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Item 1. Business

2024-02-15 compared with 2023-02-15 · 247 added, 443 removed, 166 unchanged (81% 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 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 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, GSK’s Trelegy, Roche’s Evrysdi, Johnson & Johnson’s Tremfya, Biogen’s Tysabri and Spinraza, AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Novartis’ Promacta, Pfizer’s Nurtec ODT and Gilead’s Trodelvy, among others, and 14 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 (“R&D”) costs, and high fixed manufacturing and marketing costs.

Our industry leading royalty portfolio and capital-efficient business model drives our compounding growth.

We have a focused strategy of actively identifying and tracking the development and commercialization of important new therapies, which allows us to move quickly to make acquisitions when opportunities arise.

With a deep and experienced team of investment professionals, an exhaustive due diligence process and a focus on high-quality therapies that address significant unmet patient need, we sustain attractive returns above our cost of capital, which in turn propels our compounding growth.

Our unique 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.

The success of our business has been the result of a focused strategy of actively identifying and tracking the development and commercialization of key new therapies, allowing us to move quickly to make acquisitions when opportunities arise.

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 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 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.

In addition, end market sales are a strong indicator of the importance of the therapies to both patients and the marketers.

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

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

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

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

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

Emgality Lilly Migraine prevention & episodic cluster headache 19 651

Oxlumo Alnylam Primary hyperoxaluria type 1 3 67

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

Airsupra (5) AstraZeneca Asthma — —

Other products (6) 263 —

Total royalty receipts $3,231

Development-Stage Product Candidates

Aficamten Cytokinetics Obstructive hypertrophic cardiomyopathy (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) — —

Pelacarsen (4) Novartis Cardiovascular disease (Phase 3) — —

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

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 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.

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

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

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

(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 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.

Additionally, our focus on acquiring royalties on approved products, often in the early stages of their commercial launches, and on development-stage product candidates with strong proof of concept data, mitigates development risk and expands our opportunity set.

In 2023, we generated $3.0 billion of Portfolio Receipts (as defined below) and announced transactions with a total potential value of $4.0 billion.

Portfolio Receipts is a key performance metric that represents our ability to generate cash from our portfolio investments, the primary source of capital that we can deploy to make new portfolio investments.

Portfolio Receipts is defined as the sum of royalty receipts and milestones and other contractual receipts.

Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Overview” for additional discussion regarding Portfolio Receipts.

We deployed $2.2 billion of cash to acquire royalties, milestones and other contractual receipts (“Capital Deployment”) in 2023, which also includes payments made during the year for transactions from prior years.

Capital Deployment represents the total outflows that will drive future Portfolio Receipts.

*Percentage change is not meaningful.

(1) The 2019 Portfolio Receipts and 2020 growth rates are calculated on a pro forma basis, which adjusts certain cash flow line items as if our Reorganization Transactions (as described in our final prospectus filed with the SEC on June 17, 2020) and our initial public offering had taken place on January 1, 2019.

The most significant difference between the pro forma and reported figures is the non-controlling interest attributable to legacy investors that resulted from the Reorganization Transactions.

(2) Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that is attributed to Royalty Pharma.

Milestones and other contractual receipts include sales-based or regulatory milestones payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that is attributed to Royalty Pharma.

Biopharmaceutical Industry and the Role of Royalties

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

Global prescription pharmaceutical sales are 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, 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 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.

Global prescription pharmaceutical sales are projected to grow from $1.1 trillion in 2023 to $1.5 trillion in 2028, representing a compound annual growth rate of 7% according to EvaluatePharma despite more than $150 billion in cumulative sales being lost to expected patent expiries during the same period.

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

In addition, an 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, which has increased R&D investments in new therapies.

The pace of 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.

We estimate that over the next decade academia and other non-profit institutions will spend over $1 trillion in R&D, unprofitable biopharmaceutical companies will spend over $1 trillion in R&D and selling, general and administrative expenses, and profitable biopharmaceutical companies will spend over $2 trillion in R&D.

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

As a result of the increasing cost and complexity of drug development, the creation of a new drug today typically involves a number of industry participants.

As a result of the increasing cost and complexity of drug development, the creation of a new drug today typically involves a number of industry participants and can lead to multiple royalties.

Academia and other research institutions conduct basic research and license new technologies to industry for further development.

Biotechnology companies typically in-license these new technologies, add value through applied research and early-stage clinical development, and then either out-license the resulting development-stage product candidates to large biopharmaceutical companies for late-stage clinical development and commercialization, or commercialize the products themselves.

Biotechnology companies typically in-license these new technologies, add value through applied research and early-stage clinical development, and then either out-license the resulting product candidates to large biopharmaceutical companies, or commercialize the products themselves.

As new drugs are transferred along this value chain, royalties are created as compensation for the licensing or selling institutions.

Biotechnology companies are also increasingly creating royalties on existing products within their portfolios, known as synthetic royalties, in order to provide a source of non-dilutive capital to fund their businesses.

As a result of this industry paradigm, the development of a single new drug can lead to the creation of multiple royalties.

Given our leadership position within the biopharmaceutical royalty sector, we are able to capitalize on the growing volumes of royalties that are created as new therapies are developed to address unmet medical needs.

Given our leadership position within biopharmaceutical royalties, we are able to capitalize on the growing volumes of royalties created as new therapies are developed to address unmet medical needs.

We estimate the market for biopharmaceutical royalties reached $7.4 billion in transaction value in 2023, a greater than three-fold increase compared to 2012.

We have executed transactions with an aggregate announced value of $26.4 billion from 2012 through 2023, which represents an estimated market share of approximately 58% of all royalty transactions during this period.

This compares to our nearest competitor, which we believe has executed $3.7 billion of transactions, and represents an estimated market share of 8%.

Given the scale of our business relative to our competitors, we have a particularly strong market share of large transactions within the growing biopharmaceutical royalty market.

Since 2012, there have been 15 royalty transactions with an aggregate value of more than $500 million each.

We have executed 12 of these 15 transactions, for a total transaction value of approximately $17.0 billion of cash and an estimated market share of 85%.

Our Business Model

We believe that the following elements of our business and product portfolio provide a unique and compelling proposition to investors seeking exposure to the biopharmaceutical sector.

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

The biopharmaceutical industry benefits from many attractive characteristics, including long product life cycles, significant barriers to entry and non-cyclical revenues.

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 R&D.

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 FDA drug approvals, and the potential for multiple royalties to be created from each new drug that reaches the market.

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

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.

As of December 31, 2023, our portfolio included royalties on 15 therapies that each generated end-market sales of more than $1 billion in 2023, including six therapies that each generated end-market sales of more than $3 billion.

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

Given the marketers’ significant focus on and investment in these products, they are motivated to invest substantial resources in driving continued sales growth.

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

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.

As of December 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, neuroscience, cancer, hematology, immunology, respiratory and diabetes.

In 2023, no individual product accounted for more than 23% of our Portfolio 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.

As such, the diversification of our profits directly reflects the diversification of our royalty receipts, rather than varying levels of product-level profitability, as would typically be expected within a biopharmaceutical company.

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

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

As such, the diversification of our cash generation directly reflects the diversification of our royalties, rather than varying levels of product-level profitability, as would typically be expected within a biopharmaceutical company.

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

The estimated weighted average royalty duration of our portfolio is approximately 13 years based on projected cumulative cash royalty receipts.

Our largest marketed royalty in 2022 was on Vertex’s cystic fibrosis franchise, and existing patent applications covering Trikafta, the most significant product in that franchise, are expected to provide exclusivity through 2037.

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

The estimated weighted average duration of our portfolio is approximately 13 years based on projected cumulative cash royalty receipts.

Our largest marketed royalty in 2023 was on Vertex’s cystic fibrosis franchise.

Existing patent applications covering Trikafta, the most significant product in that franchise, are expected to provide exclusivity through 2037.

Several of our marketed royalties have unlimited durations and could provide cash flows for many years after key patents have expired.

Simple and efficient operating model generates substantial cash flow for reinvestment in new biopharmaceutical royalties .

Our simple and efficient operating model generates substantial cash flow for reinvestment in new biopharmaceutical royalties .

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.

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 .

The biopharmaceutical industry benefits from a number of highly attractive characteristics, including long product life cycles, significant barriers to entry and non-cyclical revenues.

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 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.

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.

We closely follow a broad range of therapeutic areas and treatment modalities and are therefore able to move quickly when we identify compelling opportunities to acquire new royalties.

We have deep access to attractively priced investment grade debt that provides a significant cost of capital advantage.

We believe that we have an attractive cost of capital that enables us to acquire high-quality biopharmaceutical royalties at competitive prices while still creating value for our shareholders.

As of December 31, 2022, we had an aggregate principal amount of $7.3 billion of senior unsecured notes outstanding with a weighted average coupon of 2.24% and a weighted-average maturity of approximately 12 years.

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

Our high cash flow conversion provides us with significant capital that we can redeploy for new royalty acquisitions and return to shareholders through dividends or share repurchases.

In 2023, we generated Portfolio Receipts of $3.0 billion.

We deployed $2.2 billion of cash in 2023 to acquire royalties, milestones and other contractual receipts, paid dividends of $358.3 million and repurchased shares for $304.8 million.

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

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

Together they have been responsible for 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.

Together they have been responsible for $26.4 billion in announced transactions of biopharmaceutical royalties, milestones and other contractual receipts since 2012 through 2023.

Our acquisitions have included many of the industry’s leading therapies such as Trikafta, Tremfya, Imbruvica and Xtandi.

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 $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 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.

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.

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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.

Additionally, we may identify additional opportunities, platforms or technologies that leverage our capabilities.

From 2012 through 2023, we deployed $8.3 billion of cash to acquire royalties, milestones and other contractual receipts on development-stage product candidates.

As of December 31, 2023, products underlying $6.3 billion of these acquisitions have already been approved, representing a success rate to date of 76%, while products underlying $0.9 billion were not approved and products underlying $1.1 billion are still in development.

(1) Reflects cash deployed for royalty acquisitions from 2012 through 2023.

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

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

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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This allows us to quickly assess and gain conviction in the value of assets when acquisition opportunities arise.

We take a disciplined approach in assessing opportunities and seek to acquire exposure to therapies based on the following key product characteristics:

• Clinically validated:

therapies that have received regulatory approval or have strong clinical proof-of-concept data that gives us confidence in the clinical and commercial profile.

• High unmet need:

therapies that address areas of significant unmet medical need that also represent large commercial opportunities.

• Significant benefits to patients:

therapies that have potential to disrupt or significantly enhance the treatment paradigm for patients and physicians based on compelling clinical data.

• Unique competitive positioning:

therapies that are well-positioned to be leaders in their respective categories and are expected to maintain a competitive advantage in the long-term.

• Growth potential:

therapies where we see strong long-term potential, based on our in-depth evaluation and in-house expertise.

• Strong marketer:

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

• Intellectual Property:

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

• Attractive value proposition:

therapies that we believe provide value-add to the healthcare system.

We take a disciplined approach in assessing opportunities and seek to acquire exposure to therapies based on our framework of key product success factors:

• Strong scientific rationale;

• Significant impact on patients and/or caregivers;

• Conviction in probability of clinical and regulatory success for pre-approval programs;

• Mission and execution-oriented management team;

• Strong marketer and global commercial opportunity;

• Clear commercial positioning;

• Potential for multiple indications or label expansion;

• First-in-class or best-in-class;

• Long duration of patent protection or exclusivity;

• Compelling value proposition for government and commercial payors.

Our focus is to create significant long-term value for our shareholders by acquiring both approved and development-stage product candidates through a variety of structures.

In evaluating these acquisition opportunities, we focus on the following financial characteristics:

• Long duration cash flows:

we prioritize long-duration assets over short-duration assets that may boost near-term financial performance.

The durability of our cash flows also allows us to add leverage to our portfolio, enhancing returns and providing capital that we can use to acquire additional assets.

• Attractive risk-adjusted returns:

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

• Long duration cash flows:

we prioritize long-duration assets over short-duration assets that may boost near-term financial performance.

The durability of our cash flows also allows us to add leverage to our portfolio, enhancing returns and providing capital that we can use to acquire additional assets.

• Growth and scale:

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Our Portfolio

Commercial Products

The key royalties in our marketed portfolio related to approved products include the ones listed below.

Descriptions of estimated royalty expiration dates are based on our estimates of patent expiry dates (which may include estimated patent term extensions) or estimates of the dates on which the royalties otherwise expire and are based on each product’s key geographies;

duration may differ in other geographies.

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

In addition, the royalties in our portfolio are subject to the underlying contractual agreements from which they arise and may be subject to reductions or other adjustments in accordance with the terms of such agreements.

Our portfolio consists of royalties on more than 35 commercial products and 14 development-stage product candidates.

Approved Products

Portfolio Overview

The following table provides an overview of our current portfolio of royalties on approved products, including end market sales of the therapies in our portfolio:

Marketer(s) Therapeutic Area Product Detail 2023 Portfolio Receipts

(in millions)

2023 End Market Sales (in millions) (1)

Cystic fibrosis franchise (2)

Our cystic fibrosis franchise consists of our right to receive royalty payments on the sale of various products marketed by Vertex for use in the treatment of cystic fibrosis, including Kalydeco (ivacaftor), Orkambi (lumacaftor and ivacaftor), Symdeko/Symkevi (tezacaftor and ivacaftor) and Trikafta/Kaftrio (elexacaftor, tezacaftor and ivacaftor).

Vertex’s cystic fibrosis franchise represents the leading treatments for cystic fibrosis, providing treatment options for approximately 90% of cystic fibrosis patients.

We added the cystic fibrosis franchise to our portfolio in November 2014 and purchased an additional residual royalty interest in November 2020.

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

Total global end market sales for the cystic fibrosis franchise during 2022 were approximately $8.9 billion and we collected $811 million in related royalty receipts over the same period.

Global end market sales of the cystic fibrosis franchise are projected to grow to approximately $10.5 billion in 2027, according to Visible Alpha.

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

Tysabri competes in the high efficacy segment of the multiple sclerosis market, often reserved for patients with aggressive disease at onset and patients who have failed front-line therapies.

We added Tysabri to our portfolio in February 2017.

Our right to receive royalties is perpetual.

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.

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

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

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

We added Imbruvica to our portfolio in July 2013.

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

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 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.

We added Xtandi to our portfolio in March 2016.

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

Total global end market sales for Xtandi during 2022 were approximately $4.8 billion and we collected $187 million in related royalty receipts over the same period.

Global end market sales of Xtandi are projected to grow to approximately $5.2 billion in 2027, 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 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.

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

We added Tremfya to our portfolio in July 2021.

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

Total global end market sales for Tremfya during 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.

Vertex Rare disease Cystic fibrosis $771 $9,869

Tysabri Biogen Neuroscience

Relapsing forms of multiple sclerosis 279 1,877

Imbruvica AbbVie, Johnson & Johnson Cancer Hematological malignancies and chronic graft versus host disease 210 4,879

Trelegy GSK Respiratory Chronic obstructive pulmonary disease and asthma 203 2,739

Promacta Novartis Hematology Chronic immune thrombocytopenic purpura and aplastic anemia 161 2,269

Xtandi Pfizer, Astellas Cancer Prostate cancer 146 5,037

Tremfya Johnson & Johnson Immunology Plaque psoriasis and psoriatic arthritis 116 3,147

Evrysdi Roche Rare disease Spinal muscular atrophy 66 1,580

Cabometyx/Cometriq Exelixis, Ipsen, Takeda Cancer Kidney, liver and thyroid cancers 66 2,266

Spinraza Biogen Rare disease

Spinal muscular atrophy 45 1,741

Trodelvy Gilead Cancer Breast cancer 33 1,063

Orladeyo BioCryst Rare disease Hereditary angioedema prophylaxis 29 325

Erleada Johnson & Johnson Cancer Prostate cancer 27 2,387

Nurtec ODT/Zavzpret Pfizer Neuroscience

Migraine 18 928 (3)

Other products (4)

Royalty receipts

Milestones and other contractual receipts (5)

Portfolio Receipts $3,049

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

(1) Represents end market sales for 2023 as reported by respective product marketers.

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

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

(3) Reflects 2023 end market sales for Nurtec ODT.

Zavzpret sales are not disclosed by Pfizer.

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

Cimzia, Crysvita, Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Letairis, Lexiscan, Mircera, Nesina, Prevymis, Soliqua and distributions from the Legacy SLP Interest, which are presented as Distributions from equity method investees on the Statement of Cash Flows.

(5) Milestones and other contractual receipts include receipts related to Bosulif (a product co-developed by our joint venture investee, Avillion), which are presented as Distributions from equity method investees on the Statements of Cash Flows.

Amount also includes a $475.0 million milestone payment that we received following the U.S.

Food and Drug Administration (“FDA”) approval of Zavzpret in March 2023, a $50.0 million payment from Pfizer related to the oral formulation of zavegepant, a $33.0 million commercial milestone payment related to Soliqua and a $28.7 million payment from our joint venture investee, Avillion II, for our pro rata portion of the $80 million fee paid by AstraZeneca to exercise its option to commercialize Airsupra in the United States.

Portfolio Summary

The table below provides a summary of the acquisition year, estimated royalty duration, royalty rates and the ownership percentages attributable to Royalty Pharma, net of legacy non-controlling interests for selected approved products in our portfolio:

Acquisition Year(s)

Royalty Rates (2)

2023 % Attributable

to Royalty Pharma (3)

Cystic fibrosis franchise (4)

2037 Blended royalty of slightly over 9%

Tysabri 2017 Perpetual Tiered payments of 18% on first $2 billion and 25% on sales >$2 billion

Imbruvica 2013 2027-2032 Downward tiered mid-single digit royalty

2022 2029-2030

Tiered royalty of 6.5% on first $750 million, up to 10% on sales >$2.25 billion

Promacta 2019 2025-2028 Upward tiered 4.7% to 9.4% royalty

Xtandi 2016 2027-2028 Slightly less than 4% royalty

Tremfya 2021 2031-2032 Upward tiered mid-single digit royalty

Tiered royalty of 6.5% on first $500 million, up to 13% on sales >$2 billion

Cabometyx/Cometriq (7)

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

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

Cometriq is approved for progressive, metastatic medullary thyroid cancer.

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

Cabometyx is marketed in Japan by Takeda.

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

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

Total global end market sales for Cabometyx/Cometriq during 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.

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 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.

We added Evrysdi to our portfolio in July 2020.

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

Total global end market sales for Evrysdi during 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.

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 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.

Gilead is exploring monotherapy and combinations of Trodelvy across numerous cancer indications and lines of therapy.

We added Trodelvy to our portfolio in January 2018.

Our right to receive royalties is perpetual.

Total global end market sales for Trodelvy during 2022 were approximately $680 million and we collected $25 million in related royalty receipts over the same period.

Global end market sales of Trodelvy are projected to grow to approximately $2.6 billion in 2027, according to Visible Alpha.

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

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

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

Total global end market sales for Orladeyo during 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.

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

It is marketed by Johnson & Johnson.

We added Erleada to our portfolio in February 2019.

We estimate that our royalties will substantially end in 2032.

Total global end market sales for Erleada during 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.

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 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.

Oxlumo was approved by the FDA in November 2020.

We added Oxlumo to our portfolio in April 2021.

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

Total global end market sales for Oxlumo during 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 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.

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

We added aficamten to our portfolio in January 2022.

If approved, global end market sales of aficamten are projected to grow to approximately $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 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.

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

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

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

If approved, global end market sales of omecamtiv mecarbil are projected to grow to approximately $300 million in 2030, according to Visible Alpha.

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

We added pelabresib to our portfolio in July 2021.

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

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.

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, 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.

Royalty Portfolio Summary

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

Product Therapeutic Area Estimated Royalty Duration (1)

Royalty Rate (2)

Approved Products

Cystic fibrosis franchise Rare disease 2037 (3)

For combination therapies, sales are allocated equally to each of the active pharmaceutical ingredients;

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

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

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 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)

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, and no royalties on sales over $550 million;

tiered percentage of sublicense revenue in certain territories

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 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

Pelabresib Cancer — 3.0% royalty on annual worldwide net sales

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) 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.

2021 2026-2029

2023 2030-2035

Upward tiered 2.8% to 3.8% royalty, increasing to 5% to 6.8% in 2028

Trodelvy 2018 Perpetual Tiered royalty of 4.15% on first $2 billion, down to 1.75% on sales >$6 billion

Tiered royalty of 9.5% on first $350 million and 4.5% on sales up to $550 million

Erleada 2019, 2023

2032 Low-single digit royalty

Nurtec ODT/Zavzpret

2034-2036 Tiered royalty of ~2.5% on first $1.5 billion and ~1.9% on sales >$1.5 billion

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

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

(2) The royalties in our portfolio are subject to the underlying contractual agreements from which they arise and may be subject to reductions or other adjustments in accordance with the terms of such agreements.

Royalty rates apply to annual worldwide net sales unless otherwise stated.

(3) Ownership percentages for cystic fibrosis franchise, Erleada and Nurtec ODT/Zavzpret represent blended percentages across multiple royalty interests based on 2023 royalty receipts.

(4) Royalty is perpetual;

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

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

For combination therapies, sales are allocated equally to each of the active pharmaceutical ingredients, with tiered royalties ranging from single digit to subteen percentages on sales of ivacaftor, lumacaftor and tezacaftor, and mid-single digit percentages on sales of elexacaftor.

(5) 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.

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

sales after December 31, 2030.

Royalties are tiered based on sales at 6.5% up to $750 million, 8% between $750 million and $1.25 billion, 9% between $1.25 billion and $2.25 billion, and 10% over $2.25 billion.

(6) Royalties are tiered based on sales at 6.5% up to $500 million, 8.9% between $500 million and $1 billion, 11.3% between $1 billion and $2 billion, and 13% over $2 billion.

Our royalty rates are expected to be reduced by 18% in the early 2030s.

Royalty entitlement does not reflect either PTC or Royalty Pharma exercising option to sell/purchase additional Evrysdi royalties.

(7) We are entitled to royalties on sales of cabozantinib products in the U.S.

through September 2026 and non-U.S.

markets through the full term of the royalty.

(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 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.

(8) 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.

(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.

We are entitled to 25% of Ionis’ Spinraza royalty payments of 11% to 15% on sales up to $1.5 billion through 2027, increasing to 45% of royalty payments on sales up to $1.5 billion in 2028.

(9) Royalty is perpetual;

years shown represent estimated U.S.

patent expiration for Orladeyo and potential sales decline based on timing of generic entry.

We are also entitled to a tiered percentage of sublicense revenue for Orladeyo in certain territories.

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

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

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

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

Fixed Payment Arrangements

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

Other Recent Royalty Acquisition Activities

• In October 2023, we acquired additional royalties on Roche’s Evrysdi for an upfront payment of $1 billion.

Evrysdi is approved for the treatment of spinal muscular atrophy.

We expect to receive additional royalties beginning in the first quarter of 2024.

• In September 2023, we acquired a royalty interest in Skytrofa for an upfront payment of $150 million.

Skytrofa is approved for the treatment of pediatric patients with growth failure due to inadequate secretion of endogenous growth hormone.

We expect to receive royalties on Skytrofa beginning in 2025.

• In August 2023, we acquired a royalty interest in Adstiladrin for an upfront payment of $300 million and a $200 million additional milestone payment contingent on certain manufacturing goals.

Adstiladrin is approved for the treatment of adult patients with high-risk Bacillus Calmette-Guérin unresponsive non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors.

We began receiving royalties in the fourth quarter of 2023.

Development-Stage Product Candidates

The table below provides a summary of our portfolio of development-stage product candidates, which have not been approved and therefore have not generated any royalties (and we have not collected any related royalty receipts) to date :

Product Candidates

Therapeutic Area Status (1)

Product Description

Aficamten Cytokinetics Cardiology NDA filing expected 2024

Small molecule cardiac myosin inhibitor for obstructive hypertrophic cardiomyopathy

Ampreloxetine Theravance Neuroscience

Phase 3 data expected 2025

Investigational once-daily norepinephrine reuptake inhibitor for symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy

BCX10013 BioCryst Rare disease Phase 1

Oral Factor D inhibitor for complement-mediated diseases

Phase 3 data expected 2024

Oral dopamine-1 receptor antagonist for Tourette’s Syndrome

KarXT Karuna (3)

PDUFA date Q3 2024

Oral M1/M4 muscarinic agonist for schizophrenia

MK-8189 Merck Neuroscience

Phase 2b data expected 2024

Oral PDE10A inhibitor for schizophrenia

Olpasiran Amgen Cardiology Phase 3 data expected 2027

Small interfering ribonucleic acid for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease

Pelabresib MorphoSys (4)

NDA filing expected 2024

Bromodomain and extra-terminal inhibitor for myelofibrosis

Pelacarsen Novartis Cardiology Phase 3 data expected 2025

Antisense oligonucleotide for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease

Seltorexant Johnson & Johnson Neuroscience

Phase 3 data expected 2024

Selective orexin 2 receptor antagonist for major depressive disorder with insomnia symptoms

TEV-'749 Teva

Phase 3 data expected 2024

Long-acting subcutaneous injection of olanzapine for schizophrenia

Roche Neuroscience

A novel Brainshuttle Aβ antibody for the treatment of Alzheimer’s disease

Tulmimetostat MorphoSys (4)

Cancer Phase 2

Second-generation enhancer of zeste homolog 2 inhibitor for hematological malignancies and solid tumors

Vanzacaftor/tezacaftor/deutivacaftor

NDA filing expected 2024

Once-daily triple combination therapy for the treatment of cystic fibrosis

New Drug Application.

Prescription Drug User Fee Act.

(1) Based on information disclosed by marketer of the underlying product and information available on clinicaltrials.gov as of January 31, 2024.

(2) We acquired an interest in ecopipam in January 2024.

(3) In December 2023, Bristol Myers Squibb announced it has agreed to acquire Karuna.

(4) In February 2024, Novartis announced it has entered into an agreement to acquire MorphoSys.

Other Significant Funding Arrangements

The table below provides a summary of our significant contractual funding arrangements:

Funding Arrangement Therapeutic Area Key Terms (1)

Zavegepant Success-Based Milestones

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

• Payments to us of 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 • 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.

Cardiology • Tranche one $50.0 million funded.

• Tranches four and five have a required draw of $50.0 million and an optional draw of up to $125.0 million within a 12-month draw period if certain clinical and regulatory milestones are met.

• Payments to us of 1.9 times the amount drawn for tranches one, four and five.

• 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.

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

Teva Development Co-Funding Arrangement

• Provide up to $100.0 million over the course of the trial with the mutual option to increase to $125.0 million to co-fund the development of TEV-‘749.

• Payments to us equal to the total funded amount over 20 consecutive quarters commencing upon FDA approval in addition to tiered royalty payments based on worldwide sales.

• Payment to us of 1.25 times the funded amount if Teva chooses not to file a New Drug Application with the FDA following positive Phase 3 study results of TEV-‘749.

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

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

There are a limited number of suitable and attractive acquisition opportunities available in the market.

Therefore, competition to acquire such assets is intense.

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

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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.

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

Corporate Responsibility

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 mission is to accelerate innovation in life sciences and thereby positively impact patient lives globally.

To accomplish this, we partner with innovators such as academic institutions, research hospitals, nonprofits and companies at the forefront of discovering lifesaving therapies to improve human health through solutions tailored to the needs of our partners.

We believe that our corporate responsibility 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.

We maintain robust governance policies and practices that adhere to high standards of regulatory compliance, ethics, transparency and integrity.

Our Board believes that its independence from and oversight of management are maintained effectively through its leadership structure, composition and sound corporate governance policies and practices.

We support expanding patient access to health care and medicine by providing funding to organizations

addressing unmet patient needs through innovation and engaging in philanthropic activities.

We incorporate material corporate responsibility, regulatory, geopolitical and reputational considerations, including access to health and medicine, research and development, ethical clinical trials, therapeutic area profile, ethical conduct and product quality and safety into our investment decision-making and management practices.

This includes considering key risks and opportunities during the due diligence process and, where we believe we can have a material impact, engaging on these matters with our partners.

We are committed to implementing key sustainability practices across our operations and taking steps to

measure, manage and minimize our environmental impact where possible.

We believe that sustainability

is critical to addressing related risks and opportunities for our business.

We are focused on tracking our carbon footprint, mitigating our impact through energy efficiency and identifying ways to reduce our environmental impact.

Our directors and executive officers manage our operations and activities.

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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 requires the Manager’s executives to devote substantially all of their time to managing us, Royalty Pharma Investments 2019 ICAV (“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 Manager is focused on creating a supportive and values-based culture that elevates health, well-being and growth.

The Manager values diverse teams and backgrounds:

as of December 31, 2023, 49% of the workforce of our Manager are women and approximately 35% of the workforce of our Manager are ethnically diverse.

Governmental Regulation and Environmental Matters

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others in our industry.

We believe that there are no compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition and results of operations, and we do not currently anticipate material capital expenditures arising from environmental regulation.

We believe that there are no compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition or results of operations, and we do not currently anticipate material capital expenditures arising from environmental regulation.

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

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Our website and the information contained therein or connected thereto is not incorporated into this Annual Report on Form 10-K.

Our agent for service in the United States is CSC North America located at 251 Little Falls Drive, Wilmington, Delaware, 19808.

Our agent for service in the United States is CSC North America located at 251 Little Falls Drive, Wilmington, DE 19808.

Available Information

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

What changed 10-K

Item 1. Business