Major Depressive Disorder.

Amounts shown in the table may not add due to rounding.

(1) Represents end market sales for the year ended December 31, 2021 as reported by respective product marketers or based on Visible Alpha projections as of February 9, 2022 where marketers have not reported end market sales.

Sales shown for Crysvita represent Europe, the Middle East and Africa only.

For the majority of our royalties, royalty receipts lag product performance by one quarter and can generally be estimated by applying our publicly disclosed royalty rate to the preceding quarter’s marketer-announced net revenues on a product-by-product basis.

(2) The cystic fibrosis franchise includes the following approved products:

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Royalties are received on the emtricitabine portion of sales only.

(4) Includes royalty receipts for Nurtec ODT of $7.7 million and quarterly redemptions of $15.6 million of the Series A Biohaven Preferred Shares (presented as Proceeds from available for sale debt securities on the Statement of Cash Flows).

(5) Excludes duplicate end-market sales where we have multiple royalties on the same product:

Kombiglyze, Nesina, Onglyza and Soliqua.

(5) Other Growth Products include royalties on the following products:

Bosulif, Cimzia, Conbriza/Fablyn/Viviant, Entyvio, Lexiscan, Mircera, Myozyme, Nesina, Priligy and Soliqua.

Other Growth Products also include contributions from the Legacy SLP Interest, a distribution from Avillion in respect of the Merck KGaA’s anti-IL 17 nanobody M1095 (the “Merck KGaA Asset”), for which development ceased in 2020 and a payment from Biohaven in respect of an expired option to exercise additional funding of the Biohaven Series A Preferred Shares.

(6) Other Mature Products primarily include royalties on the following products:

Prezista and Thalomid.

(6) Other products primarily include royalties on the following products:

Bosulif (a product co-developed by our joint venture investee, Avillion, for which receipts are presented as Distributions from non-consolidated affiliates on the Statement of Cash Flows), Lexiscan, Soliqua, Nesina, Cimzia, Letairis, Entyvio, Myozyme and Mircera.

Other products includes a one-time $45.0 million milestone payment that we received on Soliqua and contributions from the Legacy SLP Interest (defined below).

(7) Royalty was acquired in January 2022.

(8) The financial royalty asset associated with omecamtiv mercarbil was written off in the three months ended December 31, 2020 given the uncertainty around the future of omecamtiv.

(8) The financial royalty asset associated with omecamtiv mecarbil was written off in the year ended December 31, 2020 given the uncertainty around the future of omecamtiv mecarbil at the time.

Biopharmaceutical Industry and the Role of Royalties

Our business is supported by significant growth and unprecedented innovation within the biopharmaceutical industry.

Global prescription pharmaceutical sales are expected to grow from approximately $0.9 trillion in 2020 to approximately $1.3 trillion in 2025, representing a CAGR of 7% according to EvaluatePharma despite nearly $125 billion in cumulative sales being lost to expected patent expiries during the same period.

Global prescription pharmaceutical sales are projected to grow from approximately $0.9 trillion in 2021 to approximately $1.3 trillion in 2026, representing a CAGR of 7% according to EvaluatePharma despite more than $130 billion in cumulative sales being lost to expected patent expiries during the same period.

The growth of the biopharmaceutical industry is driven by global secular trends, including population growth, increasing life expectancy and growth of the middle classes in emerging markets.

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Our portfolio provides direct exposure to a broad array of blockbuster therapies.

In 2020, our portfolio included royalties on 20 therapies that each generated end-market sales of more than $1 billion, including seven therapies that each generated end-market sales of more than $3 billion.

As of December 31, 2021, our portfolio included royalties on 14 therapies that each generated end-market sales of more than $1 billion, including five therapies that each generated end-market sales of more than $3 billion.

The therapies within our royalty portfolio are marketed by leading global biopharmaceutical companies for whom these products are important sources of revenue.

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Our portfolio is highly diversified across products, therapeutic areas and marketers.

Our portfolio consists of royalties on more than 45 marketed biopharmaceutical therapies which address a wide range of therapeutic areas, including rare diseases, cancer, neurology, HIV, cardiology and diabetes.

Our portfolio consists of royalties on more than 35 marketed biopharmaceutical therapies which address a wide range of therapeutic areas, including rare diseases, cancer, neurology, immunology, hematology and diabetes.

In the year ended December 31, 2021, no individual therapy accounted for more than 19% of our royalty receipts, no therapeutic area accounted for more than 29% of our royalty receipts and no marketer represented more than 27% of our royalty receipts.

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The graphic below shows the diversification within our 2021 royalty receipts by product, therapeutic area and marketer.

(1) Comprised of royalty receipts from Truvada, Genvoya, Biktarvy and several other emtricitabine products.

(2) Comprised of royalty receipts from Januvia, Janumet and several other DPP-IVs.

Only categories of at least 5% are separately presented in the charts.

(1) Comprised of royalty receipts from Januvia, Janumet and other DPP-IVs

The key growth-driving royalties in our portfolio are protected by long patent lives.

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In 2021, we generated cash from operating activities of $2.0 billion, Adjusted Cash Receipts of $2.1 billion and Adjusted Cash Flow of $1.8 billion.

We deployed $2.3 billion of cash in 2020 for new royalties and related assets.

Our high cash flow conversion provides us with significant capital that we can deploy for new royalty acquisitions, while also growing our dividend to shareholders.

We deployed $2.7 billion of cash in 2021 for royalties and related securities.

Our high cash flow conversion provides us with significant capital that we can deploy for new royalty acquisitions and also use to grow our dividend to shareholders.

Our business model captures many of the most attractive aspects of the biopharmaceutical industry, but with reduced exposure to many common industry challenges .

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As a result of our significant scale and highly flexible business model, we believe that we are uniquely positioned to capitalize on multiple compounding growth drivers:

an accelerating understanding of the molecular origins of disease, technological innovation leading to the creation of new treatment modalities, increasing number of biopharmaceutical industry participants with significant capital needs, competitive industry dynamics which reward companies that can rapidly execute broad clinical development programs, increasing FDA drug approvals which reached an all-time high in 2018 and the potential for multiple royalties to be created from each new drug that reaches the market.

an accelerating understanding of the molecular origins of disease, technological innovation leading to the creation of new treatment modalities, an increasing number of biopharmaceutical industry participants with significant capital needs, competitive industry dynamics which reward companies that can rapidly execute broad clinical development programs, increasing U.S.

Food and Drug Administration (“FDA”) drug approvals which reached an all-time high in 2018 and the potential for multiple royalties to be created from each new drug that reaches the market.

We have the ability to access innovation from across the biopharmaceutical ecosystem.

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As of December 31, 2021, we had an aggregate principal amount of $7.3 billion of senior unsecured notes outstanding with a weighted average coupon of 2.24% and a weighted-average maturity of approximately 13 years.

In addition, we have an undrawn $1.5 billion five-year unsecured revolving credit facility (the “Revolving Credit Facility”) that we entered into on September 18, 2020.

In addition, we have an undrawn $1.5 billion senior unsecured revolving credit facility.

We have a talented, long-tenured team with extensive experience and deep industry relationships.

Our team has significant experience identifying, evaluating and acquiring royalties on biopharmaceutical therapies.

Together they have been responsible for $20 billion of acquisitions of biopharmaceutical royalties and related assets.

Our acquisitions have included many of the industry’s leading therapies across the past three decades, such as Humira, Imbruvica, Trikafta, Lyrica, Tecfidera, Xtandi, Neupogen and Rituxan, among others.

Together they have been responsible for more than $22 billion of acquisitions of biopharmaceutical royalties and related assets.

Our acquisitions have included many of the industry’s leading therapies across the past three decades, such as Humira, Imbruvica, Trikafta, Lyrica, Tecfidera, Truvada, Xtandi, Neupogen, Remicade and Rituxan, among others.

Our long history of collaboration has resulted in deep relationships with a broad range of participants across the biopharmaceutical industry.

We are the leader in acquiring biopharmaceutical royalties.

We are the leader within the space, having executed transactions with an aggregate transaction value of $20 billion of cash.

We estimate this to represent an estimated market share of more than 50% by value.

We are the leader within the space, having executed transactions with an aggregate announced transaction value of more than $17 billion from 2012 through December 31, 2021.

We estimate this to represent an estimated market share of approximately 60% by value.

This compares to our next nearest competitor, which we believe has executed $2.8 billion of transactions, which we estimate to represent market share of 9%.

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Since 2012, there have been 11 transactions with an aggregate value of more than $500 million each.

From 1996 through December 31, 2020, we executed 13 of the 15 royalty transactions, for a total aggregate transaction value of $13.5 billion of cash and estimated market share of more than 80%, in this transaction size range.

We executed 9 of these 11 royalty transactions, for a total aggregate transaction value of $11.6 billion of cash and estimated market share of more than 80%, in this transaction size range.

The charts below show our market share since 2012 across all transaction sizes and in royalty transactions with an aggregate value of more than $500 million.

Graphs above include transactions through December 31, 2021 and exclude royalty debt transactions from market share calculations.

Our Strategic Plan to Grow the Portfolio

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• Acquisition of royalties on attractive development-stage product candidates.

We intend to supplement our diverse portfolio of royalties on approved products with acquisitions of royalties on development-stage product candidates that have generated strong clinical proof of concept data, we can minimize risk while providing attractive upside potential.

We intend to supplement our diverse portfolio of royalties on approved products with acquisitions of royalties on development-stage product candidates that have generated strong clinical proof of concept data to minimize risk and provide attractive upside potential.

• Acquisition of royalties in connection with merger and acquisition (“M&A”) transactions.

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by purchasing non-strategic assets following the closing of acquisitions, by partnering with biopharmaceutical companies to acquire other biopharmaceutical companies that own significant royalties, or in select circumstances, by seeking to acquire biopharmaceutical companies on our own that have significant royalties or products that could be out-licensed to create royalties.

We acquire royalties in a number of ways including by acquiring existing royalties, acquiring new synthetic royalties and by funding R&D in exchange for future royalties.

We acquire royalties in a number of ways including by acquiring existing royalties, acquiring new synthetic royalties and by funding R&D in exchange for future royalties and/or milestones.

During the early years of our business, we focused our acquisitions on royalties on approved biopharmaceutical products.

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These development-stage transactions have broadened our landscape of potential opportunities where we are able to leverage our scientific expertise and financial strength.

From 2012 through December 31, 2020, we deployed $7.0 billion of cash to acquire royalties on development-stage product candidates.

Products underlying $6.3 billion of these acquisitions have already been approved, representing a success rate of 90%, while products underlying $0.4 billion were not approved and products underlying $0.2 billion are still in development.

From 2012 through 2021, we deployed $7.8 billion of cash to acquire royalties and milestones on development-stage product candidates.

Products underlying $6.3 billion of these acquisitions have already been approved, representing a success rate to date of 81%, while products underlying $0.3 billion were not approved and products underlying $1.1 billion are still in development.

(1) Reflects cash deployed for royalty acquisitions from 2012 through 2021.

(2) Includes Epizyme equity investment;

Tazverik not yet approved in Japan.

(3) Includes $100 million Cytokinetics/omecamtiv investment;

includes $16 million in R&D funding for Merck KGaA’s anti-IL 17 nanobody M1095, for which we received a cash payment of 1.25 times upon termination of development.

(2) Not approved includes investments in vosaroxin, palbociclib, and Merck KgaA’s anti-IL17 nanobody M1095.

In recent years, we have increased the scope of our investments beyond royalties to include additional assets such as equity investments and the acquisition of businesses with significant royalty assets.

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therapies marketed by biopharmaceutical companies that have the resources, capabilities and commitment to successfully develop them and maximize their commercial potential.

• Intellectual Property:

therapies that have strong patent portfolios and offer durable, long-term cash flows.

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Our right to receive royalties is perpetual, but we expect that the 2037 patent expiration for Trikafta may result in potential sales declines based on potential generic entry.

Total global end market sales for the cystic fibrosis franchise during 2020 were $6.2 billion and we collected $551 million in related royalty receipts over the same period.

Global end market sales of the cystic fibrosis franchise are projected to grow to approximately $10.1 billion in 2026, according to EvaluatePharma.

Total global end market sales for the cystic fibrosis franchise during 2021 were approximately $7.6 billion and we collected $702 million in related royalty receipts over the same period.

Global end market sales of the cystic fibrosis franchise are projected to grow to approximately $10.4 billion in 2026, according to Visible Alpha.

Tysabri (natalizumab) is a monoclonal antibody marketed by Biogen for the treatment of relapsing forms of multiple sclerosis (RMS), including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.

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Our right to receive royalties is perpetual.

Total global end market sales for Tysabri during 2020 were $1.9 billion and we collected $346 million in related royalty receipts over the same period.

Global end market sales of Tysabri are projected to be approximately $1.5 billion in 2026, according to EvaluatePharma.

Imbruvica (ibrutinib) is a first-in-class small molecule Bruton’s tyrosine kinase inhibitor marketed by AbbVie and Janssen, a subsidiary of Johnson & Johnson, that is the leading therapy in chronic lymphocytic leukemia, relapsed/refractory mantle cell lymphoma and other blood cancers.

A robust clinical program supports Imbruvica's use across a wide range of patient populations and cancer types, including 11 FDA approvals in six distinct indications with more than 200,000 patients treated globally.

Total global end market sales for Tysabri during 2021 were approximately $2.1 billion and we collected $369 million in related royalty receipts over the same period.

Global end market sales of Tysabri are projected to be approximately $1.7 billion in 2026, according to Visible Alpha.

Imbruvica (ibrutinib) is a first-in-class small molecule Bruton’s tyrosine kinase inhibitor that is the leading therapy in chronic lymphocytic leukemia, relapsed/refractory mantle cell lymphoma and other blood cancers.

Imbruvica is marketed by AbbVie and Janssen, a subsidiary of Johnson & Johnson.

A robust clinical program supports Imbruvica’s use across a wide range of patient populations and cancer types, including 11 FDA approvals in six distinct indications.

We added Imbruvica to our portfolio in July 2013.

We estimate that our royalties will substantially end from 2027-2029.

Total global end market sales for Imbruvica during 2020 were $6.6 billion and we collected $322 million in related royalty receipts over the same period.

Global end market sales of Imbruvica are projected to grow to approximately $10.0 billion in 2026, according to EvaluatePharma.

HIV franchise

Our HIV franchise consists of our right to receive royalty payments on the sale of various products, including Atripla, Biktarvy, Complera, Descovy, Emtriva, Genvoya, Odefsey, Stribild, Symtuza and Truvada, which have been approved for the treatment and prevention of human immunodeficiency virus infection and acquired immune deficiency syndrome (HIV).

Gilead is the primary marketer for the products in our HIV franchise.

We added the HIV franchise to our portfolio starting in July 2005.

We estimate that our royalties will substantially end in 2021.

Total global end market sales for the products in the HIV franchise during 2020 were $16.9 billion and we collected $294 million in related royalty receipts over the same period.

We estimate that our royalties will substantially end between 2027 and 2032.

Total global end market sales for Imbruvica during 2021 were approximately $6.9 billion and we collected $353 million in related royalty receipts over the same period.

Global end market sales of Imbruvica are projected to grow to approximately $7.9 billion in 2026, according to Visible Alpha.

Promacta (eltrombopag) is an oral, small molecule activator of the thrombopoietin receptor used to increase the number of platelets in the blood, marketed by Novartis for the treatment of chronic immune thrombocytopenia and aplastic anemia.

We added Promacta to our portfolio in March 2019.

We estimate that our royalties will substantially end between 2025 and 2028.

Total global end market sales for Promacta during 2021 were approximately $2.0 billion and we collected $174 million in related royalty receipts over the same period.

Global end market sales of Promacta are projected to be approximately $600 million in 2026, according to Visible Alpha.

Xtandi (enzalutamide) is an oral, small molecule androgen receptor inhibitor marketed by Pfizer and Astellas for the treatment of non-metastatic and metastatic castration-resistant prostate cancer as well as metastatic castration sensitive prostate cancer.

We added Xtandi to our portfolio in March 2016.

We estimate that our royalties will substantially end from 2027-2028.

We estimate that our royalties will substantially end between 2027 and 2028.

Total global end market sales for Xtandi during 2021 were approximately $4.6 billion and we collected $158 million in related royalty receipts over the same period.

Global end market sales of Xtandi are projected to grow to approximately $6.2 billion in 2026, according to EvaluatePharma.

Global end market sales of Xtandi are projected to grow to approximately $6.3 billion in 2026, according to Visible Alpha.

Januvia, Janumet, other DPP-IVs

We hold patents covering the DPP-IV inhibitors which entitle us to royalty payments on the sale of various products, including Januvia (sitagliptin) / Janumet (sitagliptin and metformin) marketed by Merck;

Onglyza (saxagliptin) / Kombiglyze (saxagliptin and metformin) and Qtern (dapagliflozin and saxagliptin), which are marketed by AstraZeneca;

Novartis’ Galvus (vildagliptin) / Eucreas (vildagliptin and metformin);

Tradjenta (linagliptin) / Jentadueto (linagliptin and metformin) marketed by Boehringer Ingelheim and Eli Lilly;

and Nesina (alogliptin) marketed by Takeda, which have been approved for the treatment of Type 2 diabetics in substitution of, or in addition to, insulin therapy.

We hold patents covering the DPP-IV inhibitors which entitle us to royalty payments on the sale of various products, including Januvia (sitagliptin)/Janumet (sitagliptin and metformin) marketed by Merck & Co.;

Tradjenta (linagliptin)/Jentadueto (linagliptin and metformin) marketed by Boehringer Ingelheim and Lilly;

and Nesina (alogliptin) marketed by Takeda and Teijin Pharma, which have been approved for the treatment of type 2 diabetics in substitution of, or in addition to, insulin therapy.

We added the DPP-IV inhibitors to our portfolio in June 2011.

Our royalties on Januvia and Janumet will expire in 2022 and royalties on the other DPP-IVs have substantially ended.

Total global end market sales for the DPP-IV inhibitors during 2020 were $9.0 billion and we collected $144 million in related royalty receipts over the same period.

We added Promacta to our portfolio in March 2019.

We estimate that our royalties will substantially end from 2025-2027.

Total global end market sales for Promacta during 2020 were $1.7 billion and we collected $144 million in related royalty receipts over the same period.

Global end market sales of Promacta are projected to be approximately $0.6 billion in 2026, according to EvaluatePharma.

Prevymis (letermovir) is a first-in-class prophylactic marketed by Merck for the prophylaxis of cytomegalovirus infection and disease in adults who have received an allogeneic hematopoietic stem cell transplant.

We added Prevymis to our portfolio in the second quarter of 2020.

Total global end market sales for the DPP-IV inhibitors during 2021 were approximately $5.3 billion and we collected $151 million in related royalty receipts over the same period.

HIV franchise

Gilead is the primary marketer for the products in our HIV franchise.

We added the HIV franchise to our portfolio starting in July 2005.

Our royalties substantially ended in 2021.

Total global end market sales for the products in the HIV franchise during 2021 were approximately $16.3 billion and we collected $78 million in related royalty receipts over the same period.

Nurtec ODT/Biohaven fixed payments

Nurtec ODT (rimegepant) is an oral, small molecule calcitonin gene-related peptide receptor antagonist marketed by Biohaven and Pfizer for the acute treatment and prevention of migraine.

We added Nurtec ODT to our portfolio in June 2018 and purchased an additional interest in Nurtec ODT as part of our expanded funding agreement with Biohaven in August 2020.

We estimate that our royalties will substantially end between 2034 and 2036.

Total global end market sales for Nurtec ODT during 2021 were estimated to be approximately $455 million and we collected $8 million in related royalty receipts over the same period.

In addition, as a result of the approval of Nurtec ODT in February 2020, we received $63 million in fixed payments from Biohaven during the year ended December 31, 2021, which represent the first four of 16 consecutive quarterly payments to be received from Biohaven relating to the Series A Biohaven Preferred Shares.

Global end market sales of Nurtec ODT are projected to grow to approximately $2.4 billion in 2026, according to Visible Alpha.

Prevymis (letermovir) is a first-in-class prophylactic marketed by Merck & Co.

for the prophylaxis of cytomegalovirus infection and disease in adults who have received an allogeneic hematopoietic stem cell transplant.

We added Prevymis to our portfolio in June 2020.

We estimate that our royalties will substantially end in 2029.

Total global end market sales for Prevymis during 2020 were $281 million and we collected $21 million in related royalty receipts over the same period.

Global end market sales of Prevymis are projected to grow to approximately $0.9 billion in 2026, according to EvaluatePharma.

Emgality (galcanezumab-gnlm) is a monoclonal antibody calcitonin gene-related peptide (CGRP) receptor antagonist indicated for the preventive treatment of migraine and for the treatment of episodic cluster headache.

We added Emgality to our portfolio in March 2019.

Total global end market sales for Prevymis during 2021 were approximately $370 million and we collected $38 million in related royalty receipts over the same period.

Global end market sales of Prevymis are projected to grow to approximately $450 million in 2026, according to Visible Alpha.

Farxiga/Onglyza

Farxiga (dapagliflozin) is a first-in-class selective inhibitor of human sodium-glucose co-transporter 2 indicated as both monotherapy and as part of combination therapy with Onglyza, a dipeptidyl peptidase-4 inhibitor, to improve glycemic control as an adjunct to diet and exercise in adults with type 2 diabetes.

Farxiga received FDA approval in May 2020 for the treatment of patients with heart failure with reduced ejection fraction in both patients with and without type 2 diabetes.

Farxiga and Onglyza are both marketed by AstraZeneca.

We added Farxiga/Onglyza to our portfolio in November 2017.

We estimate that our royalties will substantially end in 2025.

Total global end market sales for Emgality during 2020 were $363 million and we collected $10 million in related royalty receipts over the same period.

Global end market sales of Emgality are projected to grow to approximately $1.1 billion in 2026, according to EvaluatePharma.

Crysvita (burosumab) is a monoclonal antibody against fibroblast growth factor 23 that has received European conditional marketing authorization for the treatment of X-linked hypophosphatemia (XLH) with radiographic evidence of bone disease in children one year of age and older and adolescents with growing skeletons.

Total global end market sales for Farxiga/Onglyza during 2021 were approximately $3.4 billion and we collected $36 million in related royalty receipts over the same period.

Global end market sales of Farxiga/Onglyza are projected to grow to approximately $4.2 billion in 2026, according to Visible Alpha.

Tremfya (guselkumab) is an anti-interleukin 23 marketed by Johnson & Johnson for the treatment of adults living with moderate to severe plaque psoriasis, and for adults with active psoriatic arthritis.

Tremfya is also in clinical development for ulcerative colitis and Crohn’s disease.

We added Tremfya to our portfolio in July 2021.

We estimate that our royalties will substantially end between 2031 and 2032.

Total global end market sales for Tremfya during 2021 were approximately $2.1 billion and we collected $36 million in related royalty receipts for the partial period subsequent to acquisition in July 2021.

Global end market sales of Tremfya are projected to grow to approximately $5.4 billion in 2026, according to Visible Alpha.

Cabometyx/Cometriq

Cabometyx (cabozantinib) is a multi-tyrosine kinase inhibitor approved for the treatment of patients with advanced renal cell carcinoma (RCC) both as monotherapy and in combination with Bristol Myers Squibb’s Opdivo (nivolumab) as a first line treatment.

Cabometyx is also approved for hepatocellular carcinoma in patients previously treated with sorafenib.

Cometriq is approved for progressive, metastatic medullary thyroid cancer.

Cabometyx and Cometriq are marketed by Exelixis in the United States and by Ipsen in regions outside the United States and Japan.

Cabometyx is marketed in Japan by Takeda.

We added Cabometyx/Cometriq to our portfolio in March 2021.

We estimate that our royalties will substantially end between 2026 and 2029.

Total global end market sales for Cabometyx/Cometriq during 2021 were estimated to be approximately $1.6 billion and we collected $34 million in related royalty receipts for the partial period subsequent to acquisition in March 2021.

Global end market sales of Cabometyx/Cometriq are projected to grow to approximately $3.4 billion in 2026, according to Visible Alpha.

Crysvita (burosumab) is a monoclonal antibody against fibroblast growth factor 23 marketed by Ultragenyx and Kyowa Kirin that has received European Commission (“EC”) conditional marketing authorization for the treatment of X-linked hypophosphatemia with radiographic evidence of bone disease in children one year of age and older and adolescents with growing skeletons.

In October 2020, this authorization was expanded to include older adolescents and adults.

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Our royalties expire when we receive aggregate royalties equal to $608 million if that happens prior to December 31, 2030, and otherwise when we receive aggregate royalties of $800 million.

We estimate that our royalties will substantially end from 2033-2038.

Total global end market sales for Crysvita during 2020 were approximately $398 million and we collected approximately $9 million in related royalty receipts over the same period.

Global end market sales of Crysvita are projected to grow to approximately $2.0 billion in 2026, according to EvaluatePharma.

We estimate that our royalties will substantially end between 2033 and 2038.

End market sales for Crysvita in Europe during 2021 were $179 million and we collected approximately $17 million in related royalty receipts over the same period.

End market sales of Crysvita in Europe are projected to grow to approximately $400 million in 2026, according to Visible Alpha.

Evrysdi (risdiplam) is a survival motor neuron 2 splicing modifier marketed by Roche, and is the first oral treatment approved for infants, children and adults with all types of spinal muscular atrophy.

We added Evrysdi to our portfolio in July 2020.

Key patents on Evrysdi in the United States expire in 2035, but our royalty will cease when aggregate royalties paid to us equal $1.3 billion.

Total global end market sales for Evrysdi during 2021 were approximately $659 million and we collected $16 million in related royalty receipts over the same period.

Global end market sales of Evrysdi are projected to grow to approximately $2.9 billion in 2026, according to Visible Alpha.

Emgality (galcanezumab-gnlm) is a monoclonal antibody calcitonin gene-related peptide receptor antagonist indicated for the preventive treatment of migraine and for the treatment of episodic cluster headache marketed by Lilly.

We added Emgality to our portfolio in March 2019.

We estimate that our royalties will substantially end in 2033.

Total global end market sales for Emgality during 2021 were approximately $577 million and we collected $15 million in related royalty receipts over the same period.

Global end market sales of Emgality are projected to grow to approximately $1.4 billion in 2026, according to Visible Alpha.

Erleada (apalutamide) is an oral, small molecule androgen receptor inhibitor indicated for the treatment of patients with non-metastatic castration-resistant prostate cancer and for the treatment of patients with metastatic castration sensitive prostate cancer.

It is marketed by Johnson & Johnson.

We added Erleada to our portfolio in February 2019.

We estimate that our royalties will substantially end in 2032.

Total global end market sales for Erleada during 2020 were $760 million and we collected approximately $8 million in related royalty receipts over the same period.

Global end market sales of Erleada are expected to grow to approximately $2.2 billion in 2026, according to EvaluatePharma.

IDHIFA (enasidenib) is an oral, targeted therapy approved by the FDA for the treatment of adult patients with relapsed or refractory acute myeloid leukemia with an isocitrate dehydrogenase-2 (IDH2) mutation.

It is marketed by Bristol Myers Squibb.

We added IDHIFA to our portfolio in June 2020.

We estimate that our royalties will substantially end from 2033-2037.

End market sales for IDHIFA are not disclosed by Bristol Myers Squibb, but we collected approximately $6 million in related royalty receipts in 2020.

We also hold rights to receive up to $55 million in outstanding regulatory milestone payments from Bristol Myers Squibb.

Trodelvy (sacituzumab govitecan-hziy) is an antibody-drug conjugate approved by the FDA for the treatment of adult patients with metastatic triple-negative breast cancer.

Total global end market sales for Erleada during 2021 were approximately $1.3 billion and we collected $14 million in related royalty receipts over the same period.

Global end market sales of Erleada are projected to grow to approximately $4.0 billion in 2026, according to Visible Alpha.

Trodelvy (sacituzumab govitecan-hziy) is an antibody-drug conjugate for the treatment of adult patients with metastatic triple-negative breast cancer.

Trodelvy was initially developed by Immunomedics and is now marketed by Gilead following the acquisition of Immunomedics in 2020.

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Our right to receive royalties is perpetual.

Total global end market sales for Trodelvy during 2020 were $137 million and we collected approximately $3 million in related royalty receipts over the same period.

Global end market sales of sacituzumab govitecan are expected to grow to approximately $2.4 billion in 2026, according to EvaluatePharma.

Nurtec ODT (rimegepant) is an oral, small molecule CGRP receptor antagonist marketed by Biohaven Pharmaceuticals for the acute treatment of migraine.

We added Nurtec ODT to our portfolio in June 2018 and purchased an additional interest as part of our expanded funding agreement with Biohaven in August 2020.

We estimate that our royalties will substantially end from 2034-2036.

Total global end market sales for Nurtec ODT during 2020 were approximately $64 million and we collected less than $1 million in related royalty receipts over the same period.

Global end market sales of Nurtec ODT are projected to grow to approximately $1.6 billion in 2026, according to EvaluatePharma.

Total global end market sales for Trodelvy during 2021 were approximately $380 million and we collected $13 million in related royalty receipts over the same period.

Global end market sales of Trodelvy are projected to grow to approximately $2.3 billion in 2026, according to Visible Alpha.

It is marketed by Bristol Myers Squibb.

We added IDHIFA to our portfolio in June 2020.

We estimate that our royalties will substantially end in the U.S.

End market sales for IDHIFA are not disclosed by Bristol Myers Squibb.

We collected $12 million in related royalty receipts in 2021.

We also hold rights to receive up to $55 million in outstanding regulatory milestone payments from Bristol Myers Squibb.

Visible Alpha does not currently have estimates available for global end market sales of IDHIFA in 2026.

Orladeyo (berotralstat) is a first-in-class oral inhibitor of plasma kallikrein marketed by BioCryst for the prevention of hereditary angioedema attacks.

We added Orladeyo to our portfolio in December 2020 and purchased an additional interest as part of our expanded funding agreement with BioCryst in November 2021.

Our right to receive royalties is perpetual, but we expect that the 2036-2039 patent expirations for Orladeyo may result in potential sales declines based on potential generic entry.

Total global end market sales for Orladeyo during 2021 were estimated to be approximately $117 million and we collected $7 million in related royalty receipts over the same period.

Global end market sales of Orladeyo are projected to grow to approximately $600 million in 2026, according to Visible Alpha.

Tazverik (tazemetostat) is a first-in-class, oral EZH2 inhibitor marketed by Epizyme that was granted accelerated approval for the treatment of epithelioid sarcoma and follicular lymphoma.

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We estimate that our royalties will substantially end in 2034.

Total global end market sales for Tazverik during 2020 were $12 million and we collected less than $1 million in related royalty receipts over the same period.

Global end market sales of Tazverik are projected to grow to approximately $1.0 billion in 2026, according to EvaluatePharma.

Evrysdi (risdiplam) is a survival motor neuron 2 (SMN2) splicing modifier marketed by Roche, and is the first oral treatment approved for infants, children and adults with all types of spinal muscular atrophy.

We added Evrysdi to our portfolio in July 2020.

Key patents on Evrysdi in the United States expire in 2035, but our royalty will cease when aggregate royalties paid to us equal $1.3 billion.

Total global end market sales for Evrysdi during 2020 were approximately $61 million and we collected less than $1 million in related royalty receipts over the same period.

Global end market sales of Evrysdi are expected to grow to approximately $2.0 billion in 2026, according to EvaluatePharma.

Orladeyo (berotralstat) is a first-in-class oral inhibitor of plasma kallikrein marketed by BioCryst for the prevention of hereditary angioedema attacks.

We added Orladeyo to our portfolio in December 2020.

Our right to receive royalties is perpetual, but we expect that the 2035-2039 patent expirations for Orladeyo may result in potential sales declines based on potential generic entry.

Global end market sales of Orladeyo are expected to grow to approximately $0.4 billion in 2026, according to EvaluatePharma.

Total global end market sales for Tazverik during 2021 were estimated to be approximately $32 million and we collected $3 million in related royalty receipts over the same period.

Global end market sales of Tazverik are projected to grow to approximately $400 million in 2026, according to Visible Alpha.

Oxlumo (lumasiran) is a small interfering ribonucleic acid therapeutic targeting hydroxyacid oxidase 1 for the treatment of primary hyperoxaluria type 1 marketed by Alnylam.

Oxlumo was approved by the FDA in November 2020.

We added Oxlumo to our portfolio in April 2021.

We estimate that our royalties will substantially end between 2034 and 2035.

Total global end market sales for Oxlumo during 2021 were approximately $60 million and we collected $1 million in related royalty receipts over the same period.

Global end market sales of Oxlumo are projected to grow to approximately $350 million in 2026, according to Visible Alpha.

Development-Stage Product Candidates

Our current portfolio includes five development-stage product candidates.

Our current portfolio includes ten development-stage product candidates.

These development-stage product candidates have not yet been approved, and therefore have not generated any royalties (and we have not collected any related royalty receipts) to date.

Zavegepant is a small molecule CGRP receptor antagonist in clinical development by Biohaven Pharmaceuticals for the acute treatment and prevention of migraines.

We added zavegepant to our portfolio in June 2018.

We estimate that our royalties will substantially end from 2034-2036.

As a result of an additional transaction in 2020, we are also entitled to success-based milestone payments that range from 0.6 times to 2.95 times of the funded amount, depending on the number of regulatory approvals achieved for zavegepant (including 1.9 times for the first zavegepant migraine regulatory approval) that would be paid over a ten-year period.

PT027 is an investigational fixed dose combination of the inhaled corticosteroid, budesonide and albuterol, a short-acting beta-2 agonist for the treatment of asthma.

In 2018, we agreed to fund up to approximately $105 million over multiple years to fund a portion of the costs for Phase III clinical trials of Avillion II, who simultaneously entered into a co-development agreement with AstraZeneca to advance PT027 through a global clinical development program in exchange for a series of deferred payments and success-based milestones.

We estimate that our royalties will substantially end in 2030.

Seltorexant is a selective orexin 2 receptor antagonist currently in Phase III development for the treatment of major depressive disorder (MDD) with insomnia symptoms by Janssen, a subsidiary of Johnson & Johnson.

We added seltorexant to our portfolio in January 2021.

Aficamten is a small molecule cardiac myosin inhibitor, in Phase 3 development by Cytokinetics for obstructive hypertrophic cardiomyopathy (oHCM).

We added aficamten to our portfolio in January 2022.

If approved, global end market sales of aficamten are projected to grow to approximately $400 million in 2026, according to Visible Alpha.

BCX9930 is an oral Factor D inhibitor in Phase 3 clinical development by BioCryst as monotherapy for paroxysmal nocturnal hemoglobinuria and other complement-mediated diseases.

We added BCX9930 to our portfolio in December 2020 and purchased an additional interest as part of our expanded funding agreement with BioCryst in November 2021.

If approved, global end market sales of BCX9930 are projected to grow to approximately $200 million in 2026, according to Visible Alpha.

CPI-0209 is a second-generation enhancer of zeste homolog 2 inhibitor, in Phase 2 development by MorphoSys for hematological malignancies and solid tumors.

We added CPI-0209 to our portfolio in July 2021.

Visible Alpha does not currently have estimates available for global end market sales of CPI-0209 in 2026.

Gantenerumab is an anti-amyloid-beta monoclonal antibody, in Phase 3 development by Roche for Alzheimer’s disease.

We added gantenerumab to our portfolio in July 2021.

If approved, global end market sales of gantenerumab are projected to grow to approximately $1.9 billion in 2026, according to Visible Alpha.

Omecamtiv mecarbil

Omecamtiv mecarbil is an oral, small molecule cardiac myosin activator in Phase III clinical development by Amgen and Cytokinetics for the treatment of heart failure with reduced ejection fraction.

Omecamtiv mecarbil is an oral, small molecule cardiac myosin activator in Phase 3 clinical development by Cytokinetics for the treatment of heart failure with reduced ejection fraction.

We added omecamtiv mecarbil to our portfolio in 2017.

In November 2020, results from the Phase III GALACTIC-HF trial of omecamtiv mecarbil in patients with heart failure showed that the trial met the primary composite endpoint of reduction in cardiovascular death or heart failure events, but did not meet the secondary endpoint of reduction in cardiovascular death.

Cytokinetics subsequently regained global rights to develop and commercialize omecamtiv mercarbil when Amgen and Servier elected to terminate their collaboration agreement effective, May 2021.

Following the Phase III results and termination of the collaboration announced in 2020, we recognized an impairment charge of $65 million related to the write-off of the associated financial royalty asset of $90 million and its associated provision of $25 million, given the uncertainty around the future of omecamtiv.

BCX9930 is an oral Factor D inhibitor in Phase I clinical development by BioCryst Pharmaceuticals as monotherapy for paroxysmal nocturnal hemoglobinuria and other complement-mediated diseases.

We added BCX9930 to our portfolio in December 2020.

Our right to receive royalties is perpetual.

Our Portfolio Products and Product Candidates

The table below provides a summary of the estimated royalty expiration and the royalty rates for our key products:

In November 2020, results from the Phase 3 GALACTIC-HF trial of omecamtiv mecarbil in patients with heart failure were presented at the American Hearth Association Scientific Sessions which showed that the trial met the primary composite endpoint of reduction in cardiovascular death or heart failure events, but did not meet the secondary endpoint of reduction in cardiovascular death.

Cytokinetics subsequently regained global rights to develop and commercialize omecamtiv mecarbil when Amgen and Servier elected to terminate their collaboration agreement.

Following the Phase 3 results and termination of the collaboration announced in 2020, given the uncertainty around the future of omecamtiv mecarbil at the time, we recognized an impairment charge of $65 million related to the write-off of the associated financial royalty asset of $90 million and its associated provision of $25 million in the year ended December 31, 2020.

If approved, global end market sales of omecamtiv mecarbil are projected to grow to approximately $200 million in 2026, according to Visible Alpha.

Otilimab is a fully human monoclonal antibody that inhibits granulocyte-macrophage colony-stimulating factor, in Phase 3 development by GlaxoSmithKline for rheumatoid arthritis.

We added otilimab to our portfolio in July 2021.

We are also entitled to 100% of future regulatory and success-based milestone payments on otilimab.

If approved, global end market sales of otilimab are projected to grow to approximately $250 million in 2026, according to Visible Alpha.

Pelabresib is a bromodomain and extra-terminal inhibitor, in Phase 3 development by MorphoSys for myelofibrosis.

We added pelabresib to our portfolio in July 2021.

If approved, global end market sales of pelabresib are projected to grow to approximately $200 million in 2026, according to Visible Alpha.

PT027 is an investigational fixed dose combination of the inhaled corticosteroid, budesonide and albuterol, a short-acting beta-2 agonist for the treatment of asthma in Phase 3 development.

In 2018, we entered into an agreement with Avillion II, which was amended in July 2021, to fund up to approximately $122.5 million over multiple years to fund a portion of the costs for Phase 2 and 3 clinical trials of Avillion II, which is a party to a co-development agreement with AstraZeneca to advance PT027 through a global clinical development program for the treatment of asthma in exchange for royalties, a series of success-based milestones, and other potential payments.

We estimate that our royalties will substantially end in 2030, but AstraZeneca is entitled to certain buyout rights which, if exercised, would result in earlier expiration.

If approved, global end market sales of PT027 are projected to grow to approximately $500 million in 2026, according to Visible Alpha.

Seltorexant is a selective orexin 2 receptor antagonist currently in Phase 3 development for the treatment of major depressive disorder with insomnia symptoms by Johnson & Johnson.

We added seltorexant to our portfolio in January 2021.

Visible Alpha does not currently have estimates available for global end market sales of seltorexant in 2026.

Zavegepant is a small molecule calcitonin gene-related peptide receptor antagonist in clinical development by Biohaven for the acute treatment and prevention of migraines in Phase 3 development.

In November 2021, Biohaven and Pfizer announced a strategic commercialization arrangement for Pfizer to commercialize zavegepant in markets outside of the United States upon approval.

We added zavegepant to our portfolio in June 2018 and purchased an additional interest as part of our expanded funding agreement with Biohaven in August 2020.

We estimate that our royalties will substantially end between 2034 and 2036.

As a result of an additional transaction in 2020, we are also entitled to success-based milestone payments.

If approved, global end market sales of zavegepant are projected to grow to approximately $650 million in 2026, according to Visible Alpha.

Royalty Portfolio Summary

The table below provides a summary of the estimated royalty expiration and the royalty rates for our portfolio:

Product Therapeutic Area Estimated Royalty

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Royalty Rate (2)

Approved Products

Cystic fibrosis franchise Rare disease 2037 (3)

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Tysabri Neurology Perpetual Contingent payments of 18% on annual worldwide net sales up to $2.0 billion and 25% on annual worldwide net sales above $2.0 billion

Imbruvica Cancer 2027-2029 Tiered royalties in the mid-single digits on annual worldwide net sales

HIV franchise Infectious disease 2021 (4)

Royalties in the single digit percentages on annual worldwide net sales varying by product depending on contribution of emtricitabine to the total

Januvia and Janumet Diabetes 2022 Royalties in the low single digit percentages on annual worldwide net sales

Xtandi Cancer 2027-2028 Royalties slightly less than 4% on annual worldwide net sales

Imbruvica Cancer 2027-2032 Tiered royalty in the mid-single digits on annual worldwide net sales

Promacta Hematology 2025-2028 Tiered royalty ranging from 4.7% to 9.4% on annual worldwide net sales

Xtandi Cancer 2027-2028 Royalty slightly less than 4% on annual worldwide net sales

Januvia and Janumet Diabetes 2022 Low-single digit royalty on annual worldwide net sales

Nurtec ODT Neurology 2034-2036 2.1% royalty on annual combined worldwide net sales of Nurtec ODT and zavegepant up to $1.5 billion and 1.5% on annual combined worldwide net sales above $1.5 billion.

0.4% incremental royalty on all Nurtec ODT worldwide net sales.

Prevymis Infectious disease 2029 Low-double digit royalty on annual worldwide net sales up to $300 million

Emgality Neurology 2033 Low single-digit royalties on annual worldwide net sales

Farxiga/Onglyza Diabetes 2025 Payments to Royalty Pharma equivalent to low-single digit downward tiered royalty on annual worldwide net sales

Tremfya Immunology 2031-2032 Mid-single digit, tiered royalty on annual worldwide net sales

Cabometyx/Cometriq Cancer 2026-2029 (4)

3% royalty on annual worldwide net sales

Crysvita Rare disease 2033-2038 (5)

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and Switzerland net sales

Evrysdi Rare disease 2030-2035 (6)

Total royalties are tiered at 8% on worldwide annual net sales up to $500 million, 11% on net sales between $500 million and $1 billion, 14% on net sales between $1 billion and $2 billion, 16% on net sales over $2 billion;

Royalty Pharma is entitled to approximately 43% of total royalties

Emgality Neurology 2033 Low-single digit royalties on annual worldwide net sales

Erleada Cancer 2032 Low-single digit royalties on annual worldwide net sales

IDHIFA Cancer 2033-2037 (6)

Tiered royalties in the low double-digits to mid-teens based on annual worldwide sales

Trodelvy Cancer Perpetual 4.15% royalty on annual worldwide net sales up to $2 billion, declining stepwise based on sales tiers to 1.75% on annual worldwide net sales above $6 billion

Nurtec ODT and Zavegepant Neurology 2034-2036 2.1% royalty on annual combined worldwide net sales up to $1.5 billion and 1.5% on annual combined worldwide net sales above $1.5 billion.

0.4% incremental royalty on all Nurtec ODT worldwide net sales and up to a 3.0% incremental royalty on zavegepant worldwide net sales

Tazverik Cancer 2034 (7)

Royalties in the mid-teen percentages on annual worldwide net sales, stepping down on annual worldwide net sales above certain sales thresholds

Evrysdi Neurology 2030-2035 (8)

Total royalties are tiered at 8% on worldwide net sales up to $500 million, 11% on net sales between $500 million and $1 billion, 14% on net sales between $1 billion and $2 billion, 16% on net sales over $2 billion;

Royalty Pharma is entitled to approximately 43% of total royalties

IDHIFA Cancer 2033 Tiered royalty in the low-double digits to mid-teens based on annual worldwide net sales

Orladeyo Rare disease 2036-2039 (7)

8.75% on direct annual net sales of up to $350 million, 2.75% on sales between $350 million and $550 million, no royalty on sales over $550 million;

9.50% royalty on direct annual net sales of up to $350 million, 4.50% on sales between $350 million and $550 million, no royalty on sales over $550 million;

tiered percentage of sublicense revenue in certain territories

Tazverik Cancer 2034 (8)

Royalties in the mid-teens percentages on annual worldwide net sales, stepping down on annual worldwide net sales above certain sales thresholds

Oxlumo Rare disease 2034-2035 Royalties in the mid- to high-single digits based on annual worldwide net sales

Development Stage Product Candidates

Aficamten (9)

Cardiology — 4.5% royalty on annual worldwide net sales up to $1 billion and 3.5% on net sales above $1 billion, subject to certain potential step-downs

BCX9930 Rare disease — 4.0% royalty on annual worldwide net sales up to $1.5 billion, 3.0% royalty on annual worldwide net sales between $1.5 billion and $3.0 billion, and 1.0% royalty on annual worldwide net sales above $3.0 billion

CPI-0209 Cancer — 3.0% royalty on annual worldwide net sales

Gantenerumab Neurology — Total royalties tiered between 5.5% and 7.0% on annual worldwide net sales;

Royalty Pharma is entitled to 60% of total royalties

Omecamtiv mecarbil Cardiology 2032-2033 Mid-single digit royalty on worldwide net sales

Otilimab Immunology — Tiered double-digit total royalties on annual worldwide net sales;

Royalty Pharma is entitled to 80% of total royalties

Pelabresib Cancer — 3.0% royalty on annual worldwide net sales

PT027 Respiratory 2030 (10)

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Seltorexant Neurology — Mid-single digit royalty on worldwide net sales

Omecamtiv mecarbil Cardiology 2032-2033 4.5% royalty on annual worldwide net sales

BCX9930 Rare disease Perpetual 1.0% royalty on annual worldwide net sales

(1) Dates shown represent our estimates of when a royalty will substantially end, which may depend on patent expiration dates (which may include patent term extensions) or other factors and may vary by geography.

Royalty expiration dates can change due to patent, regulatory, commercial or other developments.

Zavegepant Neurology 2034-2036 2.1% royalty on annual combined worldwide net sales of Nurtec ODT and zavegepant up to $1.5 billion and 1.5% on annual combined worldwide net sales above $1.5 billion.

Up to a 3.0% incremental royalty on zavegepant worldwide net sales up to $1.5 billion and up to 2.0% incremental royalty on zavegepant worldwide net sales above $1.5 billion.

(1) Dates shown represent our estimates as of current reporting date of when a royalty will substantially end, which may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography.

There can be no assurances that our royalties will expire when expected.

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(3) Royalty is perpetual;

year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry.

(4) Represents patent expiration date in the United States as patents in major jurisdictions outside the United States have expired.

year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry.

(4) Royalties on net sales of cabozantinib products in the United States through September 2026 and non-U.S.

markets through the full term of the royalty.

(5) Royalties expire when we receive aggregate royalties equal to $608 million if that happens prior to December 31, 2030, and otherwise when we receive aggregate royalties of $800 million.

(6) Represents estimated patent expiration dates in the United States and Europe, respectively.

(7) Represents the estimated patent expiration date in the United States.

(6) Key patents on Evrysdi in the United States expire in 2035, but our royalty will cease when aggregate royalties paid to us equal $1.3 billion.

(7) Royalty is perpetual;

years shown represent estimated United States patent expiration for Orladeyo and potential sales decline based on generic entry.

years shown represent estimated United States patent expiration for Orladeyo and potential sales decline based on timing of potential generic entry.

(8) Represents the estimated patent expiration date in the United States.

(9) Royalty was acquired in January 2022.

(10) AstraZeneca is entitled to certain buyout rights which, if exercised, would result in earlier expiration.

(11) Represents the portion of the royalties owed to Avillion II attributable to our minority ownership stake in Avillion II.

There can be no assurance that patents covering the products generating our royalties will expire when expected.

Any reduction in the expected patent term or any other expected period in which we are entitled to receive royalties may adversely affect our financial condition and results of operation.

There can be no assurance that our royalties will expire when expected.

Any reductions in the durations of royalties relative to our estimates may adversely affect our financial condition and results of operations.

See “Risk Factors” in Item 1A, Risk Factors for further information.

Fixed Payment Arrangements

The table below provides a summary of our fixed payment arrangements:

Funding Arrangement Therapeutic Area Key Terms (1)

Biohaven Series A

Preferred Shares Neurology 16 consecutive quarterly payments of $15.6 million to Royalty Pharma from the three months ended March 31, 2021 through the three months ended December 31, 2024 totaling $250.0 million (2.0 times the $125.0 million total purchase price of Series A Biohaven Preferred Shares that Royalty Pharma acquired in 2019).

Biohaven Series B

Preferred Shares Neurology 24 consecutive quarterly payments of $14.8 million to Royalty Pharma from the three months ended March 31, 2025 through the three months ended December 31, 2030 totaling $354.5 million (approximately 1.8 times the $200.0 million total purchase price of Series B Biohaven Preferred Shares that Royalty Pharma has agreed to acquire between the three months ended March 31, 2021 and the three months ended December 31, 2024).

Zavegepant Success-Based Milestones

Neurology Success-based milestone payments to Royalty Pharma ranging from 1.9 to 2.95 times the funded amount of $250.0 million, depending on achievement of specific regulatory approvals for zavegepant.

40 consecutive quarterly payments commencing on the first day of the second calendar quarter following a milestone event.

If zavegepant’s first regulatory approval in migraine is achieved, Royalty Pharma will receive total success-based milestone payments of $475.0 million, or 1.9 times the funded amount, related to this specific approval.

Incremental payments of up to 1.05 times the funded amount could be triggered by certain additional regulatory approvals.

MorphoSys Development Funding Bonds

Not applicable

Payments to Royalty Pharma totaling approximately 2.2 times the amount drawn by MorphoSys.

Up to $350.0 million in potential funding is available to be drawn through July 15, 2022, with a minimum draw of $150.0 million.

36 consecutive quarterly payments to Royalty Pharma commencing in the ninth quarter following the quarter of the applicable funding date.

As of February 15, 2022, the Development Funding Bonds remain undrawn.

Cytokinetics Commercial Launch Funding

Cardiology Payments to Royalty Pharma totaling 1.9 times the amount drawn for up to five tranches totaling $300.0 million in potential funding to Cytokinetics, including an initial $50.0 million tranche that was funded in the three months ended March 31, 2022.

Each subsequent tranche has a 12-month draw period following achievement of certain clinical and regulatory milestones.

34 consecutive quarterly payments to Royalty Pharma commencing on the last business day of the seventh quarter following the quarter of the applicable funding date for each tranche.

(1) Our fixed payment arrangements are subject to the underlying contractual agreements and legal instruments from which they arise and may be subject to reduction, accelerations, and other adjustments in accordance with the respective terms of such agreements and instruments.

We face competition from other entities that acquire biopharmaceutical royalties, including competitors to the Manager that are in the similar business of acquiring biopharmaceutical royalties.

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integrity (maintaining the highest ethical standards), culture (promoting an inclusive and diverse workforce) and taking responsibility (being a responsible citizen).

We do not directly conduct biopharma R&D or manufacture or market the biopharmaceutical assets in which we participate, and thus our environmental impact is minimal.

Despite the passive nature of our business, we strive to invest in novel therapies that address unmet patient needs and to support ethical business practices that drive innovation, competition and patient choice.

We do not directly conduct biopharmaceutical research and development or manufacture or market the biopharmaceutical assets in which we participate.

We strive to invest in novel therapies that address unmet patient needs and to support ethical business practices that drive innovation, competition and patient choice.

We maintain the highest standards of integrity and trust in our role as investors and partners to the biopharma industry.

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We consider it highly important to strive for an appropriate gender balance:

currently approximately 51% of our workforce are women.

We take employee engagement and retention very seriously and are proud that on average our workforce has been employed with us for approximately 4.5 years.

We are committed to our employees’ health, well-being and job satisfaction and to ensuring that people find purpose in their careers.

Opportunities for career enhancement and progression are regularly reviewed.

currently approximately 50% of the workforce of our Manager are women.

Responsibility

We are committed to good corporate citizenship and actively supports the work of a number of patient advocacy groups and medical research foundations, including the American Heart Association, the Alliance for Lupus Research, Children of Bellevue, the Melanoma Research Alliance, the National Multiple Sclerosis Society and the Prostate Cancer Foundation.

We are committed to good corporate citizenship and actively support the work of a number of patient advocacy groups and medical research foundations, including the American Heart Association, the Alliance for Lupus Research, Children of Bellevue, the Melanoma Research Alliance, the National Multiple Sclerosis Society and the Prostate Cancer Foundation.

Over one-third (by value) of the transactions we have completed since our founding have been with leading academic and non-profit institutions.

By partnering with these institutions, we have provided capital which has been used to further scientific research (for example with the Cystic Fibrosis Foundation) or to help fund capital projects.

Our commitment to responsibility starts with our Chief Executive Officer who is a founding member of Boston Children’s Hospital Medical Research Council and serves on the Board of Governors of the New York Academy of Sciences, as well as the Boards of Trustees of Rockefeller University, the Hospital for Special Surgery, the Pasteur Foundation (the U.S.

affiliate of the French Institute Pasteur) and the Open Medical Institute.

Legorreta was the founder and is currently Honorary Chairman of Alianza Médica para la Salud, a non-profit dedicated to enhancing the quality of health care in Latin America by providing doctors and healthcare providers with continued education opportunities.

Since its foundation in 2010, AMSA has provided over 500 scholarships to Mexican and Latin American doctors and healthcare providers to study abroad.

Legorreta is also a founding member of Mount Sinai’s Institute for Health Equity Research, created in part as a response to the health inequities made apparent by COVID-19.

By partnering with these institutions, we have provided capital which has been used to further scientific research (for example, the Cystic Fibrosis Foundation) or to help fund capital projects.

These diverse organizations are united in their quest to advance science, the careers of scientists and human health around the globe.

Our directors and executive officers will manage our operations and activities.

Our directors and executive officers manage our operations and activities.

However, we do not currently have any employees or any officers other than our executive officers.

Pursuant to the management agreement entered into in connection with our initial public offering (the “Management Agreement”) with the Manager, the Manager will perform corporate and administration services for us.

Pursuant to the management agreement entered into in connection with our initial public offering (the “Management Agreement”) with the Manager, the Manager performs corporate and administration services for us.

As of December 31, 2021, the Manager had 66 employees.

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Human Capital Resources

Because we are “externally managed,” we do not employ our own personnel, but instead depend upon the Manager and its executive officers and employees for virtually all of the services we require.

Because we are “externally managed,” we do not employ our own personnel, but instead depend upon the Manager and its executive officers and employees for all of the services we require.

Under the Management Agreement, the Manager manages the assets of our business and sources and evaluates royalty acquisitions.

Accordingly, our success is largely dependent upon the expertise and services of the executive officers and other personnel provided to us through the Manager.

Accordingly, our success is dependent upon the expertise and services of the executive officers and other personnel provided to us through the Manager.

The Manager is responsible for the selection of these executive officers and other personnel, and our Board of Directors reviews personnel with the Manager with the objective of evaluating the Manager’s internal capabilities.

The Management Agreement requires the Manager’s executives to devote substantially all of their time to managing us and any legacy vehicles related to Royalty Pharma Investments, an Irish Unit Trust (“Old RPI”) or Royalty Pharma Investments 2019 ICAV (“RPI”) unless otherwise approved by our Board of Directors.

The Management Agreement requires the Manager’s executives to devote substantially all of their time to managing us, Royalty Pharma Investments 2019 ICAV (“RPI” or “RPI 2019 ICAV”) and any legacy vehicles related to Royalty Pharma Investments, an Irish unit trust (“Old RPI”) unless otherwise approved by our Board of Directors.

The Management Agreement also provides for the development of succession plans for the senior management of the Manager by the Management Development and Compensation Committee of our Board of Directors in consultation with the Manager.

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others in our industry.

We believe that there are no compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition and results of operations, and we do

not currently anticipate material capital expenditures arising from environmental regulation.

We believe that climate change could present risks to our business.

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Our subsidiaries that are so engaged rely on Section 3(c)(5)(A) of the U.S.

Investment Company Act, which, according to certain SEC staff interpretations, generally may be available to an issuer who invests at least 55% of its assets in “notes, drafts, acceptances, open accounts receivable, and other obligations representing part or all of the sales price of merchandise, insurance, and services,” which we refer to as ICA Exception Qualifying Assets and not to issue any redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates.

Investment Company Act, which, according to certain SEC staff interpretations, generally may be available to an issuer that invests at least 55% of its assets in “notes, drafts, acceptances, open accounts receivable, and other obligations representing part or all of the sales price of merchandise, insurance, and services,” which we refer to as ICA Exception Qualifying Assets and that does not issue any redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates.

In a no-action letter, dated August 13, 2010, to our predecessor, the SEC staff promulgated an interpretation that royalties that entitle an issuer to collect royalty receivables that are directly based on the sales price of specific biopharmaceutical assets that use intellectual property covered by specific license agreements are ICA Exception Qualifying Assets under Section 3(c)(5)(A).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business