Item 9A. Controls and Procedures
Item 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) prior to the filing of this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were, in design and operation, effective to the reasonable assurance level.
Management ’ s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act of 1934, as amended ). Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control-Integrated Framework. Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP . Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial reporting as of December 31, 2023 . Their report is included in Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting identified in management ’ s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the fourth quarter of 2023 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met and, as set forth above, our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of our disclosure control system were met.
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Item 9B. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
The following table describes the written plans for the sale of our Class A ordinary shares adopted or terminated by our executive officers and directors during the fourth quarter of 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1 (each, a “Trading Plan”).
Name and Title Action Adoption/ Termination Date
Scheduled Expiration Date of Trading Plan (1)
Maximum Shares Subject to Trading Plan
Terrance Coyne
Executive Vice President & Chief Financial Officer
Adoption
November 22, 2023 October 17, 2024 480,000
Marshall Urist
Executive Vice President, Research and Investments
Adoption
December 20, 2023 December 30, 2024 46,667
(1) A Trading Plan may expire on an earlier date if all contemplated transactions are completed before such Trading Plan’s expiration date, upon termination by broker or the holder of the Trading Plan, or as otherwise provided in the Trading Plan.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item will be presented in our Proxy Statement to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item will be presented in our Proxy Statement, to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item will be presented in our Proxy Statement, to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE
The information required by this Item will be presented in our Proxy Statement, to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item will be presented in our Proxy Statement, to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
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PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
15(a)(1) Financial Statements. The following documents are filed as part of this Form 10-K:
• Reports of Independent Registered Public Accounting Firm
• Consolidated Balance Sheets as of December 31, 2023 and 2022
• Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021
• Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
• Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023, 2022 and 2021
• Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
• Notes to the Consolidated Financial Statements
15(a)(2) Financial Statement Schedules. Schedules are omitted because they are not required or because the information is provided elsewhere in the financial statements.
15(a)(3) Exhibits.
Incorporated by Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/
Period End Date Filed or Furnished Herewith
3.1 Articles of Association of Royalty Pharma plc
8-K 3.1 6/19/2020
3.2 Articles of Association of Royalty Pharma Holdings Ltd
8-K 3.2 3/24/2023
4.1 Form of Class A Ordinary Share Certificate
S-1/A 4.1 6/11/2020
4.2 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
x
10.1 Amended and Restated Management and Services Agreement dated October 3, 2022, among the Company and RP Management, LLC
10-Q 10.1 11/08/2022
10.2 Exchange Agreement dated June 16, 2020, among the Company, Royalty Pharma Holdings Ltd, RPI US Partners 2019, LP, RPI International Holdings 2019, LP, RPI International Partners 2019, LP and RPI EPA Holdings, LP
8-K 10.1 6/19/2020
10.3 Registration Rights Agreement dated June 18, 2020, among the Company and the Persons listed on Schedule A and Schedule B thereto
8-K 10.4 6/19/2020
10.4† Form of Deed of Indemnity
S-1/A 10.5 6/2/2020
10.5† Director Appointment Agreement, dated June 9, 2020, between the Company and Mr. Germano Giuliani
S-1/A 10.6 6/11/2020
10.6# Amended and Restated Purchase and Sale Agreement, dated November 14, 2014, with the Cystic Fibrosis Foundation Therapeutics Incorporated
S-1/A 10.7 6/2/2020
10.7# Amendment No. 1 to the Amended and Restated Purchase and Sale Agreement, dated October 13, 2016 with the Cystic Fibrosis Foundation
S-1/A 10.8 6/2/2020
10.8# Research, Development and Commercialization Agreement, dated May 24, 2004, between the Cystic Fibrosis Foundation Therapeutics Incorporated and Vertex Pharmaceuticals Incorporated, as amended
S-1 10.9 5/22/2020
10.9# Amendment No. 1 to Research, Development and Commercialization Agreement, dated January 6, 2006 by and between Vertex Pharmaceuticals Incorporated and Cystic Fibrosis Foundation Therapeutics Incorporated
S-1 10.10 5/22/2020
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10.10 Amendment No. 2 to Research, Development and Commercialization Agreement, dated January 1, 2006, by and between Vertex Pharmaceuticals Incorporated and Cystic Fibrosis Foundation Therapeutics Incorporated
S-1 10.11 5/22/2020
10.11# Amendment No. 5 to Research, Development and Commercialization Agreement, dated April 1, 2011, by and between Vertex Pharmaceuticals Incorporated and Cystic Fibrosis Foundation Therapeutics Incorporated
S-1 10.12 5/22/2020
10.12# Amendment No. 7 to Research, Development and Commercialization Agreement, dated September 1, 2016, by and between Vertex Pharmaceuticals Incorporated and Cystic Fibrosis Foundation Therapeutics Incorporated
S-1 10.13 5/22/2020
10.13 Amended and Restated Management and Services Agreement dated October 3, 2022, among Royalty Pharma Holdings Ltd and RP Management, LLC
10-Q 10.2 11/08/2022
10.14 Second Amended and Restated Management and Services Agreement dated October 3, 2022, among Royalty Pharma Investments 2019 ICAV and RP Management, LLC
10-Q 10.3 11/08/2022
10.15† Form of Independent Director Equity Incentive Plan
S-1/A 10.15 6/11/2020
10.16 Indenture, dated as of September 2, 2020, among Royalty Pharma plc, Royalty Pharma Holdings Ltd and Wilmington Trust, National Association, as Trustee
8-K 4.1 9/2/2020
10.17 First Supplemental Indenture, dated as of September 2, 2020, among Royalty Pharma plc, Royalty Pharma Holdings Ltd and Wilmington Trust, National Association, as Trustee
8-K 4.2 9/2/2020
10.18 Registration Rights Agreement, dated as of September 2, 2020, among Royalty Pharma plc, Royalty Pharma Holdings Ltd, BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
8-K 4.9 9/2/2020
10.19# Amendment No. 2 to the Amended and Restated Purchase and Sale Agreement, dated October 30, 2020, by and among RPI Finance Trust, RPI 2019 Intermediate Finance Trust and Cystic Fibrosis Foundation
8-K 10.1 11/5/2020
10.20 Second Supplemental Indenture, dated as of July 26, 2021, Royalty Pharma plc, Royalty Pharma Holdings Ltd and Wilmington Trust, National Association, as Trustee
8-K 4.2 7/26/2021
10.21 Amended and Restated Revolving Credit Agreement, dated as of September 15, 2021, as amended by Amendment No. 1, dated as of October 31, 2022, as amended by Amendment No. 2, dated as of May 16, 2023, as amended by Amendment No. 3, dated as of December 22, 2023, as amended by Amendment No. 4, dated as of January 24, 2024, among Royalty Pharma plc, Royalty Pharma Holdings Ltd., Bank of America, N.A., as Administrative Agent, the other parties thereto, and the lenders and issuing banks from time to time party thereto
x
21.1 Subsidiaries of the Registrant
x
23.1 Consent of Independent Registered Public Accounting Firm
x
24.1 Power of Attorney (reference is made to the signature page hereto) x
31.1 Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
x
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31.2 Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
x
32* Certifications of Chief Executive Office and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
x
97.1 Financial Restatement Compensation Recoupment Policy
x
101.INS XBRL Taxonomy Extension Instance Document
x
101.SCH XBRL Taxonomy Extension Schema Document
x
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
x
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
x
101.LAB XBRL Taxonomy Extension Label Linkbase Document
x
101.PRE XBRL Taxonomy Extension Presentation Linkbase
x
104 Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) x
† Management contract or compensatory plan or arrangement.
# Certain information has been excluded from the exhibit because it both (i) is not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.
* The certifications furnished in Exhibit 32 hereto are deemed to accompany this Annual Report on Form 10-K and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act.
Item 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
ROYALTY PHARMA PLC
(Registrant)
Date: February 15, 2024 /s/ Pablo Legorreta
Pablo Legorreta
Chief Executive Officer
Date: February 15, 2024 /s/ Terrance Coyne
Terrance Coyne
Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Terrance Coyne and George Lloyd, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof .
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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Signature Title Date
/s/ Pablo Legorreta Chairman of the Board, Director & Chief Executive Officer
( Principal Executive Officer and Royalty Pharma plc’s authorized representative in the United States )
February 15, 2024
Pablo Legorreta
/s/ Terrance Coyne Executive Vice President & Chief Financial Officer
( Principal Financial Officer and Principal Accounting Officer )
February 15, 2024
Terrance Coyne
/s/ Bonnie Bassler Director February 15, 2024
Bonnie Bassler
/s/ Errol De Souza Director February 15, 2024
Errol De Souza
/s/ Catherine Engelbert Director February 15, 2024
Catherine Engelbert
/s/ Henry Fernandez Director February 15, 2024
Henry Fernandez
/s/ M. Germano Giuliani Director February 15, 2024
M. Germano Giuliani
/s/ David Hodgson Director February 15, 2024
David Hodgson
/s/ Ted Love Director February 15, 2024
Ted Love
/s/ Gregory Norden Director February 15, 2024
Gregory Norden
/s/ Rory Riggs Director February 15, 2024
Rory Riggs
117