01—Abstract
Summary
Summary of the 8-K filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Royalty Pharma plc (Nasdaq: RPRX) reported second quarter 2024 results on August 8, 2024, as furnished in Exhibit 99.1 press release.
Portfolio Receipts rose 12% to $608 milliona, and Royalty Receipts grew 11% to $605 million, driven by the cystic fibrosis franchise, Trelegy, Tremfya and incremental Evrysdi royalties. Net cash provided by operating activities was $658 million, Adjusted EBITDA (non-GAAP) was $560 million, and Portfolio Cash Flow (non-GAAP) was $574 million. The company raised its full-year 2024 Portfolio Receipts guidance to $2,700 million to $2,775 million, from $2,600 million to $2,700 million previously.
The guidance excludes contributions from transactions announced after the release date and includes expected Royalty Receipts growth of 9% to 12%. Capital Deployment was $951 millionb in the quarter, and the company said it announced new transactions of up to approximately $2.0 billion in the quarter, including the Voranigo royalty acquisition from Agios for an upfront payment of $905 million, which will be paid following FDA approval. Balance sheet activity included issuance of $1.5 billion of senior unsecured notes at a weighted average coupon of 5.5%.
As of June 30, 2024, cash and cash equivalents were $1.8 billionc and total debt principal was $7.8 billion, with a weighted-average cost of debt of 3.1%. The company repurchased about three million Class A ordinary shares for $84 million in the quarter.
02—Key points
Key Highlights
- Portfolio Receipts increased 12% to $608 million in Q2 2024 versus $545 million in Q2 2023; Royalty Receipts rose 11% to $605 million.
- Full-year 2024 Portfolio Receipts guidance raised to $2,700 million–$2,775 million from $2,600 million–$2,700 million.
- Net cash provided by operating activities was $658 million; Adjusted EBITDA was $560 million and Portfolio Cash Flow was $574 million (non-GAAP).
- Capital Deployment was $951 million in Q2 2024; new transactions announced in 2024 total up to approximately $2.0 billion.
- Issued $1.5 billion of senior unsecured notes with a 5.5% weighted average coupon; weighted-average cost of debt is 3.1% and weighted-average duration is about 13 years.
- Cash and cash equivalents of $1.8 billion and total debt principal of $7.8 billion as of June 30, 2024.
- Repurchased about three million Class A ordinary shares for $84 million in Q2 2024; year-to-date through August 7, 2024, about four million shares for $115 million.
03—Questions
Frequently Asked Questions
What drove the increase in Portfolio Receipts in the second quarter of 2024?
The filing attributes the 12% increase to Portfolio Receipts, and the 11% increase to Royalty Receipts, primarily to strong growth from the cystic fibrosis franchise, Trelegy, Tremfya and incremental royalties acquired on Evrysdi in October 2023.
How much did Royalty Pharma raise its 2024 guidance?
Portfolio Receipts guidance was raised to $2,700 million to $2,775 million from $2,600 million to $2,700 million. The guidance excludes transactions announced after the release date and includes expected Royalty Receipts growth of 9% to 12%.
What is the Voranigo transaction?
Royalty Pharma announced in May 2024 a transaction to acquire a royalty interest in Voranigo (vorasidenib) from Agios Pharmaceuticals for an upfront payment of $905 million, contingent on FDA approval. The filing states that FDA approval was granted on August 6, 2024, and that the royalty is 15% on annual U.S. net sales up to $1 billion and 12% on sales above $1 billion.
How is the company financing its growth and what is its debt profile?
In June 2024 the company issued $1.5 billion of senior unsecured notes with a weighted average coupon of 5.5%. Total debt principal was $7.8 billion as of June 30, 2024, with a weighted-average duration of about 13 years and a weighted-average cost of debt of 3.1%. Expected 2024 interest paid is about $160 million, and about $260 million is anticipated in 2025.
What do Adjusted EBITDA and Portfolio Cash Flow measure?
Adjusted EBITDA is Portfolio Receipts minus payments for operating and professional costs, and Portfolio Cash Flow is Adjusted EBITDA minus interest paid or received, net. Both are non-GAAP liquidity measures defined under the credit agreement and are reconciled to net cash provided by operating activities in Table 4 of the release.
04—Continue