Cover
Cover | 3 Months Ended |
Mar. 31, 2021 | |
Cover [Abstract] | |
Document Type | S-4 |
Amendment Flag | false |
Entity Registrant Name | Royalty Pharma plc |
Entity Central Index Key | 0001802768 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | |||
Cash and cash equivalents | $ 708,810 | $ 1,008,680 | $ 246,199 |
Marketable securities | 1,068,913 | 983,279 | 94,455 |
Financial royalty assets | 522,388 | 587,193 | 452,560 |
Accrued royalty receivable | 33,454 | 33,155 | 33,525 |
Available for sale debt securities | 69,261 | 69,984 | |
Other royalty income receivable | 6,541 | 6,011 | 5,241 |
Other current assets | 6,657 | 8,596 | 92 |
Total current assets | 2,416,024 | 2,696,898 | 832,072 |
Financial royalty assets, net | 12,599,080 | 12,368,084 | 10,842,052 |
Intangible royalty assets, net | 22,995 | 28,666 | 51,724 |
Equity securities | 244,503 | 298,689 | 380,756 |
Available for sale debt securities | 179,939 | 163,016 | |
Derivative financial instruments | 2,884 | 5,439 | 42,315 |
Investments in non-consolidated affiliates | 444,407 | 454,936 | 124,061 |
Other assets | 4,256 | 4,558 | 45,635 |
Total assets | 15,914,088 | 16,020,286 | 12,449,895 |
Current liabilities | |||
Distribution payable to non-controlling interest | 108,840 | 126,366 | 31,041 |
Accounts payable and accrued expenses | 8,272 | 10,775 | 11,177 |
Interest payable | 10,271 | 42,146 | |
Accrued purchase obligation | 110,000 | 110,000 | |
Milestone payable | 18,600 | 18,600 | |
Current portion of long-term debt | 281,984 | ||
Derivative financial instruments | 9,215 | ||
Total current liabilities | 255,983 | 307,887 | 333,417 |
Long-term debt | 5,821,072 | 5,816,584 | 5,956,138 |
Derivative financial instruments | 18,902 | ||
Total liabilities | 6,077,055 | 6,124,471 | 6,308,457 |
Commitments and contingencies | |||
Shareholders' equity | |||
Deferred shares, $0.000001 par value, 316,407 and 0 issued and outstanding, respectively | 0 | 0 | 0 |
Additional paid-incapital | 2,931,249 | 2,865,964 | |
Retained earnings | 1,923,771 | 1,920,635 | 2,825,212 |
Non-controllinginterest | 4,954,818 | 5,077,036 | 35,883 |
Accumulated other comprehensive income | 29,452 | 34,395 | 2,093 |
Treasury interests | (2,359) | (2,317) | (4,266) |
Total shareholders' equity | 9,837,033 | 9,895,815 | 6,141,438 |
Shareholders' contributions | 3,282,516 | ||
Total liabilities and shareholders' equity | 15,914,088 | 16,020,286 | 12,449,895 |
Previously Reported [Member] | |||
Current Assets | |||
Available for sale debt securities | 144,416 | 131,280 | |
Other assets | 23,158 | $ 45,635 | |
Common Class A | |||
Shareholders' equity | |||
Common stock | 39 | 39 | |
Common Class B | |||
Shareholders' equity | |||
Common stock | 0 | 0 | |
Class R Redeemable Stock | |||
Shareholders' equity | |||
Common stock | $ 63 | $ 63 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred stock, par value | $ 0.000001 | $ 0.000001 | $ 0.000001 |
Deferred stock, issued | 321,128 | 316,407 | 0 |
Deferred stock, outstanding | 321,128 | 316,407 | 0 |
Common Class A | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, issued | 392,857 | 388,135 | 0 |
Common stock, outstanding | 392,857 | 388,135 | 0 |
Common Class B | |||
Common stock, par value | $ 0.000001 | $ 0.000001 | $ 0.000001 |
Common stock, issued | 214,255 | 218,976 | 0 |
Common stock, outstanding | 214,255 | 218,976 | 0 |
Class R Redeemable Stock | |||
Common stock, par value | $ 1 | $ 1 | $ 1 |
Common stock, issued | 50 | 50 | 0 |
Common stock, outstanding | 50 | 50 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Revenues | $ 573,027 | $ 500,879 | $ 2,122,353 | $ 1,814,254 | $ 1,794,894 | |
Operating expenses | ||||||
Research and development funding expense | 2,641 | 7,639 | 26,289 | 83,036 | 392,609 | |
Provision for changes in expected cash flows from financial royalty assets | 292,262 | 88,012 | 230,839 | (1,019,321) | (57,334) | |
Amortization of intangible assets | 5,671 | 5,733 | 23,058 | 23,924 | 33,267 | |
General and administrative expenses | 43,156 | 38,065 | 181,715 | 103,439 | 61,906 | |
Other operating expenses | 65,053 | |||||
Total operating expenses, net | 343,730 | 139,449 | 526,954 | (808,922) | 430,448 | |
Operating income | 229,297 | 361,430 | 1,595,399 | 2,623,176 | 1,364,446 | |
Other (income)/expense | ||||||
Equity in (earnings)/loss of non-consolidated affiliates | 1,918 | 9,074 | (44,459) | 32,517 | 7,023 | |
Interest expense | 37,415 | 53,584 | 157,059 | 268,573 | 279,956 | |
Realized gain on available for sale debt securities | 0 | 0 | (419,481) | |||
Unrealized loss on derivative financial instruments | 2,555 | 33,445 | 42,076 | 39,138 | (11,923) | |
(Gain)/loss on equity securities | 54,186 | 153,166 | (247,073) | (155,749) | 13,939 | |
Unrealized gain on forwards | (18,600) | 0 | 0 | |||
Unrealized gain on available for sale debt securities | (9,115) | 0 | ||||
Interest income | (16,598) | (2,858) | (28,379) | (22,329) | (24,441) | |
Other non-operating(income)/expense, net | (43) | 5,923 | 32,821 | (393) | 1,518 | |
Total other (income)/expense, net | 70,318 | 252,334 | (106,555) | 161,757 | (153,409) | |
Consolidated net income before tax | 158,979 | 109,096 | 1,701,954 | 2,461,419 | 1,517,855 | |
Income tax expense | 0 | 0 | 0 | 0 | 0 | |
Consolidated net income | 158,979 | 109,096 | 1,701,954 | 2,461,419 | 1,517,855 | |
Less: Net income attributable to non-controlling interest | (89,860) | (37,856) | (726,914) | (112,884) | (140,126) | |
Net income attributable to controlling interest | 69,119 | 71,240 | 975,040 | 2,348,535 | 1,377,729 | |
Other comprehensive income/(loss) | ||||||
Reclassification of loss on interest rate swaps | 4,066 | 4,066 | 6,189 | 8,003 | ||
Unrealized gain on available for sale debt securities | 5,125 | 52,725 | 83,120 | 6,159 | (402,502) | |
Reclassification of unrealized gain on available for sale debt securities | (15,491) | (20,551) | ||||
Other comprehensive (loss)/income | (10,366) | 56,791 | 66,635 | 12,348 | (394,499) | |
Comprehensive income | 58,753 | 128,031 | 1,041,675 | 2,360,883 | 983,230 | |
Less: Other comprehensive income attributable to non-controlling interest | 4,881 | (9,672) | (12,873) | |||
Comprehensive income attributable to controlling interest | $ 63,634 | 118,359 | $ 1,028,802 | 2,360,883 | 983,230 | |
Earnings per Class A ordinary share | ||||||
Basic | $ 0.18 | $ 1.32 | [1] | |||
Diluted | $ 0.18 | $ 1.32 | [1] | |||
Weighted average Class A ordinary shares outstanding | ||||||
Basic | 389,760 | 375,444 | [1] | |||
Diluted | 607,148 | 375,455 | [1] | |||
Financial Royalty Assets | ||||||
Revenues | $ 529,625 | 462,844 | $ 1,959,975 | 1,648,837 | 1,524,816 | |
Intangible Royalty Assets | ||||||
Revenues | 36,061 | 34,983 | 143,382 | 145,775 | 134,118 | |
Royalty Income, Other | ||||||
Revenues | $ 7,341 | $ 3,052 | $ 18,996 | $ 19,642 | $ 135,960 | |
[1] | Represents earnings per Class A ordinary share and weighted average Class A ordinary shares outstanding for the period from June 16, 2020 through December 31, 2020, the period following our initial public offering (see Note 13). |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Prior to IPO | Subsequent to IPO | Cumulative Effect, Period of Adoption, Adjustment | Common StockCommon Class A | Common StockCommon Class B | Common StockClass R Redeemable Stock | Deferred Shares | Additional Paid-In Capital | Retained Earnings | Retained EarningsPrior to IPO | Retained EarningsSubsequent to IPO | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income/(Loss) | Accumulated Other Comprehensive Income/(Loss)Cumulative Effect, Period of Adoption, Adjustment | Non-Controlling Interest | Non-Controlling InterestPrior to IPO | Non-Controlling InterestSubsequent to IPO | Treasury Interests | Shareholders' Contributions |
Beginning balance at Dec. 31, 2017 | $ 4,460,546 | $ 655,446 | $ (2,863) | $ 381,381 | $ 2,863 | $ 141,203 | $ 3,282,516 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Distributions | (1,031,823) | (814,359) | (217,464) | |||||||||||||||||
Reclassification of loss on interest rate swaps | 8,003 | 8,003 | ||||||||||||||||||
Net income | 1,517,855 | 1,377,729 | 140,126 | |||||||||||||||||
Unrealized gain on available for sale debt securities | (402,502) | (402,502) | ||||||||||||||||||
Ending balance at Dec. 31, 2018 | 4,552,079 | 1,215,953 | (10,255) | 63,865 | 3,282,516 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Distributions | (880,142) | (739,276) | (140,866) | |||||||||||||||||
Reclassification of loss on interest rate swaps | 6,189 | 6,189 | ||||||||||||||||||
Net income | 2,461,419 | 2,348,535 | 112,884 | |||||||||||||||||
Unrealized gain on available for sale debt securities | 6,159 | 6,159 | ||||||||||||||||||
Purchase of treasury interests | (4,266) | $ (4,266) | ||||||||||||||||||
Ending balance at Dec. 31, 2019 | 6,141,438 | $ (192,705) | 2,825,212 | (192,705) | 2,093 | 35,883 | (4,266) | 3,282,516 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Contributions | 1,441,275 | 1,133,629 | 307,646 | |||||||||||||||||
Transfer of interests | 1,037,161 | (1,037,161) | ||||||||||||||||||
Distributions | (393,202) | (141,776) | (251,426) | |||||||||||||||||
Reclassification of loss on interest rate swaps | 4,066 | 4,066 | ||||||||||||||||||
Net income | 109,096 | 71,240 | 37,856 | $ 37,856 | ||||||||||||||||
Unrealized gain on available for sale debt securities | 52,725 | 43,053 | 9,672 | |||||||||||||||||
Ending balance at Mar. 31, 2020 | 7,162,693 | 2,561,971 | 49,212 | 2,002,775 | (4,266) | 2,553,001 | ||||||||||||||
Beginning balance at Dec. 31, 2019 | 6,141,438 | $ (192,705) | 2,825,212 | $ (192,705) | 2,093 | 35,883 | (4,266) | 3,282,516 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Contributions | 1,482,322 | 1,174,676 | 307,646 | |||||||||||||||||
Transfer of interests | 1,037,161 | (1,037,161) | ||||||||||||||||||
Distributions | (1,105,765) | (313,408) | (792,357) | |||||||||||||||||
Initial share issuance upon registration of Royalty Pharma plc | 63 | $ 63 | ||||||||||||||||||
Initial share issuance upon registration of plc (in shares) | 50,000 | |||||||||||||||||||
Issuance of Class B shares to Continuing Investors Partnerships | 1 | $ 1 | ||||||||||||||||||
Issuance of Class B shares to Continuing Investor Partnerships (in shares) | 535,383,000 | |||||||||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | (1) | $ 30 | $ (1) | $ 1,402,762 | (1,261,014) | (24,022) | 2,433,098 | 2,147 | $ (2,553,001) | |||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity (in shares) | 294,176,000 | (294,176,000) | 294,176,000 | |||||||||||||||||
Issuance of Class A ordinary shares sold in IPO, net of offering costs | 1,908,744 | $ 7 | 1,150,383 | 758,354 | ||||||||||||||||
Issuance of Class A ordinary shares sold in initial public offering, net of offering costs (in shares) | 71,625,000 | |||||||||||||||||||
Share based compensation and related issuance of Class A ordinary shares | 5,428 | 5,428 | ||||||||||||||||||
Share based compensation and related issuance of Class A ordinary shares (in shares) | 76,000 | |||||||||||||||||||
Other exchanges | 191 | $ 2 | 307,391 | 2,562 | (309,566) | (198) | ||||||||||||||
Other exchanges (in shares) | 22,231,000 | (22,231,000) | 22,231,000 | |||||||||||||||||
Dividends | (112,490) | (112,490) | ||||||||||||||||||
Reclassification of loss on interest rate swaps | 4,066 | 4,066 | ||||||||||||||||||
Net income | 1,701,954 | $ 624,885 | $ 1,077,069 | $ 479,842 | $ 495,198 | 145,043 | $ 581,871 | |||||||||||||
Unrealized gain on available for sale debt securities | 83,120 | 60,617 | 22,503 | |||||||||||||||||
Reclassification of unrealized gain on available for sale debt securities | (20,551) | (10,921) | (9,630) | |||||||||||||||||
Ending balance at Dec. 31, 2020 | 9,895,815 | $ 39 | $ 63 | 2,865,964 | 1,920,635 | 34,395 | 5,077,036 | (2,317) | ||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 388,135,000 | 218,976,000 | 50,000 | 316,407,000 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Contributions | 3,253 | 3,253 | ||||||||||||||||||
Distributions | (145,378) | (145,378) | ||||||||||||||||||
Share based compensation and related issuance of Class A ordinary shares | 713 | 713 | ||||||||||||||||||
Share based compensation and related issuance of Class A ordinary shares (in shares) | 1,000 | |||||||||||||||||||
Other exchanges | 64,572 | 542 | (65,072) | (42) | ||||||||||||||||
Other exchanges (in shares) | 4,721,000 | (4,721,000) | 4,721,000 | |||||||||||||||||
Dividends | (65,983) | (65,983) | ||||||||||||||||||
Net income | 158,979 | 69,119 | 89,860 | $ 89,860 | ||||||||||||||||
Unrealized gain on available for sale debt securities | 5,125 | 2,712 | 2,413 | |||||||||||||||||
Reclassification of unrealized gain on available for sale debt securities | (15,491) | (8,197) | (7,294) | |||||||||||||||||
Ending balance at Mar. 31, 2021 | $ 9,837,033 | $ 39 | $ 63 | $ 2,931,249 | $ 1,923,771 | $ 29,452 | $ 4,954,818 | $ (2,359) | ||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 392,857,000 | 214,255,000 | 50,000 | 321,128,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||
Cash collections from financial royalty assets | $ 573,946 | $ 488,028 | $ 2,121,923 | $ 1,934,092 | $ 2,052,592 |
Cash collections from intangible royalty assets | 35,761 | 34,788 | 143,753 | 143,298 | 106,689 |
Other royalty cash collections | 6,821 | 535 | 18,305 | 27,448 | 125,162 |
Distributions from non-consolidated affiliates | 17,325 | 20,293 | 42,334 | 14,059 | 39,402 |
Interest received | 1,548 | 2,236 | 7,704 | 20,136 | 24,441 |
Swap collateral received | 45,252 | 45,252 | 360 | 3,467 | |
Swap collateral posted | (35,448) | (45,630) | (510) | ||
Swap termination payments | (35,448) | (35,448) | |||
Ongoing development-stage funding payments | (2,641) | (7,639) | (20,479) | (83,036) | (108,163) |
Upfront development-stage funding payments | (5,810) | (284,446) | |||
Payments for operating and professional costs | (42,160) | (25,838) | (179,709) | (88,524) | (72,535) |
Payments for rebates | (125) | ||||
Interest paid | (64,500) | (51,103) | (103,196) | (254,964) | (267,657) |
Net cash provided by operating activities | 526,100 | 471,104 | 2,034,629 | 1,667,239 | 1,618,317 |
Cash flows from investing activities: | |||||
Distributions from non-consolidated affiliates | 15,084 | ||||
Purchases of available for sale debt securities | (17,585) | (125,121) | |||
Purchase of warrants | (8,840) | ||||
Purchases of equity securities | (50,000) | (50,000) | (78,999) | (152,810) | |
Proceeds from available for sale debt securities | 15,625 | 3,000 | 150,000 | 750,000 | |
Purchases of marketable securities | (505,339) | (703,935) | (1,705,283) | (817,402) | |
Proceeds from sales and maturities of marketable securities | 419,783 | 104,613 | 815,440 | 725,070 | |
Proceeds from equity securities | 384,840 | ||||
Investments in non-consolidated affiliates | (8,714) | (13,142) | (40,155) | (27,042) | (24,173) |
Acquisitions of financial royalty assets | (503,070) | (99,290) | (2,182,246) | (1,721,291) | (269,593) |
Milestone payments | (250,000) | ||||
Net cash (used in)/provided by investing activities | (599,300) | (761,754) | (2,759,320) | (2,153,625) | 303,424 |
Cash flows from financing activities: | |||||
Distributions to shareholders/unitholders | (141,776) | (285,353) | (739,276) | (814,359) | |
Distributions to non-controlling interest | (125,721) | (161,387) | (543,952) | (154,084) | (268,693) |
Distributions to non-controlling interest-other | (37,183) | (181,135) | |||
Dividends to shareholders | (65,983) | (112,490) | |||
Contributions from non-controlling interest-R&D | 1,997 | 1,260 | 8,482 | ||
Contributions from non-controlling interest-other | 220 | 29,764 | 58,957 | ||
Scheduled repayments of long-term debt | (47,100) | (94,200) | (294,000) | (294,000) | |
Repayments of long-term debt | (5,170,396) | (11,116,196) | |||
Proceeds from issuance of long-term debt | 6,040,000 | 11,891,030 | |||
Debt issuance costs and other | (7,841) | (46,715) | (2,049) | ||
Purchase of treasury interests | (4,266) | ||||
Proceeds from issuance of Class A ordinary shares upon IPO, net of offering costs | 1,908,744 | ||||
Net cash (used in)/provided by financing activities | (226,670) | 542,524 | 1,487,172 | (1,191,626) | (1,379,101) |
Net change in cash and cash equivalents | (299,870) | 251,874 | 762,481 | (1,678,012) | 542,640 |
Cash and cash equivalents, beginning of period | 1,008,680 | 246,199 | 246,199 | 1,924,211 | 1,381,571 |
Cash and cash equivalents, end of period | $ 708,810 | $ 498,073 | $ 1,008,680 | $ 246,199 | $ 1,924,211 |
Organization and Purpose
Organization and Purpose | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Organization and Purpose | 1. Organization and Purpose Royalty Pharma plc is an English public limited company incorporated under the laws of England and Wales that was created for the purpose of consolidating our predecessor entities and facilitating the initial public offering (the “IPO”) of our Class A ordinary shares that was completed in June 2020. Following our IPO, we control Royalty Pharma Holdings Ltd. (“RP Holdings”), a private limited company incorporated under the laws of England and Wales and U.K. tax resident through our ownership of RP Holdings’ Class A ordinary shares (the “RP Holdings Class A Interests”) and RP Holdings’ Class B ordinary shares (the “RP Holdings Class B Interests”). We conduct our business through RP Holdings and its subsidiaries and include RP Holdings and its subsidiaries in our condensed consolidated financial statements. RP Holdings is the sole owner of Royalty Pharma Investments 2019 ICAV (“RPI 2019 ICAV”), which is an Irish collective asset management entity formed to facilitate our Exchange Offer Transactions (defined below), and is the successor to Royalty Pharma Investments, an Irish unit trust (“Old RPI”), for accounting and financial reporting purposes. RP Holdings is owned directly by RPI US Partners 2019, LP, a Delaware limited partnership, RPI International Holdings 2019, LP, (together, the “Continuing Investors Partnerships”), and Royalty Pharma plc. Old RPI is a unit trust established in August 2011 under the laws of Ireland and authorized by the Central Bank of Ireland pursuant to the Unit Trusts Act, 1990. Prior to the Exchange Offer Transactions, Old RPI was owned by various partnerships (the “Legacy Investors Partnerships”). RP Management, LLC (the “Manager”), a Delaware limited liability company, is an external adviser which is responsible for our management. RP Management (Ireland) Ltd. (“RP Ireland”), is the manager of Old RPI and equivalent to the board of directors of a company or general partner of a partnership and is responsible for the day to day operations of Old RPI. Its functions can be delegated to third parties. RP Ireland delegated responsibility for investment management of Old RPI to its parent company, the Manager, in accordance with the investment objectives and policies of Old RPI. “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis. After the consummation of the Reorganization Transactions (defined below) and before the consummation of the IPO, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to RPI 2019 ICAV. Prior to the Reorganization Transactions, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Old RPI. We are the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry. We fund innovation in the biopharmaceutical industry both directly and indirectly—directly when we partner with companies to co-fund Reorganization Transactions In connection with our IPO, we consummated an exchange offer on February 11, 2020 (the “Exchange Date”). Through the exchange offer, investors representing 82% of the aggregate limited partnership in the Legacy Investors Partnerships, exchanged their limited partnership interests in the Legacy Investors Partnerships for limited partnership interests in the Continuing Investors Partnerships. The exchange offer transaction together with (i) the concurrent incurrence of indebtedness under our new credit facility and (ii) the issuance of additional interests in Continuing Investors Partnerships to satisfy performance payments payable in respect of assets acquired prior to the date of the IPO are referred to as the “Exchange Offer Transactions.” As a result of the Exchange Offer Transactions, we own, through our subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust (“RPI Intermediate FT”), an 82% economic interest in Old RPI. Through our 82% indirect ownership of Old RPI, we are legally entitled to 82% of the economics of Old RPI’s wholly-owned subsidiaries, RPI Finance Trust, a Delaware statutory trust (“RPIFT”) and RPI Acquisitions (Ireland), Limited (“RPI Acquisitions”), an Irish private limited company, and 66% of Royalty Pharma Collection Trust, a Delaware statutory trust (“RPCT”). The remaining 34% of RPCT is owned by the Legacy Investors Partnerships and Royalty Pharma Select Finance Trust, a Delaware statutory trust (“RPSFT”), which is wholly owned by Royalty Pharma Select, an Irish unit trust. From the Exchange Date until the expiration of the Legacy Investors Partnerships’ investment period on June 30, 2020 (the “Legacy Date”), the Legacy Investors Partnerships were offered to participate proportionately in any investment made by Old RPI. Following the Legacy Date, Old RPI ceased making new investments and each of Old RPI and the Legacy Investors Partnerships became legacy entities. Following the Legacy Date, we have made and plan to make new investments through our subsidiaries, including RPI Intermediate FT. As part of the Exchange Offer Transactions, the Legacy Investors Partnerships and RPI Intermediate FT entered into new credit facilities in the amount of $1.3 billion and $6.0 billion, respectively, the proceeds of which were used to repay the $6.3 billion outstanding debt of RPIFT and, in the case of RPI Intermediate FT, will also be used to fund future investments. As part of the new credit facilities, RPI Intermediate FT repaid $5.2 billion, its pro rata portion of RPIFT’s outstanding debt and accrued interest. RPIFT also terminated all outstanding interest rate swaps in connection with the debt refinancing. Prior to, and as a condition precedent to the closing of the IPO, various reorganization transactions became effective, including the following: • the Exchange Offer Transactions (as described above); and • the execution of a new management agreement with the Manager (the “Management Agreement”). We refer to these transactions collectively as the “Reorganization Transactions.” As Old RPI is our predecessor for financial reporting purposes, we have recorded Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. The references in the following notes for the periods prior to the Exchange Date refer to the financial results of Old RPI for the same periods. IPO On June 18, 2020, we completed our IPO on the Nasdaq Global Select Market under the ticker symbol “RPRX”, in which we issued 89,334 thousand shares of Class A ordinary shares at a price to the public of $28.00 per share, of which 71,652 thousand and 17,682 thousand shares were offered by the Company and selling shareholders, respectively. We used the net proceeds from the IPO to acquire the RP Holdings Class A Interests and, as a result, we own 100% of RP Holdings Class A Interests. Upon consummation of the IPO, certain of the Continuing Investors agreed to exchange, pursuant to the Exchange Offer Transactions, interests in the Continuing Investors Partnerships represented by their ownership of 294,176 thousand RP Holdings Class B Interests into an aggregate of 294,176 thousand Class A ordinary shares of Royalty Pharma plc. Upon completion of the exchange, Royalty Pharma plc indirectly owned 294,176 thousand RP Holdings Class B Interests. The remaining investors in the Continuing Investors Partnerships who did not elect to exchange into Class A ordinary shares held 241,207 thousand newly issued Class B ordinary shares of Royalty Pharma plc. As a result, the Continuing Investors Partnerships held a number of our Class B ordinary shares equal to the number of RP Holdings Class B Interests indirectly held by them at such time which are exchangeable on a one-for-one | 1. Organization and Purpose Royalty Pharma plc is an English public limited company incorporated under the laws of England and Wales that was created for the purpose of consolidating our predecessor entities and facilitating the initial public offering (the “IPO”) of our Class A ordinary shares that was completed in June 2020. Following our IPO, we control Royalty Pharma Holdings Ltd. (“RP Holdings”), a private limited company incorporated under the laws of England and Wales and U.K. tax resident through our ownership of RP Holdings’ Class A ordinary shares (the “RP Holdings Class A Interests”) and RP Holdings’ Class B ordinary shares (the “RP Holdings Class B Interests”). We conduct our business through RP Holdings and its subsidiaries and include RP Holdings and its subsidiaries in our consolidated financial statements. RP Holdings is the sole owner of Royalty Pharma Investments 2019 ICAV, which is an Irish collective asset management entity formed to facilitate our Exchange Offer Transactions (defined below), and is the successor to Royalty Pharma Investments, an Irish unit trust (“Old RPI”), for accounting and financial reporting purposes. RP Holdings is owned directly by RPI US Partners 2019, LP, a Delaware limited partnership, RPI International Holdings 2019, LP, (together, the “Continuing Investors Partnerships”), and Royalty Pharma plc. Old RPI is a unit trust established in August 2011 under the laws of Ireland and authorized by the Central Bank of Ireland pursuant to the Unit Trusts Act, 1990. Prior to the Exchange Offer Transactions, Old RPI was owned by various partnerships (the “Legacy Investors Partnerships”). RP Management, LLC (the “Manager”), a Delaware limited liability company, is an external adviser which is responsible for our management. RP Management (Ireland) Ltd. (“RP Ireland”), is the manager of Old RPI and equivalent to the board of directors of a company or general partner of a partnership and is responsible for the day to day operations of Old RPI. Its functions can be delegated to third parties. RP Ireland delegated responsibility for investment management of Old RPI to its parent company, the Manager, in accordance with the investment objectives and policies of Old RPI. “Royalty Pharma,” “Royalty Pharma Investments,” “RPI,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis. After the consummation of the Reorganization Transactions (defined below) and before the consummation of the IPO, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma Investments 2019 ICAV. Prior to the Reorganization Transactions, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Old RPI. We are the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry. We fund innovation in the biopharmaceutical industry both directly and indirectly-directly when we partner with companies to co-fund Reorganization Transactions In connection with our IPO, we consummated an exchange offer on February 11, 2020 (the “Exchange Date”). Through the exchange offer, investors representing 82% of the aggregate limited partnership in the Legacy Investors Partnerships, exchanged their limited partnership interests in the Legacy Investors Partnerships for limited partnership interests in the Continuing Investors Partnerships. The exchange offer transaction together with (i) the concurrent incurrence of indebtedness under a new credit facility and (ii) the issuance of additional interests in Continuing Investors Partnerships to satisfy performance payments payable in respect of assets acquired prior to the date of the IPO are referred to as the “Exchange Offer Transactions.” As a result of the Exchange Offer Transactions, we own, through our wholly-owned subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust (“RPI Intermediate FT”), an 82% economic interest in Old RPI. Through our 82% indirect ownership of Old RPI, we are legally entitled to 82% of the economics of Old RPI’s wholly-owned subsidiaries, RPI Finance Trust, a Delaware statutory trust (“RPIFT”) and RPI Acquisitions (Ireland), Limited (“RPI Acquisitions”), an Irish private limited company, and 66% of Royalty Pharma Collection Trust, a Delaware statutory trust (“RPCT”). The remaining 34% of RPCT is owned by the Legacy Investors Partnerships and Royalty Pharma Select Finance Trust, a Delaware statutory trust (“RPSFT”), which is wholly owned by Royalty Pharma Select, an Irish unit trust. From the Exchange Date until the expiration of the Legacy Investors Partnerships’ investment period on June 30, 2020 (the “Legacy Date”), the Legacy Investors Partnerships were offered to participate proportionately in any investment made by Old RPI. Following the Legacy Date, Old RPI has ceased making new investments and each of Old RPI and the Legacy Investors Partnerships became legacy entities. Following the Legacy Date, we have made and will continue to make new investments through our subsidiaries, including RPI Intermediate FT. As part of the Exchange Offer Transactions, the Legacy Investors Partnerships and RPI Intermediate FT entered into new credit facilities in the amount of $1.3 billion and $6.0 billion, respectively, the proceeds of which were primarily used to repay the $6.3 billion outstanding debt of RPIFT as of the Exchange Date and, in the case of RPI Intermediate FT, was also available to be used to fund investments. As part of the new credit facilities, RPI Intermediate FT repaid $5.2 billion, its pro rata portion of RPIFT’s outstanding debt and accrued interest. RPIFT also terminated all outstanding interest rate swaps in connection with the debt refinancing. Prior to, and as a condition precedent to the closing of the IPO, various reorganization transactions became effective, including the following: • the Exchange Offer Transactions (as described above); and • the execution of a new management agreement with the Manager (the “New Management Agreement”). We refer to these transactions collectively as the “Reorganization Transactions.” As Old RPI is our predecessor for financial reporting purposes, we have recorded Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. The references in the following notes for the periods prior to the Exchange Date refer to the financial results of Old RPI for the same periods. IPO In June 2020, we completed our IPO, in which we issued 89,334 thousand shares of Class A ordinary shares at a price to the public of $28.00 per share, of which 71,652 thousand and 17,682 thousand shares were offered by the Company and selling shareholders, respectively. The Company received net proceeds of approximately $1.9 billion from the IPO after deducting underwriting discounts and commissions. The Class A ordinary shares began trading on the Nasdaq Global Select Market under the ticker symbol “RPRX” on June 16, 2020. We used the net proceeds from the IPO to acquire the RP Holdings Class A Interests shortly after completion of the IPO. As a result, we own 100% of RP Holdings Class A Interests. In connection with the IPO, pursuant to the Exchange Offer Transactions, certain of the Continuing Investor Partnerships agreed to exchange, upon consummation of the IPO, interests in the Continuing Investors Partnerships represented by their ownership of 294,176 thousand RP Holdings Class B Interests into an aggregate of 294,176 thousand Class A ordinary shares of the Company. Upon completion of the exchange, Royalty Pharma plc indirectly owned 294,176 thousand RP Holdings Class B Interests. The remaining investors in the Continuing Investors Partnerships who did not elect to exchange into Class A ordinary shares held 241,207 thousand newly issued Class B ordinary shares of Royalty Pharma plc. As a result, the Continuing Investors Partnerships held a number of our Class B ordinary shares equal to the number of RP Holdings Class B Interests indirectly held by them at such time which are exchangeable on a one-for-one |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of preparation and use of estimates The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under U.S. GAAP. As such, the information included in this Quarterly Report on Form 10-Q 10-K. The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. The precise extent to which the COVID-19 COVID-19 Basis of consolidation The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling non-controlling Following management’s determination that a high degree of common ownership existed in Royalty Pharma both before and after the Exchange Date, Royalty Pharma recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. Prior to the Exchange Offer Transactions, our only historical non-controlling non-controlling Following the consummation of our IPO in June 2020, two new non-controlling non-controlling non-controlling non-controlling All intercompany transactions and balances have been eliminated in consolidation. Adjustment to prior period presentation In connection with the preparation of our condensed consolidated interim financial statements for the three months ended September 30, 2020, we identified an adjustment to the classification of our short-term investments on our consolidated balance sheet, as of December 31, 2019 based on the original maturity dates of the investments. The adjustment resulted in an increase of $88.8 million to Marketable securities Cash and cash equivalents Purchases of marketable securities Proceeds from sales and maturities of marketable securities Net cash used in investing activities Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. Concentrations of credit risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances as of March 31, 2021 and December 31, 2020 were held with State Street and Bank of America. Our primary operating accounts significantly exceed the FDIC limits. The majority of our financial royalty assets and receivables arise from contractual royalty agreements that entitle us to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The products in which we hold royalties are marketed by leading industry participants, including, among others, AbbVie, Amgen, Bristol-Myers Squibb, Gilead, Johnson & Johnson, Lilly, Merck, Pfizer, Novartis, Biogen, Roche/Genentech and Vertex. As of March 31, 2021 and December 31, 2020, Vertex was the marketer and payor making up the largest balance of our current portion of Financial royalty assets, net We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. Recently adopted and issued accounting standards Upon the January 1, 2020 adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 2016-13”), Retained earnings Significant Accounting Policies There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K | 2. Summary of Significant Accounting Policies Basis of preparation and use of estimates The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The precise extent to which the COVID-19 COVID-19 Basis of consolidation The consolidated financial statements include the accounts of Royalty Pharma plc and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling non-controlling Following management’s determination that a high degree of common ownership existed in RPI both before and after the Exchange Date, RPI recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. Prior to the Exchange Offer Transactions, our only historical non-controlling non-controlling Following the consummation of our IPO in June 2020, two new non-controlling non-controlling non-controlling non-controlling All intercompany transactions and balances have been eliminated in consolidation. Adjustment to prior period presentation In connection with the preparation of our condensed consolidated interim financial statements for the three months ended September 30, 2020, we identified an adjustment to the classification of our short-term investments on our consolidated balance sheets, as of December 31, 2019, based on the original maturity dates of the investments. The adjustment resulted in an increase of $37.5 million to Marketable securities Cash and cash equivalents Purchases of marketable securities Proceeds from sales and maturities of marketable securities Net cash used in investing activities Concentrations of credit risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances at December 31, 2020 and 2019 were held with State Street, Deutsche Bank and Bank of America. Our primary operating accounts significantly exceed the FDIC limits. The majority of our financial royalty assets and receivables arise from contractual royalty agreements that entitle us to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The products in which we hold royalties are marketed by leading industry participants, including, among others, Abbott, AbbVie, Amgen, Bristol-Myers Squibb, Celgene, Gilead, Johnson & Johnson, Lilly, Merck, Pfizer, Novartis, Biogen, Roche/ Genentech and Vertex. For the years ended December 31, 2020 and 2019, Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise products, accounted for 27% and 17% of our current portion of Financial royalty assets We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. Segment information Our chief operating decision maker is our Chief Executive Officer who reviews financial information presented on a consolidated basis to allocate resources, evaluates financial performance and makes overall operating decisions. As such, we concluded that we operate as one single reportable segment, which is primarily focused on acquiring biopharmaceutical royalties. Royalty assets An acquisition of a royalty asset provides the buyer with contractual rights to cash flows relating to royalties from the sales of patent-protected biopharmaceutical products. These acquisitions entitle us to receive a portion of income from the sale of patent-protected biopharmaceutical products by unrelated biopharmaceutical companies. For the majority of our royalties, our rights are protective in nature. In other words, we do not own the intellectual property and we do not have the right to commercialize the underlying products. These contractual cash flow rights have yield components that most closely resemble loans and are classified as financial royalty assets. In the limited instances where we possess rights to exploit the underlying patents, rights to the intellectual property related to the biopharmaceutical products, or the ability to influence the amount or duration of future royalty payments, these royalties are classified as intangible assets. Financial royalty assets, net Although a financial royalty asset does not have the contractual terms typical of a loan (such as contractual principal and interest), we analogize to the accounting guidance within Accounting Standards Codification 310 (“ASC”), Receivables, as it most closely aligns with the underlying economics of our financial royalty assets. Therefore, such financial royalty assets are classified similar to loans receivable and are measured at amortized cost using the prospective effective interest method described in ASC 835-30 Imputation of Interest The effective interest rate is calculated by forecasting the expected cash flows to be received over the life of the asset relative to the initial invested amount. The effective interest rate is reviewed and adjusted each reporting period as differences between expected cash flows and actual cash flows are realized and as there are changes to expected future cash flows. Income is calculated by multiplying the carrying value of the financial royalty asset by the effective interest rate. The carrying value of a financial royalty assets is made up of the opening balance, or net purchase price for a new financial royalty asset, which is increased by the interest income accrual and decreased by cash receipts in the period to arrive at the ending balance. If the ending balance is greater than the net present value of the expected future cash flows, a provision is recorded to reduce the asset balance to the net present value. The provision is recorded through the income statement as Provision for changes in expected future cash flows from financial royalty assets Financial royalty assets, net The application of the prospective approach to measure financial royalty assets requires management’s judgment in forecasting the expected future cash flows of the underlying royalties. The amounts and duration of forecasted expected future cash flows used to calculate and measure interest income are largely impacted by sell-side equity research analyst coverage, commercial performance of the product and royalty duration, each discussed in further detail below. • Analyst coverage. • Commercial performance. • Royalty duration. As part of the preparation of the forecasted expected future cash flows, which relies on the sources and variables discussed above, management is required to make assumptions around the following forecast inputs: (1) product growth rates and sales trends in outer years, (2) the geographical allocation of annual sales data from sell-side equity research analysts’ models, (3) the product and pricing mix for franchised products, (4) the strength of patent protection, including anticipated entry of generics and (5) estimates of the duration of the royalty. The most sensitive of these assumptions relates to management’s estimate of the royalty duration in the final years of an asset’s life. In some cases, patent protection may extend to a later period than the expiration date management has estimated. Management may apply a shorter royalty term in this situation if, based on its experience and expertise, management believes that it is more likely that the associated patents are subject to opposition or infringement, that the market for a particular product may shift based on pipeline approvals and products, or that product sales may be harmed by competition from generics. For products providing perpetual royalties, management applies judgment in establishing the duration over which it forecasts expected future cash flows. A shortened royalty term can result in a reduction in the effective interest rate, a decline in the carrying value of the financial royalty asset, a decline in income from financial royalty assets, significant reductions in royalty payments compared to expectations, or a permanent impairment. Additionally, royalty payments may occasionally continue beyond the estimated royalty expiration date for such reasons we cannot foresee such as excess inventory in the channel or additional scope of patent protection identified after expiry, including royalties we may become entitled to from new indications, new compounds, or for new regulatory jurisdictional approvals. The current portion of Financial royalty assets, net Cumulative allowance and Provision for changes in expected cash flows from financial royalty assets We evaluate financial royalty assets for impairment on an individual basis at each reporting date by comparing the effective interest rate to that of the prior period. If the current period effective interest rate is lower than the prior period, and if the gross cash flows have declined (expected and collected), management records a provision for the change in expected cash flows. The provision is measured as the difference between the financial royalty asset’s amortized cost basis and the net present value of the expected future cash flows, calculated based on the prior period’s effective interest rate. The amount recognized as provision expense increases the financial royalty asset’s cumulative allowance, which reduces the net carrying value of the financial royalty asset. In a subsequent period, if there is an increase in expected future cash flows, or if actual cash flows are greater than cash flows previously expected, we reduce the previously established cumulative allowance for the increase in the present value of cash flows expected to be collected, resulting in a non-cash Movements in the cumulative allowance for changes in expected future cash flows, which forms part of the Financial royalty assets, net written-off non-cash true-up Provision for changes in expected cash flows from financial royalty assets Income from financial royalty assets Income from financial royalty assets We recognize income from financial royalty assets when there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The accretable yield is recognized as income at the effective rate of return over the expected life of financial royalty assets. After acquisition, if we are not able to reliably estimate expected cash flows for a product or if we have not completed the required funding obligations payable over time for an approved product, a financial royalty asset is placed in non-accrual When royalties continue to be collected for financial royalty assets that have been fully amortized, such income is recognized as Other royalty income. Allowance for current expected credit losses On January 1, 2020, we adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments non-current Financial royalty assets, net Provision for changes in expected future cash flows from financial royalty assets Refer to Note 7-Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for further information. Intangible royalty assets, net Currently, our only intangible royalty assets are the Januvia and Janumet (“DPP-IV”) DPP-IV Management reviews the performance of intangible royalty assets periodically for impairment as required by ASC 360-10, Property, Plant, and Equipment—Overall DPP-IV Revenue from intangible royalty assets and Accrued royalty receivable We earn royalties on sales by our licensees of DPP-IV DPP-IV Critical estimates that could cause a change in estimated future cash flows include changes in product demand and market growth assumptions, a change in the pricing strategy of the marketer or reimbursement coverage, and changes in country-specific contractual or patent expiry dates. Actual royalty receipts may differ from estimates and any differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically on the basis of royalty receipts. Milestone payments Certain acquisition agreements provide for future contingent payments based on the financial performance of the related biopharmaceutical product generally over a multi-year period. For purposes of measuring income from financial royalty assets, milestones payable or receivable are reflected in the cash flows used to forecast expected future cash flows in the period in which the milestone criteria is projected to be satisfied based on sell-side equity research analysts’ consensus forecasts. Milestones based on regulatory approval are not reflected in the expected future cash flows until such approval is achieved. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful completion of the defined milestones. Payments under these agreements generally become due and payable upon achievement of certain commercial milestones, and when the contingency is resolved. Financial instruments Certain financial instruments reflected in the consolidated balance sheets, (e.g., cash and cash equivalents, certain other assets, accounts payable and certain other liabilities) are recorded at cost, which approximates fair value due to their short-term nature. The fair values of financial instruments other than Financial royalty assets, net Cash and cash equivalents and Marketable securities Cash and cash equivalents include cash held at banks and all highly liquid financial instruments with original maturities of 90 days or less. We invest excess cash in marketable debt securities that are classified as trading securities and reported at fair value. Equity securities and Available for sale debt securities Our equity securities are measured and recorded at fair value with unrealized gains and losses recorded in earnings. Our equity securities represent investments in publicly traded equity securities. Available for sale debt securities, including our investment in the Biohaven Series A Preferred Shares, are measured at fair value and unrealized gains and losses are included in accumulated other comprehensive income/(loss) (“AOCI”). Unrealized gains and losses are reclassified to earnings as interest income is recognized. Interest income is recognized when we can reliably estimate forecasted cash flows. A decline in the market value of any available for sale debt security below its cost that is deemed to have resulted from a credit loss results in a reduction in carrying amount to fair value and is recognized in earnings. The determination of whether a decline in fair value below the amortized cost basis for an available for sale debt security has resulted from a credit loss requires significant judgment and requires consolidation of available quantitative and qualitative evidence in evaluating the potential impairment. Factors evaluated to determine whether a decline in the fair value below the amortized cost basis has resulted from a credit loss include: the extent to which fair value is less than the amortized cost basis, adverse conditions related to the security, an industry, or geographic area, the payment structure of the security, failure of the issuer to make scheduled payments, any changes to the rating of the security by a rating agency, the remaining payment terms of the security, prepayment speeds, the financial condition of the issuer expected defaults, our intent not to sell, and an evaluation as to whether it is more likely than not that we will have to sell before recovery of the cost basis. Assumptions associated with these factors are subject to future market and economic conditions, which could differ from management’s assessment. We may elect to apply the fair value option for certain investments in debt securities where the fair value option better aligns with the economics of such investment. Upon such election, the entire investment is measured at fair value on a recurring basis, with movements in fair value recognized in earnings. Derivatives All derivatives are measured at fair value on the consolidated balance sheets with movements in fair value recognized in earnings. Prior to 2017, RPIFT applied hedge accounting to its interest rate swap agreements. Upon the discontinuation of hedge accounting, the AOCI previously recorded on the cash flow hedges was reversed out of other comprehensive income in line with terms of the associated swap contract until the termination of all of our interest rate swaps in February 2020. This reclassification adjustment is shown on the consolidated statements of comprehensive income as part of Unrealized gain/(loss) on derivative financial instruments Investment in non-consolidated Investments in entities that provide us with the ability to exercise significant influence, but not a controlling financial interest, and where we are not the primary beneficiary are accounted for under the equity method. Investments accounted for under the equity method are initially recorded at cost. Subsequently, we recognize through earnings our proportionate share of the investee’s net income or loss, net of any adjustment to reflect the amortization of basis differences. We generally record our share of the results of these entities one quarter in arrears within Equity in (earnings)/loss of non-consolidated Investments in non-consolidated We have variable interests in entities formed for the purposes of entering into co-development When we have committed to provide further support to the investee through capital call commitments and the investment has been reduced to zero, we provide for additional losses, resulting in a negative equity method investment, which is presented as a liability on the consolidated balance sheets. Research and development funding expense We enter into transactions where we agree to fund a portion of the research and development (“R&D”) for products undergoing late-stage clinical trials in exchange for future royalties if the products are successfully developed and commercialized. In accordance with ASC 730 Research and Development, we account for the funded amounts as R&D expense when we have the ability to obtain the results of the R&D, the transfer of financial risk is genuine and substantive and, at the time of entering into the transaction, it is not yet probable that the product will receive regulatory approval. Royalty payments owed to the Company on successfully commercialized products generated from R&D agreements are recognized as Other royalty income Other royalty income Income taxes We periodically assess if our activities, as conducted through our subsidiaries, and as currently contemplated, constitute being engaged in the conduct of a trade or business within the United States. Neither the U.S. Internal Revenue Code (“the Code”) nor the applicable Treasury regulations provide a general definition of what constitutes being engaged in the conduct of a trade or business within the United States, and the limited case law on the subject does not provide definitive guidance. Based on our periodic assessment, we believe that we are not engaged in the conduct of a trade or business within the United States, and as such, we do not record a provision for U. S. federal income tax for the years presented in the consolidated financial statements. While we believe we are not engaged in the conduct of a trade or business within the United States or subject to U.S. taxation in that regard, we are subject to U. S. federal withholding tax on certain fixed or determinable annual or periodical gains, profits and income, such as royalties from sources within the United States, unless reduced or eliminated under an applicable tax treaty or provision of the Code. Generally, this tax is imposed by withholding 30% of the payments, or deemed payments, that are subject to this tax. We believe our subsidiaries are eligible for benefits under the U.S.-Ireland income tax treaty, and, under that treaty, are not subject to any U.S. withholding taxes on U.S.-source royalty payments. Consequently, because we believe that we are not engaged in the conduct of a trade or business within the United States and our subsidiaries are eligible for benefits under the U.S.-Ireland tax treaty, we do not record a provision for income taxes. We operate so as to be treated solely as resident in the U.K. for tax purposes. As a U.K. tax resident company, we are subject to U.K. corporation tax on our worldwide taxable profits and gains. U.K. tax resident companies are subject to U.K. corporation tax on receipt of dividends or other income distributions in respect of shares held by them, unless those dividends or other distributions fall within an exempt class. We believe that dividends received by us from RP Holdings, and dividends received by RP Holdings from RPI, should fall within such an exempt class and therefore should not be subject to U.K. corporation tax. As such, we do not record a provision for U.K. income taxes with respect to the dividends received from RP Holdings or with respect to the dividends received by RP Holdings from RPI. We are also subject to the U.K.’s “controlled foreign companies” rules (the “U.K. CFC Rules”). The U.K. CFC Rules, broadly, can impose a charge to U.K. tax on U.K. tax resident companies that have, alone or together with certain other persons, interests in a non-U.K. non-U.K. Earnings per share Basic earnings per share (“EPS”) is computed by dividing net income attributable to us by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to us, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares and restricted share units (“RSUs”) issued under our 2020 Independent Director Equity Incentive Plan (“Equity Incentive Plan”). We use the “if-converted” There were no Class A ordinary shares or Class B ordinary shares outstanding prior to June 16, 2020; therefore, no earnings per share information has been presented for any period prior to that date. Recently adopted accounting standards In May 2014, the Financial Accounting Standard Board (“FASB”) issued a new revenue standard under ASC Topic 606 (ASU 2014-09). 2014-09 Receivables 2014-09. 2014-09 In January 2016, the FASB issued revised guidance for the accounting and reporting of financial instruments (ASU 2016-01) 2018-03). 2016-01 2018-03 In August 2016, the FASB issued revised guidance which makes eight targeted changes to how royalty receipts and cash payments are presented and classified in the Statement of Cash Flows (ASU 2016-15). “nature-of-the-distribution” 2016-15 In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the incurred-loss model with an expected-loss model (ASU 2016-13). available-for-sale 2016-13, Retained earnings In August 2018, the FASB issued a new accounting standard that eliminates, adds and modified certain disclosures requirements for fair value measurements under Topic 820 (ASU 2018-13). |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements and Financial Instruments | 3. Fair Value Measurements and Financial Instruments Fair value measurements The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our Level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our Level 2 assets generally include marketable securities, warrants, derivatives and, historically, our interest rate swap contracts. • Level 3: Prices or valuation that require inputs that are both significant to the fair value measurement and unobservable. Our Level 3 assets consist of our investments in the Series A Biohaven Preferred Shares, Series B Biohaven Preferred Shares and the Series B Forwards. See Note 5––Available for Sale Debt Securities for a description of our investments in the Series A Biohaven Preferred Shares, Series B Biohaven Preferred Shares and the Series B Forwards. For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. Fair value hierarchy The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of March 31, 2021 and December 31, 2020 (in thousands): As of March 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 201,439 $ — $ — $ 201,439 Certificates of deposit — 91,660 — 91,660 Marketable securities Commercial paper — 369,037 — 369,037 Certificates of deposit — 699,876 — 699,876 Available for sale debt securities — — 69,261 69,261 Total current assets $ 201,439 $ 1,160,573 $ 69,261 $ 1,431,273 Equity securities $ 244,503 $ — $ — $ 244,503 Available for sale debt securities — — 157,539 157,539 Forwards (1) — — 22,400 22,400 Warrants (2) — 2,884 — 2,884 Total non-current $ 244,503 $ 2,884 $ 179,939 $ 427,326 (1) The Series B Forwards, recorded within Available for sale debt securities (2) Related to the Epizyme transaction as described in Note 4––Derivative Instruments and recorded in the non-current Derivative financial instruments The net unrealized loss recognized on equity securities still held as of March 31, 2021 was a loss of $54.2 million and $119.6 million for the three months ended March 31, 2021 and 2020, respectively. As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 24,302 $ — $ — $ 24,302 Commercial paper — 77,176 — 77,176 Certificates of deposit — 74,502 — 74,502 Marketable securities Corporate debt securities — 32,754 — 32,754 Commercial paper — 444,554 — 444,554 Certificates of deposit — 505,971 — 505,971 Available for sale debt securities — — 69,984 69,984 Total current assets $ 24,302 $ 1,134,957 $ 69,984 $ 1,229,243 Equity securities (1) $ 298,689 $ — $ — $ 298,689 Available for sale debt securities — — 144,416 144,416 Forwards (2) — — 18,600 18,600 Warrants (3) — 5,439 — 5,439 Total non-current $ 298,689 $ 5,439 $ 163,016 $ 467,144 (1) Upon Gilead’s acquisition of Immunomedics, our investment in Immunomedics common stock was redeemed in full in the three months ended December 31, 2020, resulting in a gain of $292.3 million recognized within (Gain)/loss on equity securities (2) The Series B Forwards, recorded within Available for sale debt securities (3) Related to the Epizyme transaction as described in Note 4––Derivative Instruments and recorded in the non-current Derivative financial instruments The tables presented below summarize the change in the combined carrying value (current and non-current) For the three months ended 2021 2020 Series A Biohaven Preferred Shares Balance at the beginning of the period $ 214,400 $ 131,280 Unrealized gains on available for sale debt securities (1) 5,125 52,725 Transfer to Level 2 — (184,005 ) Redemption (15,625 ) — Balance at the end of the period $ 203,900 $ — For the three months ended 2021 2020 Series B Biohaven Preferred Shares Balance at the beginning of the period $ — $ — Purchases 17,585 — Settlement of forwards (2) 5,315 — Balance at the end of the period $ 22,900 $ — For the three months ended 2021 2020 Series B Forwards Balance at the beginning of the period $ 18,600 $ — Unrealized gains included in earnings (3) 9,115 — Settlement of forwards (2) (5,315 ) — Balance at the end of the period $ 22,400 $ — (1) Recorded in other comprehensive income within Unrealized gain on available for sale debt securities (2) Reflects the fair value attributed to the Series B Forwards that were settled in the period, which is included in the fair value of the Series B Biohaven Preferred Shares. See Note 5––Available for Sale Debt Securities. (3) Recorded in earnings within Unrealized gain on available for sale debt securities Valuation inputs Below is a discussion of the valuation inputs used for financial instruments classified as Level 2 and Level 3 measurements in the fair value hierarchy. Investment in Series A Biohaven Preferred Shares The fair value of the Series A Biohaven Preferred Shares as of March 31, 2021 and December 31, 2020 was based on the cash flows due to us from Biohaven Pharmaceutical Holding Company Ltd. (“Biohaven”) of two times (2x) the original purchase price of the Series A Biohaven Preferred Shares payable in equal quarterly installments of $15.6 million following U.S. Food and Drug Administration (“FDA”) approval and starting one-year The fair value of the Series A Biohaven Preferred Shares as of March 31, 2021 and December 31, 2020 was calculated using probability-adjusted discounted cash flow calculations incorporating Level 3 fair value measurements and inputs, including estimated risk-adjusted discount rates and the probability of a change of control event occurring during the investment term, which would result in accelerated payments and redemptions. Assessing the probability that there will be a change of control event over a four-year time period and developing a risk-adjusted discount rate requires significant judgement. Our estimate of a risk adjusted discount rate of 7.9% as of March 31, 2021 and 8.3% as of December 31, 2020 could reasonably be different than the discount rate selected by a market participant in the event of a sale of the Series A Biohaven Preferred Shares, which would mean that the estimated fair value could be significantly higher or lower. As of March 31, 2021 and December 31, 2020, we estimated a fair value for the Series A Biohaven Preferred Shares of $203.9 million and $214.4 million, respectively, which we classified as Available for sale debt securities Unrealized gain on available for sale debt securities Our investment in the Series A Biohaven Preferred Shares was transferred from a Level 3 asset to a Level 2 asset in February 2020, when Nurtec ODT (rimegepant) received FDA approval, at which time we began using a discounted cash flow analysis that relied on observable inputs. During the three months ended December 31, 2020, information pertaining to Biohaven’s issuance of debt and its effective interest rate became available and we refined our valuation of the Series A Biohaven Preferred shares as of December 31, 2020 to incorporate this significant unobservable input. As a result, we reclassified the investment from a Level 2 to a Level 3 asset during the three months ended December 31, 2020. Investment in Series B Biohaven Preferred Shares We have committed to acquiring 3,992 shares of Series B Biohaven Preferred Shares at a price of $50,100 per preferred share for a total of $200.0 million payable on a quarterly basis between March 31, 2021 and December 31, 2024 (“Series B Forwards”). As of March 31, 2021, we have acquired 351 shares of Series B Biohaven Preferred Shares. In return, Biohaven will be required to redeem the Series B Biohaven Preferred Shares in a series of equal fixed quarterly payments equal to approximately 1.8 times the original issue price per share between March 31, 2025 and December 31, 2030. For additional discussion of our investment in the Series B Biohaven Preferred Shares, see Note 5–Available for Sale Debt Securities. The fair value of the Series B Biohaven Preferred Shares as of March 31, 2021 and the fair value of the Series B Forwards as of March 31, 2021 and December 31, 2020 were based on probability-adjusted discounted cash flow calculations using Level 3 fair value measurements and inputs, including estimated risk-adjusted discount rates and the probability that there will be a change of control event in different periods of time, which would result in accelerated payments and redemptions. Assessing the probability that there will be a change of control event over a 10-year Available for sale debt securities The unrealized movement in fair value of the Series B Preferred Shares and Series B Forwards is recorded in earnings within Unrealized gain on available for sale debt securities Other financial instruments We use a third party pricing service for Level 2 inputs used to value cash equivalents, marketable securities and borrowings, which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. Warrants are valued using a Black-Scholes option pricing model which considers observable and unobservable inputs. Financial assets not measured at fair value Financial royalty assets are measured and carried on the condensed consolidated balance sheets at amortized cost using the effective interest method. The current portion of financial royalty assets approximates fair value. The fair value of financial royalty assets is calculated by management using the forecasted royalty payments we expect to receive based on the projected product sales for all royalty bearing products as estimated by sell-side equity research analysts’ consensus forecasts. These projected future royalty payments by asset are then discounted to a present value using appropriate individual discount rates. The fair value of our financial royalty assets is classified as Level 3 within the fair value hierarchy since it is determined based upon inputs that are both significant and unobservable. Estimated fair values based on Level 3 inputs and related carrying values for the non-current March 31, 2021 December 31, 2020 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 18,464,028 $ 12,599,080 $ 18,718,179 $ 12,368,084 | 3. Fair Value Measurements and Financial Instruments Fair value measurements The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 and 2019, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our Level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our Level 2 assets generally include marketable securities, warrants, derivatives and our interest rate swap contracts, which may be in an asset or liability position. • Level 3: Prices or valuation that requires inputs that are both significant to the fair value measurement and unobservable. Our Level 3 assets consist of our investments in the Series A Biohaven Preferred Shares and the Series B Forwards and, historically, our investment in Tecfidera. See Note 5--Available For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. Fair value hierarchy The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of December 31, 2020 and 2019 (in thousands): As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 24,302 $ — $ — $ 24,302 Commercial paper — 77,176 — 77,176 Certificates of deposit — 74,502 — 74,502 Marketable securities Corporate debt securities — 32,754 — 32,754 Commercial paper — 444,554 — 444,554 Certificates of deposit — 505,971 — 505,971 Available for sale debt securities — — 69,984 69,984 Total current assets $ 24,302 $ 1,134,957 $ 69,984 $ 1,229,243 Equity securities (1) 298,689 — — 298,689 Available for sale debt securities — — 144,416 144,416 Forwards (2) — — 18,600 18,600 Warrants (3) — 5,439 — 5,439 Total non-current $ 298,689 $ 5,439 $ 163,016 $ 467,144 (1) Upon Gilead’s acquisition of Immunomedics, our investment in Immunomedics common stock was redeemed in full in the fourth quarter of 2020, resulting in a gain of $292.3 million recognized within (Gain)/loss on equity securities (2) The Series B Forwards, recorded within Other assets (3) Related to Epizyme transaction as described in Note 4-Derivative non-current Derivative financial instruments The net unrealized gain or loss recognized on equity securities still held as of December 31, 2020 was a loss of $45.2 million, a gain of $125.6 million and a loss of $7.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 222,326 $ — $ — $ 222,326 Certificates of deposit — 4,000 — 4,000 Marketable securities U.S. government securities — 12,877 — 12,877 Commercial paper — 21,367 — 21,367 Certificates of deposit — 60,211 — 60,211 Total current assets $ 222,326 $ 98,455 $ — $ 320,781 Equity securities 380,756 — — 380,756 Available for sale debt securities — — 131,280 131,280 Warrants (1) — 30,815 — 30,815 Forward purchase contract (1) — 11,500 — 11,500 Total non-current $ 380,756 $ 42,315 $ 131,280 $ 554,351 Liabilities: Interest rate swaps — (9,215 ) — (9,215 ) Total current liabilities $ — $ (9,215 ) $ — $ (9,215 ) Interest rate swaps — (18,902 ) — (18,902 ) Total non-current $ — $ (18,902 ) $ — $ (18,902 ) (1) Related to Epizyme warrants and put option as described in Note 4-Derivative non-current Derivative financial instruments The tables presented below summarize the change in the carrying value of Level 3 financial instruments, which relate to our investment in the Series A Biohaven Preferred Shares and the Series B Forwards (in thousands). For the years ended December 31, 2020 2019 Available for sale debt securities Balance at the beginning of the period $ 131,280 $ — Purchases — 125,121 Unrealized gains on available for sale debt securities 52,725 — Transfer to Level 2 (184,005 ) — Transfer from Level 2 (1) 198,526 — Unrealized gains on available for sale debt securities 15,874 6,159 Balance at the end of the period $ 214,400 $ 131,280 (1) Includes $14.5 million of unrealized gains on available for sale debt securities included in other comprehensive income while the instrument was classified as a Level 2 asset. For the year ended 2020 Forwards Balance at the beginning of the period $ — Unrealized gains included in earnings (1) 18,600 Balance at the end of the period $ 18,600 (1) Recorded within Unrealized gain on forwards Valuation inputs Below is a discussion of the valuation inputs used for financial instruments classified as Level 2 and Level 3 measurements in the fair value hierarchy. Investment in Series A Biohaven Preferred Shares The fair value of the Series A Biohaven Preferred Shares at December 31, 2020 is based on the cash flows due to us from Biohaven Pharmaceutical Holding Company Ltd. (“Biohaven”) of two times (2x) the original purchase price of the Series A Biohaven Preferred Shares payable in equal quarterly installments of $15.6 million following U.S. Food and Drug Administration (“FDA”) approval and starting one-year 5--Available The fair value of the Series A Biohaven Preferred Shares at December 31, 2020 was calculated using probability-adjusted discounted cash flow calculations incorporating Level 3 fair value measurements and inputs, including estimated risk-adjusted discount rates and the probability of a change of control event occurring during the investment term, which would result in accelerated payments and redemptions. Assessing the probability that there will be a change of control event over a four-year time period and developing a risk-adjusted discount rate requires significant judgement. Our estimate of a risk adjusted discount rate of 8.3% could reasonably be different than the discount rate selected by a market participant in the event of a sale of the Series A Biohaven Preferred Shares, which would mean that the estimated fair value could be significantly higher or lower. At December 31, 2020 we estimated the fair value for the Series A Biohaven Preferred Shares as $214.4 million, which we classified as available for sale debt securities. For periods prior to March 31, 2020, we valued the Series A Biohaven Preferred Shares using a Black-Derman Toy (“BDT”) lattice model. The fair value of the Series A Biohaven Preferred Shares at December 31, 2019 was determined based on significant inputs that were not observable in the market, referred to as Level 3 inputs. Key inputs to the BDT model for the December 31, 2019 valuation included, most notably, the probability (1) of Biohaven’s pipeline product, Nurtec ODT (rimegepant), being approved by the FDA by specific dates, (2) of a change of control event by specific dates and (3) that Biohaven will elect to redeem the Series A Biohaven Preferred Shares for a lump sum payment as opposed to payback over time. Probabilities for the above considerations were developed by management, which has significant healthcare and finance expertise to make such assessments. The most critical assumption that impacted the valuation of our Series A Biohaven Preferred Shares at December 31, 2019 was the probability that Nurtec ODT (rimegepant) would be approved by the FDA. Assumptions used in the valuation model as of December 31, 2019 included the following significant unobservable inputs: • Change of Control probability on a quarterly basis (0%) • Likelihood of FDA approval (0%-86%) • Likelihood of FDA approval at the end of any given quarter by December 31, 2024 (Range: 0%-59%). Our investment in the Series A Biohaven Preferred Shares was transferred from a Level 3 asset to a Level 2 asset in February 2020, when Nurtec ODT (rimegepant) received FDA approval, at which time we began using a discounted cash flow analysis that relied on observable inputs. During the three months ended December 31, 2020, we became aware of Biohaven’s issuance of debt and its effective interest rate and refined our valuation of the Series A Biohaven Preferred shares as of December 31, 2020 to incorporate this significant unobservable input. As a result, we reclassified the investment from a Level 2 to a Level 3 asset during the three months ended December 31, 2020. Investment in Series B Biohaven Preferred Shares We have committed to acquiring 3,992 shares of Series B Biohaven Preferred Shares at a price of $50,100 per preferred share for a total of $200.0 million payable on a quarterly basis between March 31, 2021 and December 31, 2024 (“Series B Forwards”). In return, Biohaven will be required to redeem the Series B Biohaven Preferred Shares in a series of equal fixed quarterly payments equal to approximately 1.8 times the original issue price per share between March 31, 2025 and December 31, 2030. For additional discussion of our investment in the Series B Biohaven Preferred Shares, see Note 5-Available The fair value of the Series B Forwards as of December 31, 2020 is based on probability-adjusted discounted cash flow calculations using Level 3 fair value measurements and inputs, including estimated risk-adjusted discount rates and the probability that there will be a change of control event in different periods of time, which would result in accelerated payments and redemptions. Assessing the probability that there will be a change of control event over a 10-year Other assets Unrealized gain on forwards Other financial instruments We use a third party pricing service for Level 2 inputs used to value cash equivalents, marketable securities and borrowings, which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. Warrants are valued using a Black-Scholes option pricing model which considers observable and unobservable inputs. Level 2 interest rate swaps are typically valued using counterparty confirmations, LIBOR yield curves and credit valuation adjustments. Financial assets not measured at fair value Financial royalty assets are measured and carried on the consolidated balance sheets at amortized cost using the effective interest method. The current portion of financial royalty assets approximates fair value. The fair value of financial royalty assets is calculated by management using the forecasted royalty payments we expect to receive based on the projected product sales for all royalty bearing products as estimated by sell-side equity research analysts’ consensus forecasts. These projected future royalty payments by asset are then discounted to a present value using appropriate individual discount rates. The fair value of our financial royalty assets is classified as Level 3 within the fair value hierarchy since it is determined based upon inputs that are both significant and unobservable. Estimated fair values based on Level 3 inputs and related carrying values for the non-current December 31, 2020 December 31, 2019 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 18,718,179 $ 12,368,084 $ 16,501,819 $ 10,842,052 |
Derivative Instruments
Derivative Instruments | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Instruments | 4. Derivative Instruments We have historically managed the impact of foreign currency exchange rate and interest rate risk through various financial instruments, including derivative instruments such as interest rate swap contracts and foreign currency forward contracts. Our policy is to use derivatives strategically to hedge existing interest rate exposure and to minimize volatility in cash flow arising from our exposure to interest rate risk and foreign currency risk. We may also acquire other financial instruments that are classified as derivatives. We do not enter into derivative instruments for trading or speculative purposes. Interest rate swaps As of March 31, 2021, we do not hold any interest rate swap contracts. In connection with the Exchange Offer Transactions described in Note 1–Organization and Purpose, RPIFT terminated all outstanding interest rate swaps in February 2020. We paid $35.4 million in the three months ended March 31, 2020 to terminate our swaps and reclaimed $45.3 million of collateral that was held by the respective counterparties. We did not apply hedge accounting and recognized all movement in fair value through earnings. During the three months ended March 31, 2020, we recorded unrealized losses of $10.9 million on interest rate swaps in the condensed consolidated statements of comprehensive income. Epizyme put option and warrant In November 2019, RPIFT made an equity investment in Epizyme Inc. (“Epizyme”) of $100.0 million. Under the terms of its agreement with Epizyme, RPIFT made an upfront payment of $100.0 million for (1) shares of Epizyme common stock, (2) a warrant to purchase an additional 2.5 million shares of Epizyme common stock at $20 per share over a three-year term, and (3) Epizyme’s royalty on sales of Tazemetostat in Japan payable by Eisai Co., Ltd (“Eisai”). In addition, Epizyme had an 18 month put option to sell an additional $50.0 million of its common stock to RPIFT at then prevailing prices, not to exceed $20 per share, which Epizyme exercised in February 2020. The warrant was recognized at fair value of $2.9 million and $5.4 million within the non-current Derivative financial instruments Biohaven written put option We determined there was a derivative associated with the Second Tranche (as defined below) of the Series A Biohaven Preferred Shares Agreement that was entered into in April 2019. The derivative related to Biohaven’s option, exercisable within 12 months from when the NDA for Nurtec ODT (rimegepant) was accepted by the FDA for Priority Review, to require Royalty Pharma to purchase up to an additional $75.0 million of Series A Biohaven Preferred Shares (the “Second Tranche”) at the same price and on the same terms as the First Tranche, in one or more transactions of no less than $25.0 million. The Biohaven written put option was not exercised and expired in the year ended December 31, 2020. See Note 5–Available for Sale Debt Securities for a description of our investment in the Series A Biohaven Preferred Shares. Summary of derivatives and reclassifications The table below summarizes the change in fair value of derivatives for the three months ended March 31, 2021 and 2020 and the line items within the condensed consolidated statements of comprehensive income where the (gains)/losses on derivatives are recorded (in thousands). For the three months ended March 31, Condensed Consolidated Statement of 2021 2020 Derivatives in hedging relationships (1) Interest Rate Swaps: Amount of loss reclassified from Accumulated Other Comprehensive Income into income $ — $ 4,066 Unrealized loss on derivative financial instruments Change in fair value of interest rate swaps — (73 ) Unrealized loss on derivative financial instruments Interest expense — 114 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps — 6,908 Unrealized loss on derivative financial instruments Interest expense — 408 Interest expense Warrant: Change in fair value of 2,555 16,744 Unrealized loss on derivative financial instruments Forward purchase contract: Change in fair value of forward purchase contract — 5,800 Unrealized loss on derivative financial instruments (1) Certain older interest rate swaps were previously designated as cash flow hedges. These swaps became ineffective as debt refinancings occurred between 2013 and 2016. As a result of the termination of interest rate swaps in February 2020, all amounts associated with interest rate swaps previously designated as cash flow hedges and recorded in Accumulated Other Comprehensive Income have been released into earnings. | 4. Derivative Instruments We have historically managed the impact of foreign currency exchange rate and interest rate risk through various financial instruments, including derivative instruments such as interest rate swap contracts and foreign currency forward contracts. Our policy is to use derivatives strategically to hedge existing interest rate exposure and to minimize volatility in cash flow arising from our exposure to interest rate risk and foreign currency risk. We may also acquire other financial instruments that are classified as derivatives. We do not enter into derivative instruments for trading or speculative purposes. Interest rate swaps As of December 31, 2020, we do not hold any interest rate swap contracts. In connection with the Exchange Offer Transactions described in Note 1-Organization As of December 31, 2019, RPIFT held interest rate swap contracts to effectively convert a portion of its floating-rate debt to a fixed basis. The notional values and fixed rates payable on the swap contracts are shown in the table below. Notional Value Fixed Rate Maturity Date (in millions) $600 2.019% November 9, 2020 $250 2.094% March 27, 2023 $500 2.029% March 27, 2023 $250 2.113% March 27, 2023 $500 2.129% March 27, 2023 We do not apply hedge accounting and recognize all movement in fair value through earnings. All outstanding interest rate swaps were terminated in February 2020. During the years ended December 31, 2020 and 2019, we recorded unrealized losses of $10.9 million and $72.6 million, respectively, on interest rate swaps in the consolidated statements of comprehensive income. During the year ended December 31, 2018, we recorded unrealized gains of $11.9 million on interest rate swaps in the consolidated statements of comprehensive income. As of December 31, 2019, the fair value of the swaps was a net liability of $28.1 million (a current liability of $9.2 million and a non-current Derivative financial instruments RPIFT had master International Swaps and Derivatives Association (“ISDA”) agreements in place with its derivative instrument counterparties which provide for final close out netting with counterparties for all positions in the case of default or termination of the ISDA agreement. Under these agreements, RPIFT has set-off RPIFT generally had executed a Credit Support Annex (“CSA”) under the ISDA it maintains with each of its over-the-counter “out-of-the-money” Only the swaps maturing in 2023 had collateral requirements. At December 31, 2019, RPIFT had a receivable of $45.6 million in cash collateral previously posted to trade counterparties, which was recorded in Other assets Epizyme put option and warrant In November 2019, RPIFT made an equity investment in Epizyme Inc. (“Epizyme”) of $100.0 million. Under the terms of its agreement with Epizyme, RPIFT made an upfront payment of $100.0 million for (1) shares of Epizyme common stock, (2) a warrant to purchase an additional 2.5 million shares of Epizyme common stock at $20 per share over a three-year term and (3) Epizyme’s royalty on sales of Tazemetostat in Japan payable by Eisai Co., Ltd (“Eisai”). In addition, Epizyme had an 18 month put option to sell an additional $50.0 million of its common stock to RPIFT at then prevailing prices, not to exceed $20 per share. On December 31, 2019, Epizyme notified RPIFT of its intention to exercise the put option. As a result, we recorded a forward purchase contract equal to the difference between the market value and exercise price of $11.5 million in the non-current Derivative financial instruments The warrant was recognized at fair value of $5.4 million and $30.8 million within the non-current Derivative financial instruments Biohaven written put option We determined there was a derivative associated with the Second Tranche (as defined below) of the Series A Biohaven Preferred Shares Agreement that was entered into in April 2019. The derivative related to Biohaven’s option, exercisable within 12 months from when the NDA for Nurtec ODT (rimegepant) was accepted by the FDA for Priority Review, to require Royalty Pharma to purchase up to an additional $75.0 million of Series A Biohaven Preferred Shares (the “Second Tranche”) at the same price and on the same terms as the First Tranche, in one or more transactions of no less than $25.0 million. As of December 31, 2019, management determined that the value of the Second Tranche written put option was immaterial, and therefore no derivative liability was recognized on the consolidated balance sheets. The exercise period for the Biohaven written put option expired in the year ended December 31, 2020, and therefore there was no value or movement in fair value associated with the Biohaven written put option as of or for the year ended December 31, 2020. See Note 5-Available for Sale Debt Securities for a description of our investment in the Series A Biohaven Preferred Shares. Summary of derivatives and reclassifications The tables below summarize the change in fair value of the derivatives for the years ended December 31, 2020, 2019 and 2018 and the line items within the consolidated statements of comprehensive income where the gains/(losses) on these derivatives are recorded (in thousands). For the years ended December 31, Consolidated Statement of 2020 2019 2018 Derivatives in hedging relationships (1) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ 4,066 $ 6,189 $ 8,003 Unrealized loss/(gain) Change in fair value of interest rate swaps (73 ) 16,954 (3,357 ) Unrealized loss/(gain) Interest expense/(income) 114 (9,565 ) (9,758 ) Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps 6,908 49,472 (16,569 ) Unrealized loss/(gain) Interest expense/(income) 408 (2,681 ) (440 ) Interest expense Warrant: Change in fair value of warrant 25,375 (21,977 ) — Unrealized loss/(gain) Forward purchase contract: Change in fair value of forward purchase contract 5,800 (11,500 ) — Unrealized loss/(gain) (1) Certain older interest rate swaps were previously designated as cash flow hedges. These swaps became ineffective as debt refinancings occurred between 2013 and 2016. As a result of the termination of interest rate swaps in February 2020, all amounts associated with interest rate swaps previously designated as cash flow hedges and recorded in AOCI have been released into earnings. |
Available for Sale Debt Securit
Available for Sale Debt Securities | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Available for Sale Debt Securities | 5. Available for Sale Debt Securities Series A Biohaven Preferred Shares On April 5, 2019, RPIFT funded the purchase of 2,495 Series A Biohaven Preferred Shares from Biohaven at a price of $50,100.00 per preferred share, for a total of $125.0 million. The approval of Nurtec ODT (rimegepant) by the FDA in February 2020 results in a payment due to us of two times the original purchase price of the Series A Biohaven Preferred Shares payable in equal quarterly installments beginning on March 31, 2021 through December 31, 2024. In the three months ended March 31, 2021, we received our first payment from the quarterly redemption of the Series A Biohaven Preferred Shares. If Biohaven effects any change of control event, then we will have the option to cause Biohaven to redeem any outstanding Series A Biohaven Preferred Shares at a price equal to two times the original purchase price of the Series A Biohaven Preferred Shares. Biohaven may redeem at their election, any outstanding Series A Biohaven Preferred Shares at a price equal to two times the original purchase price. In the event that Biohaven defaults on any obligation to redeem Series A Biohaven Preferred Shares when required, the redemption amount shall accrue interest at the rate of 18% annually until the redemption price for such unredeemed Series A Biohaven Preferred Shares is paid in full, subject to applicable law. If any such default continues for at least one year, we will be entitled to convert all unredeemed Series A Biohaven Preferred Shares into common shares equal to the redemption price, plus accrued interest, divided by the five-day Series B Biohaven Preferred Shares On August 7, 2020 we entered into a Series B Biohaven Preferred Share Purchase Agreement (“Series B Biohaven Preferred Share Agreement”) with Biohaven to purchase up to 3,992 shares of Series B Biohaven Preferred Shares at a price of $50,100 per preferred share (the “Commercial Launch Preferred Equity”), for a total of $200 million payable on a quarterly basis between March 31, 2021 and December 31, 2024. Our commitment to purchase the Series B Biohaven Preferred Shares is recognized as the Series B Forwards, as discussed in Note 3––Fair Value Measurements and Financial Instruments. In return, Biohaven will be required to redeem the Series B Biohaven Preferred Shares in a series of equal fixed quarterly payments between March 31, 2025 and December 31, 2030 at a price equal to approximately 1.8 times the original purchase price of the Series B Biohaven Preferred Shares. If Biohaven effects any change of control event, then we will have the option to cause Biohaven to issue to us all unissued Series B Preferred Shares and to redeem any outstanding Series B Biohaven Preferred Shares at a price equal to approximately 1.8 times the Series B original issue price per share. Biohaven may redeem at their election, any outstanding Series B Biohaven Preferred Shares at a price equal to approximately 1.8 times the Series B original issue price. In the event that Biohaven defaults on any obligation to redeem Series B Biohaven Preferred Shares, the redemption amount shall accrue interest on the applicable original issue price at the rate of 18% annually until the redemption price for such unredeemed Series B Biohaven Preferred Shares is paid in full, subject to applicable law. If any such default continues for at least one year, we will be entitled to convert any or all unredeemed Series B Biohaven Preferred Shares into common shares equal to the redemption price, plus accrued interest, divided by the five-day In the three months ended March 31, 2021, we began purchasing the Series B Biohaven Preferred Shares which are classified as Available for sale debt securities Available for sale debt securities The table below summarizes our available for sale debt securities recorded at fair value as of March 31, 2021 and December 31, 2020 (in thousands): Cost Unrealized gains Fair Value (1) As of March 31, 2021 Series A Biohaven Preferred Shares $ 125,121 $ 78,779 $ 203,900 Series B Biohaven Preferred Shares 17,585 5,315 22,900 Series B Forwards — 22,400 22,400 Total available for sale debt securities $ 142,706 $ 106,494 $ 249,200 As of December 31, 2020 Series A Biohaven Preferred Shares $ 125,121 $ 89,279 $ 214,400 Series B Forwards — 18,600 18,600 Total available for sale debt securities $ 125,121 $ 107,879 $ 233,000 (1) As of March 31, 2021, $69.3 million and $134.6 million related to Series A Biohaven Preferred Shares are recorded in the current and non-current Available for sale debt securities non-current Available for sale debt securities non-current Available for sale debt securities | 5. Available for Sale Debt Securities A summary of our available for sale debt securities recorded at fair value is shown below as of December 31, 2020 and December 31, 2019 (in thousands): Cost Unrealized Fair Value (1) As of December 31, 2020 Series A Biohaven Preferred Shares $ 125,121 $ 89,279 $ 214,400 Total available for sale debt securities $ 125,121 $ 89,279 $ 214,400 As of December 31, 2019 Series A Biohaven Preferred Shares $ 125,121 $ 6,159 $ 131,280 Total available for sale debt securities $ 125,121 $ 6,159 $ 131,280 (1) As of December 31, 2020, $70.0 million and $144.4 million are recorded as the current and non-current Available for sale debt securities non-current Series A Biohaven Preferred Shares On April 5, 2019, RPIFT funded the purchase of 2,495 Series A Biohaven Preferred Shares from Biohaven at a price of $50,100.00 per preferred share, for a total of $125.0 million. The approval of Nurtec ODT (rimegepant) by the FDA in February 2020 results in a payment due to us of two times the original purchase price of the Series A Biohaven Preferred Shares payable in equal quarterly installments beginning on March 31, 2021 through December 31, 2024. If Biohaven effects any change of control event, then we will have the option to cause Biohaven to redeem any outstanding Series A Biohaven Preferred Shares at a price equal to two times the original purchase price of the Series A Biohaven Preferred Shares. Biohaven may redeem at their election, any outstanding Series A Biohaven Preferred Shares at a price equal to two times the original purchase price. In the event that Biohaven defaults on any obligation to redeem Series A Biohaven Preferred Shares when required, the redemption amount shall accrue interest at the rate of 18% annually until the redemption price for such unredeemed Series A Biohaven Preferred Shares is paid in full, subject to applicable law. If any such default continues for at least one year, we will be entitled to convert all unredeemed Series A Biohaven Preferred Shares into common shares equal to the redemption price, plus accrued interest, divided by the five-day Series B Biohaven Preferred Shares On August 7, 2020 we entered into a Series B Biohaven Preferred Share Purchase Agreement (“Series B Biohaven Preferred Share Agreement”) with Biohaven to purchase up to 3,992 shares of Series B Biohaven Preferred Shares at a price of $50,100 per preferred share (the “Commercial Launch Preferred Equity”), for a total of $200.0 million payable on a quarterly basis between March 31, 2021 and December 31, 2024. Our commitment to purchase the Series B Biohaven Preferred Shares is recognized as the Series B Forwards, as discussed in Note 3--Fair five-day Upon the acquisition of the Series B Biohaven Preferred Shares, beginning on March 31, 2021, we will classify the Series B Biohaven Preferred Shares as available for sale debt securities. We have elected the fair value option to account for our Series B Forwards and will elect the fair value option for the Series B Biohaven Preferred Shares, when acquired. We believe the fair value option most accurately reflects the nature of the Series B Forwards and the associated Series B Biohaven Preferred Shares. Tecfidera In 2012 and 2013, RPIFT acquired interests in the earn-out earn-out earn-out This investment was structured in the form of multiple potential milestone payments, of which all were earned as of December 31, 2018. The allocated cost of each milestone was derived using a third-party analysis based on projected sales over time, the future competitive landscape, the strength of the patents underlying the product and the prevailing interest rate environment. The $600.0 million milestone payments that RPIFT was entitled to receive based on sales during the year ended December 31, 2018 were recorded as a $419.5 million realized gain in the consolidated statements of comprehensive income and a $180.5 million reduction of the investment in Tecfidera recorded as available for sale securities at the balance sheet date. As of December 31, 2020 and 2019, we had no available for sale debt securities related to our investment in Tecfidera. |
Financial Royalty Assets, Net
Financial Royalty Assets, Net | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Financial Royalty Assets, Net | 6. Financial Royalty Assets, Net Financial royalty assets, net The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current March 31, 2021 Estimated royalty Gross carrying value Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,292,904 $ (53,092 ) $ 5,239,812 Tysabri (c) 1,967,974 (114,354 ) 1,853,620 Imbruvica 2027-2029 1,416,270 (110,285 ) 1,305,985 Xtandi 2027-2028 1,136,270 (188,417 ) 947,853 Evrysdi 2030-2035 (d) 688,189 — 688,189 Promacta 2025-2028 658,287 — 658,287 Other 2020-2039 3,517,660 (730,280 ) 2,787,380 Total $ 14,677,554 $ (1,196,428 ) $ 13,481,126 Less: Cumulative allowance for credit losses (Note 7) (359,658 ) Total financial royalty assets, net $ 13,121,468 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on our estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) 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. e) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7—Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. December 31, 2020 Estimated royalty Gross carrying value Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,274,896 $ — $ 5,274,896 Tysabri (c) 2,003,797 (112,720 ) 1,891,077 Imbruvica 2027-2029 1,406,291 (46,872 ) 1,359,419 Xtandi 2027-2028 1,150,335 (145,565 ) 1,004,770 Promacta 2025-2027 686,129 — 686,129 Evrysdi 2030-2035 (d) 675,440 — 675,440 Other 2020-2039 3,022,213 (634,950 ) 2,387,263 Total $ 14,219,101 $ (940,107 ) $ 13,278,994 Less: Cumulative allowance for credit losses (Note 7) (323,717 ) Total financial royalty assets, net $ 12,955,277 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on our estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed by the management. d) 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. e) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7—Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. | 6. Financial Royalty Assets, Net Financial royalty assets consist of contractual rights to cash flows relating to royalty payments derived from the expected sales of patent-protected biopharmaceutical products that entitle us and our subsidiaries to receive a portion of income from the sale of those products by unrelated companies. The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current December 31, 2020 Estimated royalty Gross carrying Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,274,896 $ — $ 5,274,896 Tysabri (c) 2,003,797 (112,720 ) 1,891,077 Imbruvica 2027—2029 1,406,291 (46,872 ) 1,359,419 Xtandi 2027—2028 1,150,335 (145,565 ) 1,004,770 Promacta 2025—2027 686,129 — 686,129 Evrysdi 2030—2035 (e) 675,440 — 675,440 Other 2020—2039 3,022,213 (634,950 ) 2,387,263 Total $ 14,219,101 $ (940,107 ) $ 13,278,994 Less: Cumulative allowance for credit losses (323,717 ) Total financial royalty assets, net $ 12,955,277 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on patent expiration dates (which may include patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7-Cumulative e) 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. December 31, 2019 Estimated royalty Gross carrying Cumulative Net carrying value Cystic fibrosis franchise (d) 2037 (b) $ 4,639,045 $ — $ 4,639,045 Tysabri (c) 2,131,272 (71,789 ) 2,059,483 Imbruvica 2027—2029 1,332,077 — 1,332,077 Xtandi 2027—2028 1,193,918 (332,624 ) 861,294 Promacta 2025—2027 776,555 — 776,555 Crysvita 2033—2038 (e) 321,234 — 321,234 Other 2019—2039 1,768,929 (464,005 ) 1,304,924 Total $ 12,163,030 $ (868,418 ) $ 11,294,612 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on patent expiration dates (which may include patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) The Vertex triple combination therapy, Trikafta, was approved by the FDA in October 2019. Sell-side equity research analysts’ consensus forecasts increased due to expected sales of the newly approved cystic fibrosis franchise product and resulted in a reversal of the entire cumulative allowance for changes in expected cash flows in the fourth quarter of 2019 related to this financial royalty asset. e) As of December 31, 2019, the timing of when we expected to reach the royalty cap of 2.5 times our purchase price was 2032. Cystic fibrosis franchise payment reduction In November 2019, Vertex announced that it reached an agreement with French authorities for a national reimbursement deal for Orkambi. As a result, management expected a reduction to royalty receipts in 2020 from the cystic fibrosis franchise of approximately $35.0 million to $45.0 million, to reflect an adjustment related to prior periods where we collected royalties on French sales of Orkambi at a higher selling price. We recognized a reduction to the current portion of Financial royalty assets |
Cumulative Allowance and the Pr
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 7. Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets The cumulative allowance for changes in expected future cash flows from financial royalty assets is presented net within the non-current Financial royalty assets, net • the movement in the cumulative allowance related to changes in forecasted royalty payments we expect to receive based on projected product sales for royalty bearing products as estimated by sell-side equity research analysts’ consensus forecasts, and • the movement in the cumulative allowance for current expected credit losses. The periodic movement in the cumulative allowance is presented on the condensed consolidated statements of comprehensive income as the Provision for changes in expected future cash flows from financial royalty assets Upon the January 1, 2020 adoption of ASU 2016-13, Retained earnings The following tables set forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses, as of the dates indicated (in thousands): Activity for the period Balance at December 31, 2020 (a) $ (1,263,824 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (283,617 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 27,296 Current period provision for credit losses (b) (35,941 ) Balance at March 31, 2021 $ (1,556,086 ) (a) Includes $323.7 million related to cumulative allowance for credit losses. (b) Primarily related to provision for credit losses resulting from increases to our portfolio of financial royalty assets in the three months ended March 31, 2021, predominantly the $100.0 million increase to our zavegepant financial royalty asset related to the funding payment we made to Biohaven upon the start of the oral zavegepant Phase 3 program and a new royalty interest in the cabozantinib products. | 7. Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets The cumulative allowance for changes in expected future cash flows from financial royalty assets is presented net within the non-current Financial royalty assets, net • the movement in the cumulative allowance related to changes in forecasted royalty payments we expect to receive based on projected product sales for royalty bearing products as estimated by sell-side equity research analysts’ consensus forecasts, and • the movement in the cumulative allowance for current expected credit losses. The periodic movement in the cumulative allowance is presented on the consolidated statements of comprehensive income as the Provision for changes in expected future cash flows from financial royalty assets Upon the January 1, 2020 adoption of ASU 2016-13, Retained earnings The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses, as of the dates indicated (in thousands): Activity for the Balance at December 31, 2017 $ (2,045,868 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (284,214 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 341,548 Reversal of cumulative allowance (a) 5,637 Balance at December 31, 2018 (1,982,897 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (322,717 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 1,342,038 Reversal of cumulative allowance (a) 95,158 Balance at December 31, 2019 (868,418 ) Cumulative adjustment for adoption of ASU 2016-13 (192,705 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (645,612 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 570,959 Reversal of cumulative allowance (a) 2,964 Write off of credit loss allowance (b) 25,174 Current period provision for credit losses (c) (156,186 ) Balance at December 31, 2020 $ (1,263,824 ) (a) Relates to amounts reversed out of the allowance at the end of a financial royalty asset’s life to bring the account balance to zero. Reversals solely impact the asset account and allowance account, there is no impact on the consolidated statements of comprehensive income. (b) Relates to amounts reversed out of the credit loss allowance associated with omecamtiv mecarbil as a result of the write-off (c) Primarily related to the allowance for credit losses resulting from increases to our portfolio of financial royalty assets in 2020, predominantly the final tranche of Tazverik, zavegepant, and the residual interest in the cystic fibrosis franchise. |
Intangible Royalty Assets, Net
Intangible Royalty Assets, Net | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Royalty Assets, Net | 8. Intangible Royalty Assets, Net The following schedules of the intangible royalty assets present the cost, accumulated amortization and net carrying value as of March 31, 2021 and December 31, 2020 (in thousands). As of March 31, 2021 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 583,221 $ 22,995 Total intangible royalty assets $ 606,216 $ 583,221 $ 22,995 As of December 31, 2020 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 The DPP-IV Our revenue is tied to underlying patent protected sales of other DPP-IV | 8. Intangible Royalty Assets, Net The following schedules of the intangible royalty assets present the cost, accumulated amortization and net carrying value as of December 31, 2020 and 2019 (in thousands). As of December 31, 2020 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 As of December 31, 2019 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 The DPP-IV Our revenue is tied to underlying patent protected sales of other DPP-IV |
Non-Consolidated Affiliates
Non-Consolidated Affiliates | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Non-Consolidated Affiliates | 9. Non-Consolidated The Legacy SLP Interest In connection with the Exchange Offer Transactions, we acquired a special limited partnership interest in the Legacy Investors Partnerships (the “Legacy SLP Interest”) from the Continuing Investors Partnerships for $303.7 million in exchange for issuing shares in our subsidiary. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy SLP Interest entitles us to the equivalent of performance distribution payments that would have been paid to the general partner of the Legacy Investors Partnerships and an income allocation on a similar basis. Our income allocation is equal to the general partner’s former contractual rights to the income of the Legacy Investors Partnerships. The Legacy SLP Interest is treated as an equity method investment as our Manager is also the Manager of the Legacy Investors Partnerships and has the ability to exercise significant influence. The Legacy Investors Partnerships no longer participate in investment opportunities from June 30, 2020 and, as such, the value of the Legacy SLP Interest is expected to decline over time. The Legacy Investors Partnerships also own a non-controlling The income allocation from the Legacy SLP Interest is based on an estimate, as the Legacy Investors Partnerships are private partnerships that are expected to report on a lag subsequent to the date of this quarterly report. Management’s estimate of equity in earnings from the Legacy SLP Interest for the current period will be updated for historical results in the subsequent period. During the three months ended March 31, 2021, we received cash distributions of $3.9 million from the Legacy Investors Partnerships and recorded an income allocation of $5.2 million within Equity in loss of non-consolidated Equity in loss of non-consolidated The Avillion Entities We account for our partnership interests in Avillion Financing I, LP (“Avillion I”) and BAv Financing II, LP (“Avillion II”, or, together, the “Avillion Entities”) as equity method investments because RPIFT has the ability to exercise significant influence over the entities. During the three months ended March 31, 2021 and 2020, we recorded a loss allocation of $7.1 million and $12.2 million, respectively, within Equity in loss of non-consolidated On December 19, 2017, the Avillion Entities announced that the FDA approved a supplemental New Drug Application for Pfizer’s Bosulif (bosutinib). Avillion I is eligible to receive fixed payments from Pfizer based on this approval. Subsequent to the asset sale, the only operations of Avillion I are the collection of cash and unwinding of discount on the series of fixed annual payments due from Pfizer. We received distributions of $13.4 million from Avillion I during the three months ended March 31, 2021 and 2020, respectively, in connection with Avillion I’s receipt of the fixed annual payments due under its co-development In March 2017, RPIFT entered into an agreement with Avillion II, amended in 2019, to invest approximately $19.0 million to fund approximately 50% of the costs of a Phase 2 clinical trial for the use of Merck KGaA’s anti-IL In May 2018, RPIFT entered into an additional agreement to invest up to $105.0 million in Avillion II over multiple years to fund approximately 44% of the costs of Phase 2 and 3 clinical trials to advance Pearl Therapeutics, Inc.’s product PT-027 As of March 31, 2021 and December 31, 2020, RPIFT had $19.9 million and $28.6 million, respectively, of unfunded commitments related to the Avillion Entities. Our maximum exposure to loss at any particular reporting date is limited to the current carrying value of the investment plus the unfunded commitments. | 9. Non-Consolidated The Legacy SLP Interest In connection with the Exchange Offer Transactions, we acquired a special limited partnership interest in the Legacy Investors Partnerships (the “Legacy SLP Interest”) from the Continuing Investors Partnerships for $303.7 million in exchange for issuing shares in our subsidiary. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy SLP Interest entitles us to the equivalent of performance distribution payments that would have been paid to the general partner of the Legacy Investors Partnerships and an income allocation on a similar basis. Our income allocation is equal to the general partner’s former contractual rights to the income of the Legacy Investors Partnerships. The Legacy SLP Interest is treated as an equity method investment as our Manager is also the Manager of the Legacy Investors Partnerships and has the ability to exercise significant influence. The Legacy Investors Partnerships no longer participated in investment opportunities from June 30, 2020 and, as such, the value of the Legacy SLP Interest is expected to decline over time. The Legacy Investors Partnerships also own a non-controlling The income allocation from the Legacy SLP Interest is based on an estimate, as the Legacy Investors Partnerships are private partnerships that are expected to report on a lag subsequent to the date of this annual report. Management’s estimate of equity in earnings from the Legacy SLP Interest for the current period will be updated for historical results in the subsequent period. During the year ended December 31, 2020, we received cash distributions of $22.7 million from the Legacy Investors Partnerships and recorded an income allocation of $62.0 million within Equity in (earnings)/loss of non-consolidated The Avillion Entities We account for our partnership interests in Avillion Financing I, LP (“Avillion I”) and BAv Financing II, LP (“Avillion II”, or, together, the “Avillion Entities”) as equity method investments because RPIFT has the ability to exercise significant influence over the entities. We recorded a loss allocation of $17.6 million, $32.5 million and $7.0 million within Equity in (earnings)/loss of non-consolidated On December 19, 2017, the Avillion Entities announced that the FDA approved a supplemental New Drug Application for Pfizer’s Bosulif (bosutinib). Avillion I is eligible to receive fixed payments from Pfizer based on this approval. Subsequent to the asset sale, the only operations of Avillion I are the collection of cash and unwinding of discount on the series of fixed annual payments due from Pfizer. We received distributions of $13.4 million and $14.1 million from Avillion I during the years ended December 31, 2020 and 2019, respectively, in connection with Avillion I’s receipt of the fixed annual payments due under its co-development In March 2017, RPIFT entered into an agreement with Avillion II, amended in 2019, to invest approximately $19.0 million to fund approximately 50% of the costs of a Phase 2 clinical trial for the use of Merck KGaA’s anti-IL In May 2018 RPIFT entered into an additional agreement to invest up to $105.0 million in Avillion II over multiple years to fund approximately 44% of the costs of Phase 2 and 3 clinical trials to advance Pearl Therapeutics, Inc.’s product PT-027 RPIFT had $28.6 million and $70.8 million of unfunded commitments related to the Avillion Entities as of December 31, 2020 and 2019, respectively. Our maximum exposure to loss at any particular reporting date is limited to the current carrying value of the investment plus the unfunded commitments. |
R&D Funding Expense
R&D Funding Expense | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Research and Development [Abstract] | ||
R&D Funding Expense | 10. Research & Development (“R&D”) Funding Expense During the three months ended March 31, 2021, we did not enter into any new R&D funding arrangements. We recognized $2.6 million and $7.6 million of R&D funding expense for the three months ended March 31, 2021 and 2020, respectively, primarily related to ongoing development-stage funding payments under our co-funding As of March 31, 2021 we have a remaining commitment of $13.9 million related to our R&D funding agreement with Sanofi. | 10. R&D Funding Expense During the year ended December 31, 2020, we did not enter into any new R&D funding arrangements. R&D funding expense incurred in 2020 related to ongoing development stage funding payments, primarily under our co-funding We recognized $26.3 million of R&D funding expense for the year ended December 31, 2020, of which $18.5 million related to our co-funding We recognized $392.6 million of R&D funding expense during the year ended December 31, 2018, of which $6.9 million and $99.3 million related to our funding agreements with Sanofi and Pfizer, respectively. We recognized the $175.0 million and $100.0 million in upfront payments and premiums paid over market value for stock purchases related to our Immunomedics and Biohaven funding agreements, respectively, as R&D funding expense during the year ended December 31, 2018. As of December 31, 2020, we have a remaining commitment of $16.6 million related to a R&D funding agreement with Sanofi. |
Borrowings
Borrowings | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Borrowings | 11. Borrowings Our borrowings as of March 31, 2021 and December 31, 2020 consisted of the following (in thousands): Type of Borrowing Maturity Interest rate March 31, 2021 December 31, 2020 Senior Unsecured Notes: Senior unsecured notes (issued at 99.322% of par) 9/2023 0.75 % $ 1,000,000 $ 1,000,000 Senior unsecured notes (issued at 98.875% of par) 9/2025 1.20 % 1,000,000 1,000,000 Senior unsecured notes (issued at 98.284% of par) 9/2027 1.75 % 1,000,000 1,000,000 Senior unsecured notes (issued at 97.760% of par) 9/2030 2.20 % 1,000,000 1,000,000 Senior unsecured notes (issued at 95.556% of par) 9/2040 3.30 % 1,000,000 1,000,000 Senior unsecured notes (issued at 95.306% of par) 9/2050 3.55 % 1,000,000 1,000,000 Senior Unsecured Revolving Credit Facility — — Unamortized debt discount and issuance costs (178,928 ) (183,416 ) Total debt carrying value 5,821,072 5,816,584 Less: Current portion of long-term debt — — Total long-term debt $ 5,821,072 $ 5,816,584 Senior Unsecured Notes On September 2, 2020, we issued $6.0 billion of senior unsecured notes (the “Notes”). Our obligations under the Notes are fully and unconditionally guaranteed by RP Holdings, a non-wholly Our Notes may be redeemed at our option at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate, plus a make-whole premium as defined in the indenture. Our Notes maturing after 2023 also have a call feature, exercisable at our option, to redeem the Notes at par in whole or in part one to six months immediately preceding maturity. In each case, accrued and unpaid interest is also required to be redeemed to the date of redemption. Upon the occurrence of a change of control triggering event and downgrade in the rating of our Notes by two of three credit agencies, the holders may require us to repurchase all or part of their Notes at a price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. We are required to comply with certain covenants under our Notes and as of March 31, 2021, we were in compliance with all applicable covenants. We used the net proceeds from the Notes offering, together with available cash on hand, to repay in full the senior secured credit facilities. Senior Unsecured Revolving Credit Facility On September 18, 2020, our subsidiary RP Holdings, as borrower, entered into a five-year unsecured revolving credit facility (the “Revolving Credit Facility”) which provides for borrowing capacity of up to $1.5 billion for general corporate purposes. We capitalized approximately $6.1 million in debt issuance costs related to the revolving credit facility which is recorded within Other current assets Other assets non-current The Revolving Credit Facility is subject to an interest rate, at our option, of either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime rate, (2) the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR, plus 1% per annum (“ABR”) or (b) adjusted LIBOR, plus in each case, the applicable margin. The applicable margin for the Revolving Credit Facility varies based on our consolidated leverage ratio. Accordingly, the interest rates for the Revolving Credit Facility fluctuates during the term of the facility based on changes in the ABR, LIBOR and future changes in our consolidated leverage ratio. The revolving credit agreement (the “Credit Agreement”) that governs the Revolving Credit Facility contains certain customary covenants, that among other things, require us to maintain (i) a consolidated leverage ratio at or below 4.00 to 1.00 (or at or below 4.50 to 1.00 following a qualifying material acquisition) of consolidated funded debt to consolidated EBITDA, each as defined and calculated with the ratio level calculated with further adjustments as set forth in the Credit Agreement and (ii) a consolidated coverage ratio at or above 2.50 to 1.00 of consolidated EBITDA to consolidated charges, each as defined and calculated with further adjustments as set forth in the Credit Agreement. All obligations under the Revolving Credit Facility are unconditionally guaranteed by us. As of March 31, 2021, RP Holdings was in compliance with these covenants. Senior Secured Credit Facilities On February 11, 2020, in connection with the Exchange Offer Transactions (as discussed in Note 1–Organization and Purpose) and using funds contributed by RPI Intermediate FT and the Legacy Investors Partnerships, RPIFT repaid its outstanding debt and accrued interest, and terminated all outstanding interest rate swaps. RPI Intermediate FT, as borrower, entered into a term loan credit agreement (the “Senior Secured Credit Agreement”) with Bank of America, N.A., as administrative agent, the lenders party thereto from time to time and the other parties thereto. The senior secured credit facilities contained in the Senior Secured Credit Agreement consisted of a term loan A (“Tranche A-1”) B-1”) RPIFT Senior Secured Credit Facilities The RPIFT Senior Secured Credit Facilities were repaid in full in February 2020 in connection with the Exchange Offer Transactions. We recorded a loss on debt extinguishment of $5.4 million as part of Other non-operating Principal Payments on the Notes The future principal payments for our borrowings as of March 31, 2021 over the next five years and thereafter are as follows (in thousands): Year Principal Payments Remainder of 2021 $ — 2022 — 2023 1,000,000 2024 — 2025 1,000,000 Thereafter 4,000,000 Total (1) $ 6,000,000 (1) Excludes unamortized discount and loan issuance costs on long-term debt of $178.9 million as of March 31, 2021, which are amortized through interest expense over the remaining life of the underlying debt obligations. As of March 31, 2021, the fair value of our outstanding Notes was approximately $5.8 billion and is classified as a Level 2 measurement within the fair value hierarchy. | 11. Borrowings Our borrowings at December 31, 2020 and 2019 consisted of the following (in thousands): Type of Borrowing Maturity Interest rate December 31, 2020 December 31, 2019 Senior Unsecured Notes: Senior unsecured notes (issued at 99.322% of par) 9/2023 0.75 % $ 1,000,000 $ — Senior unsecured notes (issued at 98.875% of par) 9/2025 1.20 % 1,000,000 — Senior unsecured notes (issued at 98.284% of par) 9/2027 1.75 % 1,000,000 — Senior unsecured notes (issued at 97.760% of par) 9/2030 2.20 % 1,000,000 — Senior unsecured notes (issued at 95.556% of par) 9/2040 3.30 % 1,000,000 — Senior unsecured notes (issued at 95.306% of par) 9/2050 3.55 % 1,000,000 — Senior Unsecured Revolving Credit Facility — — RPIFT Senior Secured Credit Facilities (1): Term Loan B Facility (2 ) LIBOR + 200 bps — 4,123,000 Term Loan A Facility (2 ) LIBOR + 150 bps — 2,150,000 Unamortized debt discount and issuance costs (183,416 ) (34,878 ) Total debt carrying value 5,816,584 6,238,122 Less: Current portion of long-term debt — (281,984 ) Total long-term debt $ 5,816,584 $ 5,956,138 (1) The carrying value of our senior secured term loans, including the current portion, approximates its fair value and represented a Level 2 liability within the fair value hierarchy. (2) In February 2020, the outstanding principal amounts of our Prior Credit Facility (as defined below) were repaid in full with net proceeds from our senior secured credit facilities which we subsequently repaid in full in September 2020 with net proceeds from the Notes (as defined below) and available cash on hand. Senior Unsecured Notes On September 2, 2020, we issued $6 billion of senior unsecured notes (the “Notes”). Our obligations under the Notes are fully and unconditionally guaranteed by RP Holdings, a non-wholly Our Notes may be redeemed at our option at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate, plus a make-whole premium as defined in the indenture. Our Notes maturing after 2023 also have a call feature, exercisable at our option, to redeem the Notes at par in whole or in part one to six months immediately preceding maturity. In each case, accrued and unpaid interest is also required to be redeemed to the date of redemption. Upon the occurrence of a change of control and downgrade in the rating of our Notes by two of three credit agencies, the holders may require us to repurchase all or part of their Notes at a price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. We are required to comply with certain covenants under our Notes and, as of December 31, 2020, we were in compliance with all applicable covenants. We used the net proceeds from the Notes offering, together with available cash on hand, to repay in full the senior secured credit facilities. Senior Unsecured Revolving Credit Facility On September 18, 2020, our subsidiary RP Holdings, as borrower, entered into a five-year unsecured revolving credit facility (the “Revolving Credit Facility”) which provides for borrowing capacity of up to $1.5 billion for general corporate purposes. In connection with the transaction, we capitalized approximately $6.1 million in debt issuance costs related to the revolving credit facility which is recorded within Other current assets Other assets non-current The Revolving Credit Facility is subject to an interest rate, at our option, of either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime rate, (2) the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR, plus 1% per annum (“ABR”) or (b) adjusted LIBOR, plus in each case, the applicable margin. The applicable margin for the Revolving Credit Facility varies based on our consolidated leverage ratio. Accordingly, the interest rates for the Revolving Credit Facility fluctuates during the term of the facility based on changes in the ABR, LIBOR and future changes in our consolidated leverage ratio. The revolving credit agreement (the “Credit Agreement”) that governs the Revolving Credit Facility contains certain customary covenants, that among other things, require us to maintain (i) a consolidated leverage ratio at or below 4.00 to 1.00 (or at or below 4.50 to 1.00 following a qualifying material acquisition) of consolidated funded debt to consolidated EBITDA, each as defined and calculated with the ratio level calculated with further adjustments as set forth in the Credit Agreement and (ii) a consolidated coverage ratio at or above 2.50 to 1.00 of consolidated EBITDA to consolidated charges, each as defined and calculated with further adjustments as set forth in the Credit Agreement. All obligations under the Revolving Credit Facility are unconditionally guaranteed by us. As of December 31, 2020, RP Holdings was in compliance with these covenants. Senior Secured Credit Facilities On February 11, 2020, in connection with the Exchange Offer Transactions (as discussed in Note 1-Organization A-1”) B-1”) A-1 B-1 Other non-operating RPIFT Senior Secured Credit Facilities The RPIFT Senior Secured Credit Facilities (the “Prior Credit Facility”) was repaid in full in February 2020 in connection with the Exchange Offer Transactions. We recorded a loss on debt extinguishment of $5.4 million as part of Other non-operating A-4 B-6 The Prior Credit Facility contained the following covenants measured quarterly: (i) maximum total leverage ratio of 4:00 to 1:00; (ii) debt coverage ratio of greater than 3.50 to 1.00. RPIFT was in compliance with these covenants at December 31, 2019. Principal payments on the Notes The future principal payments for our borrowings as of December 31, 2020 over the next five years and thereafter are as follows (in thousands): Year Principal Payments 2021 $ — 2022 — 2023 1,000,000 2024 — 2025 1,000,000 Thereafter 4,000,000 Total (1) $ 6,000,000 (1) Excludes unamortized discount and loan issuance costs on long-term debt of $183.4 million as of December 31, 2020, which are amortized through interest expense over the remaining life of the underlying debt obligations. As of December 31, 2020, the fair value of our outstanding Notes was approximately $6.2 billion and represented a Level 2 measurement within the fair value hierarchy. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Shareholders' Equity | 12. Shareholders’ Equity Capital structure Following the completion of our IPO as discussed in Note 1–Organization and Purpose, we have two classes of voting shares: Class A ordinary shares and Class B ordinary shares, each of which has one vote per ordinary share. The Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of shareholders, except as otherwise required by applicable law. Our Class B ordinary shares are not publicly traded and holders of Class B ordinary shares only have limited rights to receive a distribution equal to their nominal value upon a liquidation, dissolution or winding up of the Company. The holders of Class A ordinary shares are entitled to receive dividends subject to approval by the Board of Directors. The holders of Class B shares do not have any rights to receive dividends; however, the RP Holdings Class B Interests are entitled to dividends and distributions from RP Holdings. As of March 31, 2021, we have outstanding 392,857 thousand Class A ordinary shares and 214,255 thousand Class B ordinary shares. The RP Holdings Class B Interests are exchangeable on a one-for-one re-designation In addition, we have in issue 50 thousand Class R redeemable shares, which do not entitle the holder to voting or dividend rights. The purpose of the Class R redeemable shares was to ensure Royalty Pharma Limited had sufficient sterling denominated share capital at the time it was re-registered Non-controlling Prior to the Exchange Offer Transactions in February 2020, the only non-controlling non-controlling RPSFT Legacy Continuing EPA Holdings Total December 31, 2020 $ 12,436 $ 1,939,509 $ 3,125,091 $ — $ 5,077,036 Contributions — 3,253 — — 3,253 Distributions (13,653 ) (94,542 ) (37,183 ) — (145,378 ) Net income 15,058 36,257 38,545 — 89,860 Other exchanges — — (65,072 ) — (65,072 ) Other comprehensive income: Unrealized gain on available for sale debt securities — 901 1,512 — 2,413 Reclassification of unrealized gain on available for sale debt securities — (2,723 ) (4,571 ) — (7,294 ) March 31, 2021 $ 13,841 $ 1,882,655 $ 3,058,322 $ — $ 4,954,818 (1) Related to the Continuing Investors Partnerships’ ownership as of March 31, 2021 of approximately 35% in RP Holdings through their ownership of the RP Holdings Class B Interests. Royalty Pharma plc owns the remaining 65% of RP Holdings through its ownership of RP Holdings Class A Interests and Class B Interests as of March 31, 2021. RPSFT Legacy Total December 31, 2019 $ 35,883 $ — $ 35,883 Contributions — 1,133,629 1,133,629 Transfer of interests — 1,037,161 1,037,161 Distributions (29,246 ) (222,180 ) (251,426 ) Net income 24,926 12,930 37,856 Other comprehensive income: Unrealized gain on available for sale debt securities — 9,672 9,672 March 31, 2020 $ 31,563 $ 1,971,212 $ 2,002,775 RP Holdings Class C Special Interest held by EPA Holdings EPA Holdings is entitled to Equity Performance Awards (as defined below) through its RP Holdings Class C Special Interest based on our performance, as determined on a portfolio-by-portfolio two-year Dividends We declared and paid one quarterly cash dividend for an aggregate amount of $66.0 million, or $0.17 per share during the three months ended March 31, 2021 to holders of our Class A ordinary shares. We did not have any Class A ordinary shares outstanding in the three months ended March 31, 2020. Future dividends are subject to declaration by the board of directors. 2020 Independent Directors Equity Incentive Plan On June 15, 2020, our 2020 Independent Director Equity Incentive Plan was approved and became effective, whereby 800 thousand Class A ordinary shares have been reserved for future issuance to our independent directors. RSU activity and share-based compensation We grant RSUs to independent directors under the 2020 Independent Director Equity Incentive Plan. Share-based compensation expense is recognized based on estimated fair value of the award on the grant date and amortized on a straight-line basis over the requisite service period of generally one year. We recognized share-based compensation of approximately $0.9 million for the three months ended March 31, 2021, which is recorded as part of General and administrative expenses There were no share-based awards or related share-based compensation in periods prior to the IPO. | 12. Shareholders’ Equity Capital structure Following the completion of our IPO as discussed in Note 1-Organization In addition, we have in issue 50 thousand Class R redeemable shares, which do not entitle the holder to voting or dividend rights. The purpose of the Class R redeemable shares was to ensure Royalty Pharma Limited had sufficient sterling denominated share capital at the time it was re-registered The RP Holdings Class B Interests are exchangeable on a one-for-one re-designation Non-controlling Prior to the Exchange Offer Transactions in February 2020, the only non-controlling non-controlling RPSFT Legacy Investors Continuing EPA Total December 31, 2019 $ 35,883 $ — $ — $ — $ 35,883 Contributions — 1,165,258 9,418 — 1,174,676 Transfer of interests — 1,037,161 — — 1,037,161 Distributions (112,339 ) (594,592 ) (85,426 ) — (792,357 ) Net income prior to IPO 42,151 102,892 — — 145,043 Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity — (750 ) 2,433,848 — 2,433,098 Issuance of Class A ordinary shares sold in IPO, net of offering costs — — 758,354 — 758,354 Other exchanges — — (309,566 ) (309,566 ) Net income subsequent to IPO 46,741 218,137 316,993 — 581,871 Other comprehensive income: Unrealized gain on available for sale debt securities — 15,015 7,488 — 22,503 Reclassification of unrealized gain on available for sale debt securities — (3,612 ) (6,018 ) — (9,630 ) December 31, 2020 $ 12,436 $ 1,939,509 $ 3,125,091 $ — $ 5,077,036 (1) Related to the Continuing Investors Partnerships’ ownership of approximately 36% in RP Holdings through their ownership of the RP Holdings Class B Interests as of December 31, 2020. Royalty Pharma plc owns the remaining 64% of RP Holdings through its ownership of RP Holdings Class A and Class B Interests as of December 31, 2020. RP Holdings Class C Special Interest held by EPA Holdings EPA Holdings is entitled to Equity Performance Awards (as defined below) through its RP Holdings Class C Special Interest based on our performance, as determined on a portfolio-by-portfolio two-year Dividends The holders of Class A ordinary shares are entitled to receive ratably such dividends, if any, as may be approved from time to time by the Board of Directors. Subsequent to our IPO, we declared and paid two quarterly cash dividends for an aggregate amount of $112.5 million, or $0.15 per share during the year ended December 31, 2020 to holders of our Class A ordinary shares. Future dividends are subject to declaration by the Board of Directors. 2020 Independent Director Equity Incentive Plan Our 2020 Independent Director Equity Incentive Plan was approved and became effective on June 15, 2020 whereby 800 thousand Class A ordinary shares were reserved for future issuance to our independent directors. As of December 31, 2020, approximately 675 thousand shares remain reserved for future issuance under the Equity Incentive Plan. RSU activity and share-based compensation We grant RSUs to our independent directors under the 2020 Independent Director Equity Incentive Plan. Share-based compensation expense is recognized based on estimated fair value of the award on the grant date and amortized on a straight-line basis over the requisite service period of generally one year. The estimated fair value of RSUs is based on the closing price of our Class A ordinary shares on the grant date. During the year ended December 31, 2020, we granted approximately 125 thousand RSUs, of which approximately 71 thousand RSUs were vested. No RSUs were cancelled or forfeited during the year. We recognized share-based compensation of approximately $5.7 million for the year ended December 31, 2020, which is recorded as part of General and administrative expenses In periods prior to the IPO, we did not have share-based awards or related share-based compensation. |
Earnings per Share
Earnings per Share | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Earnings per Share | 13. Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income attributable to us by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to us, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares, Class B ordinary shares contingently issuable to EPA Holdings related to Equity Performance Awards, and unvested RSUs issued under our Equity Incentive Plan. We use the “if-converted” Prior to the IPO, our capital structure included predominantly unitholder interests. We analyzed the calculation of earnings per interest for periods prior to the IPO and determined that the resultant values would not be meaningful to the users of these unaudited condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three months ended March 31, 2020. Our Class B ordinary shares, Class R redeemable shares, and deferred shares do not share in the earnings or losses attributable to us and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share for Class B ordinary shares, Class R redeemable shares, and deferred shares under the two-class one-for-one The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A ordinary share for the three months ended March 31, 2021 (in thousands, except per share amounts). Three Months Ended Numerator: Consolidated Net Income $ 158,979 Less: Net income attributable to Continuing Investor Partnerships 38,545 Less: Net income attributable to non-controlling 51,315 Net income attributable to Royalty Pharma plc—basic 69,119 Add: Reallocation of net income attributable to non-controlling 38,545 Net income attributable to Royalty Pharma plc—diluted $ 107,664 Denominator Weighted average Class A ordinary shares outstanding—basic 389,760 Add: Dilutive effects as shown separately below Class B ordinary shares exchangeable for Class A ordinary shares 217,350 Unvested RSUs 38 Weighted average Class A ordinary shares outstanding—diluted 607,148 Earnings per Class A ordinary share—basic $ 0.18 Earnings per Class A ordinary share—diluted $ 0.18 | 13. Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income attributable to us by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to us, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares, Class B ordinary shares potentially issuable to EPA Holdings, and unvested RSUs issued under our Equity Incentive Plan. We use the “if-converted” Prior to the IPO, our capital structure included predominantly unitholder interests. We analyzed the calculation of earnings per interest for periods prior to the IPO and determined that the resultant values would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for the years ended December 31, 2019 and 2018. Our Class B ordinary shares, Class R redeemable shares, and deferred shares do not share in the earnings or losses attributable to us and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share for Class B ordinary shares, Class R redeemable shares, and deferred shares under the two-class one-for-one if-converted The basic and diluted earnings per share for the year ended December 31, 2020 are only applicable for the period from June 16, 2020 to December 31, 2020, which represents the period in which we had outstanding Class A ordinary shares. We have 607,111 thousand fully diluted Class A ordinary shares outstanding as of December 31, 2020. The following table sets forth reconciliations used to compute basic and diluted earnings per Class A ordinary share (in thousands, except per share amounts). Year Ended Basic earnings per share: Numerator Consolidated net income $ 1,701,954 Less: net income attributable to Continuing Investors Partnerships prior to the IPO (1) 479,842 Less: net income attributable to Continuing Investors Partnerships subsequent to the IPO 316,993 Less: net income attributable to non-controlling 409,921 Net income attributable to Royalty Pharma plc $ 495,198 Denominator Weighted average Class A ordinary shares outstanding-basic 375,444 Earnings per Class A ordinary share-basic $ 1.32 Diluted earnings per share: Numerator Net income attributable to Royalty Pharma plc $ 495,198 Denominator Weighted average Class A ordinary shares outstanding-basic 375,444 Dilutive effect of unvested RSUs 11 Weighted average Class A ordinary shares outstanding-diluted 375,455 Earnings per Class A ordinary share-diluted $ 1.32 (1) Reflected as Net income attributable to controlling interest |
Indirect Cash Flow
Indirect Cash Flow | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||
Indirect Cash Flow | 14. Indirect Cash Flow Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below (in thousands). For the Three Months Ended 2021 2020 Cash flow from operating activities: Consolidated net income $ 158,979 $ 109,096 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Income from financial royalty assets (529,625 ) (462,844 ) Provision for changes in expected cash flows from financial royalty assets 292,262 88,012 Amortization of intangible assets 5,671 5,733 Amortization of debt discount and issuance costs 4,790 2,478 Unrealized loss on derivative contracts 2,555 33,445 Loss on equity securities 54,186 153,166 Equity in loss of non-consolidated 1,918 9,074 Distributions from non-consolidated 17,325 20,293 Loss on extinguishment of debt — 5,406 Share-based compensation 713 — Interest income accretion (15,491 ) — Unrealized gain on available for sale debt securities (9,115 ) — Loss on derivative financial instruments — (34,952 ) Other 958 3,469 Decrease/(increase) in operating assets: Cash collected on financial royalty assets 573,946 488,028 Accrued royalty receivable (299 ) (196 ) Other royalty income receivable (530 ) (2,619 ) Other current assets 1,939 40 Other assets — 45,007 (Decrease)/increase in operating liabilities: Accounts payable and accrued expenses (2,207 ) 8,468 Interest payable (31,875 ) — Net cash provided by operating activities $ 526,100 $ 471,104 Non-cash For the Three 2021 2020 Supplemental schedule of non-cash Receipt of contribution of investment in Legacy Investors Partnerships (Note 9) $ — $ 303,679 Settlement of Epizyme forward purchase contract (Note 4) — 5,700 Accrued purchase obligation—Tazverik (Note 17) — 110,000 Repayments of long-term debt by contributions from non-controlling — 1,103,774 (1) Related to the pro rata portion of RPIFT’s outstanding debt repaid by the Legacy Investors Partnerships | 14. Indirect Cash Flow Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below (in thousands). For the Years Ended December 31, 2020 2019 2018 Cash flow from operating activities: Consolidated net income $ 1,701,954 $ 2,461,419 $ 1,517,855 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Provision for changes in expected cash flows from financial royalty assets 230,839 (1,019,321 ) (57,334 ) Amortization of intangible assets 23,058 23,924 33,267 Amortization of debt discount and issuance costs 11,715 12,790 13,127 Realized gain on available for sale debt securities — — (419,481 ) Unrealized loss/(gain) on derivative contracts 42,076 39,138 (11,923 ) (Gain)/loss on equity securities (247,073 ) (155,749 ) 13,939 Equity in (earnings)/loss of non-consolidated (44,459 ) 32,517 7,023 Distributions from non-consolidated 42,334 14,059 39,402 Loss on extinguishment of debt 30,272 — — Share-based compensation 5,428 — — Interest income accretion (20,551 ) — — Unrealized gain on forwards (18,600 ) — — Impairment charge 65,053 — — Loss on derivative financial instruments (34,952 ) — — Other 9,621 (2,122 ) (7,771 ) (Increase)/decrease in operating assets: Financial royalty assets (1,959,975 ) (1,648,837 ) (1,524,816 ) Cash collected on financial royalty assets 2,121,923 1,934,092 2,052,592 Available for sale debt securities — (150,000 ) (150,000 ) Accrued royalty receivable 370 2,471 (27,372 ) Other receivables — 150,000 150,000 Other royalty income receivable (770 ) 7,390 (11,099 ) Other current assets (10,278 ) 4,607 (442 ) Other assets 45,264 (45,635 ) — Increase/(decrease) in operating liabilities: Accounts payable and accrued expenses (766 ) 6,496 1,350 Interest payable 42,146 — — Net cash provided by operating activities $ 2,034,629 $ 1,667,239 $ 1,618,317 Non-cash For the Years Ended 2020 2019 2018 Supplemental schedule of non-cash Receipt of contribution of investment in Legacy Investors Partnerships (Note 9) $ 303,679 $ — $ — Settlement of Epizyme forward purchase contract (Note 4) 5,700 — — Accrued purchase obligation-Tazverik 110,000 — — Repayments of long-term debt by contributions from non-controlling 1,103,774 — — Milestone payable-Erleada (2) 18,600 — — (1) Related to the pro rata portion of RPIFT’s outstanding debt repaid by the Legacy Investors Partnerships (2) Related to the achievement of a sales-based milestone that was not paid as of December 31, 2020. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Accumulated Other Comprehensive Income | 15. Accumulated Other Comprehensive Income Comprehensive income is comprised of net income and other comprehensive income/(loss). We include unrealized gains and losses on available for sale debt securities related to Series A Biohaven Preferred Shares, which is the only component of accumulated other comprehensive income as of March 31, 2021 and December 31, 2020. As a result of the termination of interest rate swaps in February 2020, all amounts associated with interest rate swaps previously designated as cash flow hedges and recorded in accumulated other comprehensive income were released into earnings during the three months ended March 31, 2020. Changes in accumulated other comprehensive income are as follows (in thousands): Unrealized gain/(loss) Balance at December 31, 2020 $ 34,395 Reclassifications to net income (8,197 ) Activity for the period 2,712 Reclassifications from non-controlling 542 Balance at March 31, 2021 $ 29,452 The total reclassification of unrealized gains on available for sale debt securities of $15.5 million for the three months ended March 31, 2021 is presented in earnings within Interest income non-controlling | 15. Accumulated Other Comprehensive Income (Loss) Comprehensive income is comprised of net income and other comprehensive income/(loss). We include unrealized gains and losses on available for sale debt securities and unrealized gains/(losses) on the interest rate swaps that were designated as cash flow hedges in other comprehensive income/(loss). Prior to January 1, 2018, unrealized gains and losses on available for sale equity securities were included in accumulated other comprehensive income/(loss). Beginning on January 1, 2018, following the adoption of ASU 2016-01, Changes in accumulated other comprehensive income/(loss) by component are as follows (in thousands): Unrealized gain/(loss) on equity Unrealized Unrealized Total Accumulated Balance at December 31, 2017 $ (2,863 ) $ 402,502 $ (18,258 ) $ 381,381 Activity for the year — (402,502 ) — (402,502 ) Cumulative adjustment for adoption of ASU 2016—01 2,863 — — 2,863 Reclassifications to net income — — 8,003 8,003 Balance at December 31, 2018 — — (10,255 ) (10,255 ) Activity for the year — 6,159 — 6,159 Reclassifications to net income — — 6,189 6,189 Balance at December 31, 2019 — 6,159 (4,066 ) 2,093 Reclassifications to net income — (10,921 ) 4,066 (6,855 ) Activity for the year — 60,617 — 60,617 Reclassifications to non-controlling — (24,022 ) — (24,022 ) Reclassifications from non-controlling — 2,562 — 2,562 Balance at December 31, 2020 $ — $ 34,395 $ — $ 34,395 The total reclassification of unrealized gains on available for sale debt securities of $20.6 million in 2020 is presented within interest income on the statement of comprehensive income, including the reclassification of $10.9 million attributable to controlling interest noted in the table above. |
Related Party Transactions
Related Party Transactions | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | 16. Related Party Transactions The Manager The Manager is the investment manager of Royalty Pharma and its subsidiaries. The Manager is an affiliate of RP Ireland, the administrator of RPIFT and RPI Intermediate FT. The sole member of the Manager, Pablo Legorreta, holds an interest in us and serves as our Chief Executive Officer and Chairman of the board of directors, and as a director on the board of directors of RP Holdings. In connection with the Exchange Offer Transactions (discussed in Note 1–Organization and Purpose), the Manager entered into Management Agreements with us and our subsidiaries, the Continuing Investors Partnerships, and with the Legacy Investors Partnerships. Pursuant to the Management Agreements, we pay quarterly operating and personnel expenses to the Manager or its affiliates (“Operating and Personnel Payments”) equal to 6.5% of the Adjusted Cash Receipts (both, as defined in the Management Agreement) for such quarter and 0.25% of the GAAP value of our security investments as of the end of such quarter. The operating and personnel payments for Old RPI, an obligation of the Legacy Investors Partnerships as a non-controlling General and administrative expenses Prior to the Exchange Date, the Manager received operating and personnel payments payable in equal quarterly installments that increased by 5% annually on a compounded basis under the terms of its management agreement with Old RPI and the Legacy Investors Partnerships. RP Ireland receives an annual management fee payable in advance by Old RPI in equal quarterly installments under terms of the limited partnership agreements of the Legacy Investors Partnerships. After the Exchange Date, operating and personnel payments were calculated in accordance with the methodology discussed in the paragraph above. During the three months ended March 31, 2020, total operating and personnel payments incurred were $19.7 million and were recognized within General and administrative expenses Distribution Payable to Non-Controlling The Distribution payable to non-controlling non-controlling non-controlling Distribution payable to non-controlling non-controlling non-controlling Distribution payable to non-controlling non-controlling non-controlling Acquisition from Epizyme In November 2019, in connection with an equity investment in Epizyme of $100.0 million made by RPIFT, Pablo Legorreta, our Chief Executive Officer, was appointed as a director of Epizyme, for which he received, and continues to receive, compensation in cash and shares of Epizyme, all of which will be contributed to the Manager and used to reduce costs and expenses, which would otherwise be billed to us or our affiliates. Acquisition from Bristol-Myers Squibb In November 2017, RPI Acquisitions entered into a purchase agreement with Bristol-Myers Squibb (“BMS”) to acquire from BMS a percentage of its future royalties on worldwide sales of Onglyza, Farxiga, and related diabetes products marketed by AstraZeneca (the “Purchase Agreement”). We agreed to make payments to BMS based on sales of the products over eight quarters beginning with the first quarter of 2018 in exchange for a high single-digit royalty on worldwide sales of the products from 2020 through 2025. On December 8, 2017, RPI Acquisitions entered into a purchase, sale and assignment agreement (“Assignment Agreement”) with a wholly owned subsidiary of BioPharma Credit PLC (“BPCR”), an affiliate of us. BPCR is a related entity due to the sole member of the investment manager having significant influence over both entities. Under the terms of the Assignment Agreement, RPI Acquisitions assigned the benefit of 50% of the payment stream acquired from BMS to BPCR in consideration for BPCR meeting 50% of the funding obligations owed to BMS under the Purchase Agreement. We began making installment payments to BMS during the second quarter of 2018 and completed our funding in the first quarter of 2020. As of March 31, 2020, we funded a cumulative amount of $162.4 million, net of the assigned funding obligations. During the three months ended March 31, 2020, installment payments made to BMS totaled $24.3 million, of which RPI Acquisitions funded $12.1 million. Upon transfer of funds from BPCR to RPI Acquisitions to meet the quarterly funding obligation to BMS, RPI Acquisitions derecognized 50% of the financial royalty asset. Cash received from BPCR in respect of each funding obligation equaled the carrying amount of the assigned transfer of interest, therefore no gain or loss was recognized upon the transfer. We began to measure this financial royalty asset using the effective interest method once our installment funding obligation was completed and we received our first royalty payment on the asset in the second quarter of 2020. As of March 31, 2021 and December 31, 2020, the financial royalty asset of $146.1 million and $150.6 million, respectively, included in Financial royalty assets, net Other transactions In connection with the Exchange Offer Transactions, we acquired the Legacy SLP Interest from the Continuing Investors Partnerships in exchange for issuing shares in our subsidiary. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy Investors Partnerships own a non-controlling 9–Non-Consolidated RPIFT owns 27,210 limited partnership interests in the Continuing Investors Partnership whose only substantive operations are their investment in our subsidiaries. The total investment of $4.3 million is recorded as treasury interests, of which $1.9 million and $1.9 million are held by non-controlling Based on its ownership percentage of RP Holdings relative to the Company, each Continuing Investor Partnership pays a pro rata portion of any costs and expenses in connection with the contemplation of, formation of, listing and ongoing operation of us and any of our subsidiaries, including any third-party expenses of managing us and any of our subsidiaries, such as accounting, audit, legal, reporting, compliance, administration (including directors’ fees), financial advisory, consulting, investor relations and insurance expenses relating to our affairs and those of any subsidiary. | 16. Related Party Transactions The Manager The Manager is the investment manager of Royalty Pharma and its subsidiaries. The Manager is an affiliate of RP Ireland, the administrator of RPIFT and RPI Intermediate FT. The sole member of the Manager, Pablo Legorreta holds an interest in us and serves as our Chief Executive Officer and Chairman of the Board, and as a director on the board of RP Holdings. In connection with the Exchange Offer Transactions (discussed in Note 1-Organization non-controlling Historically, the Manager received operating and personnel payments in equal quarterly installments that increased by 5% annually on a compounded basis under the terms of its management agreement with Old RPI and the Legacy Investors Partnerships. RP Ireland receives an annual management fee payable in advance by Old RPI in equal quarterly installments under terms of the Limited Partnership Agreements of the Legacy Investors Partnerships. Operating and personnel payments incurred during years ended December 31, 2019 and 2018 were $60.0 million and $57.2 million, respectively, and were recognized within General and administrative expenses Distribution payable to non-controlling The Distribution payable to non-controlling non-controlling non-controlling Distribution payable to non-controlling non-controlling non-controlling Distribution payable to non-controlling non-controlling Acquisition from Epizyme In November 2019, in connection with an equity investment in Epizyme Inc. of $100.0 million made by RPIFT, Pablo Legorreta, our Chief Executive Officer, was appointed as a director of Epizyme, for which he received compensation in cash and shares, all of which will be contributed to the Manager and used to reduce costs and expenses which would otherwise be billed to us or our affiliates. Acquisition from Bristol-Myers Squibb In November 2017, RPI Acquisitions entered into a purchase agreement with Bristol-Myers Squibb (“BMS”) to acquire from BMS a percentage of its future royalties on worldwide sales of Onglyza, Farxiga, and related diabetes products marketed by AstraZeneca (the “Purchase Agreement”). We agreed to make payments to BMS based on sales of the products over eight quarters beginning with the first quarter of 2018 in exchange for a high single-digit royalty on worldwide sales of the products from 2020 through 2025. On December 8, 2017, RPI Acquisitions entered into a purchase, sale and assignment agreement (“Assignment Agreement”) with a wholly owned subsidiary of BioPharma Credit PLC (“BPCR”), an affiliate of us. BPCR is a related entity due to the sole member of the investment manager having significant influence over both entities. Under the terms of the Assignment Agreement, RPI Acquisitions assigned the benefit of 50% of the payment stream acquired from BMS to BPCR in consideration for BPCR meeting 50% of the funding obligations owed to BMS under the Purchase Agreement. We began making installment payments to BMS during the second quarter of 2018 and completed our funding in the first quarter of 2020. Installment payments made to BMS during the year ended December 31, 2020 and 2019 totaled $24.3 million and $171.0 million, respectively, of which RPI Acquisitions funded $12.1 million and $85.5 million, respectively. Upon transfer of funds from BPCR to RPI Acquisitions to meet the quarterly funding obligation to BMS, RPI Acquisitions derecognized 50% of the financial royalty asset. Cash received from BPCR in respect of each funding obligation equaled the carrying amount of the assigned transfer of interest, therefore no gain or loss was recognized upon the transfer. The financial royalty asset of $150.6 million and $150.3 million included in Financial royalty assets, net We funded a cumulative amount of $162.4 million, net of the assigned funding obligations. We began to measure this financial royalty asset using the effective interest method once our installment funding obligation was completed and we received our first royalty payment on the asset in the second quarter of 2020. Other transactions In the year ended December 31, 2020, we reimbursed Pablo Legorreta, our Chief Executive Officer, approximately $1.0 million for the cost of purchasing and donating ventilators to hospitals on our behalf. In connection with the Exchange Offer Transactions, we acquired the Legacy SLP Interest from the Continuing Investors Partnerships in exchange for issuing shares in our subsidiary. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy Investors Partnerships own a non-controlling 9-Non-Consolidated RPIFT owns 27,210 limited partnership interests in the Continuing Investors Partnerships, whose only substantive operations are their investment in our subsidiaries. The total investment of $4.3 million is recorded as treasury interests, of which $1.9 million is held by non-controlling Based on its ownership percentage of RP Holdings relative to us, each Continuing Investor Partnership pays a pro rata portion of any costs and expenses in connection with the contemplation of, formation of, listing and the ongoing operation of us and any of our subsidiaries, including any third-party expenses of managing us and any of our subsidiaries, such as accounting, audit, legal, reporting, compliance, administration (including directors’ fees), financial advisory, consulting, investor relations and insurance expenses relating to our affairs and those of any subsidiary. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 17. Commitments and Contingencies In the ordinary course of its business, we may enter into contracts or agreements that contain customary indemnifications relating to such things as confidentiality agreements and representations as to corporate existence and authority to enter into contracts. The maximum exposure under such agreements is indeterminable until a claim, if any, is made. However, no such claims have been made against us to date and we believe that the likelihood of such proceedings taking place in the future is remote. On August 7, 2020, we entered into a funding agreement with Biohaven, including the Series B Biohaven Preferred Share Agreement, for up to $450.0 million to fund the development of zavegepant and the commercialization of Nurtec ODT in exchange for royalties and success-based milestones. Biohaven received $150.0 million at closing and received an additional $100.0 million in the three months ended March 31, 2021, upon the start of the oral zavegepant Phase 3 program. Pursuant to the Series B Biohaven Preferred Share Agreement, we agreed to provide further support for the ongoing launch of Nurtec ODT with the purchase of committed, non-contingent In November 2019, RPIFT agreed to pay $330.0 million to purchase Eisai’s royalties on future worldwide sales of Tazverik (tazemetostat), a novel targeted therapy in late-stage clinical development that was approved by the FDA in January 2020 for epithelioid sarcoma, and with the potential to be approved in several cancer indications. Under the terms of its agreement with Eisai, RPIFT acquired Eisai’s future worldwide royalties on net sales by Epizyme of Tazverik outside of Japan, for an upfront payment of $110.0 million plus up to an additional $220.0 million for the remainder of the royalty upon FDA approval of Tazverik for certain indications. The FDA approval of Tazverik in January 2020 triggered our obligation to fund the second $110.0 million tranche in November 2020. In June 2020, the FDA approval of additional indications of Tazverik triggered our obligation to fund the final $110.0 million tranche in November 2021, which is recorded within the current liabilities on the condensed consolidated balance sheet as of March 31, 2021. We have commitments to advance funds to counterparties through our investment in the Avillion Entities and R&D arrangements. Please refer to Notes 9–Non-Consolidated Legal Proceedings We are a party to legal actions with respect to a variety of matters in the ordinary course of business. Some of these proceedings may be based on complex claims involving substantial uncertainties and unascertainable damages. Unless otherwise noted, it is not possible to determine the probability of loss or estimate damages, and therefore we have not established accruals for any of these proceedings in our consolidated balance sheets as of March 31, 2021 and December 31, 2020. When we determine that a loss is both probable and reasonably estimable, we record a liability, and, if the liability is material, we disclose the amount of the liability reserved. We do not believe the outcome of any existing legal proceedings to which we are a party, either individually or in the aggregate, will adversely affect our business, financial condition or results of operations. | 17. Commitments and Contingencies In the ordinary course of its business, we may enter into contracts or agreements that contain customary indemnifications relating to such things as confidentiality agreements and representations as to corporate existence and authority to enter into contracts. The maximum exposure under such agreements is indeterminable until a claim, if any, is made. However, no such claims have been made against us to date and we believe that the likelihood of such proceedings taking place in the future is remote. On August 7, 2020, we entered into a funding agreement with Biohaven, including the Series B Biohaven Preferred Share Agreement, for up to $450.0 million to fund the development of zavegepant and the commercialization of Nurtec ODT in exchange for royalties and success-based milestones. Biohaven received $150.0 million at closing and will receive $100.0 million upon the start of the oral zavegepant Phase 3 program. Pursuant to the Series B Biohaven Preferred Share Agreement, we will also provide further support for the ongoing launch of Nurtec ODT with the purchase of committed, non-contingent In November 2019, RPIFT agreed to pay $330.0 million to purchase Eisai’s royalties on future worldwide sales of Tazverik (tazemetostat), a novel targeted therapy in late-stage clinical development that was approved by the FDA in January 2020 for epithelioid sarcoma, and with the potential to be approved in several cancer indications. Under the terms of its agreement with Eisai, RPIFT acquired Eisai’s future worldwide royalties on net sales by Epizyme of Tazverik outside of Japan, for an upfront payment of $110.0 million plus up to an additional $220.0 million for the remainder of the royalty upon FDA approval of Tazverik for certain indications. The FDA approval of Tazverik in January 2020 triggered our obligation to fund the second $110.0 million tranche in November 2020. In June 2020, the FDA approval of additional indications of Tazverik triggered our obligation to fund the final $110.0 million tranche in November 2021, which is recorded within current liabilities on the consolidated balance sheet at December 31, 2020. We have commitments to advance funds to counterparties through our investment in the Avillion Entities and R&D arrangements. Please refer to Notes 9-Non-Consolidated 10-R&D 16-Related Legal proceedings We are a party to legal actions with respect to a variety of matters in the ordinary course of business. Some of these proceedings may be based on complex claims involving substantial uncertainties and unascertainable damages. Unless otherwise noted, it is not possible to determine the probability of loss or estimate damages, and therefore we have not established accruals for any of these proceedings in our consolidated balance sheets as of December 31, 2020 and 2019. When we determine that a loss is both probable and reasonably estimable, we record a liability, and, if the liability is material, we disclose the amount of the liability reserved. We do not believe the outcome of any existing legal proceedings to which we are a party, either individually or in the aggregate, will adversely affect our business, financial condition or results of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 18. Subsequent Events In April 2021, we acquired a royalty interest in Oxlumo (lumasiran) from Dicerna Pharmaceuticals, Inc. for an upfront cash payment of $180 million and up to $60 million in contingent sales-based milestone payments. Oxlumo, which has been approved by the FDA and European Medicines Agency for the treatment of primary hyperoxaluria (PH) type 1, is marketed by Alnylam Pharmaceuticals, Inc. | 18. Subsequent Events In January 2021, we acquired a royalty interest in seltorexant from Minerva Neurosciences, Inc. for an upfront payment of $60 million and up to $95 million in additional milestone payments, contingent on the achievement of certain clinical, regulatory and commercialization milestones. Seltorexant is currently in Phase 3 development for the treatment of major depressive disorder (MDD) with insomnia symptoms by Janssen Pharmaceutica, N.V., a subsidiary of Johnson & Johnson. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Basis of preparation | The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under U.S. GAAP. As such, the information included in this Quarterly Report on Form 10-Q 10-K. | The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of estimates | The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. The precise extent to which the COVID-19 COVID-19 | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The precise extent to which the COVID-19 COVID-19 |
Basis of consolidation | Basis of consolidation The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling non-controlling Following management’s determination that a high degree of common ownership existed in Royalty Pharma both before and after the Exchange Date, Royalty Pharma recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. Prior to the Exchange Offer Transactions, our only historical non-controlling non-controlling Following the consummation of our IPO in June 2020, two new non-controlling non-controlling non-controlling non-controlling All intercompany transactions and balances have been eliminated in consolidation. | Basis of consolidation The consolidated financial statements include the accounts of Royalty Pharma plc and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling non-controlling Following management’s determination that a high degree of common ownership existed in RPI both before and after the Exchange Date, RPI recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. Prior to the Exchange Offer Transactions, our only historical non-controlling non-controlling Following the consummation of our IPO in June 2020, two new non-controlling non-controlling non-controlling non-controlling All intercompany transactions and balances have been eliminated in consolidation. Adjustment to prior period presentation In connection with the preparation of our condensed consolidated interim financial statements for the three months ended September 30, 2020, we identified an adjustment to the classification of our short-term investments on our consolidated balance sheets, as of December 31, 2019, based on the original maturity dates of the investments. The adjustment resulted in an increase of $37.5 million to Marketable securities Cash and cash equivalents Purchases of marketable securities Proceeds from sales and maturities of marketable securities Net cash used in investing activities |
Adjustment to prior period presentation | Adjustment to prior period presentation In connection with the preparation of our condensed consolidated interim financial statements for the three months ended September 30, 2020, we identified an adjustment to the classification of our short-term investments on our consolidated balance sheet, as of December 31, 2019 based on the original maturity dates of the investments. The adjustment resulted in an increase of $88.8 million to Marketable securities Cash and cash equivalents Purchases of marketable securities Proceeds from sales and maturities of marketable securities Net cash used in investing activities | |
Concentrations of credit risk | Concentrations of credit risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances as of March 31, 2021 and December 31, 2020 were held with State Street and Bank of America. Our primary operating accounts significantly exceed the FDIC limits. The majority of our financial royalty assets and receivables arise from contractual royalty agreements that entitle us to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The products in which we hold royalties are marketed by leading industry participants, including, among others, AbbVie, Amgen, Bristol-Myers Squibb, Gilead, Johnson & Johnson, Lilly, Merck, Pfizer, Novartis, Biogen, Roche/Genentech and Vertex. As of March 31, 2021 and December 31, 2020, Vertex was the marketer and payor making up the largest balance of our current portion of Financial royalty assets, net We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. | Concentrations of credit risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances at December 31, 2020 and 2019 were held with State Street, Deutsche Bank and Bank of America. Our primary operating accounts significantly exceed the FDIC limits. The majority of our financial royalty assets and receivables arise from contractual royalty agreements that entitle us to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The products in which we hold royalties are marketed by leading industry participants, including, among others, Abbott, AbbVie, Amgen, Bristol-Myers Squibb, Celgene, Gilead, Johnson & Johnson, Lilly, Merck, Pfizer, Novartis, Biogen, Roche/ Genentech and Vertex. For the years ended December 31, 2020 and 2019, Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise products, accounted for 27% and 17% of our current portion of Financial royalty assets We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. |
Recently adopted accounting standards | Recently adopted and issued accounting standards Upon the January 1, 2020 adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 2016-13”), Retained earnings | Recently adopted accounting standards In May 2014, the Financial Accounting Standard Board (“FASB”) issued a new revenue standard under ASC Topic 606 (ASU 2014-09). 2014-09 Receivables 2014-09. 2014-09 In January 2016, the FASB issued revised guidance for the accounting and reporting of financial instruments (ASU 2016-01) 2018-03). 2016-01 2018-03 In August 2016, the FASB issued revised guidance which makes eight targeted changes to how royalty receipts and cash payments are presented and classified in the Statement of Cash Flows (ASU 2016-15). “nature-of-the-distribution” 2016-15 In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the incurred-loss model with an expected-loss model (ASU 2016-13). available-for-sale 2016-13, Retained earnings In August 2018, the FASB issued a new accounting standard that eliminates, adds and modified certain disclosures requirements for fair value measurements under Topic 820 (ASU 2018-13). |
Fair value measurements | The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our Level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our Level 2 assets generally include marketable securities, warrants, derivatives and, historically, our interest rate swap contracts. • Level 3: Prices or valuation that require inputs that are both significant to the fair value measurement and unobservable. Our Level 3 assets consist of our investments in the Series A Biohaven Preferred Shares, Series B Biohaven Preferred Shares and the Series B Forwards. See Note 5––Available for Sale Debt Securities for a description of our investments in the Series A Biohaven Preferred Shares, Series B Biohaven Preferred Shares and the Series B Forwards. For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. | Fair value measurements The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 and 2019, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our Level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our Level 2 assets generally include marketable securities, warrants, derivatives and our interest rate swap contracts, which may be in an asset or liability position. • Level 3: Prices or valuation that requires inputs that are both significant to the fair value measurement and unobservable. Our Level 3 assets consist of our investments in the Series A Biohaven Preferred Shares and the Series B Forwards and, historically, our investment in Tecfidera. See Note 5--Available For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. |
Segment information | Segment information Our chief operating decision maker is our Chief Executive Officer who reviews financial information presented on a consolidated basis to allocate resources, evaluates financial performance and makes overall operating decisions. As such, we concluded that we operate as one single reportable segment, which is primarily focused on acquiring biopharmaceutical royalties. | |
Royalty assets | Royalty assets An acquisition of a royalty asset provides the buyer with contractual rights to cash flows relating to royalties from the sales of patent-protected biopharmaceutical products. These acquisitions entitle us to receive a portion of income from the sale of patent-protected biopharmaceutical products by unrelated biopharmaceutical companies. For the majority of our royalties, our rights are protective in nature. In other words, we do not own the intellectual property and we do not have the right to commercialize the underlying products. These contractual cash flow rights have yield components that most closely resemble loans and are classified as financial royalty assets. In the limited instances where we possess rights to exploit the underlying patents, rights to the intellectual property related to the biopharmaceutical products, or the ability to influence the amount or duration of future royalty payments, these royalties are classified as intangible assets. | |
Financial royalty assets, net | Financial royalty assets, net Although a financial royalty asset does not have the contractual terms typical of a loan (such as contractual principal and interest), we analogize to the accounting guidance within Accounting Standards Codification 310 (“ASC”), Receivables, as it most closely aligns with the underlying economics of our financial royalty assets. Therefore, such financial royalty assets are classified similar to loans receivable and are measured at amortized cost using the prospective effective interest method described in ASC 835-30 Imputation of Interest The effective interest rate is calculated by forecasting the expected cash flows to be received over the life of the asset relative to the initial invested amount. The effective interest rate is reviewed and adjusted each reporting period as differences between expected cash flows and actual cash flows are realized and as there are changes to expected future cash flows. Income is calculated by multiplying the carrying value of the financial royalty asset by the effective interest rate. The carrying value of a financial royalty assets is made up of the opening balance, or net purchase price for a new financial royalty asset, which is increased by the interest income accrual and decreased by cash receipts in the period to arrive at the ending balance. If the ending balance is greater than the net present value of the expected future cash flows, a provision is recorded to reduce the asset balance to the net present value. The provision is recorded through the income statement as Provision for changes in expected future cash flows from financial royalty assets Financial royalty assets, net The application of the prospective approach to measure financial royalty assets requires management’s judgment in forecasting the expected future cash flows of the underlying royalties. The amounts and duration of forecasted expected future cash flows used to calculate and measure interest income are largely impacted by sell-side equity research analyst coverage, commercial performance of the product and royalty duration, each discussed in further detail below. • Analyst coverage. • Commercial performance. • Royalty duration. As part of the preparation of the forecasted expected future cash flows, which relies on the sources and variables discussed above, management is required to make assumptions around the following forecast inputs: (1) product growth rates and sales trends in outer years, (2) the geographical allocation of annual sales data from sell-side equity research analysts’ models, (3) the product and pricing mix for franchised products, (4) the strength of patent protection, including anticipated entry of generics and (5) estimates of the duration of the royalty. The most sensitive of these assumptions relates to management’s estimate of the royalty duration in the final years of an asset’s life. In some cases, patent protection may extend to a later period than the expiration date management has estimated. Management may apply a shorter royalty term in this situation if, based on its experience and expertise, management believes that it is more likely that the associated patents are subject to opposition or infringement, that the market for a particular product may shift based on pipeline approvals and products, or that product sales may be harmed by competition from generics. For products providing perpetual royalties, management applies judgment in establishing the duration over which it forecasts expected future cash flows. A shortened royalty term can result in a reduction in the effective interest rate, a decline in the carrying value of the financial royalty asset, a decline in income from financial royalty assets, significant reductions in royalty payments compared to expectations, or a permanent impairment. Additionally, royalty payments may occasionally continue beyond the estimated royalty expiration date for such reasons we cannot foresee such as excess inventory in the channel or additional scope of patent protection identified after expiry, including royalties we may become entitled to from new indications, new compounds, or for new regulatory jurisdictional approvals. The current portion of Financial royalty assets, net Cumulative allowance and Provision for changes in expected cash flows from financial royalty assets We evaluate financial royalty assets for impairment on an individual basis at each reporting date by comparing the effective interest rate to that of the prior period. If the current period effective interest rate is lower than the prior period, and if the gross cash flows have declined (expected and collected), management records a provision for the change in expected cash flows. The provision is measured as the difference between the financial royalty asset’s amortized cost basis and the net present value of the expected future cash flows, calculated based on the prior period’s effective interest rate. The amount recognized as provision expense increases the financial royalty asset’s cumulative allowance, which reduces the net carrying value of the financial royalty asset. In a subsequent period, if there is an increase in expected future cash flows, or if actual cash flows are greater than cash flows previously expected, we reduce the previously established cumulative allowance for the increase in the present value of cash flows expected to be collected, resulting in a non-cash Movements in the cumulative allowance for changes in expected future cash flows, which forms part of the Financial royalty assets, net written-off non-cash true-up Provision for changes in expected cash flows from financial royalty assets Income from financial royalty assets Income from financial royalty assets We recognize income from financial royalty assets when there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The accretable yield is recognized as income at the effective rate of return over the expected life of financial royalty assets. After acquisition, if we are not able to reliably estimate expected cash flows for a product or if we have not completed the required funding obligations payable over time for an approved product, a financial royalty asset is placed in non-accrual When royalties continue to be collected for financial royalty assets that have been fully amortized, such income is recognized as Other royalty income. | |
Allowance for current expected credit losses | Allowance for current expected credit losses On January 1, 2020, we adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments non-current Financial royalty assets, net Provision for changes in expected future cash flows from financial royalty assets Refer to Note 7-Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for further information. | |
Intangible royalty assets, net | Intangible royalty assets, net Currently, our only intangible royalty assets are the Januvia and Janumet (“DPP-IV”) DPP-IV Management reviews the performance of intangible royalty assets periodically for impairment as required by ASC 360-10, Property, Plant, and Equipment—Overall DPP-IV | |
Revenue from intangible royalty assets and Accrued royalty receivable | Revenue from intangible royalty assets and Accrued royalty receivable We earn royalties on sales by our licensees of DPP-IV DPP-IV Critical estimates that could cause a change in estimated future cash flows include changes in product demand and market growth assumptions, a change in the pricing strategy of the marketer or reimbursement coverage, and changes in country-specific contractual or patent expiry dates. Actual royalty receipts may differ from estimates and any differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically on the basis of royalty receipts. Milestone payments Certain acquisition agreements provide for future contingent payments based on the financial performance of the related biopharmaceutical product generally over a multi-year period. For purposes of measuring income from financial royalty assets, milestones payable or receivable are reflected in the cash flows used to forecast expected future cash flows in the period in which the milestone criteria is projected to be satisfied based on sell-side equity research analysts’ consensus forecasts. Milestones based on regulatory approval are not reflected in the expected future cash flows until such approval is achieved. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful completion of the defined milestones. Payments under these agreements generally become due and payable upon achievement of certain commercial milestones, and when the contingency is resolved. | |
Financial instruments | Financial instruments Certain financial instruments reflected in the consolidated balance sheets, (e.g., cash and cash equivalents, certain other assets, accounts payable and certain other liabilities) are recorded at cost, which approximates fair value due to their short-term nature. The fair values of financial instruments other than Financial royalty assets, net | |
Cash and cash equivalents and Marketable securities | Cash and cash equivalents and Marketable securities Cash and cash equivalents include cash held at banks and all highly liquid financial instruments with original maturities of 90 days or less. We invest excess cash in marketable debt securities that are classified as trading securities and reported at fair value. | |
Equity securities and Available for sale debt securities | Equity securities and Available for sale debt securities Our equity securities are measured and recorded at fair value with unrealized gains and losses recorded in earnings. Our equity securities represent investments in publicly traded equity securities. Available for sale debt securities, including our investment in the Biohaven Series A Preferred Shares, are measured at fair value and unrealized gains and losses are included in accumulated other comprehensive income/(loss) (“AOCI”). Unrealized gains and losses are reclassified to earnings as interest income is recognized. Interest income is recognized when we can reliably estimate forecasted cash flows. A decline in the market value of any available for sale debt security below its cost that is deemed to have resulted from a credit loss results in a reduction in carrying amount to fair value and is recognized in earnings. The determination of whether a decline in fair value below the amortized cost basis for an available for sale debt security has resulted from a credit loss requires significant judgment and requires consolidation of available quantitative and qualitative evidence in evaluating the potential impairment. Factors evaluated to determine whether a decline in the fair value below the amortized cost basis has resulted from a credit loss include: the extent to which fair value is less than the amortized cost basis, adverse conditions related to the security, an industry, or geographic area, the payment structure of the security, failure of the issuer to make scheduled payments, any changes to the rating of the security by a rating agency, the remaining payment terms of the security, prepayment speeds, the financial condition of the issuer expected defaults, our intent not to sell, and an evaluation as to whether it is more likely than not that we will have to sell before recovery of the cost basis. Assumptions associated with these factors are subject to future market and economic conditions, which could differ from management’s assessment. We may elect to apply the fair value option for certain investments in debt securities where the fair value option better aligns with the economics of such investment. Upon such election, the entire investment is measured at fair value on a recurring basis, with movements in fair value recognized in earnings. | |
Equity securities and Available for sale debt securities | Equity securities and Available for sale debt securities Our equity securities are measured and recorded at fair value with unrealized gains and losses recorded in earnings. Our equity securities represent investments in publicly traded equity securities. Available for sale debt securities, including our investment in the Biohaven Series A Preferred Shares, are measured at fair value and unrealized gains and losses are included in accumulated other comprehensive income/(loss) (“AOCI”). Unrealized gains and losses are reclassified to earnings as interest income is recognized. Interest income is recognized when we can reliably estimate forecasted cash flows. A decline in the market value of any available for sale debt security below its cost that is deemed to have resulted from a credit loss results in a reduction in carrying amount to fair value and is recognized in earnings. The determination of whether a decline in fair value below the amortized cost basis for an available for sale debt security has resulted from a credit loss requires significant judgment and requires consolidation of available quantitative and qualitative evidence in evaluating the potential impairment. Factors evaluated to determine whether a decline in the fair value below the amortized cost basis has resulted from a credit loss include: the extent to which fair value is less than the amortized cost basis, adverse conditions related to the security, an industry, or geographic area, the payment structure of the security, failure of the issuer to make scheduled payments, any changes to the rating of the security by a rating agency, the remaining payment terms of the security, prepayment speeds, the financial condition of the issuer expected defaults, our intent not to sell, and an evaluation as to whether it is more likely than not that we will have to sell before recovery of the cost basis. Assumptions associated with these factors are subject to future market and economic conditions, which could differ from management’s assessment. We may elect to apply the fair value option for certain investments in debt securities where the fair value option better aligns with the economics of such investment. Upon such election, the entire investment is measured at fair value on a recurring basis, with movements in fair value recognized in earnings. | |
Derivatives | Derivatives All derivatives are measured at fair value on the consolidated balance sheets with movements in fair value recognized in earnings. Prior to 2017, RPIFT applied hedge accounting to its interest rate swap agreements. Upon the discontinuation of hedge accounting, the AOCI previously recorded on the cash flow hedges was reversed out of other comprehensive income in line with terms of the associated swap contract until the termination of all of our interest rate swaps in February 2020. This reclassification adjustment is shown on the consolidated statements of comprehensive income as part of Unrealized gain/(loss) on derivative financial instruments | |
Investment in non-consolidated affiliates | Investment in non-consolidated Investments in entities that provide us with the ability to exercise significant influence, but not a controlling financial interest, and where we are not the primary beneficiary are accounted for under the equity method. Investments accounted for under the equity method are initially recorded at cost. Subsequently, we recognize through earnings our proportionate share of the investee’s net income or loss, net of any adjustment to reflect the amortization of basis differences. We generally record our share of the results of these entities one quarter in arrears within Equity in (earnings)/loss of non-consolidated Investments in non-consolidated We have variable interests in entities formed for the purposes of entering into co-development When we have committed to provide further support to the investee through capital call commitments and the investment has been reduced to zero, we provide for additional losses, resulting in a negative equity method investment, which is presented as a liability on the consolidated balance sheets. | |
Research and development funding expense | Research and development funding expense We enter into transactions where we agree to fund a portion of the research and development (“R&D”) for products undergoing late-stage clinical trials in exchange for future royalties if the products are successfully developed and commercialized. In accordance with ASC 730 Research and Development, we account for the funded amounts as R&D expense when we have the ability to obtain the results of the R&D, the transfer of financial risk is genuine and substantive and, at the time of entering into the transaction, it is not yet probable that the product will receive regulatory approval. Royalty payments owed to the Company on successfully commercialized products generated from R&D agreements are recognized as Other royalty income Other royalty income | |
Income taxes | Income taxes We periodically assess if our activities, as conducted through our subsidiaries, and as currently contemplated, constitute being engaged in the conduct of a trade or business within the United States. Neither the U.S. Internal Revenue Code (“the Code”) nor the applicable Treasury regulations provide a general definition of what constitutes being engaged in the conduct of a trade or business within the United States, and the limited case law on the subject does not provide definitive guidance. Based on our periodic assessment, we believe that we are not engaged in the conduct of a trade or business within the United States, and as such, we do not record a provision for U. S. federal income tax for the years presented in the consolidated financial statements. While we believe we are not engaged in the conduct of a trade or business within the United States or subject to U.S. taxation in that regard, we are subject to U. S. federal withholding tax on certain fixed or determinable annual or periodical gains, profits and income, such as royalties from sources within the United States, unless reduced or eliminated under an applicable tax treaty or provision of the Code. Generally, this tax is imposed by withholding 30% of the payments, or deemed payments, that are subject to this tax. We believe our subsidiaries are eligible for benefits under the U.S.-Ireland income tax treaty, and, under that treaty, are not subject to any U.S. withholding taxes on U.S.-source royalty payments. Consequently, because we believe that we are not engaged in the conduct of a trade or business within the United States and our subsidiaries are eligible for benefits under the U.S.-Ireland tax treaty, we do not record a provision for income taxes. We operate so as to be treated solely as resident in the U.K. for tax purposes. As a U.K. tax resident company, we are subject to U.K. corporation tax on our worldwide taxable profits and gains. U.K. tax resident companies are subject to U.K. corporation tax on receipt of dividends or other income distributions in respect of shares held by them, unless those dividends or other distributions fall within an exempt class. We believe that dividends received by us from RP Holdings, and dividends received by RP Holdings from RPI, should fall within such an exempt class and therefore should not be subject to U.K. corporation tax. As such, we do not record a provision for U.K. income taxes with respect to the dividends received from RP Holdings or with respect to the dividends received by RP Holdings from RPI. We are also subject to the U.K.’s “controlled foreign companies” rules (the “U.K. CFC Rules”). The U.K. CFC Rules, broadly, can impose a charge to U.K. tax on U.K. tax resident companies that have, alone or together with certain other persons, interests in a non-U.K. non-U.K. | |
Earnings per share | Earnings per share Basic earnings per share (“EPS”) is computed by dividing net income attributable to us by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to us, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares and restricted share units (“RSUs”) issued under our 2020 Independent Director Equity Incentive Plan (“Equity Incentive Plan”). We use the “if-converted” There were no Class A ordinary shares or Class B ordinary shares outstanding prior to June 16, 2020; therefore, no earnings per share information has been presented for any period prior to that date. |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Fair Value Hierarchy | The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of March 31, 2021 and December 31, 2020 (in thousands): As of March 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 201,439 $ — $ — $ 201,439 Certificates of deposit — 91,660 — 91,660 Marketable securities Commercial paper — 369,037 — 369,037 Certificates of deposit — 699,876 — 699,876 Available for sale debt securities — — 69,261 69,261 Total current assets $ 201,439 $ 1,160,573 $ 69,261 $ 1,431,273 Equity securities $ 244,503 $ — $ — $ 244,503 Available for sale debt securities — — 157,539 157,539 Forwards (1) — — 22,400 22,400 Warrants (2) — 2,884 — 2,884 Total non-current $ 244,503 $ 2,884 $ 179,939 $ 427,326 (1) The Series B Forwards, recorded within Available for sale debt securities (2) Related to the Epizyme transaction as described in Note 4––Derivative Instruments and recorded in the non-current Derivative financial instruments The net unrealized loss recognized on equity securities still held as of March 31, 2021 was a loss of $54.2 million and $119.6 million for the three months ended March 31, 2021 and 2020, respectively. As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 24,302 $ — $ — $ 24,302 Commercial paper — 77,176 — 77,176 Certificates of deposit — 74,502 — 74,502 Marketable securities Corporate debt securities — 32,754 — 32,754 Commercial paper — 444,554 — 444,554 Certificates of deposit — 505,971 — 505,971 Available for sale debt securities — — 69,984 69,984 Total current assets $ 24,302 $ 1,134,957 $ 69,984 $ 1,229,243 Equity securities (1) $ 298,689 $ — $ — $ 298,689 Available for sale debt securities — — 144,416 144,416 Forwards (2) — — 18,600 18,600 Warrants (3) — 5,439 — 5,439 Total non-current $ 298,689 $ 5,439 $ 163,016 $ 467,144 (1) Upon Gilead’s acquisition of Immunomedics, our investment in Immunomedics common stock was redeemed in full in the three months ended December 31, 2020, resulting in a gain of $292.3 million recognized within (Gain)/loss on equity securities (2) The Series B Forwards, recorded within Available for sale debt securities (3) Related to the Epizyme transaction as described in Note 4––Derivative Instruments and recorded in the non-current Derivative financial instruments | The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of December 31, 2020 and 2019 (in thousands): As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 24,302 $ — $ — $ 24,302 Commercial paper — 77,176 — 77,176 Certificates of deposit — 74,502 — 74,502 Marketable securities Corporate debt securities — 32,754 — 32,754 Commercial paper — 444,554 — 444,554 Certificates of deposit — 505,971 — 505,971 Available for sale debt securities — — 69,984 69,984 Total current assets $ 24,302 $ 1,134,957 $ 69,984 $ 1,229,243 Equity securities (1) 298,689 — — 298,689 Available for sale debt securities — — 144,416 144,416 Forwards (2) — — 18,600 18,600 Warrants (3) — 5,439 — 5,439 Total non-current $ 298,689 $ 5,439 $ 163,016 $ 467,144 (1) Upon Gilead’s acquisition of Immunomedics, our investment in Immunomedics common stock was redeemed in full in the fourth quarter of 2020, resulting in a gain of $292.3 million recognized within (Gain)/loss on equity securities (2) The Series B Forwards, recorded within Other assets (3) Related to Epizyme transaction as described in Note 4-Derivative non-current Derivative financial instruments The net unrealized gain or loss recognized on equity securities still held as of December 31, 2020 was a loss of $45.2 million, a gain of $125.6 million and a loss of $7.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents Money market funds $ 222,326 $ — $ — $ 222,326 Certificates of deposit — 4,000 — 4,000 Marketable securities U.S. government securities — 12,877 — 12,877 Commercial paper — 21,367 — 21,367 Certificates of deposit — 60,211 — 60,211 Total current assets $ 222,326 $ 98,455 $ — $ 320,781 Equity securities 380,756 — — 380,756 Available for sale debt securities — — 131,280 131,280 Warrants (1) — 30,815 — 30,815 Forward purchase contract (1) — 11,500 — 11,500 Total non-current $ 380,756 $ 42,315 $ 131,280 $ 554,351 Liabilities: Interest rate swaps — (9,215 ) — (9,215 ) Total current liabilities $ — $ (9,215 ) $ — $ (9,215 ) Interest rate swaps — (18,902 ) — (18,902 ) Total non-current $ — $ (18,902 ) $ — $ (18,902 ) (1) Related to Epizyme warrants and put option as described in Note 4-Derivative non-current Derivative financial instruments |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The tables presented below summarize the change in the combined carrying value (current and non-current) For the three months ended 2021 2020 Series A Biohaven Preferred Shares Balance at the beginning of the period $ 214,400 $ 131,280 Unrealized gains on available for sale debt securities (1) 5,125 52,725 Transfer to Level 2 — (184,005 ) Redemption (15,625 ) — Balance at the end of the period $ 203,900 $ — For the three months ended 2021 2020 Series B Biohaven Preferred Shares Balance at the beginning of the period $ — $ — Purchases 17,585 — Settlement of forwards (2) 5,315 — Balance at the end of the period $ 22,900 $ — For the three months ended 2021 2020 Series B Forwards Balance at the beginning of the period $ 18,600 $ — Unrealized gains included in earnings (3) 9,115 — Settlement of forwards (2) (5,315 ) — Balance at the end of the period $ 22,400 $ — (1) Recorded in other comprehensive income within Unrealized gain on available for sale debt securities (2) Reflects the fair value attributed to the Series B Forwards that were settled in the period, which is included in the fair value of the Series B Biohaven Preferred Shares. See Note 5––Available for Sale Debt Securities. (3) Recorded in earnings within Unrealized gain on available for sale debt securities | The tables presented below summarize the change in the carrying value of Level 3 financial instruments, which relate to our investment in the Series A Biohaven Preferred Shares and the Series B Forwards (in thousands). For the years ended December 31, 2020 2019 Available for sale debt securities Balance at the beginning of the period $ 131,280 $ — Purchases — 125,121 Unrealized gains on available for sale debt securities 52,725 — Transfer to Level 2 (184,005 ) — Transfer from Level 2 (1) 198,526 — Unrealized gains on available for sale debt securities 15,874 6,159 Balance at the end of the period $ 214,400 $ 131,280 (1) Includes $14.5 million of unrealized gains on available for sale debt securities included in other comprehensive income while the instrument was classified as a Level 2 asset. For the year ended 2020 Forwards Balance at the beginning of the period $ — Unrealized gains included in earnings (1) 18,600 Balance at the end of the period $ 18,600 (1) Recorded within Unrealized gain on forwards |
Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | Estimated fair values based on Level 3 inputs and related carrying values for the non-current March 31, 2021 December 31, 2020 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 18,464,028 $ 12,599,080 $ 18,718,179 $ 12,368,084 | Estimated fair values based on Level 3 inputs and related carrying values for the non-current December 31, 2020 December 31, 2019 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 18,718,179 $ 12,368,084 $ 16,501,819 $ 10,842,052 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Summary of Derivatives and Reclassifications | The table below summarizes the change in fair value of derivatives for the three months ended March 31, 2021 and 2020 and the line items within the condensed consolidated statements of comprehensive income where the (gains)/losses on derivatives are recorded (in thousands). For the three months ended March 31, Condensed Consolidated Statement of 2021 2020 Derivatives in hedging relationships (1) Interest Rate Swaps: Amount of loss reclassified from Accumulated Other Comprehensive Income into income $ — $ 4,066 Unrealized loss on derivative financial instruments Change in fair value of interest rate swaps — (73 ) Unrealized loss on derivative financial instruments Interest expense — 114 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps — 6,908 Unrealized loss on derivative financial instruments Interest expense — 408 Interest expense Warrant: Change in fair value of 2,555 16,744 Unrealized loss on derivative financial instruments Forward purchase contract: Change in fair value of forward purchase contract — 5,800 Unrealized loss on derivative financial instruments (1) Certain older interest rate swaps were previously designated as cash flow hedges. These swaps became ineffective as debt refinancings occurred between 2013 and 2016. As a result of the termination of interest rate swaps in February 2020, all amounts associated with interest rate swaps previously designated as cash flow hedges and recorded in Accumulated Other Comprehensive Income have been released into earnings. | The tables below summarize the change in fair value of the derivatives for the years ended December 31, 2020, 2019 and 2018 and the line items within the consolidated statements of comprehensive income where the gains/(losses) on these derivatives are recorded (in thousands). For the years ended December 31, Consolidated Statement of 2020 2019 2018 Derivatives in hedging relationships (1) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ 4,066 $ 6,189 $ 8,003 Unrealized loss/(gain) Change in fair value of interest rate swaps (73 ) 16,954 (3,357 ) Unrealized loss/(gain) Interest expense/(income) 114 (9,565 ) (9,758 ) Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps 6,908 49,472 (16,569 ) Unrealized loss/(gain) Interest expense/(income) 408 (2,681 ) (440 ) Interest expense Warrant: Change in fair value of warrant 25,375 (21,977 ) — Unrealized loss/(gain) Forward purchase contract: Change in fair value of forward purchase contract 5,800 (11,500 ) — Unrealized loss/(gain) (1) Certain older interest rate swaps were previously designated as cash flow hedges. These swaps became ineffective as debt refinancings occurred between 2013 and 2016. As a result of the termination of interest rate swaps in February 2020, all amounts associated with interest rate swaps previously designated as cash flow hedges and recorded in AOCI have been released into earnings. |
Schedule of Notional Values and Fixed Rates | As of December 31, 2019, RPIFT held interest rate swap contracts to effectively convert a portion of its floating-rate debt to a fixed basis. The notional values and fixed rates payable on the swap contracts are shown in the table below. Notional Value Fixed Rate Maturity Date (in millions) $600 2.019% November 9, 2020 $250 2.094% March 27, 2023 $500 2.029% March 27, 2023 $250 2.113% March 27, 2023 $500 2.129% March 27, 2023 |
Available for Sale Debt Secur_2
Available for Sale Debt Securities (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Summary of Available for Sale Debt Securities | The table below summarizes our available for sale debt securities recorded at fair value as of March 31, 2021 and December 31, 2020 (in thousands): Cost Unrealized gains Fair Value (1) As of March 31, 2021 Series A Biohaven Preferred Shares $ 125,121 $ 78,779 $ 203,900 Series B Biohaven Preferred Shares 17,585 5,315 22,900 Series B Forwards — 22,400 22,400 Total available for sale debt securities $ 142,706 $ 106,494 $ 249,200 As of December 31, 2020 Series A Biohaven Preferred Shares $ 125,121 $ 89,279 $ 214,400 Series B Forwards — 18,600 18,600 Total available for sale debt securities $ 125,121 $ 107,879 $ 233,000 (1) As of March 31, 2021, $69.3 million and $134.6 million related to Series A Biohaven Preferred Shares are recorded in the current and non-current Available for sale debt securities non-current Available for sale debt securities non-current Available for sale debt securities | A summary of our available for sale debt securities recorded at fair value is shown below as of December 31, 2020 and December 31, 2019 (in thousands): Cost Unrealized Fair Value (1) As of December 31, 2020 Series A Biohaven Preferred Shares $ 125,121 $ 89,279 $ 214,400 Total available for sale debt securities $ 125,121 $ 89,279 $ 214,400 As of December 31, 2019 Series A Biohaven Preferred Shares $ 125,121 $ 6,159 $ 131,280 Total available for sale debt securities $ 125,121 $ 6,159 $ 131,280 (1) As of December 31, 2020, $70.0 million and $144.4 million are recorded as the current and non-current Available for sale debt securities non-current |
Financial Royalty Assets, Net (
Financial Royalty Assets, Net (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Summary of Financial Royalty Assets, Net | The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current March 31, 2021 Estimated royalty Gross carrying value Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,292,904 $ (53,092 ) $ 5,239,812 Tysabri (c) 1,967,974 (114,354 ) 1,853,620 Imbruvica 2027-2029 1,416,270 (110,285 ) 1,305,985 Xtandi 2027-2028 1,136,270 (188,417 ) 947,853 Evrysdi 2030-2035 (d) 688,189 — 688,189 Promacta 2025-2028 658,287 — 658,287 Other 2020-2039 3,517,660 (730,280 ) 2,787,380 Total $ 14,677,554 $ (1,196,428 ) $ 13,481,126 Less: Cumulative allowance for credit losses (Note 7) (359,658 ) Total financial royalty assets, net $ 13,121,468 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on our estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) 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. e) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7—Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. December 31, 2020 Estimated royalty Gross carrying value Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,274,896 $ — $ 5,274,896 Tysabri (c) 2,003,797 (112,720 ) 1,891,077 Imbruvica 2027-2029 1,406,291 (46,872 ) 1,359,419 Xtandi 2027-2028 1,150,335 (145,565 ) 1,004,770 Promacta 2025-2027 686,129 — 686,129 Evrysdi 2030-2035 (d) 675,440 — 675,440 Other 2020-2039 3,022,213 (634,950 ) 2,387,263 Total $ 14,219,101 $ (940,107 ) $ 13,278,994 Less: Cumulative allowance for credit losses (Note 7) (323,717 ) Total financial royalty assets, net $ 12,955,277 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on our estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed by the management. d) 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. e) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7—Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. | The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current December 31, 2020 Estimated royalty Gross carrying Cumulative Net carrying value Cystic fibrosis franchise 2037 (b) $ 5,274,896 $ — $ 5,274,896 Tysabri (c) 2,003,797 (112,720 ) 1,891,077 Imbruvica 2027—2029 1,406,291 (46,872 ) 1,359,419 Xtandi 2027—2028 1,150,335 (145,565 ) 1,004,770 Promacta 2025—2027 686,129 — 686,129 Evrysdi 2030—2035 (e) 675,440 — 675,440 Other 2020—2039 3,022,213 (634,950 ) 2,387,263 Total $ 14,219,101 $ (940,107 ) $ 13,278,994 Less: Cumulative allowance for credit losses (323,717 ) Total financial royalty assets, net $ 12,955,277 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on patent expiration dates (which may include patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7-Cumulative e) 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. December 31, 2019 Estimated royalty Gross carrying Cumulative Net carrying value Cystic fibrosis franchise (d) 2037 (b) $ 4,639,045 $ — $ 4,639,045 Tysabri (c) 2,131,272 (71,789 ) 2,059,483 Imbruvica 2027—2029 1,332,077 — 1,332,077 Xtandi 2027—2028 1,193,918 (332,624 ) 861,294 Promacta 2025—2027 776,555 — 776,555 Crysvita 2033—2038 (e) 321,234 — 321,234 Other 2019—2039 1,768,929 (464,005 ) 1,304,924 Total $ 12,163,030 $ (868,418 ) $ 11,294,612 a) Dates shown represent management’s estimates of when a royalty will substantially end, which may depend on patent expiration dates (which may include patent term extensions) or other factors and may vary by geography. Royalty expiration dates can change due to patent, regulatory, commercial or other developments. There can be no assurances that our royalties will expire when expected. b) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on generic entry. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. d) The Vertex triple combination therapy, Trikafta, was approved by the FDA in October 2019. Sell-side equity research analysts’ consensus forecasts increased due to expected sales of the newly approved cystic fibrosis franchise product and resulted in a reversal of the entire cumulative allowance for changes in expected cash flows in the fourth quarter of 2019 related to this financial royalty asset. e) As of December 31, 2019, the timing of when we expected to reach the royalty cap of 2.5 times our purchase price was 2032. |
Cumulative Allowance and the _2
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
Schedule of Cumulative Allowance for Changes in Expected Cash Flows | The following tables set forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses, as of the dates indicated (in thousands): Activity for the period Balance at December 31, 2020 (a) $ (1,263,824 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (283,617 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 27,296 Current period provision for credit losses (b) (35,941 ) Balance at March 31, 2021 $ (1,556,086 ) (a) Includes $323.7 million related to cumulative allowance for credit losses. (b) Primarily related to provision for credit losses resulting from increases to our portfolio of financial royalty assets in the three months ended March 31, 2021, predominantly the $100.0 million increase to our zavegepant financial royalty asset related to the funding payment we made to Biohaven upon the start of the oral zavegepant Phase 3 program and a new royalty interest in the cabozantinib products. | The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses, as of the dates indicated (in thousands): Activity for the Balance at December 31, 2017 $ (2,045,868 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (284,214 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 341,548 Reversal of cumulative allowance (a) 5,637 Balance at December 31, 2018 (1,982,897 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (322,717 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 1,342,038 Reversal of cumulative allowance (a) 95,158 Balance at December 31, 2019 (868,418 ) Cumulative adjustment for adoption of ASU 2016-13 (192,705 ) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (645,612 ) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 570,959 Reversal of cumulative allowance (a) 2,964 Write off of credit loss allowance (b) 25,174 Current period provision for credit losses (c) (156,186 ) Balance at December 31, 2020 $ (1,263,824 ) (a) Relates to amounts reversed out of the allowance at the end of a financial royalty asset’s life to bring the account balance to zero. Reversals solely impact the asset account and allowance account, there is no impact on the consolidated statements of comprehensive income. (b) Relates to amounts reversed out of the credit loss allowance associated with omecamtiv mecarbil as a result of the write-off (c) Primarily related to the allowance for credit losses resulting from increases to our portfolio of financial royalty assets in 2020, predominantly the final tranche of Tazverik, zavegepant, and the residual interest in the cystic fibrosis franchise. |
Intangible Royalty Assets, Net
Intangible Royalty Assets, Net (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Royalty Interests | The following schedules of the intangible royalty assets present the cost, accumulated amortization and net carrying value as of March 31, 2021 and December 31, 2020 (in thousands). As of March 31, 2021 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 583,221 $ 22,995 Total intangible royalty assets $ 606,216 $ 583,221 $ 22,995 As of December 31, 2020 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 | The following schedules of the intangible royalty assets present the cost, accumulated amortization and net carrying value as of December 31, 2020 and 2019 (in thousands). As of December 31, 2020 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 As of December 31, 2019 Cost Accumulated Net carrying DPP-IV $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Schedule of Borrowings | Our borrowings as of March 31, 2021 and December 31, 2020 consisted of the following (in thousands): Type of Borrowing Maturity Interest rate March 31, 2021 December 31, 2020 Senior Unsecured Notes: Senior unsecured notes (issued at 99.322% of par) 9/2023 0.75 % $ 1,000,000 $ 1,000,000 Senior unsecured notes (issued at 98.875% of par) 9/2025 1.20 % 1,000,000 1,000,000 Senior unsecured notes (issued at 98.284% of par) 9/2027 1.75 % 1,000,000 1,000,000 Senior unsecured notes (issued at 97.760% of par) 9/2030 2.20 % 1,000,000 1,000,000 Senior unsecured notes (issued at 95.556% of par) 9/2040 3.30 % 1,000,000 1,000,000 Senior unsecured notes (issued at 95.306% of par) 9/2050 3.55 % 1,000,000 1,000,000 Senior Unsecured Revolving Credit Facility — — Unamortized debt discount and issuance costs (178,928 ) (183,416 ) Total debt carrying value 5,821,072 5,816,584 Less: Current portion of long-term debt — — Total long-term debt $ 5,821,072 $ 5,816,584 | Our borrowings at December 31, 2020 and 2019 consisted of the following (in thousands): Type of Borrowing Maturity Interest rate December 31, 2020 December 31, 2019 Senior Unsecured Notes: Senior unsecured notes (issued at 99.322% of par) 9/2023 0.75 % $ 1,000,000 $ — Senior unsecured notes (issued at 98.875% of par) 9/2025 1.20 % 1,000,000 — Senior unsecured notes (issued at 98.284% of par) 9/2027 1.75 % 1,000,000 — Senior unsecured notes (issued at 97.760% of par) 9/2030 2.20 % 1,000,000 — Senior unsecured notes (issued at 95.556% of par) 9/2040 3.30 % 1,000,000 — Senior unsecured notes (issued at 95.306% of par) 9/2050 3.55 % 1,000,000 — Senior Unsecured Revolving Credit Facility — — RPIFT Senior Secured Credit Facilities (1): Term Loan B Facility (2 ) LIBOR + 200 bps — 4,123,000 Term Loan A Facility (2 ) LIBOR + 150 bps — 2,150,000 Unamortized debt discount and issuance costs (183,416 ) (34,878 ) Total debt carrying value 5,816,584 6,238,122 Less: Current portion of long-term debt — (281,984 ) Total long-term debt $ 5,816,584 $ 5,956,138 (1) The carrying value of our senior secured term loans, including the current portion, approximates its fair value and represented a Level 2 liability within the fair value hierarchy. (2) In February 2020, the outstanding principal amounts of our Prior Credit Facility (as defined below) were repaid in full with net proceeds from our senior secured credit facilities which we subsequently repaid in full in September 2020 with net proceeds from the Notes (as defined below) and available cash on hand. |
Schedule of Repayments of Debt by Year | The future principal payments for our borrowings as of March 31, 2021 over the next five years and thereafter are as follows (in thousands): Year Principal Payments Remainder of 2021 $ — 2022 — 2023 1,000,000 2024 — 2025 1,000,000 Thereafter 4,000,000 Total (1) $ 6,000,000 (1) Excludes unamortized discount and loan issuance costs on long-term debt of $178.9 million as of March 31, 2021, which are amortized through interest expense over the remaining life of the underlying debt obligations. | The future principal payments for our borrowings as of December 31, 2020 over the next five years and thereafter are as follows (in thousands): Year Principal Payments 2021 $ — 2022 — 2023 1,000,000 2024 — 2025 1,000,000 Thereafter 4,000,000 Total (1) $ 6,000,000 (1) Excludes unamortized discount and loan issuance costs on long-term debt of $183.4 million as of December 31, 2020, which are amortized through interest expense over the remaining life of the underlying debt obligations. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Schedule of Balance Of Non-controlling Interests | The net change in the balance of our four non-controlling RPSFT Legacy Continuing EPA Holdings Total December 31, 2020 $ 12,436 $ 1,939,509 $ 3,125,091 $ — $ 5,077,036 Contributions — 3,253 — — 3,253 Distributions (13,653 ) (94,542 ) (37,183 ) — (145,378 ) Net income 15,058 36,257 38,545 — 89,860 Other exchanges — — (65,072 ) — (65,072 ) Other comprehensive income: Unrealized gain on available for sale debt securities — 901 1,512 — 2,413 Reclassification of unrealized gain on available for sale debt securities — (2,723 ) (4,571 ) — (7,294 ) March 31, 2021 $ 13,841 $ 1,882,655 $ 3,058,322 $ — $ 4,954,818 (1) Related to the Continuing Investors Partnerships’ ownership as of March 31, 2021 of approximately 35% in RP Holdings through their ownership of the RP Holdings Class B Interests. Royalty Pharma plc owns the remaining 65% of RP Holdings through its ownership of RP Holdings Class A Interests and Class B Interests as of March 31, 2021. RPSFT Legacy Total December 31, 2019 $ 35,883 $ — $ 35,883 Contributions — 1,133,629 1,133,629 Transfer of interests — 1,037,161 1,037,161 Distributions (29,246 ) (222,180 ) (251,426 ) Net income 24,926 12,930 37,856 Other comprehensive income: Unrealized gain on available for sale debt securities — 9,672 9,672 March 31, 2020 $ 31,563 $ 1,971,212 $ 2,002,775 | The net change in the balance of our four non-controlling RPSFT Legacy Investors Continuing EPA Total December 31, 2019 $ 35,883 $ — $ — $ — $ 35,883 Contributions — 1,165,258 9,418 — 1,174,676 Transfer of interests — 1,037,161 — — 1,037,161 Distributions (112,339 ) (594,592 ) (85,426 ) — (792,357 ) Net income prior to IPO 42,151 102,892 — — 145,043 Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity — (750 ) 2,433,848 — 2,433,098 Issuance of Class A ordinary shares sold in IPO, net of offering costs — — 758,354 — 758,354 Other exchanges — — (309,566 ) (309,566 ) Net income subsequent to IPO 46,741 218,137 316,993 — 581,871 Other comprehensive income: Unrealized gain on available for sale debt securities — 15,015 7,488 — 22,503 Reclassification of unrealized gain on available for sale debt securities — (3,612 ) (6,018 ) — (9,630 ) December 31, 2020 $ 12,436 $ 1,939,509 $ 3,125,091 $ — $ 5,077,036 (1) Related to the Continuing Investors Partnerships’ ownership of approximately 36% in RP Holdings through their ownership of the RP Holdings Class B Interests as of December 31, 2020. Royalty Pharma plc owns the remaining 64% of RP Holdings through its ownership of RP Holdings Class A and Class B Interests as of December 31, 2020. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A ordinary share for the three months ended March 31, 2021 (in thousands, except per share amounts). Three Months Ended Numerator: Consolidated Net Income $ 158,979 Less: Net income attributable to Continuing Investor Partnerships 38,545 Less: Net income attributable to non-controlling 51,315 Net income attributable to Royalty Pharma plc—basic 69,119 Add: Reallocation of net income attributable to non-controlling 38,545 Net income attributable to Royalty Pharma plc—diluted $ 107,664 Denominator Weighted average Class A ordinary shares outstanding—basic 389,760 Add: Dilutive effects as shown separately below Class B ordinary shares exchangeable for Class A ordinary shares 217,350 Unvested RSUs 38 Weighted average Class A ordinary shares outstanding—diluted 607,148 Earnings per Class A ordinary share—basic $ 0.18 Earnings per Class A ordinary share—diluted $ 0.18 | The following table sets forth reconciliations used to compute basic and diluted earnings per Class A ordinary share (in thousands, except per share amounts). Year Ended Basic earnings per share: Numerator Consolidated net income $ 1,701,954 Less: net income attributable to Continuing Investors Partnerships prior to the IPO (1) 479,842 Less: net income attributable to Continuing Investors Partnerships subsequent to the IPO 316,993 Less: net income attributable to non-controlling 409,921 Net income attributable to Royalty Pharma plc $ 495,198 Denominator Weighted average Class A ordinary shares outstanding-basic 375,444 Earnings per Class A ordinary share-basic $ 1.32 Diluted earnings per share: Numerator Net income attributable to Royalty Pharma plc $ 495,198 Denominator Weighted average Class A ordinary shares outstanding-basic 375,444 Dilutive effect of unvested RSUs 11 Weighted average Class A ordinary shares outstanding-diluted 375,455 Earnings per Class A ordinary share-diluted $ 1.32 (1) Reflected as Net income attributable to controlling interest |
Indirect Cash Flow (Tables)
Indirect Cash Flow (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||
Schedule of Cash Flow, Supplemental Disclosures | Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below (in thousands). For the Three Months Ended 2021 2020 Cash flow from operating activities: Consolidated net income $ 158,979 $ 109,096 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Income from financial royalty assets (529,625 ) (462,844 ) Provision for changes in expected cash flows from financial royalty assets 292,262 88,012 Amortization of intangible assets 5,671 5,733 Amortization of debt discount and issuance costs 4,790 2,478 Unrealized loss on derivative contracts 2,555 33,445 Loss on equity securities 54,186 153,166 Equity in loss of non-consolidated 1,918 9,074 Distributions from non-consolidated 17,325 20,293 Loss on extinguishment of debt — 5,406 Share-based compensation 713 — Interest income accretion (15,491 ) — Unrealized gain on available for sale debt securities (9,115 ) — Loss on derivative financial instruments — (34,952 ) Other 958 3,469 Decrease/(increase) in operating assets: Cash collected on financial royalty assets 573,946 488,028 Accrued royalty receivable (299 ) (196 ) Other royalty income receivable (530 ) (2,619 ) Other current assets 1,939 40 Other assets — 45,007 (Decrease)/increase in operating liabilities: Accounts payable and accrued expenses (2,207 ) 8,468 Interest payable (31,875 ) — Net cash provided by operating activities $ 526,100 $ 471,104 Non-cash For the Three 2021 2020 Supplemental schedule of non-cash Receipt of contribution of investment in Legacy Investors Partnerships (Note 9) $ — $ 303,679 Settlement of Epizyme forward purchase contract (Note 4) — 5,700 Accrued purchase obligation—Tazverik (Note 17) — 110,000 Repayments of long-term debt by contributions from non-controlling — 1,103,774 (1) Related to the pro rata portion of RPIFT’s outstanding debt repaid by the Legacy Investors Partnerships | Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below (in thousands). For the Years Ended December 31, 2020 2019 2018 Cash flow from operating activities: Consolidated net income $ 1,701,954 $ 2,461,419 $ 1,517,855 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Provision for changes in expected cash flows from financial royalty assets 230,839 (1,019,321 ) (57,334 ) Amortization of intangible assets 23,058 23,924 33,267 Amortization of debt discount and issuance costs 11,715 12,790 13,127 Realized gain on available for sale debt securities — — (419,481 ) Unrealized loss/(gain) on derivative contracts 42,076 39,138 (11,923 ) (Gain)/loss on equity securities (247,073 ) (155,749 ) 13,939 Equity in (earnings)/loss of non-consolidated (44,459 ) 32,517 7,023 Distributions from non-consolidated 42,334 14,059 39,402 Loss on extinguishment of debt 30,272 — — Share-based compensation 5,428 — — Interest income accretion (20,551 ) — — Unrealized gain on forwards (18,600 ) — — Impairment charge 65,053 — — Loss on derivative financial instruments (34,952 ) — — Other 9,621 (2,122 ) (7,771 ) (Increase)/decrease in operating assets: Financial royalty assets (1,959,975 ) (1,648,837 ) (1,524,816 ) Cash collected on financial royalty assets 2,121,923 1,934,092 2,052,592 Available for sale debt securities — (150,000 ) (150,000 ) Accrued royalty receivable 370 2,471 (27,372 ) Other receivables — 150,000 150,000 Other royalty income receivable (770 ) 7,390 (11,099 ) Other current assets (10,278 ) 4,607 (442 ) Other assets 45,264 (45,635 ) — Increase/(decrease) in operating liabilities: Accounts payable and accrued expenses (766 ) 6,496 1,350 Interest payable 42,146 — — Net cash provided by operating activities $ 2,034,629 $ 1,667,239 $ 1,618,317 Non-cash For the Years Ended 2020 2019 2018 Supplemental schedule of non-cash Receipt of contribution of investment in Legacy Investors Partnerships (Note 9) $ 303,679 $ — $ — Settlement of Epizyme forward purchase contract (Note 4) 5,700 — — Accrued purchase obligation-Tazverik 110,000 — — Repayments of long-term debt by contributions from non-controlling 1,103,774 — — Milestone payable-Erleada (2) 18,600 — — (1) Related to the pro rata portion of RPIFT’s outstanding debt repaid by the Legacy Investors Partnerships (2) Related to the achievement of a sales-based milestone that was not paid as of December 31, 2020. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income are as follows (in thousands): Unrealized gain/(loss) Balance at December 31, 2020 $ 34,395 Reclassifications to net income (8,197 ) Activity for the period 2,712 Reclassifications from non-controlling 542 Balance at March 31, 2021 $ 29,452 | Changes in accumulated other comprehensive income/(loss) by component are as follows (in thousands): Unrealized gain/(loss) on equity Unrealized Unrealized Total Accumulated Balance at December 31, 2017 $ (2,863 ) $ 402,502 $ (18,258 ) $ 381,381 Activity for the year — (402,502 ) — (402,502 ) Cumulative adjustment for adoption of ASU 2016—01 2,863 — — 2,863 Reclassifications to net income — — 8,003 8,003 Balance at December 31, 2018 — — (10,255 ) (10,255 ) Activity for the year — 6,159 — 6,159 Reclassifications to net income — — 6,189 6,189 Balance at December 31, 2019 — 6,159 (4,066 ) 2,093 Reclassifications to net income — (10,921 ) 4,066 (6,855 ) Activity for the year — 60,617 — 60,617 Reclassifications to non-controlling — (24,022 ) — (24,022 ) Reclassifications from non-controlling — 2,562 — 2,562 Balance at December 31, 2020 $ — $ 34,395 $ — $ 34,395 |
Organization and Purpose (Detai
Organization and Purpose (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jun. 18, 2021 | Jun. 16, 2020 | Feb. 11, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 02, 2020 | Feb. 29, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Repayments of outstanding debt | $ 5,170,396 | $ 11,116,196 | ||||||
Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Ownership percentage following IPO | 100.00% | 100.00% | ||||||
RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | $ 3,200,000 | |||||||
RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | 2,840,000 | |||||||
Old Credit Facility | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Repayments of outstanding debt | $ 6,300,000 | |||||||
IPO | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Sale of stock, consideration received | $ 1,900,000 | |||||||
IPO | Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 89,334 | 89,334 | ||||||
Sale of stock, price per share (in dollars per share) | $ 28 | $ 28 | ||||||
IPO - Shares From Company | Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 71,652 | 71,652 | ||||||
IPO - Shares From Selling Shareholders | Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 17,682 | 17,682 | ||||||
Public Stock Offering - Continuing Investors Partnerships Interests | Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares available to convert (in shares) | 294,176 | |||||||
Public Stock Offering - Continuing Investors Partnerships Interests | Common Class B | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares available to convert (in shares) | 294,176 | |||||||
Number of shares converted (in shares) | 241,207 | |||||||
Old RPI | Exchange Offer Transaction | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Ownership percentage (as a percent) | 82.00% | |||||||
RPCT | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Ownership percentage (as a percent) | 66.00% | |||||||
Legacy Investors Partnerships | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | $ 1,300,000 | |||||||
Legacy Investors Partnerships | R P I Intermediate Ft Senio Secured Credit Facilities Tranche A1 | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | $ 1,300,000 | |||||||
Legacy Investors Partnerships | Exchange Offer Transaction | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Exchange offering, ownership percentage | 82.00% | |||||||
Legacy Investors Partnerships | Old RPI | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Noncontrolling interest (percentage) | 18.00% | |||||||
RPSFT | RPCT | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Noncontrolling interest (percentage) | 34.00% | |||||||
RPI Intermediate FT | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | $ 6,000,000 | |||||||
RPI Intermediate FT | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt issued, amount | 6,000,000 | $ 149,000 | ||||||
RPI Intermediate FT | RPIFT Senior Secured Credit Facilities | Senior Secured Debt | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Repayments of outstanding debt | $ 5,200,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2020Partnership | Feb. 29, 2020 | Jan. 01, 2020USD ($) | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Number of non controlling interests created | Partnership | 2 | ||||||||
Marketable securities | $ 1,068,913 | $ 983,279 | $ 94,455 | ||||||
Purchases of available for sale debt securities | 505,339 | $ 703,935 | 1,705,283 | 817,402 | |||||
Proceeds from sales and maturities of marketable securities | 419,783 | 104,613 | 815,440 | 725,070 | |||||
Net cash flow from investing | (599,300) | (761,754) | (2,759,320) | (2,153,625) | $ 303,424 | ||||
Cumulative adjustment | 9,837,033 | 7,162,693 | $ 9,895,815 | $ 6,141,438 | 4,552,079 | $ 4,460,546 | |||
Customer Concentration Risk | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Concentration risk (as a percent) | 27.00% | 17.00% | |||||||
Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative adjustment | 1,923,771 | 2,561,971 | $ 1,920,635 | $ 2,825,212 | 1,215,953 | $ 192,700 | 655,446 | ||
Accumulated Other Comprehensive Income/(Loss) | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative adjustment | $ 29,452 | 49,212 | $ 34,395 | 2,093 | $ (10,255) | 381,381 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative adjustment | (192,705) | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative adjustment | (192,705) | (2,863) | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income/(Loss) | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative adjustment | $ 2,863 | ||||||||
Current portion of Financial royalty assets | Vertex | Customer Concentration Risk | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Concentration risk (as a percent) | 28.00% | 27.00% | |||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Marketable securities | 88,800 | 37,500 | |||||||
Purchases of available for sale debt securities | 66,700 | 388,000 | |||||||
Proceeds from sales and maturities of marketable securities | 22,100 | 350,500 | |||||||
Net cash flow from investing | $ 88,800 | $ 37,500 | |||||||
Old RPI | Legacy Investors Partnerships | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Non controlling interest (percentage) | 18.00% | ||||||||
RP Holdings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Non controlling interest (percentage) | 65.00% | 64.00% | |||||||
RP Holdings | Continuing Investors Partnerships | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Non controlling interest (percentage) | 35.00% | 36.00% |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | |||
Marketable securities | $ 1,068,913 | $ 983,279 | $ 94,455 |
Available for sale debt securities | 69,261 | 69,984 | |
Available for sale debt securities | 69,261 | 69,984 | |
Marketable securities | 1,068,913 | 983,279 | 94,455 |
Equity securities | 244,503 | 298,689 | 380,756 |
Available for sale debt securities | 179,939 | 163,016 | |
Liabilities: | |||
Interest rate swaps | 9,215 | ||
Total current liabilities | (9,215) | ||
Interest rate swaps | 18,902 | ||
Total non-currentliabilities | (18,902) | ||
Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 69,261 | 69,984 | 60,211 |
Total current assets | 1,431,273 | 1,229,243 | 320,781 |
Available for sale debt securities | 69,261 | 69,984 | 60,211 |
Total current assets | 1,431,273 | 1,229,243 | 320,781 |
Equity securities | 244,503 | 298,689 | 380,756 |
Available for sale debt securities | 157,539 | 144,416 | 131,280 |
Liabilities: | |||
Total non-currentassets | 427,326 | 467,144 | 554,351 |
Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 369,037 | 444,554 | 12,877 |
Marketable securities | 369,037 | 444,554 | 12,877 |
Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 699,876 | 505,971 | 21,367 |
Marketable securities | 699,876 | 505,971 | 21,367 |
Fair Value, Recurring | Forwards | |||
Assets: | |||
Derivatives | 22,400 | 18,600 | 30,815 |
Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 2,884 | 5,439 | 11,500 |
Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 32,754 | ||
Marketable securities | 32,754 | ||
Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | (9,215) | ||
Interest rate swaps | (18,902) | ||
Fair Value, Recurring | Money Market Funds | |||
Assets: | |||
Cash equivalents | 201,439 | 24,302 | 222,326 |
Cash equivalents | 201,439 | 24,302 | 222,326 |
Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Cash equivalents | 91,660 | 74,502 | 4,000 |
Cash equivalents | 91,660 | 74,502 | 4,000 |
Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Cash equivalents | 77,176 | ||
Cash equivalents | 77,176 | ||
Level 1 | |||
Liabilities: | |||
Total current liabilities | 0 | ||
Total non-currentliabilities | 0 | ||
Level 1 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | 0 |
Total current assets | 201,439 | 24,302 | 222,326 |
Available for sale debt securities | 0 | 0 | 0 |
Total current assets | 201,439 | 24,302 | 222,326 |
Equity securities | 244,503 | 298,689 | 380,756 |
Available for sale debt securities | 0 | 0 | 0 |
Liabilities: | |||
Total non-currentassets | 244,503 | 298,689 | 380,756 |
Level 1 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 0 | 0 | 0 |
Marketable securities | 0 | 0 | 0 |
Level 1 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 0 | 0 | 0 |
Marketable securities | 0 | 0 | 0 |
Level 1 | Fair Value, Recurring | Forwards | |||
Assets: | |||
Derivatives | 0 | 0 | 0 |
Level 1 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 0 | 0 | 0 |
Level 1 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Marketable securities | 0 | ||
Level 1 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | 0 | ||
Interest rate swaps | 0 | ||
Level 1 | Fair Value, Recurring | Money Market Funds | |||
Assets: | |||
Cash equivalents | 201,439 | 24,302 | 222,326 |
Cash equivalents | 201,439 | 24,302 | 222,326 |
Level 1 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Cash equivalents | 0 | 0 | 0 |
Cash equivalents | 0 | 0 | 0 |
Level 1 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Cash equivalents | 0 | ||
Cash equivalents | 0 | ||
Level 2 | |||
Liabilities: | |||
Total current liabilities | (9,215) | ||
Total non-currentliabilities | (18,902) | ||
Level 2 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | 60,211 |
Total current assets | 1,160,573 | 1,134,957 | 98,455 |
Available for sale debt securities | 0 | 0 | 60,211 |
Total current assets | 1,160,573 | 1,134,957 | 98,455 |
Equity securities | 0 | 0 | 0 |
Available for sale debt securities | 0 | 0 | 0 |
Liabilities: | |||
Total non-currentassets | 2,884 | 5,439 | 42,315 |
Level 2 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 369,037 | 444,554 | 12,877 |
Marketable securities | 369,037 | 444,554 | 12,877 |
Level 2 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 699,876 | 505,971 | 21,367 |
Marketable securities | 699,876 | 505,971 | 21,367 |
Level 2 | Fair Value, Recurring | Forwards | |||
Assets: | |||
Derivatives | 0 | 0 | 30,815 |
Level 2 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 2,884 | 5,439 | 11,500 |
Level 2 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 32,754 | ||
Marketable securities | 32,754 | ||
Level 2 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | (9,215) | ||
Interest rate swaps | (18,902) | ||
Level 2 | Fair Value, Recurring | Money Market Funds | |||
Assets: | |||
Cash equivalents | 0 | 0 | 0 |
Cash equivalents | 0 | 0 | 0 |
Level 2 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Cash equivalents | 91,660 | 74,502 | 4,000 |
Cash equivalents | 91,660 | 74,502 | 4,000 |
Level 2 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Cash equivalents | 77,176 | ||
Cash equivalents | 77,176 | ||
Level 3 | |||
Liabilities: | |||
Total current liabilities | 0 | ||
Total non-currentliabilities | 0 | ||
Level 3 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 69,261 | 69,984 | 0 |
Total current assets | 69,261 | 69,984 | 0 |
Available for sale debt securities | 69,261 | 69,984 | 0 |
Total current assets | 69,261 | 69,984 | 0 |
Equity securities | 0 | 0 | 0 |
Available for sale debt securities | 157,539 | 144,416 | 131,280 |
Liabilities: | |||
Total non-currentassets | 179,939 | 163,016 | 131,280 |
Level 3 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 0 | 0 | 0 |
Marketable securities | 0 | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 0 | 0 | 0 |
Marketable securities | 0 | 0 | 0 |
Level 3 | Fair Value, Recurring | Forwards | |||
Assets: | |||
Derivatives | 22,400 | 18,600 | 0 |
Level 3 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 0 | 0 | |
Level 3 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Marketable securities | 0 | ||
Level 3 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | 0 | ||
Interest rate swaps | 0 | ||
Level 3 | Fair Value, Recurring | Money Market Funds | |||
Assets: | |||
Cash equivalents | 0 | 0 | 0 |
Cash equivalents | 0 | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Cash equivalents | 0 | 0 | 0 |
Cash equivalents | $ 0 | 0 | $ 0 |
Level 3 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Cash equivalents | 0 | ||
Cash equivalents | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Narrative (Detail) $ / shares in Units, $ in Thousands | Aug. 07, 2020USD ($)$ / sharesshares | Apr. 05, 2019USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Feb. 29, 2020USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Gain (loss) on equity securities still held | $ 54,200 | $ 119,600 | $ 45,200 | $ 125,600 | $ 7,800 | |||
Available for sale debt securities | 249,200 | 214,400 | 131,280 | |||||
Purchase of available for sale debt securities | 17,585 | $ 125,121 | ||||||
Valuation Technique, Black-Derman-Troy | Level 3 | Change Of Control Probability | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Measurement input, percentage (as a percent) | 0 | |||||||
Valuation Technique, Black-Derman-Troy | Level 3 | Likelihood of FDA Approval | Minimum | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Measurement input, percentage (as a percent) | 0 | |||||||
Valuation Technique, Black-Derman-Troy | Level 3 | Likelihood of FDA Approval | Maximum | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Measurement input, percentage (as a percent) | 0.86 | |||||||
Valuation Technique, Black-Derman-Troy | Level 3 | Likelihood Of FDA Approval At End Of Any Given Quarter By 2024 | Minimum | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Measurement input, percentage (as a percent) | 0 | |||||||
Valuation Technique, Black-Derman-Troy | Level 3 | Likelihood Of FDA Approval At End Of Any Given Quarter By 2024 | Maximum | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Measurement input, percentage (as a percent) | 0.59 | |||||||
Series A Biohaven Preferred Shares | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Purchase of available for sale debt securities | $ 125,000 | |||||||
Series B Biohaven Preferred Shares | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Purchase of available for sale debt securities | $ 200,000 | 200,000 | 200,000 | |||||
Preferred Shares | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Preferred shares, quarterly payments | 15,600 | |||||||
Preferred shares, fixed payment amount | $ 250,000 | |||||||
Preferred shares, weighted average cost of capital | 8.30% | |||||||
Available for sale debt securities | $ 214,400 | $ 131,280 | ||||||
Preferred Shares | Series A Biohaven Preferred Shares | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Preferred shares, quarterly payments | $ 15,600 | |||||||
Preferred shares, fixed payment amount | $ 250,000 | |||||||
Preferred shares, weighted average cost of capital | 7.90% | 8.30% | ||||||
Available for sale debt securities | $ 203,900 | $ 214,400 | ||||||
Price per share | $ / shares | $ 50,100 | |||||||
Number of shares purchased | shares | 2,495 | |||||||
Preferred Shares | Series B Biohaven Preferred Shares | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Number of shares committed to be acquired | shares | 3,992 | |||||||
Price per share | $ / shares | $ 50,100 | $ 50,100 | $ 50,100 | |||||
Number of shares purchased | shares | 3,992 | 351 | 3,992 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hierarchy (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Immunomedics | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Gain (loss) on equity securities | $ 292.3 |
Fair Value Measurements and F_6
Fair Value Measurements and Financial Instruments - Summary of Change in Carrying Value of Level 3 Financial Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Series A Biohaven Preferred Shares | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance at the beginning of the period | $ 214,400 | $ 131,280 | $ 131,280 | |
Unrealized gains included in earnings | 5,125 | 52,725 | ||
Transfer to Level 2 | 0 | (184,005) | ||
Redemption | (15,625) | 0 | ||
Balance at the end of the period | 203,900 | 0 | 214,400 | $ 131,280 |
Available for sale debt securities | ||||
Balance at the beginning of the period | 214,400 | 131,280 | 131,280 | |
Unrealized gains on available for sale debt securities | (5,125) | (52,725) | ||
Transfer to Level 2 | 0 | 184,005 | ||
Balance at the end of the period | 203,900 | 0 | 214,400 | 131,280 |
Forwards | ||||
Balance at the beginning of the period | 214,400 | 131,280 | 131,280 | |
Balance at the end of the period | 203,900 | 0 | 214,400 | 131,280 |
Series B Biohaven Preferred Shares | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance at the beginning of the period | 0 | 0 | 0 | |
Balance at the end of the period | 22,900 | 0 | 0 | 0 |
Purchases | 17,585 | 0 | ||
Settlement of forwards | 5,315 | 0 | ||
Available for sale debt securities | ||||
Balance at the beginning of the period | 0 | 0 | 0 | |
Purchases | 17,585 | 0 | ||
Balance at the end of the period | 22,900 | 0 | 0 | 0 |
Forwards | ||||
Balance at the beginning of the period | 0 | 0 | 0 | |
Balance at the end of the period | 22,900 | 0 | 0 | 0 |
Forwards | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance at the beginning of the period | 18,600 | 0 | 0 | |
Unrealized gains included in earnings | 9,115 | 0 | ||
Balance at the end of the period | 22,400 | 0 | 18,600 | 0 |
Settlement of forwards | (5,315) | 0 | ||
Available for sale debt securities | ||||
Balance at the beginning of the period | 18,600 | 0 | 0 | |
Unrealized gains on available for sale debt securities | (9,115) | 0 | ||
Unrealized gains on available for sale debt securities | (18,600) | |||
Balance at the end of the period | 22,400 | 0 | 18,600 | 0 |
Forwards | ||||
Balance at the beginning of the period | 18,600 | 0 | 0 | |
Unrealized gains included in earnings | 18,600 | |||
Balance at the end of the period | 22,400 | 0 | 18,600 | 0 |
Available-for-sale Securities [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance at the beginning of the period | 214,400 | 131,280 | 131,280 | 0 |
Unrealized gains included in earnings | (52,725) | 0 | ||
Transfer to Level 2 | 184,005 | 0 | ||
Balance at the end of the period | 214,400 | 131,280 | ||
Purchases | 0 | 125,121 | ||
Available for sale debt securities | ||||
Balance at the beginning of the period | 214,400 | 131,280 | 131,280 | 0 |
Purchases | 0 | 125,121 | ||
Unrealized gains on available for sale debt securities | 52,725 | 0 | ||
Transfer to Level 2 | (184,005) | 0 | ||
Transfer from Level 2 | 198,526 | 0 | ||
Unrealized gains on available for sale debt securities | 15,874 | 6,159 | ||
Balance at the end of the period | 214,400 | 131,280 | ||
Unrealized gains on available for sale debt securities | 14,500 | |||
Forwards | ||||
Balance at the beginning of the period | $ 214,400 | $ 131,280 | 131,280 | 0 |
Unrealized gains included in earnings | (15,874) | (6,159) | ||
Balance at the end of the period | $ 214,400 | $ 131,280 |
Fair Value Measurements and F_7
Fair Value Measurements and Financial Instruments - Schedule of Estimated Fair Values Based on Level 3 Inputs (Detail) - Level 3 - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | |||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||
Financial royalty assets, net | $ 18,464,028 | $ 18,718,179 | $ 16,501,819 |
Carrying value, net | |||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||
Financial royalty assets, net | $ 12,599,080 | $ 12,368,084 | $ 10,842,052 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Nov. 30, 2019 | Apr. 30, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 05, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Swap termination payments | $ 35,448,000 | $ 35,448,000 | ||||||
Interest received | 45,252,000 | 45,252,000 | $ 360,000 | $ 3,467,000 | ||||
Unrealized Gain (Loss) on Derivatives | 18,600,000 | 0 | 0 | |||||
Equity securities | $ 100 | |||||||
Upfront payment for equity investment | $ 100 | |||||||
Warrants to purchase additional shares | 2.5 | |||||||
Exercise price of warrant | $ 20 | |||||||
Put option to sell additional common stock | $ 50 | |||||||
Put option to selling price maximum | $ 20 | |||||||
Derivative financial instruments | $ 2,884,000 | 5,439,000 | 42,315,000 | |||||
Additional issuance, purchase price, maximum | $ 75,000,000 | |||||||
Additional issuance, purchase price, minimum | $ 25,000,000 | |||||||
Derivative liability | 28,100,000 | |||||||
Derivative liability, current | 9,215,000 | |||||||
Derivative liability, noncurrent | 18,902,000 | |||||||
Other assets | 4,256,000 | 4,558,000 | 45,635,000 | |||||
Epizyme Common Stock Warrant | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Warrants to purchase additional shares | 2,500,000 | |||||||
Preferred Shares | Series A Biohaven Preferred Shares | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative instrument, exercise period | 12 months | |||||||
Additional issuance, purchase price, maximum | $ 75,000,000 | |||||||
Additional issuance, purchase price, minimum | $ 25,000,000 | |||||||
Equity Investment In Epizyme Inc. | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Equity securities | $ 100,000,000 | |||||||
Upfront payment for equity investment | $ 100,000,000 | |||||||
Equity Investment In Epizyme Inc. | Put Option | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Put option, term) | 18 months | |||||||
Put option to sell additional common stock | $ 50,000,000 | |||||||
Put option to selling price maximum | $ 20 | |||||||
Equity Investment In Epizyme Inc. | Epizyme Common Stock Warrant | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Exercise price of warrant | $ 20 | |||||||
Term of warrant | 3 years | |||||||
Interest Rate Swap | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Unrealized Gain (Loss) on Derivatives | 10,900,000 | 10,900,000 | 72,600,000 | $ 11,900,000 | ||||
Warrant | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Unrealized Gain (Loss) on Derivatives | 2,600,000 | $ 16,700,000 | 25,400,000 | 22,000,000 | ||||
Derivative financial instruments | $ 2,900,000 | $ 5,400,000 | 30,800,000 | |||||
Forwards | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative liability, noncurrent | $ 11,500,000 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Derivatives and Reclassifications (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unrealized loss on derivative financial instruments | Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Amount of loss reclassified from AOCI into income | $ 0 | $ 4,066 | $ 4,066 | $ 6,189 | $ 8,003 |
Interest rate swaps | 0 | (73) | (73) | 16,954 | (3,357) |
Unrealized loss on derivative financial instruments | Interest Rate Swap | Not Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivatives not designated as hedging instruments | 0 | 6,908 | 6,908 | 49,472 | (16,569) |
Unrealized loss on derivative financial instruments | Warrant | Not Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivatives not designated as hedging instruments | 2,555 | 16,744 | 25,375 | (21,977) | 0 |
Unrealized loss on derivative financial instruments | Forwards | Not Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Change in fair value of derivative contracts | 0 | 5,800 | 5,800 | (11,500) | 0 |
Interest Expense | Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Interest rate swaps | 0 | 114 | 114 | (9,565) | (9,758) |
Interest Expense | Interest Rate Swap | Not Designated as Hedging Instrument | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivatives not designated as hedging instruments | $ 0 | $ 408 | $ 408 | $ (2,681) | $ (440) |
Available for Sale Debt Secur_3
Available for Sale Debt Securities - Narrative (Detail) - USD ($) $ / shares in Units, $ in Thousands | Aug. 07, 2020 | Apr. 05, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchase of available for sale debt securities | $ 17,585 | $ 125,121 | ||||
Realized gain on available for sale securities | $ 0 | 0 | $ 419,481 | |||
Reduction of the investment | 249,200 | 214,400 | 131,280 | |||
Royalty Pharma Investment Financial Trust | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Milestone payments | 600,000 | |||||
Realized gain on available for sale securities | 419,500 | |||||
Tecfidera | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Reduction of the investment | 0 | 0 | $ 180,500 | |||
Series A Biohaven Preferred Shares | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchase of available for sale debt securities | $ 125,000 | |||||
Series B Biohaven Preferred Shares | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchase of available for sale debt securities | $ 200,000 | 200,000 | 200,000 | |||
Preferred Shares | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Reduction of the investment | 214,400 | $ 131,280 | ||||
Preferred Shares | Series A Biohaven Preferred Shares | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares purchased | 2,495 | |||||
Price per share | $ 50,100 | |||||
Redemption default, interest rate | 18.00% | |||||
Redemption default, threshold period | 1 year | |||||
Reduction of the investment | $ 203,900 | $ 214,400 | ||||
Preferred Shares | Series B Biohaven Preferred Shares | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares purchased | 3,992 | 351 | 3,992 | |||
Price per share | $ 50,100 | $ 50,100 | $ 50,100 | |||
Redemption default, interest rate | 18.00% | |||||
Redemption default, threshold period | 1 year |
Available for Sale Debt Secur_4
Available for Sale Debt Securities - Summary of Available for Sale Debt Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | |||
Cost | $ 142,706 | $ 125,121 | $ 125,121 |
Unrealized gains | 106,494 | 89,279 | 6,159 |
Fair Value | 249,200 | 214,400 | 131,280 |
Available for sale debt securities, current | 69,261 | 69,984 | |
Available for sale debt securities, noncurrent | 179,939 | 163,016 | |
Previously Reported [Member] | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Unrealized gains | 107,879 | ||
Fair Value | 233,000 | ||
Available for sale debt securities, noncurrent | 144,416 | 131,280 | |
Series A Biohaven Preferred Shares | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Cost | 125,121 | 125,121 | |
Unrealized gains | 78,779 | 89,279 | |
Fair Value | 203,900 | 214,400 | |
Available for sale debt securities, current | 69,300 | 70,000 | |
Available for sale debt securities, noncurrent | 134,600 | 144,400 | |
Series B Biohaven Preferred Shares | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Cost | 17,585 | ||
Unrealized gains | 5,315 | ||
Fair Value | 22,900 | ||
Forwards | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Cost | 0 | 0 | |
Unrealized gains | 22,400 | 18,600 | |
Fair Value | $ 22,400 | 18,600 | |
Preferred Shares | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Cost | 125,121 | 125,121 | |
Unrealized gains | 89,279 | 6,159 | |
Fair Value | $ 214,400 | $ 131,280 |
Financial Royalty Assets, Net -
Financial Royalty Assets, Net - Summary of Financial Royalty Assets, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Lease and Investment Commitments [Line Items] | ||||
Cumulative allowance for credit losses | $ (359,658) | $ (323,717) | ||
Net carrying value | 13,121,468 | 12,955,277 | ||
Gross carrying value | 14,219,101 | $ 14,677,554 | $ 12,163,030 | |
Cumulative allowance for changes in expected cash flows | (940,107) | (1,196,428) | (868,418) | |
Net carrying value | 13,278,994 | 13,481,126 | 11,294,612 | |
Cystic fibrosis franchise | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 5,274,896 | 5,292,904 | 4,639,045 | |
Cumulative allowance for changes in expected cash flows | (53,092) | |||
Net carrying value | 5,274,896 | 5,239,812 | 4,639,045 | |
Tysabri | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 2,003,797 | 1,967,974 | 2,131,272 | |
Cumulative allowance for changes in expected cash flows | (112,720) | (114,354) | (71,789) | |
Net carrying value | 1,891,077 | 1,853,620 | 2,059,483 | |
Imbruvica | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 1,406,291 | 1,416,270 | 1,332,077 | |
Cumulative allowance for changes in expected cash flows | (46,872) | (110,285) | 0 | |
Net carrying value | 1,359,419 | 1,305,985 | 1,332,077 | |
Xtandi | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 1,150,335 | 1,136,270 | 1,193,918 | |
Cumulative allowance for changes in expected cash flows | (145,565) | (188,417) | (332,624) | |
Net carrying value | 1,004,770 | 947,853 | 861,294 | |
Evrysdi | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 675,440 | 688,189 | ||
Cumulative allowance for changes in expected cash flows | 0 | 0 | ||
Net carrying value | 675,440 | 688,189 | ||
Aggregate royalty amount when patents cease | $ 1,300,000 | 1,300,000 | ||
Promacta | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 686,129 | 658,287 | 776,555 | |
Cumulative allowance for changes in expected cash flows | 0 | 0 | 0 | |
Net carrying value | 686,129 | 658,287 | 776,555 | |
Other | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 3,022,213 | 3,517,660 | 1,768,929 | |
Cumulative allowance for changes in expected cash flows | (634,950) | (730,280) | (464,005) | |
Net carrying value | $ 2,387,263 | $ 2,787,380 | 1,304,924 | |
Crysvita | ||||
Lease and Investment Commitments [Line Items] | ||||
Gross carrying value | 321,234 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value | $ 321,234 |
Cumulative Allowance and the _3
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets - Narrative (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||||
Cumulative adjustment to retained earnings | $ 9,837,033 | $ 9,895,815 | $ 7,162,693 | $ 6,141,438 | $ 4,552,079 | $ 4,460,546 | |
Retained Earnings | |||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||||
Cumulative adjustment to retained earnings | $ 1,923,771 | $ 1,920,635 | $ 2,561,971 | $ 192,700 | 2,825,212 | $ 1,215,953 | 655,446 |
Cumulative Effect, Period of Adoption, Adjustment | |||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||||
Cumulative adjustment to retained earnings | (192,705) | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | |||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||||
Cumulative adjustment to retained earnings | $ (192,705) | $ (2,863) |
Cumulative Allowance and the _4
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets - Schedule of Cumulative Allowance for Changes in Expected Cash Flows (Detail) - USD ($) $ in Thousands | Aug. 07, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Beginning balance | $ (1,263,824) | $ (868,418) | $ (1,982,897) | $ (2,045,868) | |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (283,617) | ||||
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (645,612) | (322,717) | (284,214) | ||
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 25,174 | 1,342,038 | 341,548 | ||
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 27,296 | 570,959 | |||
Reversal of cumulative allowance (a) | 2,964 | 95,158 | 5,637 | ||
Current period provision for credit losses | (35,941) | (156,186) | |||
Ending balance | (1,556,086) | (1,263,824) | (868,418) | $ (1,982,897) | |
Cumulative allowance for credit losses | (359,658) | (323,717) | |||
Writeoff related to financial royalty asset | 90,200 | ||||
Funding Agreement With Biohaven Pharmaceuticals | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Purchase commitment, additional payments | $ 100,000 | $ 100,000 | 100,000 | ||
Cumulative Effect, Period of Adoption, Adjustment | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Beginning balance | $ (192,705) | ||||
Ending balance | $ (192,705) |
Intangible Royalty Assets, Ne_2
Intangible Royalty Assets, Net - Schedule of Intangible Royalty Interests (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Liabilities [Line Items] | |||
Cost | $ 606,216 | $ 606,216 | $ 606,216 |
Accumulated amortization | 583,221 | 577,550 | 554,492 |
Net carrying value | 22,995 | 28,666 | 51,724 |
DPP-IV Inhibitors | |||
Finite-Lived Intangible Liabilities [Line Items] | |||
Cost | 606,216 | 606,216 | 606,216 |
Accumulated amortization | 583,221 | 577,550 | 554,492 |
Net carrying value | $ 22,995 | $ 28,666 | $ 51,724 |
Intangible Royalty Assets, Ne_3
Intangible Royalty Assets, Net - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Benchmark | Individual Licensees Concentration List | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Individual licensees exceeding 10% or more of revenue (as a percent) | 99.00% | 94.00% | 97.00% | 91.00% | 73.00% |
DPP-IV Inhibitors | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite lived intangible assets, useful life | 1 year | ||||
Projected amortization expense, 2021 | $ 17.3 | ||||
Projected amortization expense, 2021 | $ 5.7 | ||||
DPP-IV patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite lived intangible assets, useful life | 1 year 3 months | ||||
Projected amortization expense, 2021 | $ 23 | ||||
Projected amortization expense, 2022 | $ 5.7 |
Non-Consolidated Affiliates (De
Non-Consolidated Affiliates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 11, 2020 | May 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Investments in non-consolidated affiliates | $ 444,407 | $ 454,936 | $ 124,061 | |||||||
Distributions from non-consolidated affiliates | 15,084 | |||||||||
Equity in income (loss) of non-consolidated affiliates | (1,918) | $ (9,074) | 44,459 | (32,517) | $ (7,023) | |||||
Distributions from non-consolidated affiliates | 17,325 | 20,293 | 42,334 | 14,059 | 39,402 | |||||
Avillion II | Merck Asset - Phase II Clinical Trial | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Other commitment | 19,000 | $ 19,000 | ||||||||
Other commitments, percentage of costs (as a percent) | 50.00% | |||||||||
Avillion II | AZ Asset - Phase II and Phase III Clinical Trial | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Other commitment | $ 105,000 | $ 105,000 | ||||||||
Other commitments, percentage of costs (as a percent) | 44.00% | 44.00% | ||||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Legacy Investors Partnerships | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Investments in non-consolidated affiliates | $ 303,700 | |||||||||
Distributions from non-consolidated affiliates | 3,900 | 5,200 | 22,700 | |||||||
Equity in income (loss) of non-consolidated affiliates | 6,900 | 3,200 | 62,000 | |||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion I | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Distributions from non-consolidated affiliates | 13,400 | 13,400 | 13,400 | 14,100 | ||||||
Equity in income (loss) of non-consolidated affiliates | 7,100 | $ 12,200 | ||||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion II | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Distributions from non-consolidated affiliates | $ 21,300 | 21,300 | ||||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion Entities | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Equity in income (loss) of non-consolidated affiliates | 17,600 | 32,500 | $ 7,000 | |||||||
Equity method investment, unfunded commitments | $ 19,900 | $ 28,600 | $ 70,800 |
Research and Development Fundin
Research and Development Funding Expense - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Research and development funding expense | $ 2,641 | $ 7,639 | $ 26,289 | $ 83,036 | $ 392,609 |
Funding Agreements With Sanofi | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Research and development funding expense | 2,600 | $ 7,600 | 18,500 | 18,200 | 6,900 |
Remaining commitment for R&D funding agreement | $ 13,900 | $ 16,600 | |||
Funding Agreements With Pfizer | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Research and development funding expense | $ 62,800 | 99,300 | |||
Funding Agreement With Immunomedics [Member] | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Upfront payment and premium paid | 175,000 | ||||
Funding Agreement With Biohaven [Member] | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Upfront payment and premium paid | $ 100,000 |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Unamortized debt discount and issuance costs | $ (178,928) | $ (183,416) | $ (34,878) |
Total debt carrying value | 5,821,072 | 5,816,584 | 6,238,122 |
Less: Current portion of long-term debt | 281,984 | ||
Total long-term debt | $ 5,821,072 | $ 5,816,584 | 5,956,138 |
Unsecured Debt [Member] | Point Seven Five Percent Senior Notes Due Two Thousand and Twenty Three [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 99.322% | 99.322% | |
Debt instrument, stated rate (as a percent) | 0.75% | 0.75% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | 0 |
Unsecured Debt [Member] | One Point Two Zero Percent Senior Notes Due Two Thousand and Twenty Five [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 98.875% | 98.875% | |
Debt instrument, stated rate (as a percent) | 1.20% | 1.20% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | 0 |
Unsecured Debt [Member] | One Point Seven Five Percent Senior Notes Due Two Thousand and Twenty Seven [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 98.284% | 98.284% | |
Debt instrument, stated rate (as a percent) | 1.75% | 1.75% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | 0 |
Unsecured Debt [Member] | Two Point Two Zero Percent Senior Notes Due Two Thousand and Thirty [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 97.76% | 97.76% | |
Debt instrument, stated rate (as a percent) | 2.20% | 2.20% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | 0 |
Unsecured Debt [Member] | Three Point Three Zero Percent Senior Notes Due Two Thousand and Forty [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 95.556% | 95.556% | |
Debt instrument, stated rate (as a percent) | 3.30% | 3.30% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | 0 |
Unsecured Debt [Member] | Three Point Five Five Percent Senior Notes Due Two Thousand and Fifty [Member] | |||
Debt Instrument [Line Items] | |||
Debt issued as a percent of par value (as a percent) | 95.306% | 95.306% | |
Debt instrument, stated rate (as a percent) | 3.55% | 3.55% | |
Debt issued, amount | $ 1,000,000 | $ 1,000,000 | $ 0 |
Unsecured Debt [Member] | RPIFT Senior Secured Credit Facilities | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated rate (as a percent) | 0.00% | ||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 2.00% | ||
Debt issued, amount | $ 4,123,000 | ||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.50% | ||
Debt issued, amount | $ 2,150,000 |
Borrowings - Narrative (Detail)
Borrowings - Narrative (Detail) | Sep. 18, 2020USD ($) | Sep. 02, 2020USD ($) | Feb. 11, 2020USD ($) | Sep. 30, 2020USD ($) | Feb. 29, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)Partnership | Dec. 31, 2018USD ($) |
Loss on extinguishment of debt | $ 0 | $ 5,406,000 | $ 30,272,000 | $ 0 | $ 0 | |||||
Unsecured Debt [Member] | Notes [Member] | ||||||||||
Debt issued, amount | $ 6,000,000 | |||||||||
Debt issuance costs | $ 40,400,000 | |||||||||
Weighted average coupon rate (as a percent) | 2.125% | 2.125% | ||||||||
Weighted average effective interest rate (as a percent) | 2.50% | 2.50% | ||||||||
Unsecured Debt [Member] | Senior Unsecured Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt instrument, term | 5 years | |||||||||
Line of credit, maximum borrowing capacity | $ 1,500,000,000 | |||||||||
Debt issuance costs related to revolving credit facility | $ 6,100,000 | |||||||||
Outstanding borrowings | $ 0 | 0 | $ 0 | |||||||
Maximum consolidated leverage ratio | 4 | |||||||||
Maximum consolidated leverage ratio following qualifying material acquisition | 4.50 | |||||||||
Minimum consolidated coverage ratio | 2.50 | |||||||||
Unsecured Debt [Member] | Senior Unsecured Revolving Credit Facility [Member] | Federal Funds Purchased [Member] | ||||||||||
Basis spread on variable rate (percentage) | 0.50% | |||||||||
Unsecured Debt [Member] | Senior Unsecured Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility [Member] | ||||||||||
Basis spread on variable rate (percentage) | 1.00% | |||||||||
Unsecured Debt [Member] | Level 2 | Notes [Member] | ||||||||||
Fair value of outstanding Notes | $ 5,800,000,000 | |||||||||
Unsecured Debt [Member] | Level 2 | The Notes | ||||||||||
Fair value of outstanding Notes | $ 6,200,000,000 | |||||||||
Unsecured Debt [Member] | Debt Instrument, Redemption, Period One [Member] | Notes [Member] | ||||||||||
Redemption price (as a percent) | 100.00% | |||||||||
Unsecured Debt [Member] | Debt Instrument, Redemption, Period Three [Member] | Notes [Member] | ||||||||||
Redemption price (as a percent) | 101.00% | |||||||||
Senior Secured Debt | RPI Intermediate FT | ||||||||||
Debt issued, amount | $ 6,000,000,000 | |||||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | ||||||||||
Debt issued, amount | 2,840,000,000 | |||||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | RPI Intermediate FT | ||||||||||
Debt issued, amount | $ 149,000,000 | $ 6,000,000,000 | ||||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | London Interbank Offered Rate (LIBOR) | ||||||||||
Basis spread on variable rate (percentage) | 1.75% | |||||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | ||||||||||
Debt issued, amount | $ 3,200,000,000 | |||||||||
Loss on extinguishment of debt | $ 25,100,000 | |||||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | London Interbank Offered Rate (LIBOR) | ||||||||||
Basis spread on variable rate (percentage) | 1.50% | |||||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities | ||||||||||
Loss on extinguishment of debt | $ 5,400,000 | $ 5,400,000 | ||||||||
Number of instruments held | Partnership | 2 | |||||||||
Collateral as a percentage of the collection trust account | 80.00% | |||||||||
Maximum total leverage ratio | 4 | |||||||||
Minimum debt coverage ratio | 3.50 | |||||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | ||||||||||
Debt issued, amount | $ 2,150,000,000 | |||||||||
Basis spread on variable rate (percentage) | 1.50% | |||||||||
Amortization rate (percentage) | 5.90% | |||||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | ||||||||||
Debt issued, amount | $ 4,123,000,000 | |||||||||
Basis spread on variable rate (percentage) | 2.00% | |||||||||
Amortization rate (percentage) | 3.20% |
Borrowings - Schedule of Repaym
Borrowings - Schedule of Repayments of Debt by Year (Detail) - Senior Secured Debt - Notes [Member] - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Remainder of 2021 | $ 0 | |
2021 | 0 | $ 0 |
2022 | 1,000,000 | |
2023 | 1,000,000 | |
2024 | 1,000,000 | |
Thereafter | 4,000,000 | |
2025 | 1,000,000 | |
Thereafter | 4,000,000 | |
Long-term debt, gross | 6,000,000 | 6,000,000 |
Unamortized discount and loan issuance costs on long-term debt | $ 178,900 | $ 183,400 |
Borrowings - Schedule of Repa_2
Borrowings - Schedule of Repayments of Debt by Year (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Notes [Member] | Senior Secured Debt | ||
Debt Instrument [Line Items] | ||
Unamortized discount and loan issuance costs on long-term debt | $ 178.9 | $ 183.4 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Detail) | Oct. 31, 2020$ / sharesshares | Jun. 17, 2020USD ($) | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2021€ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)€ / sharesshares | Jun. 15, 2020shares | Dec. 31, 2019shares |
Class of Stock [Line Items] | ||||||||
Share based compensation | $ | $ 0 | $ 900,000 | ||||||
Requisite service period | 1 year | |||||||
Number of noncontrolling interests | 4,000 | 4,000 | ||||||
Restricted Stock Units (RSUs) | ||||||||
Class of Stock [Line Items] | ||||||||
Share based compensation | $ | $ 5,700,000 | |||||||
Restricted stock granted during period (in shares) | 125,000,000 | |||||||
Restricted stock vested during period (in shares) | 71,000 | |||||||
Restricted stock units forfeited (in shares) | 0 | |||||||
Unrecognized share based compensation expense | $ | $ 1,000,000 | $ 1,000,000 | ||||||
Unrecognized share based compensation expense, period of recognition | 6 months | |||||||
Common Class A | ||||||||
Class of Stock [Line Items] | ||||||||
Common share outstanding | 392,857,000 | 392,857,000 | 388,135,000 | 388,135,000 | 0 | |||
Common stock, issued | 392,857,000 | 392,857,000 | 388,135,000 | 388,135,000 | 0 | |||
Dividends declared and paid | $ | $ 66,000,000 | $ 112,500,000 | ||||||
Dividends declared and paid (in dollars per share) | $ / shares | $ 0.17 | $ 0.15 | ||||||
Common Class A | Secondary Offering [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 17,343,000 | |||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 42 | |||||||
Common Class A | Secondary Offering [Member] | Public Stock Offering - Continuing Investors Partnerships Interests | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 4,137,000 | |||||||
Common Class A | Secondary Offering [Member] | Continuing Investors Partnerships | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 13,206,000 | |||||||
Common Class A | 2020 Equity Incentive Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | 675,000 | 675,000 | 800,000 | |||||
Common Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Common share outstanding | 214,255,000 | 214,255,000 | 218,976,000 | 218,976,000 | 0 | |||
Common stock, issued | 214,255,000 | 214,255,000 | 218,976,000 | 218,976,000 | 0 | |||
Common Class B | Secondary Offering [Member] | Continuing Investors Partnerships | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 13,206,000 | |||||||
Deferred Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Shares outstanding | 321,128,000 | 321,128,000 | 316,407,000 | 316,407,000 | ||||
Class R Redeemable Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common share outstanding | 50,000 | 50,000 | 50,000 | 50,000 | 0 | |||
Common stock, issued | 50,000 | 50,000 | 50,000 | 50,000 | 0 | |||
Redeemable stock, redemption price | € / shares | € 1 | $ 1 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | $ 9,895,815 | $ 6,141,438 | $ 6,141,438 | $ 4,552,079 | $ 4,460,546 | ||
Contributions | 3,253 | 1,441,275 | 1,482,322 | ||||
Distributions | (145,378) | (393,202) | (1,105,765) | (880,142) | (1,031,823) | ||
Net income | 158,979 | 109,096 | 1,701,954 | 2,461,419 | 1,517,855 | ||
Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity | (1) | ||||||
Issuance of Class A ordinary shares sold in IPO, net of offering costs | 1,908,744 | ||||||
Other exchanges | 191 | ||||||
Unrealized gain on available for sale debt securities | 5,125 | 52,725 | 83,120 | 6,159 | (402,502) | ||
Reclassification of unrealized gain on available for sale debt securities | (15,491) | (20,551) | |||||
Ending balance | $ 9,837,033 | 7,162,693 | $ 9,895,815 | $ 9,895,815 | 6,141,438 | 4,552,079 | |
RP Holdings | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest (percentage) | 65.00% | 64.00% | 64.00% | ||||
RP Holdings | Continuing Investors Partnerships | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest (percentage) | 35.00% | 36.00% | 36.00% | ||||
Prior to IPO | |||||||
Noncontrolling Interest [Line Items] | |||||||
Net income | $ 624,885 | ||||||
Non-Controlling Interest | |||||||
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | $ 5,077,036 | 35,883 | 35,883 | 63,865 | 141,203 | ||
Contributions | 3,253 | 1,133,629 | 1,174,676 | ||||
Transfer of interests | 1,037,161 | 1,037,161 | |||||
Distributions | (145,378) | (251,426) | (792,357) | (140,866) | (217,464) | ||
Net income | 89,860 | 37,856 | $ 581,871 | $ 145,043 | 112,884 | 140,126 | |
Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity | 2,433,098 | ||||||
Issuance of Class A ordinary shares sold in IPO, net of offering costs | 758,354 | ||||||
Other exchanges | (65,072) | (309,566) | |||||
Unrealized gain on available for sale debt securities | 2,413 | 9,672 | 22,503 | ||||
Reclassification of unrealized gain on available for sale debt securities | (7,294) | (9,630) | |||||
Ending balance | 4,954,818 | 2,002,775 | 5,077,036 | 5,077,036 | 35,883 | $ 63,865 | |
Non-Controlling Interest | RPSFT | |||||||
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | 12,436 | 35,883 | 35,883 | ||||
Distributions | (13,653) | (29,246) | (112,339) | ||||
Net income | 46,741 | 42,151 | |||||
Ending balance | 13,841 | 31,563 | 12,436 | 12,436 | $ 35,883 | ||
Non-Controlling Interest | Legacy Investors Partnerships | |||||||
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | 1,939,509 | ||||||
Contributions | 3,253 | 1,133,629 | 1,165,258 | ||||
Transfer of interests | 1,037,161 | 1,037,161 | |||||
Distributions | (94,542) | (222,180) | (594,592) | ||||
Net income | 218,137 | $ 102,892 | |||||
Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity | (750) | ||||||
Unrealized gain on available for sale debt securities | 901 | 9,672 | 15,015 | ||||
Reclassification of unrealized gain on available for sale debt securities | (2,723) | (3,612) | |||||
Ending balance | 1,882,655 | 1,971,212 | 1,939,509 | 1,939,509 | |||
Non-Controlling Interest | Continuing Investors Partnerships | |||||||
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | 3,125,091 | ||||||
Contributions | 9,418 | ||||||
Distributions | (37,183) | (85,426) | |||||
Net income | 316,993 | ||||||
Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity | 2,433,848 | ||||||
Issuance of Class A ordinary shares sold in IPO, net of offering costs | 758,354 | ||||||
Other exchanges | (65,072) | (309,566) | |||||
Unrealized gain on available for sale debt securities | 1,512 | 7,488 | |||||
Reclassification of unrealized gain on available for sale debt securities | (4,571) | (6,018) | |||||
Ending balance | 3,058,322 | 3,125,091 | 3,125,091 | ||||
Non-Controlling Interest | EPA Holdings | |||||||
Noncontrolling Interest [Line Items] | |||||||
Beginning balance | 0 | ||||||
Ending balance | $ 0 | 0 | |||||
Non-Controlling Interest | Prior to IPO | |||||||
Noncontrolling Interest [Line Items] | |||||||
Net income | 89,860 | 37,856 | $ 145,043 | ||||
Non-Controlling Interest | Prior to IPO | RPSFT | |||||||
Noncontrolling Interest [Line Items] | |||||||
Net income | 15,058 | 24,926 | |||||
Non-Controlling Interest | Prior to IPO | Legacy Investors Partnerships | |||||||
Noncontrolling Interest [Line Items] | |||||||
Net income | 36,257 | $ 12,930 | |||||
Non-Controlling Interest | Prior to IPO | Continuing Investors Partnerships | |||||||
Noncontrolling Interest [Line Items] | |||||||
Net income | $ 38,545 |
Shareholders' Equity - Summar_2
Shareholders' Equity - Summary of Noncontrolling Interests (Parenthetical) (Detail) - RP Holdings | Mar. 31, 2021 | Dec. 31, 2020 |
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest (percentage) | 65.00% | 64.00% |
Continuing Investors Partnerships | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest (percentage) | 35.00% | 36.00% |
Earnings Per Share (Detail)
Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Numerator | |||||||
Consolidated net income | $ 158,979 | $ 109,096 | $ 1,701,954 | $ 2,461,419 | $ 1,517,855 | ||
Less: net income attributable to Continuing Investors Partnerships prior to the IPO | [1] | 479,842 | |||||
Less: net income attributable to non-controlling interest | 89,860 | $ 37,856 | 726,914 | $ 112,884 | $ 140,126 | ||
Net income attributable to Royalty Pharma plc-basic | 69,119 | 495,198 | |||||
Add: Reallocation of net income attributable to non-controlling interest from the assumed conversion of Class B ordinary shares | 38,545 | ||||||
Net income attributable to Royalty Pharma plc-diluted | $ 107,664 | $ 495,198 | |||||
Denominator | |||||||
Weighted average Class A ordinary shares outstanding-basic | 389,760 | 375,444 | [2] | ||||
Add: Dilutive effects as shown separately below Class B ordinary shares exchangeable for Class A ordinary shares | 217,350 | ||||||
Unvested RSUs | 38 | 11 | |||||
Weighted average Class A ordinary shares outstanding-diluted | 607,148 | 375,455 | [2] | ||||
Earnings per Class A ordinary share-basic | $ 0.18 | $ 1.32 | [2] | ||||
Earnings per Class A ordinary share-diluted | $ 0.18 | $ 1.32 | [2] | ||||
Class B Holders | |||||||
Numerator | |||||||
Less: net income attributable to non-controlling interest | $ 38,545 | $ 316,993 | |||||
Legacy Investors Partnerships and RPSFT | |||||||
Numerator | |||||||
Less: net income attributable to non-controlling interest | $ 51,315 | $ 409,921 | |||||
[1] | Reflected as Net income attributable to controlling interest on the consolidated statements of comprehensive income. | ||||||
[2] | Represents earnings per Class A ordinary share and weighted average Class A ordinary shares outstanding for the period from June 16, 2020 through December 31, 2020, the period following our initial public offering (see Note 13). |
Indirect Cash Flow (Detail)
Indirect Cash Flow (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Supplemental Cash Flow Elements [Abstract] | ||||||
Consolidated net income | $ 158,979 | $ 109,096 | $ 1,701,954 | $ 2,461,419 | $ 1,517,855 | |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||||
Income from financial royalty assets | (529,625) | (462,844) | ||||
Provision for changes in expected cash flows from financial royalty assets | 292,262 | 88,012 | 230,839 | (1,019,321) | (57,334) | |
Amortization of intangible assets | 5,671 | 5,733 | 23,058 | 23,924 | 33,267 | |
Amortization of debt discount and issuance costs | 4,790 | 2,478 | 11,715 | 12,790 | 13,127 | |
Realized gain on available for sale debt securities | 0 | 0 | (419,481) | |||
Unrealized loss/(gain) on derivative contracts | 2,555 | 33,445 | 42,076 | 39,138 | (11,923) | |
(Gain)/loss on equity securities | 54,186 | 153,166 | (247,073) | (155,749) | 13,939 | |
Equity in (earnings)/loss of non-consolidated affiliates | 1,918 | 9,074 | (44,459) | 32,517 | 7,023 | |
Distributions from non-consolidated affiliates | 17,325 | 20,293 | 42,334 | 14,059 | 39,402 | |
Loss on extinguishment of debt | 0 | 5,406 | 30,272 | 0 | 0 | |
Share-based compensation | 713 | 0 | 5,428 | 0 | 0 | |
Interest income accretion | (15,491) | 0 | (20,551) | 0 | 0 | |
Unrealized gain on forwards | (18,600) | 0 | 0 | |||
Unrealized gain on available for sale debt securities | (9,115) | 0 | ||||
Impairment charge | 65,053 | 0 | 0 | |||
Loss on derivative financial instruments | 0 | (34,952) | (34,952) | 0 | 0 | |
Other | 958 | 3,469 | 9,621 | (2,122) | (7,771) | |
(Increase)/decrease in operating assets: | ||||||
Financial royalty assets | (1,959,975) | (1,648,837) | (1,524,816) | |||
Cash collected on financial royalty assets | 573,946 | 488,028 | 2,121,923 | 1,934,092 | 2,052,592 | |
Available for sale debt securities | 0 | (150,000) | (150,000) | |||
Accrued royalty receivable | (299) | (196) | 370 | 2,471 | (27,372) | |
Other receivables | 0 | 150,000 | 150,000 | |||
Other royalty income receivable | (530) | (2,619) | (770) | 7,390 | (11,099) | |
Other current assets | 1,939 | 40 | (10,278) | 4,607 | (442) | |
Other assets | 0 | 45,007 | 45,264 | (45,635) | 0 | |
(Decrease)/increase in operating liabilities: | ||||||
Accounts payable and accrued expenses | (2,207) | 8,468 | (766) | 6,496 | 1,350 | |
Interest payable | (31,875) | 0 | 42,146 | 0 | 0 | |
Net cash provided by operating activities | $ 526,100 | 471,104 | 2,034,629 | 1,667,239 | 1,618,317 | |
Supplemental schedule of non-cash investing / financing activities: | ||||||
Receipt of contribution of investment in Legacy Investors Partnerships | 303,679 | 303,679 | 0 | 0 | ||
Settlement of Epizyme forward purchase contract | 5,700 | 5,700 | 0 | 0 | ||
Accrued purchase obligation-Tazverik | 110,000 | 110,000 | 0 | 0 | ||
Repayments of long-term debt by contributions from non-controlling interest | [1] | $ 1,103,774 | 1,103,774 | 0 | 0 | |
Milestone payable-Erleada | [2] | $ 18,600 | $ 0 | $ 0 | ||
[1] | Related to the pro rata portion of RPIFT's outstanding debt repaid by the Legacy Investors Partnerships | |||||
[2] | Related to the achievement of a sales-based milestone that was not paid as of December 31, 2020. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassifications to net income | $ (6,855) | $ 6,189 | $ 8,003 | |
Activity for the period | 60,617 | 6,159 | (402,502) | |
Reclassifications to non-controlling interest | (24,022) | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 2,863 | |||
Unrealized gain/(loss) on available for sale debt securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 34,395 | 6,159 | 0 | 402,502 |
Reclassifications to net income | (8,197) | (10,921) | 0 | 0 |
Activity for the period | 2,712 | 60,617 | 6,159 | (402,502) |
Reclassifications to non-controlling interest | (24,022) | |||
Reclassifications from non-controlling interest | 542 | 2,562 | ||
Ending balance | 29,452 | 34,395 | 6,159 | 0 |
Unrealized gain/(loss) on available for sale debt securities | Cumulative Effect, Period of Adoption, Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | |||
Unrealized gain/(loss) on equity securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | 0 | 0 | (2,863) |
Reclassifications to net income | 0 | 0 | 0 | |
Activity for the period | 0 | 0 | 0 | |
Reclassifications to non-controlling interest | 0 | |||
Reclassifications from non-controlling interest | 0 | |||
Ending balance | 0 | 0 | 0 | |
Unrealized gain/(loss) on equity securities | Cumulative Effect, Period of Adoption, Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 2,863 | |||
Unrealized gain/(loss) on interest rate swaps | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | (4,066) | (10,255) | (18,258) |
Reclassifications to net income | 4,066 | 6,189 | 8,003 | |
Activity for the period | 0 | 0 | 0 | |
Reclassifications to non-controlling interest | 0 | |||
Reclassifications from non-controlling interest | 0 | |||
Ending balance | 0 | (4,066) | (10,255) | |
Unrealized gain/(loss) on interest rate swaps | Cumulative Effect, Period of Adoption, Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | |||
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 34,395 | 2,093 | (10,255) | 381,381 |
Reclassifications from non-controlling interest | 2,562 | |||
Ending balance | $ 34,395 | $ 2,093 | $ (10,255) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification of unrealized gain on available for sale debt securities | $ 15,491 | $ 20,551 |
Interest Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification of unrealized gain on available for sale debt securities | 15,500 | 20,600 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification of unrealized gain on available for sale debt securities | (8,200) | (10,900) |
Non-Controlling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification of unrealized gain on available for sale debt securities | $ 7,294 | $ 9,630 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 08, 2017 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2019 |
Related Party Transaction [Line Items] | |||||||
Distribution payable to non-controlling interest | $ 108,840 | $ 126,366 | $ 31,041 | $ 44,300 | |||
Investments in non-consolidated affiliates | 444,407 | 454,936 | 124,061 | ||||
Total financial royalty assets, net | $ 13,121,468 | 12,955,277 | |||||
Treasury interests | 4,266 | ||||||
Bristol-Myers Squibb | |||||||
Related Party Transaction [Line Items] | |||||||
Installment payments made during period | $ 24,300 | 24,300 | 171,000 | ||||
Payments To Related Party Funded By Acquisitions | Bristol-Myers Squibb | |||||||
Related Party Transaction [Line Items] | |||||||
Installment payments made during period | 12,100 | $ 12,100 | 85,500 | ||||
The Manager | Operating and Personnel Payments | |||||||
Related Party Transaction [Line Items] | |||||||
Quarterly payments to affiliates, percent of adjusted cash receipts (as a percent) | 6.50% | 6.50% | |||||
Quarterly payments to affiliates, percent of security investment (as a percent) | 0.25% | 0.25% | |||||
Amount calculated for operating and personal payment | $ 1,000 | $ 1,000 | |||||
Percent calculated for operating and personal payment | 0.3125% | 0.3125% | |||||
Operating and personnel payments incurred | $ 35,700 | $ 112,500 | |||||
The Manager | Former Operating and Personnel Payments | |||||||
Related Party Transaction [Line Items] | |||||||
Operating and personnel payments incurred | $ 19,700 | 60,000 | $ 57,200 | ||||
Increase in quarterly installment payments (as a percent) | 5.00% | 5.00% | |||||
Affiliated Entity | Royalty Distribution Payable To Legacy Investors Partnerships | |||||||
Related Party Transaction [Line Items] | |||||||
Distribution payable to non-controlling interest | $ 91,700 | $ 100,000 | |||||
Affiliated Entity | Royalty Distribution Payable to RP Select Finance Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Distribution payable to non-controlling interest | 17,100 | 26,300 | |||||
Affiliated Entity | Assignment Agreement - Benefit of Payment Stream | Bristol-Myers Squibb | |||||||
Related Party Transaction [Line Items] | |||||||
Related party, rate (as a percent) | 50.00% | ||||||
Affiliated Entity | Assignment Agreement - Funding Obligations | Bristol-Myers Squibb | |||||||
Related Party Transaction [Line Items] | |||||||
Related party, rate (as a percent) | 50.00% | ||||||
Cumulative funding amount | 162,400 | 162,400 | |||||
Total financial royalty assets, net | $ 146,100 | $ 150,600 | 150,300 | ||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | |||||||
Related Party Transaction [Line Items] | |||||||
Number of limited partnership interest acquired (in shares) | 27,210 | 27,210 | |||||
Treasury interests | $ 4,300 | $ 4,300 | |||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | Non-Controlling Interest | |||||||
Related Party Transaction [Line Items] | |||||||
Treasury interests | $ 1,900 | 1,900 | $ 4,300 | ||||
Pablo Legorreta [Member] | Purchasing And Donating Ventilators | |||||||
Related Party Transaction [Line Items] | |||||||
Amount paid to CEO | $ 1,000 | ||||||
Equity Investment In Epizyme Inc. | |||||||
Related Party Transaction [Line Items] | |||||||
Investments in non-consolidated affiliates | $ 100,000 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) - USD ($) $ in Millions | Aug. 07, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | Jan. 31, 2020 | Nov. 30, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Funding Agreement With Biohaven Pharmaceuticals | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Payment for purchase of royalties | $ 450 | $ 182.4 | |||||
Purchase commitment, upfront payment | 150 | ||||||
Purchase commitment, additional payments | 100 | $ 100 | $ 100 | ||||
Purchase commitment, purchase of committed, non-contingent Commercial Launch Preferred Equity payable | $ 200 | ||||||
Purchase Of Eisai Royalties | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Payment for purchase of royalties | $ 330 | ||||||
Purchase commitment, upfront payment | $ 110 | ||||||
Purchase commitment, additional payments | $ 110 | $ 220 | |||||
Purchase Of Eisai Royalties | Forecast | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Purchase commitment, additional payments | $ 110 |
Subsequent Events (Detail)
Subsequent Events (Detail) - USD ($) $ in Millions | 1 Months Ended | |
Jan. 31, 2021 | Apr. 30, 2020 | |
Subsequent Event [Line Items] | ||
Payments to acquire royalty interests, upfront payment | $ 60 | |
Additional milestone payments | $ 95 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Payments to acquire royalty interests, upfront payment | $ 180 | |
Additional milestone payments | $ 60 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Values and Fixed Rates (Detail) $ in Millions | Dec. 31, 2019USD ($) |
Interest Rate Swap, Due November 2020 | |
Accumulated Other Comprehensive Income [Line Items] | |
Notional Value | $ 600 |
Fixed Rate | 2.019% |
Interest Rate Swap, Due March 2023 - 1 | |
Accumulated Other Comprehensive Income [Line Items] | |
Notional Value | $ 250 |
Fixed Rate | 2.094% |
Interest Rate Swap, Due March 2023 - 2 | |
Accumulated Other Comprehensive Income [Line Items] | |
Notional Value | $ 500 |
Fixed Rate | 2.029% |
Interest Rate Swap, Due March 2023 - 3 | |
Accumulated Other Comprehensive Income [Line Items] | |
Notional Value | $ 250 |
Fixed Rate | 2.113% |
Interest Rate Swap, Due March 2023 - 4 | |
Accumulated Other Comprehensive Income [Line Items] | |
Notional Value | $ 500 |
Fixed Rate | 2.129% |
Financial Royalty Assets, Net_2
Financial Royalty Assets, Net - Narrative (Detail) - Cystic fibrosis franchise - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Nov. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reduction in financial royalty assets | $ 41 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected reduction in royalty receipts | $ 35 | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected reduction in royalty receipts | $ 45 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | ||
Denominator | |||
Weighted average Class A ordinary shares outstanding - diluted (in shares) | 607,148 | 375,455 | [1] |
Common Class A | |||
Denominator | |||
Weighted average Class A ordinary shares outstanding - diluted (in shares) | 607,111 | ||
[1] | Represents earnings per Class A ordinary share and weighted average Class A ordinary shares outstanding for the period from June 16, 2020 through December 31, 2020, the period following our initial public offering (see Note 13). |