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Item 1. Business

2023-02-15 compared with 2022-02-15 · 294 added, 268 removed, 315 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 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 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 Vertex’s Trikafta, Kalydeco, Orkambi and Symdeko, Biogen’s Tysabri, AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, GSK’s Trelegy, Novartis’ Promacta, Pfizer’s Nurtec ODT, Johnson & Johnson’s Tremfya, Roche’s Evrysdi, Gilead’s Trodelvy, and 12 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 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.

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 (“R&D”) 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 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 $2.7 billion of cash in 2021 for royalties and related securities.

From 2012, when we began acquiring royalties on development-stage product candidates, through January 31, 2023, we have entered into transactions to acquire biopharmaceutical royalties, milestones and related assets with an aggregated transaction value of $24 billion, representing approximately 60% of all royalty transactions by value announced during this period.

In 2022, we generated net cash from operating activities of $2.1 billion, Adjusted Cash Receipts (as defined in “Non-GAAP Financial Results”) of $2.8 billion, Adjusted EBITDA (as defined in “Non-GAAP Financial Results”) of $2.6 billion and Adjusted Cash Flow (as defined in “Non-GAAP Financial Results”) of $2.2 billion.

We deployed $2.5 billion of cash in 2022 to acquire royalties, milestones and related assets.

Portfolio Overview

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

Our portfolio consists of royalties on more than 35 commercial products and 12 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 2021 Royalty Receipts

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

Royalties Marketer(s) Product Detail 2022 Royalty Receipts (in millions) 2022 End Market Sales (in millions) (1)

Approved Products

Cystic fibrosis franchise (2) Vertex Cystic fibrosis $811 $8,931

Nurtec ODT/Biohaven payment (3) Pfizer Migraine 560 764

Tysabri Biogen Relapsing forms of multiple sclerosis 370 2,028

Imbruvica AbbVie, Johnson & Johnson Hematological malignancies and chronic graft versus host disease 313 5,820

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

Xtandi Pfizer, Astellas Prostate cancer 187 4,817

Promacta Novartis Chronic immune thrombocytopenic purpura and aplastic anemia 182 2,088

Tremfya Johnson & Johnson Plaque psoriasis and psoriatic arthritis 97 2,668

Trelegy GSK Chronic obstructive pulmonary disease and asthma 90 2,142

Januvia, Janumet, Other DPP-IVs Merck & Co., others Diabetes 73 4,512

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

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

Cabometyx/Cometriq Exelixis, Ipsen, Takeda Kidney, liver and thyroid cancers 55 1,940

Farxiga/Onglyza AstraZeneca Diabetes 44 4,638

Evrysdi Roche Spinal muscular atrophy 41 1,173

Prevymis Merck & Co.

Prophylaxis of CMV in adult recipients of stem cell transplant 37 428

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

Trodelvy Gilead Breast cancer 25 680

Orladeyo BioCryst Hereditary angioedema prophylaxis 22 252

Erleada Johnson & Johnson Prostate cancer 21 1,881

Crysvita Ultragenyx, Kyowa Kirin X-linked hypophoshatemia 20 220

Evrysdi Roche Spinal muscular atrophy 16 659

Emgality Lilly Migraine prevention & episodic cluster headache 19 651

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 3 67

Spinraza (4) Biogen Spinal muscular atrophy — 1,762

Airsupra (5) AstraZeneca Asthma — —

Other products (6) 263 —

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Aficamten 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) — —

Ampreloxetine Theravance Symptomatic nOH with multiple system atrophy (Phase 3) — —

BCX10013 BioCryst Once-daily Factor D Inhibitor (Phase 1) — —

MK-8189 Merck Schizophrenia (Phase 2b) — —

Olpasiran Amgen Cardiovascular disease (Phase 3) — —

Omecamtiv mecarbil (7) Cytokinetics Heart failure (under FDA review) — —

Pelabresib MorphoSys Myelofibrosis (Phase 3) — —

PT027 AstraZeneca Asthma (Phase 3) — —

Pelacarsen (4) Novartis Cardiovascular disease (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.

Trontinemab (8) Roche Alzheimer’s disease (Phase 2a) — —

Tulmimetostat (9) MorphoSys Hematological malignancies and solid tumors (Phase 2) — —

Zavegepant Pfizer Acute migraine (under FDA review) and prevention (Phase 3) — —

CMV is cytomegalovirus, nOH is neurogenic orthostatic hypotension 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.

(1) Represents end market sales for 2022 as reported by respective product marketers or, where marketers have not reported end market sales by February 10, 2023, based on Visible Alpha projections as of February 7, 2023.

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

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Kalydeco, Orkambi, Symdeko/Symkevi and Trikafta/Kaftrio.

(3) The HIV franchise includes the following approved products:

Atripla, Truvada, Emtriva, Complera, Stribild, Genvoya, Descovy, Odefsey, Symtuza and Biktarvy.

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.

(3) Royalty receipts includes quarterly redemption payments of $15.6 million related to the Series A Biohaven Preferred Shares and the accelerated redemption payments of $479.5 million for all outstanding Series A and Series B Preferred Shares following Pfizer’s acquisition of Biohaven in October 2022.

The remaining amounts are related to royalty receipts from Nurtec ODT.

(4) Royalties were acquired in January 2023.

(5) Airsupra, formerly known as PT027, was approved by the U.S.

Food and Drug Administration (“FDA”) in January 2023.

(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 mecarbil was written off in the year ended December 31, 2020 given the uncertainty around the future of omecamtiv mecarbil at the time.

Bosulif (a product co-developed by our joint venture investee, Avillion, for which receipts are presented as Distributions from equity method investees on the Statements of Cash Flows), Cimzia, Entyvio, Gavreto, HIV Franchise, IDHIFA, Letairis, Lexiscan, Mircera, Myozyme, Nesina, Soliqua, Tazverik and distributions from the Legacy SLP Interest.

(7) The financial royalty asset associated with omecamtiv mecarbil was written off in 2020 given the uncertainty around the future of omecamtiv mecarbil at the time.

(8) The financial royalty asset associated with gantenerumab was written off in 2022 as a result of Roche’s statement that it would discontinue clinical trials of gantenerumab.

Roche continues to test a different formulation of gantenerumab called trontinemab.

(9) Product formerly known as CPI-0209.

Biopharmaceutical Industry and the Role of Royalties

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Global prescription pharmaceutical sales are projected to grow from approximately $1.2 trillion in 2022 to approximately $1.5 trillion in 2027, representing a CAGR of 6% according to EvaluatePharma despite more than $140 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.

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

In addition, a dramatic acceleration of medical research in recent years has led to a better understanding of the molecular origins of disease and identification of potential targets for therapeutic intervention.

This has created research and development opportunities for new drugs.

The significant pace of biopharmaceutical innovation coupled with the proliferation of new biotechnology companies and the increasing cost of drug development has created a significant capital need over recent years that we believe will provide a sustainable tailwind for our business.

This has accelerated R&D opportunities for new drugs.

The pace of biopharmaceutical innovation coupled with the proliferation of new biotechnology companies and the increasing cost of drug development has created a significant capital need over recent years that we believe will provide a sustainable tailwind for our business.

Royalties play a fundamental and growing role in the biopharmaceutical industry.

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

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.

As of January 31, 2023, our portfolio included royalties on 15 therapies that each generated end-market sales of more than $1 billion in 2022, 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 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.

As of January 31, 2023, 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 2022, no individual therapy accounted for more than 21% of our royalty receipts, no therapeutic area accounted for more than 29% of our royalty receipts and no marketer represented more than 25% of our royalty receipts.

The royalties in our portfolio entitle us to payments based directly on the top-line sales of the associated therapies, rather than the profits of these therapies.

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The graphic below shows the diversification within our 2022 royalty receipts by product, therapeutic area and marketer.

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

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

Royalty receipts for Nurtec ODT includes redemption payments that were accelerated related to Biohaven Preferred Shares following Pfizer’s acquisition of Biohaven in 2022.

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

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Our capital-efficient operating model requires limited operating expenses and no material capital investment in fixed assets or infrastructure in order to support the ongoing growth of our business.

As a result, we generate high Adjusted Cash Flow relative to our Adjusted Cash Receipts and we convert the vast majority of our Adjusted Cash Flow into operating cash flow.

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

As a result, we generate high Adjusted Cash Flow relative to our Adjusted Cash Receipts.

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.

In 2022, we generated net cash from operating activities of $2.1 billion, Adjusted Cash Receipts of $2.8 billion, Adjusted EBITDA of $2.6 billion and Adjusted Cash Flow of $2.2 billion.

We deployed $2.5 billion of cash in 2022 to acquire royalties, milestones and related assets.

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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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 from across the biopharmaceutical industry.

We focus on the acquisition of royalties on approved products or development-stage product candidates that have generated strong proof of concept data, avoiding the risks associated with early stage research and development.

By acquiring royalties, we are able to realize payments based directly on the top-line sales of leading biopharmaceutical therapies, without the costs associated with fixed research and development, manufacturing and commercial infrastructure.

By acquiring royalties, we are able to realize payments based directly on the top-line sales of leading biopharmaceutical therapies, without the costs associated with fixed R&D, manufacturing and commercial infrastructure.

Our unique role in the biopharmaceutical ecosystem positions us to benefit from multiple compounding growth drivers .

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

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.

Together they have been responsible for approximately $30 billion of acquisitions of biopharmaceutical royalties, milestones and related assets since 1996 through January 31, 2023.

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

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 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.

We are the leader within the space, having executed transactions with an aggregate announced transaction value of more than $24 billion since 2012 through January 31, 2023.

We estimate this to represent an estimated market share of approximately 60% of all royalty transactions by value announced during this period.

This compares to our next nearest competitor, which we believe has executed $3 billion of transactions, which we estimate to represent market share of 8%.

Given the scale of our business relative to our competitors, we have a particularly strong leadership position within large royalty transactions.

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

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.

Since 2012, there have been 13 royalty transactions with an aggregate value of more than $500 million each.

We executed 11 of these 13 transactions, for a total aggregate transaction value of approximately $16 billion of cash and estimated market share of 86%, 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

Includes transactions through January 31, 2023;

excludes royalty debt transactions from market share calculations.

We intend to grow our business by continuing to partner with constituents across the biopharmaceutical value chain to fund innovation.

The three key pillars of our growth strategy are summarized below.

• Acquisition of royalties on approved products which provide dependable cash flows .

We intend to continue capturing a leading share of royalties on approved products, particularly those that are early in their life cycles, so that we can participate in the growth that is generated as they penetrate their markets, and enter new indications or geographies.

• 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 to minimize risk and provide attractive upside potential.

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

We acquire royalties in connection with M&A transactions in a number of ways:

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 and/or milestones.

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

However, as we grew and diversified our business, we began acquiring royalties on development-stage product candidates that had demonstrated strong clinical proof of concept.

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 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.

Our growth strategy is tailored to the needs of our partners through a variety of structures:

• Third-party Royalties – Existing royalties on approved or late-stage development therapies with high commercial potential.

A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property.

The majority of our current portfolio consists of third-party royalties.

• Synthetic Royalties – Newly-created royalties on approved or late-stage development therapies with strong proof of concept and high commercial potential.

A synthetic royalty is the contractual right to a percentage of top-line sales by the developer or marketer of a therapy in exchange for funding.

A synthetic royalty may also include contingent milestone payments.

We also fund ongoing R&D for biopharmaceutical companies in exchange for future royalties and milestones if the product or indication we are funding is approved.

• Launch and Development Capital – Tailored supplemental funding solutions, generally included as a component within a transaction, increasing the scale of our capital.

Launch and development capital is generally provided in exchange for a long-term stream of fixed payments with a predetermined schedule around the launch of a drug.

Launch and development capital may also include a direct investment in the public equity of a company.

• Mergers and Acquisitions (“M&A”) Related – We acquire royalties in connection with M&A transactions, often from the buyers of biopharmaceutical companies when they dispose of the non-strategic assets of the target company following the closing of the acquisition.

We also seek to partner with companies to acquire other biopharmaceutical companies that own significant royalties.

We may also seek to acquire biopharmaceutical companies that have significant royalties or where we can create royalties in subsequent transactions.

Additionally, we may identify additional opportunities, platforms or technologies that leverage our capabilities such as our strategic alliance with MSCI Inc.

(“MSCI”) to develop thematic life sciences indexes.

From 2012 through 2022, we deployed $8.3 billion of cash to acquire royalties, milestones and related assets on development-stage product candidates.

As of January 31, 2023, products underlying $6.4 billion of these acquisitions have already been approved, representing a success rate to date of 77%, while products underlying $0.8 billion were not approved and products underlying $1.1 billion are still in development.

(1) Reflects cash deployed for royalty acquisitions from 2012 through 2022.

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

(2) Not approved includes investments in vosaroxin, palbociclib, Merck KGaA’s anti-IL17 nanobody M1095, BCX9930, gantenerumab and otilimab.

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.

Our broad scope maximizes our total addressable market and has allowed us to provide a broad range of solutions to our partners across the biopharmaceutical ecosystem.

Our broad scope increases our total addressable market and has allowed us to provide a broad range of solutions to our partners across the biopharmaceutical ecosystem.

Our approach is to first assess innovative science in areas of significant unmet medical need and then evaluate how to acquire royalties on therapies that we believe are attractive.

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we focus on generating attractive returns on our investments on a risk-adjusted basis.

We do not target the same return for all assets and evaluate opportunities across the risk spectrum.

We evaluate opportunities across the risk spectrum and do not target the same return for all assets.

• Growth and scale:

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Our right to receive royalties is perpetual.

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.

Total global end market sales for Tysabri during 2022 are estimated to be approximately $2.0 billion and we collected $370 million in related royalty receipts over the same period.

Global end market sales of Tysabri are projected to be approximately $1.4 billion in 2027, according to Visible Alpha.

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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.

A robust clinical program supports Imbruvica’s use across a wide range of patient populations and cancer types, including 12 FDA approvals in seven distinct indications.

We added Imbruvica to our portfolio in July 2013.

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Total global end market sales for Imbruvica during 2022 were approximately $5.8 billion and we collected $313 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.

Global end market sales of Imbruvica are projected to be approximately $3.5 billion in 2027, 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.

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Global end market sales of Xtandi are projected to grow to approximately $5.2 billion in 2027, 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 & 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 2021 were approximately $5.3 billion and we collected $151 million in related royalty receipts over the same period.

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 HIV and acquired immune deficiency syndrome.

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 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 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 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 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.

Total global end market sales for Promacta during 2022 were approximately $2.1 billion and we collected $182 million in related royalty receipts over the same period.

Global end market sales of Promacta are projected to be approximately $525 million in 2027, 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.

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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.

Total global end market sales for Tremfya during 2022 were approximately $2.7 billion and we collected $97 million in related royalty receipts over the same period.

Global end market sales of Tremfya are projected to grow to approximately $6.0 billion in 2027, according to Visible Alpha.

Nurtec ODT/Biohaven payment

Nurtec ODT (rimegepant) is an oral, small molecule calcitonin gene-related peptide receptor antagonist marketed by 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 2022 are estimated to be approximately $764 million and we collected $18 million in royalty receipts on Nurtec ODT over the same period.

Additionally, we received $542 million from the redemption of all outstanding Series A and Series B Biohaven Preferred Shares in 2022.

The Series A and Series B Biohaven Preferred Shares were fully redeemed following Pfizer’s acquisition of Biohaven in October 2022.

We will only receive royalties from underlying product sales beginning in 2023.

Global end market sales of Nurtec ODT are projected to grow to approximately $2.7 billion in 2027, according to Visible Alpha.

Trelegy is a combination of an inhaled corticosteroid and two bronchodilators in a single delivery device administered once-daily for the maintenance treatment of chronic obstructive pulmonary disease and the maintenance treatment of asthma in patients aged 18 years and older.

Trelegy is marketed by GSK.

We added Trelegy to our portfolio in July 2022.

We estimate that our royalties will substantially end between 2029 and 2030.

Total global end market sales for Trelegy during 2022 were approximately $2.1 billion.

Subsequent to adding Trelegy to our portfolio in July 2022, we collected $90 million in related royalty receipts.

Global end market sales of Trelegy are projected to grow to approximately $3.5 billion in 2027, according to Visible Alpha.

Cabometyx/Cometriq

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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.

Total global end market sales for Cabometyx/Cometriq during 2022 were approximately $1.9 billion and we collected $55 million in related royalty receipts over the same period.

Global end market sales of Cabometyx/Cometriq are projected to grow to approximately $2.8 billion in 2027, 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.

We added a royalty on Crysvita sales in Europe to our portfolio in December 2019.

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 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.

Farxiga/Onglyza

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 Farxiga/Onglyza during 2022 were approximately $4.6 billion and we collected $44 million in related royalty receipts over the same period.

Global end market sales of Farxiga/Onglyza are projected to be approximately $4.4 billion in 2027, 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.

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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.

Total global end market sales for Evrysdi during 2022 were approximately $1.2 billion and we collected $41 million in related royalty receipts over the same period.

Global end market sales of Evrysdi are projected to grow to approximately $2.8 billion in 2027, 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.

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 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.

Total global end market sales for Prevymis during 2022 were approximately $428 million and we collected $37 million in related royalty receipts over the same period.

Global end market sales of Prevymis are projected to grow to approximately $525 million in 2027, 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 and pre-treated hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative metastatic 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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Global end market sales of Trodelvy are projected to grow to approximately $2.6 billion in 2027, according to Visible Alpha.

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 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 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.

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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.

Total global end market sales for Orladeyo during 2022 are estimated to be approximately $252 million and we collected $22 million in related royalty receipts over the same period.

Global end market sales of Orladeyo are projected to grow to approximately $725 million in 2027, 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.

We added Tazverik to our portfolio in November 2019.

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 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.

Total global end market sales for Erleada during 2022 were approximately $1.9 billion and we collected $21 million in related royalty receipts over the same period.

Global end market sales of Erleada are projected to grow to approximately $4.3 billion in 2027, according to Visible Alpha.

Crysvita (burosumab) is a monoclonal antibody that is approved in the European Union for the treatment of fibroblast growth factor-23 related hypophosphataemia in tumor-induced osteomalacia associated with phosphaturic mesenchymal tumors that cannot be curatively resected or localised in children and adolescents aged 1 to 17 years and in adults.

Crysvita is also approved in the European Union for X-linked in children and adolescents aged 1 to 17 years with radiographic evidence of bone disease, and in adults.

Crysvita is marketed by Kyowa Kirin and Ultragenyx.

We added a royalty on Crysvita sales in Europe to our portfolio in December 2019.

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 between 2033 and 2038.

Total end market sales for Crysvita during 2022 are estimated to be approximately $220 million and we collected approximately $20 million in related royalty receipts over the same period.

End market sales of Crysvita are projected to grow to approximately $575 million in 2027, according to Visible Alpha.

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 2022 were approximately $651 million and we collected $19 million in related royalty receipts over the same period.

Global end market sales of Emgality are projected to grow to approximately $1.0 billion in 2027, 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.

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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.

Total global end market sales for Oxlumo during 2022 are estimated to be approximately $67 million and we collected $3 million in related royalty receipts over the same period.

Global end market sales of Oxlumo are projected to grow to approximately $325 million in 2027, according to Visible Alpha.

Spinraza is for the treatment for spinal muscular atrophy marketed by Biogen.

We added Spinraza to our portfolio in January 2023.

We estimate that our royalties will substantially end between 2030 and 2035.

Total global end market sales for Spinraza during 2022 are estimated to be approximately $1.8 billion.

Global end market sales of Spinraza are projected to be approximately $1.4 billion in 2027, according to Visible Alpha.

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

Airsupra was approved by the FDA in January 2023.

We have an equity investment in the Avillion entities, one of which is a party to a co-development agreement with AstraZeneca to advance Airsupra 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 distributions from Avillion II for our portion of royalties will substantially end in 2030, but AstraZeneca is entitled to certain buyout rights which, if exercised, would result in earlier expiration.

In January 2023, AstraZeneca notified Avillion II that it elected to pay a fee of $80 million to Avillion II to exercise an option to commercialize Airsupra in the United States.

We expect to receive our pro rata portion of the exercise fee of approximately $35 million, subject to any holdback for expenses, in 2023.

Global end market sales of Airsupra are projected to grow to approximately $550 million in 2027, according to Visible Alpha.

Development-Stage Product Candidates

Our current portfolio includes ten development-stage product candidates.

Our current portfolio includes 12 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.

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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.

If approved, global end market sales of aficamten are projected to grow to approximately $1.5 billion in 2030, according to Visible Alpha.

Ampreloxetine

Ampreloxetine is an investigational once-daily norepinephrine reuptake inhibitor in Phase 3 development by Theravance for the treatment of symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy.

We added ampreloxetine to our portfolio in July 2022.

If approved, global end market sales of ampreloxetine are projected to grow to approximately $150 million in 2030, according to Visible Alpha.

BCX10013 is an oral, once-daily Factor D inhibitor for the treatment of complement-mediated diseases.

We added BCX10013 to our portfolio as part of our expanded funding agreement with BioCryst in November 2021.

In December 2022, BioCryst decided to focus its complement inhibitor development efforts on BCX10013 after discontinuing the development of BCX9930.

Visible Alpha does not currently have estimates available for global end market sales of BCX10013 in 2030.

MK-8189 is an oral PDE10A inhibitor in Phase 2B development by Merck for the treatment of schizophrenia.

We added MK-8189 to our portfolio in October 2022.

If approved, global end market sales of MK-8189 are projected to grow to approximately $150 million in 2030, according to Visible Alpha.

Olpasiran is a small interfering RNA (siRNA) in Phase 3 development by Amgen designed to lower levels of lipoprotein(a), a genetically-determined independent risk factor for cardiovascular disease.

We added olpasiran to our portfolio in November 2022.

If approved, global end market sales of olpasiran are projected to grow to approximately $875 million in 2030, according to Visible Alpha.

Omecamtiv mecarbil

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.

Omecamtiv mecarbil is an oral, small molecule cardiac myosin activator developed by Cytokinetics and under FDA regulatory review for the treatment of heart failure with reduced ejection fraction.

We added omecamtiv mecarbil to our portfolio in 2017.

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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 $300 million in 2030, 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.

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If approved, global end market sales of pelabresib are projected to grow to approximately $375 million in 2030, 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.

Pelacarsen is in Phase 3 development by Novartis for the treatment specifically targeting elevated lipoprotein(a), and independent, inherited and causal risk factor for cardiovascular disease.

We added pelacarsen to our portfolio in January 2023.

If approved, global end market sales of pelacarsen are projected to grow to approximately $825 million in 2030, according to Visible Alpha.

Seltorexant is a selective orexin 2 receptor antagonist 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.

If approved, global end market sales of seltorexant are projected to grow to approximately $225 million in 2030, according to Visible Alpha.

Trontinemab is a fully human monoclonal antibody that targets and binds to aggregated forms of beta-amyloid and activates immune cells in the brain to clear amyloid plaque and prevent further accumulation.

Trontinemab is in Phase 2a development and uses Roche’s brain shuttle technology, which is designed to transfer the drug across the blood brain barrier and increase the antibody concentration in the brain.

We added trontinemab to our portfolio in July 2021.

Visible Alpha does not currently have estimates available for global end market sales of trontinemab in 2030.

Tulmimetostat

Tulmimetostat, formerly known as 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 tulmimetostat to our portfolio in July 2021.

If approved, global end market sales of tulmimetostat are projected to grow to approximately $25 million in 2030, according to Visible Alpha.

Zavegepant is a small molecule calcitonin gene-related peptide receptor antagonist under FDA regulatory review for the acute treatment of migraine and in Phase 3 development for the prevention of migraine.

If approved, zavegepant will be marketed by Pfizer following its acquisition of Biohaven in October 2022.

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.

As a result of an additional transaction in 2020, we are also entitled to success-based milestone payments, the first of which would be paid upon initial FDA approval of zavegepant.

If approved, global end market sales of zavegepant are projected to grow to approximately $850 million in 2030, according to Visible Alpha.

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

Product Therapeutic Area Estimated Royalty

Expiration (1)

Product Therapeutic Area Estimated Royalty Duration (1)

Royalty Rate (2)

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tiered royalties ranging from single digit to subteen percentages on annual worldwide net sales of ivacaftor, lumacaftor and tezacaftor, and mid-single digit percentages on annual worldwide net sales of elexacaftor

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 2027-2032 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

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

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 2027-2032 Tiered royalties in the mid-single digits on annual worldwide net sales

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

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

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

Trelegy Respiratory 2029-2030 (4)

Royalties are tiered based on annual net sales at 6.5% up to $750 million, 8.0% on sales between $750 million and $1.25 billion, 9.0% on sales between $1.25 billion and $2.25 billion, 10.0% over $2.25 billion

Cabometyx/Cometriq Cancer 2026-2029 (5)

3% royalty on annual worldwide net sales

Crysvita Rare disease 2033-2038 (5)

10% royalty on annual EU, U.K.

and Switzerland net sales

3% royalty on worldwide net sales

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

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

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

Tiered royalties of 3.4% on worldwide net sales up to $500 million, 4.7% on net sales between $500 million and $1 billion, 6.0% on net sales between $1 billion and $2 billion 6.9% on net sales over $2 billion (7)

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

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 net sales above $6 billion

Orladeyo Rare disease 2036-2039 (8)

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;

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

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

Crysvita Rare disease 2033-2038 (9)

10% royalty on EU, U.K.

and Switzerland net sales

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

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

Spinraza (10)

Rare disease 2030-2035 (11)

Tiered royalties on up to $1.5 billion of annual worldwide net sales at rates ranging from 2.8% to 3.8% through 2027 and increasing to 5.0% to 6.8% in 2028 (12)

Airsupra (13)

Respiratory 2030 (14)

Tiered royalties in the low-single digits on annual U.S.

net sales (15)

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

Aficamten 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

Ampreloxetine Neurology — Low- to mid-single digit royalty on worldwide net sales

BCX10013 Rare disease — 3.0% royalty on annual worldwide net sales up to $1.5 billion and 2.0% royalty on annual worldwide net sales between $1.5 billion and $3.0 billion

MK-8189 Neurology — Royalty on worldwide net sales

Olpasiran Cardiology — Up to low-double digit tiered royalties on worldwide net sales

Omecamtiv mecarbil Cardiology 2032-2034 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)

Tiered royalties in the low-single digits on annual worldwide net sales (11)

Pelacarsen (16)

Cardiology — Upward-tiered mid-single digit royalties on worldwide net sales (17)

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

Neurology — Tiered royalties ranging between 3.3% and 4.2% on annual worldwide net sales (18)

Tulmimetostat (19)

Cancer — 3.0% royalty on worldwide net sales

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.

(1) Durations shown represent our estimates as of the 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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year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry.

(4) We will pay Theravance Biopharma, Inc.

85% of the royalties in respect of ex-U.S.

net sales after June 30, 2029 and 85% of the royalties in respect of U.S.

net sales after December 31, 2030.

(5) 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) 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) We are entitled to approximately 43% of the tiered royalties ranging from 8% to 16% for Evrysdi.

(8) Royalty is perpetual;

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.

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

(9) 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.

(10) We acquired an interest in Ionis Pharmaceuticals, Inc.’s (“Ionis”) royalty in Biogen's Spinraza in January 2023.

(11) Our royalty interest in Spinraza will revert to Ionis after we receive aggregate Spinraza royalties equal to $475 million or $550 million, depending on the timing and occurrence of certain events.

(12) We are entitled to 25% of Ionis’ Spinraza royalty payments of 11% to 15% on annual worldwide net sales through 2027, increasing to 45% of royalty payments in 2028.

(13) Product formerly known as PT027.

(14) 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.

(15) Represents the portion of the royalties on Airsupra that we are entitled to based on our minority ownership stake in Avillion II.

(16) We acquired an interest in Ionis’ royalty in Novartis' pelacarsen in January 2023.

(17) We are entitled to 25% of Ionis’ pelacarsen royalty payments of mid-teens to low-20% on annual worldwide net sales.

(18) We are entitled to 60% of MorphoSys’ trontinemab royalty payments ranging from 5.5% to 7% of worldwide net sales.

(19) Product formerly known as CPI-0209.

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

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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.

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

• Success-based milestone payment of $475.0 million, or 1.9 times the funded amount, if zavegepant’s first regulatory approval in migraine is achieved.

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

• Each milestone event achieved will result in an accelerated lump sum payment.

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.

• Payments to us of approximately 2.2 times the $300.0 million funded amount.

• Expected payments in 36 consecutive quarterly payments from the fourth quarter of 2024.

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.

Cardiology • Up to five tranches totaling $300.0 million, including first $50.0 million tranche funded in the first quarter of 2022.

• Payments to us of 1.9 times the amount drawn, except for the second and third tranches, which each total 2.0 times the amount drawn.

• Required draw of $50.0 million if a certain contingency is met and optional draw of the remaining $200.0 million if certain regulatory and clinical development milestones are met.

• Each subsequent tranche has a 12-month draw period once certain clinical and regulatory milestones are met.

• 34 consecutive quarterly payments to us on the last business day of the seventh quarter following the quarter of the 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.

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The Manager is subject to competition from other potential royalty buyers, including from the companies that market the products on which royalties are paid, financial institutions and other entities.

These potential royalty buyers may be larger and better capitalized than us.

These other potential royalty buyers may be larger and better capitalized than us.

The Manager may not be able to identify and obtain a sufficient number of asset acquisition opportunities to invest the full amount of capital that may be available to us.

We also compete with other forms of financing available to biopharmaceutical companies, such as equity, debt or convertible debt financing and licensing opportunities.

If biopharmaceutical companies opt to finance through such other means, we may not be able to acquire additional assets or grow our business.

There can be no assurance that we will continue to acquire biopharmaceutical products and companies that hold biopharmaceutical royalties that are acceptable to us.

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The length of any product’s commercial life cannot be predicted.

There can be no assurance that one or more products will not be rendered obsolete or non-competitive by new products or improvements made to existing products, either by the current marketer of such products or by another marketer.

Adverse competition, obsolescence or governmental and regulatory action or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which serve as the security or other support for the payments due under the biopharmaceutical products that we hold.

There can be no assurance that one or more products will not be rendered obsolete or non-competitive by new or alternate products or improvements made to existing products, either by the current marketer of such products or by another marketer.

Adverse competition, obsolescence, governmental and regulatory action, or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which serve as the security or other support for the payments due under the biopharmaceutical products that we hold.

Competitive factors affecting the market position and success of each product include:

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• price, including third-party insurance reimbursement policies;

• timing and introduction of the product;

• efficacy of marketing strategy;

• governmental regulation;

• availability of lower-cost generics and/or biosimilars;

• timing, introduction and marketer support of the product;

• efficacy and execution of marketing and commercialization strategy;

• market acceptance;

• manufacturing, supply and distribution;

• governmental regulation, including price caps;

• availability of lower-cost generics or biosimilars;

• intellectual property protection and exclusivity;

• treatment innovations that eliminate or minimize the need for a product;

• product liability claims.

If a product for which we have a royalty receivable or other interest is rendered obsolete or non-competitive by new products, including generics and/or biosimilars, or improvements on existing therapies or governmental or regulatory action, such developments could have a material adverse effect on the ability of the payor with respect to a biopharmaceutical asset to make payments to us, and consequently could materially adversely affect our business, financial condition and results of operations.

If additional side effects or complications are discovered with respect to a product, and such product’s market acceptance is impaired or it is withdrawn from the market, continuing payments with respect to biopharmaceutical products, including royalty payments and payments of interest on and repayment of the principal, relating to such product may not be made on time or at all.

Products for which we have a royalty receivable or other interest may be rendered obsolete or non-competitive by new or alternate products, including generics or biosimilars, improvements on existing products or governmental or regulatory action.

In addition, as biopharmaceutical companies increasingly devote significant resources to innovate next-generation products and therapies, products on which we have a royalty may become unattractive to commercialize or obsolete.

If a product’s market acceptance is diminished or it is withdrawn from the market, continuing payments with respect to biopharmaceutical products, including royalty payments and payments of interest on and repayment of the principal, may not be made on time or at all, which may affect our ability to realize the benefits of the royalty receivable or other interest in such product and may result in us incurring asset impairment charges.

Further, any product for which we have a royalty receivable or other interest that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful.

Many approved drugs are well established therapies and are widely accepted by physicians, patients and third-party payors.

Insurers and other third-party payors may also encourage the use of generic products.

Any of these developments could adversely affect products for which we have a royalty, and consequently could adversely affect our business, financial condition and results of operations.

Corporate Responsibility

We are the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharma industry.

We play an important role in providing capital to the biopharma ecosystem and thereby positively impact human health.

Our responsibility to stakeholders is based around three key areas:

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 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.

This is recognized in our market-leading position and the high esteem with which we believe we are held in the industry.

We conduct thorough diligence and monitoring with all of our investment positions.

The biopharmaceutical companies and academic and non-profit institutions with which we work typically have well-developed and transparent environmental, social and governance (ESG) policies, which seek to benefit wider society through sustainable and ethical business practices.

A diverse, talented and motivated workforce is essential to maintain our competitive advantages and to successfully execute our business strategy.

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

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

Responsibility

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, 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.

We are the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharma industry, collaborating with innovators from academic institutions, research hospitals and non-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.

Our sustainability efforts reflect the uniqueness of our business model.

We believe that our environmental, social and governance (ESG) strategy, policies and practices will create sustainable long-term value for our company, our employees, our shareholders and other stakeholders while also helping us reduce risk and identify new opportunities.

Risk management, compliance and high ethical standards are foundational to our culture.

One of our most valuable assets is our reputation for integrity, professionalism, fairness and good stewardship.

Our strong corporate governance program, from board oversight to robust management practices, aligns the interests of our stakeholders and underpins our market-leading position and the high esteem with which we are held in the life sciences industry.

We believe our people are the key to our success and are what sets us apart.

We seek to have a well-rounded, diverse workplace, which reflects our shareholders and other stakeholders with whom we collaborate, and the communities in which we live and work.

We value diverse teams and backgrounds:

as of December 31, 2022, 52% of the workforce of our Manager are women and approximately 33% of the workforce of our Manager are ethnically diverse.

We collaborate with organizations seeking to address health needs, improve health outcomes, spur innovation and expand patient care opportunities.

Approximately one-fourth (by value) of the royalty transactions we have completed since 2012 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, the Cystic Fibrosis Foundation).

Our philanthropy seeks to address the challenges of a complex and evolving world by providing funds and resources to support programs that enable innovation in the life sciences, reduce the risk of disease, strengthen access to healthcare and ensure equal access to quality healthcare.

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 Leukemia & Lymphoma Society, National Multiple Sclerosis Society, Lupus Research Alliance, Melanoma Research Alliance and Prostate Cancer Foundation.

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 performs corporate and administration services for us.

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

As of December 31, 2022, the Manager had 75 employees.

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We believe that the Manager’s relations with its employees are satisfactory.

Human Capital Resources

Human Capital

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.

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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 Development and Compensation Committee of our Board of Directors in consultation with the Manager also plans for the succession of senior management of the Manager.

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.

Governmental Regulation and Environmental Matters

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We rely on this no-action letter for the position that royalty receivables relating to biopharmaceutical assets that we hold are ICA Exception Qualifying Assets under Section 3(c)(5)(A) and Section 3(c)(6), which is described below.

As the parent of one or more subsidiaries that rely on Section 3(c)(5)(A), we currently are excepted from registration as an investment company based on Section 3(a)(1)(C) and/or Section 3(c)(6) of the U.S.

As the parent of one or more subsidiaries that rely on Section 3(c)(5)(A), we currently are exempted from registration as an investment company based on Section 3(a)(1)(C) and/or Section 3(c)(6) of the U.S.

Investment Company Act.

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Our predecessor was founded in 1996 and we were incorporated under the laws of England and Wales on February 6, 2020.

We are a holding company, and our principal asset is a controlling equity interest in Royalty Pharma Holdings Ltd.

(“RP Holdings”).

We are a holding company, and our principal asset is a controlling equity interest in Royalty Pharma Holdings Ltd (“RP Holdings”).

Our principal executive offices are located at 110 East 59 th Street, New York, NY 10022, and our telephone number is (212) 883-0200.

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Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings, and public conference calls and webcasts.

Statements and information concerning our status as a Passive Foreign Investment Company (“PFIC”) for U.S.

taxpayers are also available, free of charge, on the Investors section of our website under “Tax Information.” The information contained on or connected to the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing.

Further, references to website URLs are intended to be inactive textual references only.

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