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Royalty Pharma 8-K Report, Corporate Update (Jun 20, 2024)

Reports
Other Events
Filing Date
Filed June 20, 2024
Period End
June 17, 2024
Security
RPRX
In the record · 2020–202610-K610-Q208-K80

RPRX filed 6 annual reports (10-K), 20 quarterly reports (10-Q) and 80 current reports (8-K) between 2020 and 2026.

  1. Material agreement8-K · Jul ’21Jul ’21
  2. Impairment8-K · Dec ’22Dec ’22
  3. Material agreement8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed June 20, 2024. Cited figures are marked; the original filing is the authoritative source.

On June 17, 2024, PTC Therapeutics, Inc. exercised an option to sell half of its retained royalties on Roche's Evrysdi to a subsidiary of Royalty Pharma plc for approximately $242 milliona upfront.

The filing states that this option arose from the Evrysdi royalty transaction with PTC announced in October 2023. Evrysdi, an oral SMN2 splicing modifier for spinal muscular atrophy approved by the FDA in 2020, generated sales of approximately CHF 1.4 billion ($1.6 billionb) in 2023, an increase of 39% at constant exchange rates. After the transaction, Royalty Pharma's ownership of the Evrysdi royalty rises from 81% to 90.5% (before the cap), equating to a royalty of 7.2% to 14.5% on worldwide net product sales, not including any future PTC option exercises.

Royalty Pharma will receive the increased share starting with royalties paid on sales for the second quarter of 2024. The total funding across its Evrysdi royalty transactions is $1.9 billion upfront, including up to $250 millionc for an option.

PTC retains the option, exercisable until December 31, 2025, to sell its remaining 9.5% of the Evrysdi royalty to Royalty Pharma for $250 milliond less royalties received. The filing estimates the duration of the royalty stream at 2030-2035 for the 2020 deal and 2035-2036 for the later transactions.

02—Key points

Key Highlights

  1. PTC Therapeutics exercised an option on June 17, 2024 to sell half of its retained Evrysdi royalties to a Royalty Pharma subsidiary for approximately $242 million upfront.
  2. Royalty Pharma's share of the Evrysdi royalty increases from 81% to 90.5% (before the cap), a royalty of 7.2% to 14.5% on worldwide net sales.
  3. The increased share applies starting with royalties paid on sales for the second quarter of 2024.
  4. Total Evrysdi royalty funding across transactions reaches $1.9 billion upfront, including up to $250 million for the PTC option.
  5. PTC holds an option until December 31, 2025 to sell its remaining 9.5% royalty for $250 million less royalties received.
  6. Evrysdi generated 2023 sales of approximately $1.6 billion (CHF 1.4 billion), an increase of 39% at constant exchange rates.
  7. The filing is made under Item 8.01 (Other Events) and is signed by CFO Terrance Coyne.

03—Questions

Frequently Asked Questions

  1. What did Royalty Pharma acquire in this transaction?

    Royalty Pharma's subsidiary acquired half of PTC Therapeutics' retained royalties on Roche's Evrysdi for approximately $242 million upfront, following PTC's exercise of an option on June 17, 2024.

  2. How does the transaction change Royalty Pharma's Evrysdi royalty position?

    Royalty Pharma's ownership of the Evrysdi royalty increases from 81% to 90.5% before the cap, equating to a royalty of 7.2% to 14.5% on worldwide net product sales, excluding any future PTC option exercises.

  3. When will the increased royalty share take effect?

    Royalty Pharma will receive the increased 90.5% share starting with royalties paid in respect of sales for the second quarter of 2024.

  4. What remains open for PTC Therapeutics under the agreement?

    Until December 31, 2025, PTC has the option to sell its remaining 9.5% of the Evrysdi royalty to Royalty Pharma for $250 million less royalties received.

  5. What is the total investment Royalty Pharma has made in Evrysdi royalties?

    The filing shows total funding of $1.9 billion upfront across the July 2020, October 2023 and June 2024 transactions, including up to $250 million for the PTC option.

04—Continue

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