Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39329 | ||
Entity Registrant Name | Royalty Pharma plc | ||
Entity Incorporation, State or Country Code | X0 | ||
Entity Tax Identification Number | 98-1535773 | ||
Entity Address, Address Line One | 110 East 59th Street | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10022 | ||
City Area Code | 212 | ||
Local Phone Number | 883-0200 | ||
Title of 12(b) Security | Class A ordinary shares, par value $0.0001 | ||
Trading Symbol | RPRX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.2 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement relating to the Annual Meeting of Shareholders, or Proxy Statement, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2020. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement shall not be deemed to be filed as part hereof. | ||
Entity Central Index Key | 0001802768 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 388,134,040 | ||
Common Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 218,976,830 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 1,008,680 | $ 246,199 |
Marketable securities | 983,279 | 94,455 |
Financial royalty assets | 587,193 | 452,560 |
Accrued royalty receivable | 33,155 | 33,525 |
Available for sale debt securities | 69,984 | 0 |
Other royalty income receivable | 6,011 | 5,241 |
Other current assets | 8,596 | 92 |
Total current assets | 2,696,898 | 832,072 |
Financial royalty assets, net | 12,368,084 | 10,842,052 |
Intangible royalty assets, net | 28,666 | 51,724 |
Equity securities | 298,689 | 380,756 |
Available for sale debt securities | 144,416 | 131,280 |
Derivative financial instruments | 5,439 | 42,315 |
Investments in non-consolidated affiliates | 454,936 | 124,061 |
Other assets | 23,158 | 45,635 |
Total assets | 16,020,286 | 12,449,895 |
Current liabilities | ||
Distribution payable to non-controlling interest | 126,366 | 31,041 |
Accounts payable and accrued expenses | 10,775 | 11,177 |
Interest payable | 42,146 | 0 |
Accrued purchase obligation | 110,000 | 0 |
Milestone payable | 18,600 | 0 |
Current portion of long-term debt | 0 | 281,984 |
Derivative financial instruments | 0 | 9,215 |
Total current liabilities | 307,887 | 333,417 |
Long-term debt | 5,816,584 | 5,956,138 |
Derivative financial instruments | 0 | 18,902 |
Total liabilities | 6,124,471 | 6,308,457 |
Commitments and contingencies | ||
Shareholders’/Unitholders’ equity | ||
Shareholders’ contributions | 0 | 3,282,516 |
Deferred shares, $0.000001 par value, 316,407 and 0 issued and outstanding, respectively | 0 | 0 |
Additional paid-in capital | 2,865,964 | 0 |
Retained earnings | 1,920,635 | 2,825,212 |
Non-controlling interest | 5,077,036 | 35,883 |
Accumulated other comprehensive income | 34,395 | 2,093 |
Treasury interests | (2,317) | (4,266) |
Total shareholders’/unitholders’ equity | 9,895,815 | 6,141,438 |
Total liabilities and shareholders’/unitholders’ equity | 16,020,286 | 12,449,895 |
Common Class A | ||
Shareholders’/Unitholders’ equity | ||
Common stock | 39 | 0 |
Common Class B | ||
Shareholders’/Unitholders’ equity | ||
Common stock | 0 | 0 |
Class R Redeemable Stock | ||
Shareholders’/Unitholders’ equity | ||
Common stock | $ 63 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Parenthetical) shares in Thousands | Dec. 31, 2020$ / sharesshares | Dec. 31, 2020£ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019£ / sharesshares |
Deferred stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Deferred stock, issued (in shares) | 316,407 | 316,407 | 0 | 0 |
Deferred stock, outstanding (in shares) | 316,407 | 316,407 | 0 | 0 |
Common Class A | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (in shares) | 388,135 | 388,135 | 0 | 0 |
Common stock, outstanding (in shares) | 388,135 | 388,135 | 0 | 0 |
Common Class B | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Common stock, issued (in shares) | 218,976 | 218,976 | 0 | 0 |
Common stock, outstanding (in shares) | 218,976 | 218,976 | 0 | 0 |
Class R Redeemable Stock | ||||
Common stock, par value (in dollars/pounds per share) | £ / shares | £ 1 | £ 1 | ||
Common stock, issued (in shares) | 50 | 50 | 0 | 0 |
Common stock, outstanding (in shares) | 50 | 50 | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Revenues | $ 2,122,353 | $ 1,814,254 | $ 1,794,894 | |
Operating expenses | ||||
Research and development funding expense | 26,289 | 83,036 | 392,609 | |
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 | |
General and administrative expenses | 181,715 | 103,439 | 61,906 | |
Other operating expenses | 65,053 | 0 | 0 | |
Total operating expenses, net | 526,954 | (808,922) | 430,448 | |
Operating income | 1,595,399 | 2,623,176 | 1,364,446 | |
Other (income)/expense | ||||
Equity in (earnings)/loss of non-consolidated affiliates | (44,459) | 32,517 | 7,023 | |
Interest expense | 157,059 | 268,573 | 279,956 | |
Realized gain on available for sale debt securities | 0 | 0 | (419,481) | |
Unrealized loss/(gain) on derivative financial instruments | 42,076 | 39,138 | (11,923) | |
(Gain)/loss on equity securities | (247,073) | (155,749) | 13,939 | |
Unrealized Gain (Loss) on Derivatives | (18,600) | 0 | 0 | |
Interest income | (28,379) | (22,329) | (24,441) | |
Other non-operating expense/(income), net | 32,821 | (393) | 1,518 | |
Total other (income)/expense, net | (106,555) | 161,757 | (153,409) | |
Consolidated net income before tax | 1,701,954 | 2,461,419 | 1,517,855 | |
Income tax expense | 0 | 0 | 0 | |
Consolidated net income | 1,701,954 | 2,461,419 | 1,517,855 | |
Less: Net income attributable to non-controlling interest | (726,914) | (112,884) | (140,126) | |
Net income attributable to controlling interest | 975,040 | 2,348,535 | 1,377,729 | |
Other comprehensive income/(loss) | ||||
Reclassification of loss on interest rate swaps | 4,066 | 6,189 | 8,003 | |
Unrealized gain/(loss) on available for sale debt securities | 83,120 | 6,159 | (402,502) | |
Reclassification of unrealized gain on available for sale debt securities | (20,551) | 0 | 0 | |
Other comprehensive income/(loss) | 66,635 | 12,348 | (394,499) | |
Comprehensive income | 1,041,675 | 2,360,883 | 983,230 | |
Less: Other comprehensive income attributable to non-controlling interest | (12,873) | 0 | 0 | |
Comprehensive income attributable to controlling interest | $ 1,028,802 | 2,360,883 | 983,230 | |
Earnings per Class A ordinary share | ||||
Basic (in dollars per share) | [1] | $ 1.32 | ||
Diluted (in dollars per share) | [1] | $ 1.32 | ||
Weighted average Class A ordinary shares outstanding | ||||
Basic (in shares) | [1] | 375,444 | ||
Diluted (in shares) | [1] | 375,455 | ||
Financial Royalty Assets | ||||
Revenues | $ 1,959,975 | 1,648,837 | 1,524,816 | |
Intangible Royalty Assets | ||||
Revenues | 143,382 | 145,775 | 134,118 | |
Royalty Income, Other | ||||
Revenues | $ 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). |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Class R Redeemable Stock | Unitholders’ Contributions | Common StockCommon Class A | Common StockCommon Class B | Common StockClass R Redeemable Stock | Deferred Shares | Additional Paid-In Capital | Shareholders’ Contributions | Retained Earnings | 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 | Treasury Interests |
Beginning balance at Dec. 31, 2017 | $ 4,460,546 | $ 0 | $ 3,282,516 | $ 655,446 | $ (2,863) | $ 381,381 | $ 2,863 | $ 141,203 | $ 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Distributions | (1,031,823) | (814,359) | (217,464) | |||||||||||||
Net income (loss) | 1,517,855 | 1,377,729 | 140,126 | |||||||||||||
Unrealized gain/(loss) on available for sale debt securities | (402,502) | (402,502) | ||||||||||||||
Reclassification of loss on interest rate swaps | 8,003 | 8,003 | ||||||||||||||
Reclassification of unrealized gain on available for sale debt securities | 0 | |||||||||||||||
Ending balance at Dec. 31, 2018 | 4,552,079 | 3,282,516 | 1,215,953 | (10,255) | 63,865 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Distributions | $ (880,142) | (739,276) | (140,866) | |||||||||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||||||
Net income (loss) | $ 2,461,419 | 2,348,535 | 112,884 | |||||||||||||
Unrealized gain/(loss) on available for sale debt securities | 6,159 | 6,159 | ||||||||||||||
Reclassification of loss on interest rate swaps | 6,189 | 6,189 | ||||||||||||||
Purchase of treasury interests | (4,266) | (4,266) | ||||||||||||||
Reclassification of unrealized gain on available for sale debt securities | 0 | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 0 | 0 | 0 | 0 | ||||||||||||
Ending balance at Dec. 31, 2019 | 6,141,438 | $ (192,705) | $ 3,282,516 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 2,825,212 | $ (192,705) | 2,093 | 35,883 | (4,266) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Distributions | (1,105,765) | (313,408) | (792,357) | |||||||||||||
Net income (loss) | 1,701,954 | |||||||||||||||
Unrealized gain/(loss) on available for sale debt securities | 83,120 | 60,617 | 22,503 | |||||||||||||
Reclassification of loss on interest rate swaps | 4,066 | 4,066 | 0 | |||||||||||||
Contributions | 1,482,322 | $ 307,646 | 1,174,676 | |||||||||||||
Transfer of interests | 0 | (1,037,161) | 1,037,161 | |||||||||||||
Initial share issuance upon registration of Royalty Pharma plc (in shares) | 50,000 | |||||||||||||||
Initial share issuance upon registration of Royalty Pharma plc | 63 | $ 63 | ||||||||||||||
Issuance of Class B shares to Continuing Investor Partnerships (in shares) | 535,383,000 | |||||||||||||||
Issuance of Class B shares to Continuing Investors Partnerships | 1 | $ 1 | ||||||||||||||
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 | |||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A ordinary shares and reallocation of historical equity | (1) | $ 30 | $ (1) | 1,402,762 | (2,553,001) | (1,261,014) | (24,022) | 2,433,098 | 2,147 | |||||||
Issuance of Class A ordinary shares sold in initial public offering, net of offering costs (in shares) | 71,652,000 | |||||||||||||||
Issuance of Class A ordinary shares sold in IPO, net of offering costs | 1,908,744 | $ 7 | 1,150,383 | 758,354 | ||||||||||||
Share based compensation and related issuance of Class A ordinary shares (in shares) | 76,000 | |||||||||||||||
Share-based compensation and related issuance of Class A ordinary shares | 5,428 | 5,428 | ||||||||||||||
Other exchanges (in shares) | 22,231,000 | (22,231,000) | 22,231,000 | |||||||||||||
Other exchanges | 191 | $ 2 | 307,391 | 2,562 | (309,566) | (198) | ||||||||||
Dividends | (112,490) | (112,490) | ||||||||||||||
Reclassification of unrealized gain on available for sale debt securities | (20,551) | (10,921) | (9,630) | |||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 50,000 | 388,135,000 | 218,976,000 | 50,000 | 316,407,000 | |||||||||||
Ending balance at Dec. 31, 2020 | $ 9,895,815 | $ 39 | $ 0 | $ 63 | $ 0 | $ 2,865,964 | $ 0 | $ 1,920,635 | $ 34,395 | $ 5,077,036 | $ (2,317) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Cash collections from financial royalty assets | $ 2,121,923 | $ 1,934,092 | $ 2,052,592 |
Cash collections from intangible royalty assets | 143,753 | 143,298 | 106,689 |
Other royalty cash collections | 18,305 | 27,448 | 125,162 |
Distributions from non-consolidated affiliates | 42,334 | 14,059 | 39,402 |
Interest received | 7,704 | 20,136 | 24,441 |
Swap collateral received | 45,252 | 360 | 3,467 |
Swap collateral posted | 0 | (45,630) | (510) |
Swap termination payments | (35,448) | 0 | 0 |
Ongoing development-stage funding payments | (20,479) | (83,036) | (108,163) |
Upfront development-stage funding payments | (5,810) | 0 | (284,446) |
Payments for operating and professional costs | (179,709) | (88,524) | (72,535) |
Payments for rebates | 0 | 0 | (125) |
Interest paid | (103,196) | (254,964) | (267,657) |
Net cash provided by operating activities | 2,034,629 | 1,667,239 | 1,618,317 |
Cash flows from investing activities: | |||
Distributions from non-consolidated affiliates | 15,084 | 0 | 0 |
Purchases of available for sale debt securities | 0 | (125,121) | 0 |
Purchase of warrants | 0 | (8,840) | 0 |
Purchases of equity securities | (50,000) | (78,999) | (152,810) |
Proceeds from available for sale debt securities | 3,000 | 150,000 | 750,000 |
Purchases of marketable securities | (1,705,283) | (817,402) | 0 |
Proceeds from sales and maturities of marketable securities | 815,440 | 725,070 | 0 |
Proceeds from equity securities | 384,840 | 0 | 0 |
Investments in non-consolidated affiliates | (40,155) | (27,042) | (24,173) |
Acquisitions of financial royalty assets | (2,182,246) | (1,721,291) | (269,593) |
Milestone payments | 0 | (250,000) | 0 |
Net cash (used in)/provided by investing activities | (2,759,320) | (2,153,625) | 303,424 |
Cash flows from financing activities: | |||
Distributions to shareholders/unitholders | (285,353) | (739,276) | (814,359) |
Distributions to non-controlling interest | (543,952) | (154,084) | (268,693) |
Distributions to non-controlling interest- other | (181,135) | 0 | 0 |
Dividends to shareholders | (112,490) | 0 | 0 |
Contributions from non-controlling interest- R&D | 8,482 | 0 | 0 |
Contributions from non-controlling interest- other | 58,957 | 0 | 0 |
Scheduled repayments of long-term debt | (94,200) | (294,000) | (294,000) |
Repayments of long-term debt | (11,116,196) | 0 | 0 |
Proceeds from issuance of long-term debt | 11,891,030 | 0 | 0 |
Debt issuance costs and other | (46,715) | 0 | (2,049) |
Purchase of treasury interests | 0 | (4,266) | 0 |
Proceeds from issuance of Class A ordinary shares upon IPO, net of offering costs | 1,908,744 | 0 | 0 |
Net cash provided by/(used in) financing activities | 1,487,172 | (1,191,626) | (1,379,101) |
Net change in cash and cash equivalents | 762,481 | (1,678,012) | 542,640 |
Cash and cash equivalents, beginning of year | 246,199 | 1,924,211 | 1,381,571 |
Cash and cash equivalents, end of year | $ 1,008,680 | $ 246,199 | $ 1,924,211 |
Organization and Purpose
Organization and Purpose | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Purpose | 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 late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when we acquire existing royalties from the original innovators. 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 basis for Class A ordinary shares of Royalty Pharma plc. Our Class B ordinary shares will not be 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. However, the RP Holdings Class B Interests will be entitled to dividends and distributions from RP Holdings. Our Class A ordinary and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as otherwise required by applicable law, with each share entitled to one vote. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 pandemic will impact our operational and financial performance will depend on various factors. To date, the pandemic has not materially impacted our financial performance and we do not believe it is reasonably likely to in the future. Due to the nature of our business, the effect of the COVID-19 pandemic may not be fully reflected in certain of our results of operations until future periods. 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 interest in our consolidated statements of comprehensive income equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. 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 interest was attributable to a de minimis interest in RPCT held by RPSFT. As a result of the Exchange Offer Transactions in February 2020, a new non-controlling interest was created related to the Legacy Investors Partnerships’ ownership of approximately 18% in Old RPI. Following the consummation of our IPO in June 2020, two new non-controlling interests were created: (1) a non-controlling interest related to the Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of the RP Holdings Class B Interests, which amounted to approximately 36% as of December 31, 2020, and (2) a non-controlling interest attributable to the RP Holdings Class C Special Interest held by EPA Holdings, an affiliate of the Manager. Income will not be allocated to the latter non-controlling interest until certain conditions are met, which we do not expect to occur for several years. 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 and a corresponding decrease to Cash and cash equivalents on the consolidated balance sheet as of December 31, 2019. In addition, the adjustment resulted in an increase of $388.0 million and $350.5 million in cash activity related to Purchases of marketable securities and Proceeds from sales and maturities of marketable securities , respectively, within Net cash used in investing activities for the year ended December 31, 2019, with a net impact on net cash flow from investing of $37.5 million. The adjustment had no effect on our reported total income and revenues, consolidated net income, total assets, or shareholders’ equity for any period. In addition, the adjustment does not impact net cash provided by operating activities in any period. We evaluated the adjustment and determined that, based on quantitative and qualitative analysis, it was not material to the consolidated financial statements as of and for the year ended December 31, 2019. 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 , respectively. 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 and the carrying value of Financial royalty assets, net is presented net of the cumulative allowance for changes in expected future cash flows. 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. Forecasts of expected future cash flows are developed from sales projections of the underlying biopharmaceutical products as published in sell-side equity research analyst reports. In projecting future cash flows, our policy is to derive annual sales projections for each financial royalty asset by applying the median growth rates calculated from consensus forecasts among sell-side equity research analysts currently reporting on a product to the corresponding periods for which we are entitled to royalties. Growth rates inherent in these forecasts are based on input from internal and external market research that analyzes factors such as growth in global economies, industry trends and product life cycles. When royalty-bearing biopharmaceutical products have no coverage, limited sell-side equity research analyst coverage or where sell-side equity research analyst estimates are not available for the full term of the royalty, particularly for the later years in a product’s life, management uses reasonable judgment to make assumptions about the growth or decline in the sales of these products based on historical data, market trends and management’s own expertise. Further, based on the level of detail in sell-side equity research analyst models, management can also be required to apply assumptions to the sales forecasts to estimate the quarterly and geographical allocation from annual sales projections and, for franchised products, to estimate the product mix and pricing mix, or to exclude from projections sales forecasts for unapproved products or indications. Our contractual royalty terms and rates are then applied to the adjusted sales projections to calculate the expected royalty payments over the term of the financial royalty asset’s life, forming the basis for our forecast of expected future cash flows used to calculate and measure interest income. • Commercial performance. The approval of a product for use in new indications can extend the date through which we are entitled to royalties on that product. Likewise, for certain royalties, such as the cystic fibrosis franchise, we are entitled to royalties on approved combination products and may be entitled to royalties on future combination products, which, once approved, create new cash flow streams which were not initially contemplated and whose sales were previously not reflected in sales projections. We generally do not recognize income from, or forecast sales for, unapproved products or indications. If a product is removed from all or a portion of a market, subsequent sell-side equity research analysts’ forecasts will reflect the expected drop in sales. Both the new cash flow streams and the cessation of cash flow streams related to a product’s performance in the market can materially affect our forecast of expected future cash flows over the royalty term. • Royalty duration. The duration of a royalty can be based on a number of factors, such as patent expiration dates, the number of years from first commercial sale, the first date of manufacture of the patent-protected product, the entry of generics or a contractual date arising from litigation, which are all impacted by the time in the product’s life cycle at which we acquire the royalty. Royalty duration varies by geography as United States, European Union and other jurisdictions may be subject to different country-specific patent protection terms or exclusivity based on contractual terms. Products may be covered by a number of patents and, for products whose royalty term is linked to the existence of valid patents, management is required to make judgments about the patent providing the strongest patent protection to align the period over which management forecasts expected future cash flows to the royalty term. It is common for the latest expiring patent in effect at the date we acquire a royalty asset to be extended, adjusted or replaced with newer dated patents subsequent to our acquisition of a royalty due to new information, resulting in changes to the royalty duration in later periods. Patents may expire earlier than expected at the time of the acquisition due to the loss of patent protection, loss of data exclusivity on intellectual property, contractual licensing terms limiting royalty payments based on time from product launch, due to recent legal developments or litigation outcomes. Macroeconomic factors, such as changes in economies or the competitive landscape, including the unexpected loss of exclusivity to the products underlying our portfolio of royalties, changes in government legislation, product life cycles, industry consolidations and other changes beyond our control could result in a positive or negative impact on our forecast of expected future cash flows. 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 represents an estimation for current quarter royalty receipts which are collected during the subsequent quarter and for which the estimates are derived from the latest external publicly available sell-side equity research analyst reports, reported in arrears. 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 credit to the provision line on the income statement. Management also recalculates the amount of accretable yield to be received based on the revised remaining future cash flows. The adjustment to the accretable yield is treated as a change in estimate and is recognized prospectively over the remaining life of the financial royalty asset by adjusting the effective interest rate used to calculate income. Movements in the cumulative allowance for changes in expected future cash flows, which forms part of the Financial royalty assets, net line item on the consolidated balance sheet, are accompanied by corresponding changes to the provision. Amounts not expected to be collected are written off against the allowance at the time that such a determination is made. Recoveries of previously written-off amounts are credited to the allowance. In some cases, when a financial royalty asset’s contractual cash flows expire, the final royalty payment may differ from the remaining net carrying value. We account for this non-cash true-up at the end of the royalty term as either Provision for changes in expected cash flows from financial royalty assets or as Income from financial royalty assets on the consolidated statements of comprehensive income. 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 status (e.g., for royalties from products that have not yet received FDA approval or for accelerated royalties). Such financial royalty assets are held at cost and no income is recognized until the reasonable expectation of the timing of the future cash flows to be collected is available or until funding obligations payable over time for an approved product are complete. We evaluate such financial royalty assets held at cost for impairment based on, among other factors, a review of development progress, clinical trial results, and publicly available information around regulatory discussions and approval status. An impairment loss is recognized if, based on current information and events, it is probable that we will be unable to collect amounts due according to the contractual terms of the financial royalty asset, and the amount of loss can be reasonably estimated. 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 which requires earlier recognition of credit losses. We now recognize an allowance for current expected credit losses on our portfolio of financial royalty assets. The credit loss allowance is estimated using the probability of default and loss given default method. The credit rating, which is primarily based on publicly available data and updated quarterly, is the primary credit quality indicator used to determine the probability of default of the marketers responsible for paying our royalties and the resulting loss given default. The allowance for current expected credit losses is presented net within the non-current portion of Financial royalty assets, net on the consolidated balance sheets. Any subsequent routine movement in the allowance for credit losses is recorded as part of the Provision for changes in expected future cash flows from financial royalty assets on the consolidated statements of comprehensive income. 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”) patents. The DPP-IV patents are finite-life intangible royalty assets whose cost is amortized using the straight-line method over the expected lives of the patents, which terminate at various dates until 2022. The amortization period commenced concurrent with the sale of the product underlying the royalty asset. Management reviews the performance of intangible royalty assets periodically for impairment as required by ASC 360-10, Property, Plant, and Equipment - Overall . The test for recoverability is performed by comparing the carrying value of the intangible royalty asset with the estimated future undiscounted cash flows generated through royalty payments from sales of the underlying DPP-IV products. When evaluating indicators of impairment, we consider factors such as competitive environment and the product’s life cycle stage, recent and prospective sales trends, collectability concerns, and any potential rebate chargebacks that may occur at the end of a royalty’s term. An impairment loss is recognized if the carrying value of the intangible royalty asset is not recoverable and its carrying amount exceeds its fair value. Revenue from intangible royalty assets and Accrued royalty receivable We earn royalties on sales by our licensees of DPP-IV products covered under patents that we own. We do not have future performance obligations under these license arrangements. Royalty revenue on DPP-IV products is recognized in the period the product is sold. However, under the license agreements, licensees generally provide royalty reports and payments on a one quarter lag. Thus, the accrued royalty receivable is based on an analysis of historical royalties received and sell-side equity research analysts’ projected sales, adjusted for any changes in estimates. Royalty-bearing sales are net of certain rebates and other discounts, as permitted under the terms of the license agreements. Because rebates are generally invoiced and paid in arrears by the marketer, royalty reports often reflect deductions in current periods for rebates related to prior periods which we do not have the ability to estimate. 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 are determined through a combination of management estimates and information obtained from third parties using the latest market data. The fair value of financial instruments is determined utilizing the valuation techniques appropriate to the type of instrument as discussed in Note 3 – Fair Value Measurements and Financial Instruments. 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 affiliates 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 affiliates in the consolidated statements of comprehensive income. The investment is reflected as Investments in non-consolidated affiliates on the consolidated balance sheet. We have variable interests in entities formed for the purposes of entering into co-development arrangements for potential biopharmaceutical products (the “Avillion entities”). The Avillion entities are variable interest entities for which we are not the primary beneficiary as we do not have the power to direct the activities that most significantly influence the economic performance of the entity. In determining whether we are the primary beneficiary of an entity, management applies a qualitative approach that determines whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant. Management continuously assesses whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of one or more of its investees. 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 |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | 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 Sale Debt Securities for a description of our investments in the Biohaven Preferred Shares. 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 assets $ 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 in the year ended December 31, 2020. (2) The Series B Forwards, recorded within Other assets in the consolidated balance sheet as of December 31, 2020, relate to our obligation to fund the acquisition of the Series B Biohaven Preferred Shares. (3) Related to Epizyme transaction as described in Note 4–Derivative Instruments and recorded in the non-current asset portion of Derivative financial instruments in the consolidated balance sheet as of December 31, 2020. 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 assets $ 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 liabilities $ — $ (18,902) $ — $ (18,902) (1) Related to Epizyme warrants and put option as described in Note 4–Derivative Instruments and both recorded in the non-current asset portion of Derivative financial instruments in the consolidated balance sheet as of December 31, 2019. 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 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 on the consolidated statements of comprehensive income. 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 after FDA approval through December 31, 2024. The FDA approved Nurtec ODT (rimegepant) in February 2020, at which point we became entitled to receive a fixed payment amount of $250.0 million payable in equal quarterly payments from March 31, 2021 through December 31, 2024. For additional discussion of our investment in the Series A Biohaven Preferred Shares, see Note 5––Available for Sale Debt Securities. 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 for Sale Debt Securities. 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 time period and developing a risk-adjusted discounted rate requires significant judgement. Our expectation of the probability and timing of the occurrence of a change of control event could reasonably be different than the timing of an actual change of control event, and if so, would mean that the estimate fair value could be significantly higher or lower than the fair value determined by management at any particular date. Our estimate of a risk adjusted discount rate could reasonably be different than the discount rate selected by a market participant in the event of a sale of the Series B Forwards, which would mean that the estimated fair value could be significantly higher or lower. We have elected the fair value option to account for our Series B Forwards as it most accurately reflects the nature of our Series B Forwards, which we record within Other assets in our consolidated balance sheet. The unrealized movement in fair value of the Series B forwards is recorded within Unrealized gain on forwards on the consolidated statements of comprehensive income. 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 portion of our financial royalty assets as of December 31, 2020 and 2019 are presented below (in thousands). 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 |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative InstrumentsWe 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 and Purpose, RPIFT terminated all outstanding interest rate swaps in February 2020. We paid $35.4 million to terminate our swaps and reclaimed $45.3 million of collateral that was held by the respective counterparties. 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 $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 liability of $18.9 million) and included within Derivative financial instruments on the consolidated balance sheets. 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 rights with the same counterparty but elected not to offset such derivative instrument fair values in the consolidated balance sheets. RPIFT generally had executed a Credit Support Annex (“CSA”) under the ISDA it maintains with each of its over-the-counter (“OTC”) derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality securities. These CSAs are bilateral agreements that require collateral postings by the party “out-of-the-money” or in a net derivative liability position. Various thresholds for the amount and timing of collateralization of net liability positions are applicable. RPIFT elected not to offset fair value amounts of any outstanding derivatives against the fair value amounts recognized for the related cash collateral receivable or payable that arise from those derivative instruments on the consolidated balance sheets. 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 on the consolidated balance sheets. At December 31, 2019, RPIFT did not have the obligation to return any cash collateral to counterparties, as it did not hold any cash collateral at that date. 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 asset portion of Derivative financial instruments on the consolidated balance sheet at December 31, 2019. The exercise of the put option was settled in February 2020. The warrant was recognized at fair value of $5.4 million and $30.8 million within the non-current asset portion of Derivative financial instruments on the consolidated balance sheets at December 31, 2020 and 2019, respectively. We recorded an unrealized loss on derivative contracts of $25.4 million and an unrealized gain on derivative contracts of $22.0 million related to the change in fair value of the warrants on the consolidated statements of comprehensive income for the years ended December 31, 2020 and 2019, respectively. 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 p ut 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 Consolidated Statement of Comprehensive Income location 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) on derivative financial instruments Change in fair value of interest rate swaps (73) 16,954 (3,357) Unrealized loss/(gain) on derivative financial instruments 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) on derivative financial instruments Interest expense/(income) 408 (2,681) (440) Interest expense Warrant: Change in fair value of warrant 25,375 (21,977) — Unrealized loss/(gain) on derivative financial instruments Forward purchase contract: Change in fair value of forward purchase contract 5,800 (11,500) — Unrealized loss/(gain) on derivative financial instruments |
Available for Sale Debt Securit
Available for Sale Debt Securities | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for Sale Debt Securities | 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 gains 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 asset portion of Available for sale debt securities , respectively, in the consolidated balance sheet. As of December 31, 2019, the entire balance of the Series A Biohaven Preferred Shares was recorded as a non-current asset. 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 volume-weighted trading price immediately preceding the conversion date. 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 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 volume-weighted trading price immediately preceding the conversion date. 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 payable to the former shareholders of Fumapharm AG. The Fumapharm earn-out primarily represents an indirect interest in Biogen’s sales of Tecfidera, an oral therapeutic for the treatment of relapsing-remitting multiple sclerosis. Our investment in the Tecfidera earn-out was classified as available for sale debt securities. 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 |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Financial Royalty Assets, Net | 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 portion of financial royalty assets at December 31, 2020 and December 31, 2019 are as follows (in thousands): December 31, 2020 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (d) 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 (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 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 Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. 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 duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) 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 of $41.0 million as of December 31, 2019. Upon receipt of the royalty payment in the first quarter of 2020, we did not recognize any material adjustments related to our estimate. |
Cumulative Allowance and the Pr
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 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 portion of Financial royalty assets, net on the consolidated balance sheets and includes the following activities: • 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, we recorded a cumulative adjustment to Retained earnings of $192.7 million to recognize an allowance for current expected credit losses on our portfolio of financial royalty assets. The current period provision for changes in expected cash flows from financial royalty assets reflects the activity for the period that relates to the change in estimates applied to calculate the allowance for credit losses, namely any new financial royalty assets with limited protective rights and changes in the underlying cash flow forecasts used in the effective interest model to measure income from our financial royalty assets. Refer to Note 2 – Summary of Significant Accounting Policies for further information. 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 year 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 as a result of the write-off of the related financial royalty asset balance of $90.2 million. |
Intangible Royalty Assets, Net
Intangible Royalty Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Royalty Assets, Net | 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 amortization Net carrying value DPP-IV patents $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 As of December 31, 2019 Cost Accumulated amortization Net carrying value DPP-IV patents $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 The DPP-IV patents associated with the intangible royalty assets terminate at various dates up to 2022. The weighted average remaining life of the intangible royalty assets is 1.25 years. The projected amortization expense is $23.0 million and $5.7 million in 2021 and 2022, respectively. |
Non-Consolidated Affiliates
Non-Consolidated Affiliates | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Non-Consolidated Affiliates | Non-Consolidated Affiliates 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 interest in Old RPI. 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 affiliates . 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 affiliates during the years ended December 31, 2020, 2019 and 2018, respectively. 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 agreement with Pfizer. 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 II clinical trial for the use of Merck KGaA’s anti-IL 17 nanobody M1095 (the “Merck KGgA Asset”) for the treatment of psoriasis in exchange for certain milestone and royalty payments. We received a distribution of $21.3 million from Avillion II in respect of the Merck KGgA Asset, for which development ceased during the year ended December 31, 2020. 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 II and III clinical trials to advance Pearl Therapeutics, Inc.’s product PT-027 (the “AZ Asset”) through a global clinical development program for the treatment of asthma in exchange for a series of deferred payments and success-based milestones. 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 |
Dec. 31, 2020 | |
Research and Development [Abstract] | |
R&D Funding Expense | 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 agreement with Sanofi, and upfront funding related to a royalty on an unapproved product that we acquired from BioCryst in the quarter ended December 31, 2020. R&D funding expense in 2019 primarily related to funding agreements with both Sanofi and Pfizer. We completed our funding commitments in the fourth quarter of 2019 under our agreement with Pfizer. R&D funding expense incurred in 2018 related to funding agreements with Sanofi, Pfizer, Immunomedics and Biohaven. 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 agreement with Sanofi. We recognized $83.0 million of R&D funding expense during the year ended December 31, 2019, of which $18.2 million and $62.8 million related to our funding agreements with Sanofi and Pfizer, respectively. 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 |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | 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 owned subsidiary. Interest on each series of the Notes accrues at the respective rate per annum and is payable semi-annually in arrears on March 2 and September 2 of each year, commencing on March 2, 2021. The Notes were issued at a total discount of $149.0 million. In connection with the transaction, we capitalized approximately $40.4 million in debt issuance costs primarily comprised of underwriting fees. The discount and the capitalized debt issuance costs are recorded as a direct deduction from the carrying amount of the Notes on our consolidated balance sheets and are being amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. The Notes have a weighted average coupon rate and a weighted average effective interest rate of 2.125% and 2.50% as of December 31, 2020, respectively. 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 for the current portion and Other assets for the non-current portion. As of December 31, 2020 , there were no outstanding borrowings under the Revolving Credit Facility. 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 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”) and term loan B (“Tranche B-1”) in the amounts of $3.20 billion and $2.84 billion, respectively. Tranche A-1 had an interest rate of 1.50% above LIBOR and matures in February 2025. Tranche B-1 had an interest rate of 1.75% above LIBOR and matures in February 2027. In September 2020, the Company repaid in whole the outstanding principal amounts of term loans under the senior secured credit facilities governed by the Senior Secured Credit Agreement with net proceeds from the Notes and available cash on hand. Upon refinancing of our senior secured credit facilities in September 2020, we recorded a loss on debt extinguishment of $25.1 million as part of Other non-operating expense/(income), net, which primarily consisted of unamortized loan issuance costs and original issue discount related to our senior secured credit facilities. 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 expense/(income), net, . As of December 31, 2019, the Prior Credit Facility included two term loans, Term Loan A and Term Loan B. Tranche A-4 required annual amortization of 5.9% per year and tranche B-6 required annual amortization of 3.2% per year. The Prior Credit Facility was secured by a grant by RPIFT of a security interest in substantially all of its personal property and a grant by RPCT of a security interest in RPIFT’s share (80%) of all amounts on deposit in RPCT ’ s bank account. 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. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Capital structure Following the completion of our IPO as discussed in Note 1–Organization and Purpose, there have been no material changes in our capital structure, except for the secondary offering that was completed in October 2020, whereby 17,343 thousand of our Class A ordinary shares were offered for sale by certain of the Continuing Investors (the “Selling Shareholders”) at a price of $42.00 per share. We did not receive any proceeds from or pay any underwriting costs associated with the sale of Class A ordinary shares offered by the Selling Shareholders. The shares sold in the offering consisted of (i) 4,137 thousand existing Class A ordinary shares held by the Continuing Investor Partnerships and (ii) 13,206 thousand newly-issued Class A ordinary shares issued in connection with the redemption of 13,206 thousand RP Holdings Class B Interests by the Continuing Investors Partnerships that participated in the secondary offering. As of December 31, 2020, we have outstanding 388,135 thousand Class A ordinary shares and 218,976 thousand Class B ordinary shares. 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 as a public limited company to Royalty Pharma plc, as required by the U.K. Companies Act. The Class R redeemable shares may be redeemed at the Company’s option in the future. Any such redemption would be at the nominal value of £1 each. The RP Holdings Class B Interests are exchangeable on a one-for-one basis for our Class A ordinary shares pursuant to an Exchange Agreement entered into by us, RP Holdings, the Continuing Investors Partnerships, RPI International Partners 2019, LP and EPA Holdings that governs the exchange of RP Holdings Class B Interests held by the Continuing Investors Partnerships for Class A ordinary shares. Each such exchange also results in the re-designation of the same number of our Class B ordinary shares as deferred shares. As of December 31, 2020, we have outstanding deferred shares of 316,407 thousand. Non-controlling interests Prior to the Exchange Offer Transactions in February 2020, the only non-controlling interest related to RPSFT, for which the related movements are presented in the historical statements of shareholders’ equity. The net change in the balance of our four non-controlling interests for the year ended December 31, 2020 is as follows (in thousands): RPSFT Legacy Investors Partnerships Continuing Investors Partnerships (1) EPA Holdings 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 basis. Investments made during each two-year period will be grouped together as separate portfolios (each, a “Portfolio”). Subject to certain conditions, at the end of each fiscal quarter, EPA Holdings is entitled to a distribution from RP Holdings in respect of each Portfolio equal to 20% of the Net Economic Profit (defined as the aggregate cash receipts for all new portfolio investments in such Portfolio less Total Expenses (defined as interest expense, operating expense and recovery of acquisition cost in respect of such Portfolio)) for such Portfolio for the applicable measuring period (the “Equity Performance Awards”). The Equity Performance Awards will be allocated and paid by RP Holdings to EPA Holdings as the holder of the RP Holdings Class C Special Interest. The Equity Performance Awards will be payable in RP Holdings Class B Interests for which we will issue the same number of Class B ordinary shares, which will be subsequently exchanged for our Class A ordinary shares. We do not currently expect any material Equity Performance Awards to be payable until the mid to late 2020s. 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 t o 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 the consolidated statement of comprehensive income. As of December 31, 2020, the total unrecognized share-based compensation expense related to total outstanding RSUs was less than $1.0 million, which we expect to recognize in the next six months. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
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, Class B ordinary shares potentially issuable to EPA Holdings, and unvested RSUs issued under our Equity Incentive Plan. We use the “if-converted” method to determine the potentially dilutive effect of our Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. 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 method has not been presented. Our Class B ordinary shares are, however, considered potentially dilutive shares of Class A ordinary shares because shares of Class B ordinary shares, together with the related RP Holdings Class B Interests, are exchangeable into Class A ordinary shares on a one-for-one basis. Class B ordinary shares potentially issuable to EPA Holdings were evaluated and were determined not to have any dilutive impact for the year ended December 31, 2020. Class B ordinary shares currently in issue were evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. 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 December 31, 2020 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 interest - Legacy Investors Partnerships and RPSFT 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 on the consolidated statements of comprehensive income. |
Indirect Cash Flow
Indirect Cash Flow | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Indirect Cash Flow | 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 affiliates (44,459) 32,517 7,023 Distributions from non-consolidated affiliates 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 investing and financing activities are summarized below (in thousands). For the Years Ended December 31, 2020 2019 2018 Supplemental schedule of non-cash investing / financing activities: 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 interest (1) 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 (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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, unrealized gains and losses on equity securities are recognized through earnings. Changes in accumulated other comprehensive income/(loss) by component are as follows (in thousands): Unrealized gain/(loss) on equity securities Unrealized gain/(loss) on available for sale debt securities Unrealized gain/(loss) on interest rate swaps Total Accumulated Other Comprehensive Income/(Loss) 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 interest — (24,022) — (24,022) Reclassifications from non-controlling interest — 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 |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 and Purpose), the Manager has entered into new management agreements with RPI and its subsidiaries, the Continuing Investors Partnerships, and with the Legacy Investors Partnerships. Pursuant to the new management agreements, RPI pays quarterly Operating and Personnel Payments in respect of operating and personnel expenses to the Manager or its affiliates equal to 6.5% of the Adjusted Cash Receipts (both, as defined in the New 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 Payment for Old RPI, an obligation of the Legacy Investors Partnerships as a non-controlling interest in Old RPI and for which the expense is reflected in our income statement, is calculated as the greater of $1 million per quarter and 0.3125% of Royalty Investments (as defined in the New Management Agreement) during the previous twelve calendar months. Operating and Personnel Payments incurred during the year ended December 31, 2020 were $112.5 million. 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 on the consolidated statements of comprehensive income. Distribution payable to non-controlling interest The Distribution payable to non-controlling interest represents the contractual cash flows required to be distributed based on the Legacy Investors Partnerships’ non-controlling interest in Old RPI and RPSFT’s non-controlling interest in RPCT. The Distribution payable to non-controlling interest of $126.4 million at December 31, 2020 includes the following: (1) $100.0 million due to the Legacy Investors Partnerships from Old RPI in connection with the Legacy Investors Partnerships’ non-controlling interest in Old RPI that arose in the Reorganization Transactions and (2) $26.3 million due to RPSFT from RPCT in connection with RPSFT’s non-controlling interest in RPCT. The Distribution payable to non-controlling interest of $31.0 million and $44.3 million at December 31, 2019 and 2018, respectively, represents the contractual distribution of cash flows due from RPCT to RPSFT in connection with its non-controlling interest in RPCT. 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 on the consolidated balance sheets as of December 31, 2020 and 2019, respectively, represents only our right to the future payment streams acquired from BMS. 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 interest in Old RPI. Refer to Note 9–Non-Consolidated Affiliates for additional discussion. 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 interests in the consolidated balance sheet as of December 31, 2020. The total investment of $4.3 million was recorded as treasury interests held by controlling equity in the consolidated balance sheet as of December 31, 2019. 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 |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 III 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 Commercial Launch Preferred Equity for a total of $200.0 million payable on a quarterly basis between March 31, 2021 and December 31, 2024. 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. 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 Affiliates and 10–R&D Funding Expense, respectively, for details of these arrangements. We also have requirements to make Operating and Personnel Payments over the life of the management agreement as described in Note 16–Related Party Transactions, which are variable and based on projected cash receipts. 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 |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn 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 III 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 |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of preparation | 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 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 pandemic will impact our operational and financial performance will depend on various factors. To date, the pandemic has not materially impacted our financial performance and we do not believe it is reasonably likely to in the future. Due to the nature of our business, the effect of the COVID-19 pandemic may not be fully reflected in certain of our results of operations until future periods. |
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 interest in our consolidated statements of comprehensive income equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. 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. |
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. |
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 and the carrying value of Financial royalty assets, net is presented net of the cumulative allowance for changes in expected future cash flows. 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. Forecasts of expected future cash flows are developed from sales projections of the underlying biopharmaceutical products as published in sell-side equity research analyst reports. In projecting future cash flows, our policy is to derive annual sales projections for each financial royalty asset by applying the median growth rates calculated from consensus forecasts among sell-side equity research analysts currently reporting on a product to the corresponding periods for which we are entitled to royalties. Growth rates inherent in these forecasts are based on input from internal and external market research that analyzes factors such as growth in global economies, industry trends and product life cycles. When royalty-bearing biopharmaceutical products have no coverage, limited sell-side equity research analyst coverage or where sell-side equity research analyst estimates are not available for the full term of the royalty, particularly for the later years in a product’s life, management uses reasonable judgment to make assumptions about the growth or decline in the sales of these products based on historical data, market trends and management’s own expertise. Further, based on the level of detail in sell-side equity research analyst models, management can also be required to apply assumptions to the sales forecasts to estimate the quarterly and geographical allocation from annual sales projections and, for franchised products, to estimate the product mix and pricing mix, or to exclude from projections sales forecasts for unapproved products or indications. Our contractual royalty terms and rates are then applied to the adjusted sales projections to calculate the expected royalty payments over the term of the financial royalty asset’s life, forming the basis for our forecast of expected future cash flows used to calculate and measure interest income. • Commercial performance. The approval of a product for use in new indications can extend the date through which we are entitled to royalties on that product. Likewise, for certain royalties, such as the cystic fibrosis franchise, we are entitled to royalties on approved combination products and may be entitled to royalties on future combination products, which, once approved, create new cash flow streams which were not initially contemplated and whose sales were previously not reflected in sales projections. We generally do not recognize income from, or forecast sales for, unapproved products or indications. If a product is removed from all or a portion of a market, subsequent sell-side equity research analysts’ forecasts will reflect the expected drop in sales. Both the new cash flow streams and the cessation of cash flow streams related to a product’s performance in the market can materially affect our forecast of expected future cash flows over the royalty term. • Royalty duration. The duration of a royalty can be based on a number of factors, such as patent expiration dates, the number of years from first commercial sale, the first date of manufacture of the patent-protected product, the entry of generics or a contractual date arising from litigation, which are all impacted by the time in the product’s life cycle at which we acquire the royalty. Royalty duration varies by geography as United States, European Union and other jurisdictions may be subject to different country-specific patent protection terms or exclusivity based on contractual terms. Products may be covered by a number of patents and, for products whose royalty term is linked to the existence of valid patents, management is required to make judgments about the patent providing the strongest patent protection to align the period over which management forecasts expected future cash flows to the royalty term. It is common for the latest expiring patent in effect at the date we acquire a royalty asset to be extended, adjusted or replaced with newer dated patents subsequent to our acquisition of a royalty due to new information, resulting in changes to the royalty duration in later periods. Patents may expire earlier than expected at the time of the acquisition due to the loss of patent protection, loss of data exclusivity on intellectual property, contractual licensing terms limiting royalty payments based on time from product launch, due to recent legal developments or litigation outcomes. Macroeconomic factors, such as changes in economies or the competitive landscape, including the unexpected loss of exclusivity to the products underlying our portfolio of royalties, changes in government legislation, product life cycles, industry consolidations and other changes beyond our control could result in a positive or negative impact on our forecast of expected future cash flows. 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 represents an estimation for current quarter royalty receipts which are collected during the subsequent quarter and for which the estimates are derived from the latest external publicly available sell-side equity research analyst reports, reported in arrears. 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 credit to the provision line on the income statement. Management also recalculates the amount of accretable yield to be received based on the revised remaining future cash flows. The adjustment to the accretable yield is treated as a change in estimate and is recognized prospectively over the remaining life of the financial royalty asset by adjusting the effective interest rate used to calculate income. Movements in the cumulative allowance for changes in expected future cash flows, which forms part of the Financial royalty assets, net line item on the consolidated balance sheet, are accompanied by corresponding changes to the provision. Amounts not expected to be collected are written off against the allowance at the time that such a determination is made. Recoveries of previously written-off amounts are credited to the allowance. In some cases, when a financial royalty asset’s contractual cash flows expire, the final royalty payment may differ from the remaining net carrying value. We account for this non-cash true-up at the end of the royalty term as either Provision for changes in expected cash flows from financial royalty assets or as Income from financial royalty assets on the consolidated statements of comprehensive income. 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 status (e.g., for royalties from products that have not yet received FDA approval or for accelerated royalties). Such financial royalty assets are held at cost and no income is recognized until the reasonable expectation of the timing of the future cash flows to be collected is available or until funding obligations payable over time for an approved product are complete. We evaluate such financial royalty assets held at cost for impairment based on, among other factors, a review of development progress, clinical trial results, and publicly available information around regulatory discussions and approval status. An impairment loss is recognized if, based on current information and events, it is probable that we will be unable to collect amounts due according to the contractual terms of the financial royalty asset, and the amount of loss can be reasonably estimated. 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 which requires earlier recognition of credit losses. We now recognize an allowance for current expected credit losses on our portfolio of financial royalty assets. The credit loss allowance is estimated using the probability of default and loss given default method. The credit rating, which is primarily based on publicly available data and updated quarterly, is the primary credit quality indicator used to determine the probability of default of the marketers responsible for paying our royalties and the resulting loss given default. The allowance for current expected credit losses is presented net within the non-current portion of Financial royalty assets, net on the consolidated balance sheets. Any subsequent routine movement in the allowance for credit losses is recorded as part of the Provision for changes in expected future cash flows from financial royalty assets on the consolidated statements of comprehensive income. |
Intangible royalty assets, net | Currently, our only intangible royalty assets are the Januvia and Janumet (“DPP-IV”) patents. The DPP-IV patents are finite-life intangible royalty assets whose cost is amortized using the straight-line method over the expected lives of the patents, which terminate at various dates until 2022. The amortization period commenced concurrent with the sale of the product underlying the royalty asset. Management reviews the performance of intangible royalty assets periodically for impairment as required by ASC 360-10, Property, Plant, and Equipment - Overall . The test for recoverability is performed by comparing the carrying value of the intangible royalty asset with the estimated future undiscounted cash flows generated through royalty payments from sales of the underlying DPP-IV products. When evaluating indicators of impairment, we consider factors such as competitive environment and the product’s life cycle stage, recent and prospective sales trends, collectability concerns, and any potential rebate chargebacks that may occur at the end of a royalty’s term. An impairment loss is recognized if the carrying value of the intangible royalty asset is not recoverable and its carrying amount exceeds its fair value. |
Revenue from intangible royalty assets and Accrued royalty receivable | We earn royalties on sales by our licensees of DPP-IV products covered under patents that we own. We do not have future performance obligations under these license arrangements. Royalty revenue on DPP-IV products is recognized in the period the product is sold. However, under the license agreements, licensees generally provide royalty reports and payments on a one quarter lag. Thus, the accrued royalty receivable is based on an analysis of historical royalties received and sell-side equity research analysts’ projected sales, adjusted for any changes in estimates. Royalty-bearing sales are net of certain rebates and other discounts, as permitted under the terms of the license agreements. Because rebates are generally invoiced and paid in arrears by the marketer, royalty reports often reflect deductions in current periods for rebates related to prior periods which we do not have the ability to estimate. 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 are determined through a combination of management estimates and information obtained from third parties using the latest market data. The fair value of financial instruments is determined utilizing the valuation techniques appropriate to the type of instrument as discussed in Note 3 – Fair Value Measurements and Financial Instruments. |
Cash and cash equivalents | 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 |
Investments in non-consolidated affiliates | 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 affiliates in the consolidated statements of comprehensive income. The investment is reflected as Investments in non-consolidated affiliates on the consolidated balance sheet. We have variable interests in entities formed for the purposes of entering into co-development arrangements for potential biopharmaceutical products (the “Avillion entities”). The Avillion entities are variable interest entities for which we are not the primary beneficiary as we do not have the power to direct the activities that most significantly influence the economic performance of the entity. In determining whether we are the primary beneficiary of an entity, management applies a qualitative approach that determines whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant. Management continuously assesses whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of one or more of its investees. |
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 in the same period in which the sale of the product occurs. Fixed or milestone payments receivable based on the achievement of contractual criteria (i.e., typically the achievement of agreed upon sales thresholds) for products arising out of our R&D arrangements are also recognized as Other royalty income in the period that the commercial sales threshold is met. Milestone thresholds are typically not triggered until after all funding obligations have been completed and we have no further performance obligations. |
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 be 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. tax resident company (the “Controlled Foreign Company”) which is controlled by a U.K. person or persons. The charge under the U.K. CFC Rules applies by reference to certain types of chargeable profit arising to the Controlled Foreign Company, whether or not that profit is distributed, subject to specific exemptions. Certain non-U.K. entities in which we hold a greater than 25% interest, including RPI (which is Irish tax resident) and Old RPI (which is Irish tax resident and which is held indirectly by us through our participation in RP Holdings) |
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” method to determine the potentially dilutive effect of Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. |
Recently adopted and issued accounting standards | In May 2014, the Financial Accounting Standard Board (“FASB”) issued a new revenue standard under ASC Topic 606 (ASU 2014-09). ASU 2014-09 applies to all contracts with customers. Based on management’s assessment, income from financial royalty assets which are accounted for in accordance with ASC 310, Receivables , is not subject to the application of ASU 2014-09. As a result, management believes that financial royalty assets represent contractual rights and obligations that continue to be within the scope of Topic 310 and therefore specifically exempted from the new revenue standard. The provisions of ASU 2014-09 became effective for us on January 1, 2018, including interim reporting periods. Our revenues are primarily derived from intangible royalty assets, which fall under the sales-based royalties exception in the new standard. Therefore, we did not recognize any adjustment upon adoption of the new revenue standard. In January 2016, the FASB issued revised guidance for the accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued related technical corrections (ASU 2018-03). The new guidance requires that equity investments with readily determinable fair values currently classified as available for sale be measured at fair value with changes in fair value recognized in net income. The new guidance also changed certain disclosure requirements. We adopted ASU 2016-01 as of January 1, 2018 using a modified retrospective approach. We recorded a cumulative-effect adjustment upon adoption that decreased retained earnings by $2.9 million as a result of accumulated other comprehensive income previously recognized on its available for sale equity securities. ASU 2018-03 was also adopted as of January 1, 2018 on a prospective basis and did not result in any additional impact upon adoption. 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). Among the updates, the standard allows companies to elect the “cumulative earnings” approach or the “nature-of-the-distribution” approach in distinguishing whether distributions received from equity method investees are returns of investment, which should be classified as cash flows from investing activities, and returns on investment, which should be classified as cash flows from operating activities. We made a policy election to use the “cumulative earnings” approach and adopted ASU 2016-15 for the year ended December 31, 2018. 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). Accordingly, these financial assets are presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. With certain exceptions, adjustments are applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. Upon the January 1, 2020 adoption of ASU 2016-13, we recorded a cumulative adjustment to Retained earnings of $192.7 million to recognize an allowance for current expected credit losses on our financial royalty assets. 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). The ASU modifies the disclosures by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income/(loss). We adopted this standard as of January 1, 2020 with no material impact on our consolidated financial statements and accompanying notes. |
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 Sale Debt Securities for a description of our investments in the Biohaven Preferred Shares. 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 and F_2
Fair Value Measurements and Financial Instruments (Tables) | 12 Months Ended |
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 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 assets $ 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 in the year ended December 31, 2020. (2) The Series B Forwards, recorded within Other assets in the consolidated balance sheet as of December 31, 2020, relate to our obligation to fund the acquisition of the Series B Biohaven Preferred Shares. (3) Related to Epizyme transaction as described in Note 4–Derivative Instruments and recorded in the non-current asset portion of Derivative financial instruments in the consolidated balance sheet as of December 31, 2020. 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 assets $ 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 liabilities $ — $ (18,902) $ — $ (18,902) (1) Related to Epizyme warrants and put option as described in Note 4–Derivative Instruments and both recorded in the non-current asset portion of Derivative financial instruments in the consolidated balance sheet as of December 31, 2019. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | 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 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 portion of our financial royalty assets as of December 31, 2020 and 2019 are presented below (in thousands). 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 |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Values and Fixed Rates | The notional values and fixed rates payable on the swap contracts are shown in the table below. Notional Value Fixed Rate Maturity Date $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 |
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 Consolidated Statement of Comprehensive Income location 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) on derivative financial instruments Change in fair value of interest rate swaps (73) 16,954 (3,357) Unrealized loss/(gain) on derivative financial instruments 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) on derivative financial instruments Interest expense/(income) 408 (2,681) (440) Interest expense Warrant: Change in fair value of warrant 25,375 (21,977) — Unrealized loss/(gain) on derivative financial instruments Forward purchase contract: Change in fair value of forward purchase contract 5,800 (11,500) — Unrealized loss/(gain) on derivative financial instruments |
Available for Sale Debt Secur_2
Available for Sale Debt Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of 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 gains 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 asset portion of Available for sale debt securities , respectively, in the consolidated balance sheet. As of December 31, 2019, the entire balance of the Series A Biohaven Preferred Shares was recorded as a non-current asset. |
Financial Royalty Assets, Net (
Financial Royalty Assets, Net (Tables) | 12 Months Ended |
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 portion of financial royalty assets at December 31, 2020 and December 31, 2019 are as follows (in thousands): December 31, 2020 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (d) 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 (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 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 Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. 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 duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) 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. |
Cumulative Allowance and the _2
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Schedule of Cumulative Allowance for Changes in Expected Cash Flows | 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 year 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 as a result of the write-off of the related financial royalty asset balance of $90.2 million. (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 |
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 December 31, 2020 and 2019 (in thousands). As of December 31, 2020 Cost Accumulated amortization Net carrying value DPP-IV patents $ 606,216 $ 577,550 $ 28,666 Total intangible royalty assets $ 606,216 $ 577,550 $ 28,666 As of December 31, 2019 Cost Accumulated amortization Net carrying value DPP-IV patents $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of 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. |
Schedule of Repayments of Debt by Year | 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 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Balance Of Non-controlling Interests | The net change in the balance of our four non-controlling interests for the year ended December 31, 2020 is as follows (in thousands): RPSFT Legacy Investors Partnerships Continuing Investors Partnerships (1) EPA Holdings 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 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | 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 December 31, 2020 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 interest - Legacy Investors Partnerships and RPSFT 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 on the consolidated statements of comprehensive income. |
Indirect Cash Flow (Tables)
Indirect Cash Flow (Tables) | 12 Months Ended |
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 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 affiliates (44,459) 32,517 7,023 Distributions from non-consolidated affiliates 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 investing and financing activities are summarized below (in thousands). For the Years Ended December 31, 2020 2019 2018 Supplemental schedule of non-cash investing / financing activities: 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 interest (1) 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 (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income/(loss) by component are as follows (in thousands): Unrealized gain/(loss) on equity securities Unrealized gain/(loss) on available for sale debt securities Unrealized gain/(loss) on interest rate swaps Total Accumulated Other Comprehensive Income/(Loss) 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 interest — (24,022) — (24,022) Reclassifications from non-controlling interest — 2,562 — 2,562 Balance at December 31, 2020 $ — $ 34,395 $ — $ 34,395 |
Organization and Purpose (Detai
Organization and Purpose (Details) - USD ($) | Jun. 18, 2020 | Feb. 11, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 29, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Repayments of outstanding debt | $ 11,116,196,000 | $ 0 | $ 0 | ||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Debt issued, amount | $ 3,200,000,000 | ||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Debt issued, amount | 2,840,000,000 | ||||||
Senior Secured Debt | Old Credit Facility | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Repayments of outstanding debt | $ 6,300,000,000 | ||||||
RPCT | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Ownership percentage (as a percent) | 66.00% | ||||||
Legacy Investors Partnerships | Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Debt issued, amount | $ 1,300,000,000 | ||||||
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 | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Debt issued, amount | $ 6,000,000,000 | ||||||
RPI Intermediate FT | Senior Secured Debt | RPIFT Senior Secured Credit Facilities | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Repayments of outstanding debt | $ 5,200,000,000 | ||||||
Common Class A | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Ownership percentage following IPO | 100.00% | ||||||
Exchange Offer Transaction | Old RPI | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Ownership percentage (as a percent) | 82.00% | ||||||
Exchange Offer Transaction | Legacy Investors Partnerships | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Exchange offering, ownership percentage | 82.00% | ||||||
IPO | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale of stock, consideration received | $ 1,900,000,000 | ||||||
IPO | Common Class A | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued (in shares) | 89,334,000 | ||||||
Sale of stock, price per share (in dollars per share) | $ 28 | ||||||
IPO - Shares From Company | Common Class A | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued (in shares) | 71,652,000 | ||||||
IPO - Shares From Selling Shareholders | Common Class A | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued (in shares) | 17,682,000 | ||||||
Public Stock Offering - Continuing Investors Partnerships Interests | Common Class B | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares available to convert (in shares) | 294,176,000 | ||||||
Number of shares converted (in shares) | 241,207,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2020partnership | Feb. 29, 2020 | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of noncontrolling interests created | partnership | 2 | |||||
Cash and cash equivalents | $ (1,008,680) | $ (246,199) | ||||
Marketable securities | 983,279 | 94,455 | ||||
Purchases of marketable securities | 1,705,283 | 817,402 | $ 0 | |||
Net cash flow from investing | (2,759,320) | (2,153,625) | 303,424 | |||
Proceeds from sales and maturities of marketable securities | $ 815,440 | 725,070 | 0 | |||
Number of operating segments | segment | 1 | |||||
Cumulative adjustment | $ 9,895,815 | 6,141,438 | 4,552,079 | $ 4,460,546 | ||
Revision of Prior Period, Reclassification, Adjustment | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Marketable securities | 37,500 | |||||
Purchases of marketable securities | 388,000 | |||||
Net cash flow from investing | 37,500 | |||||
Proceeds from sales and maturities of marketable securities | 350,500 | |||||
RP Holdings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Noncontrolling interest (percentage) | 64.00% | |||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment | (192,705) | 0 | ||||
Accumulated Other Comprehensive Income/(Loss) | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment | $ 34,395 | 2,093 | (10,255) | 381,381 | ||
Accumulated Other Comprehensive Income/(Loss) | Cumulative Effect, Period of Adoption, Adjustment | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment | 2,863 | |||||
Retained Earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment | $ 1,920,635 | 2,825,212 | $ 1,215,953 | 655,446 | ||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment | $ (192,705) | $ (2,863) | ||||
Customer Concentration Risk | Current portion of Financial royalty assets | Vertex | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Concentration risk (as a percent) | 27.00% | 17.00% | ||||
Legacy Investors Partnerships | Old RPI | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Noncontrolling interest (percentage) | 18.00% | |||||
Continuing Investors Partnerships | RP Holdings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Noncontrolling interest (percentage) | 36.00% |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets: | |||
Marketable securities | $ 983,279 | $ 94,455 | |
Available for sale debt securities | 69,984 | 0 | |
Equity securities | 298,689 | 380,756 | |
Available for sale debt securities | 144,416 | 131,280 | |
Liabilities: | |||
Interest rate swaps | 0 | (9,215) | |
Interest rate swaps | 0 | (18,902) | |
Unrealized gain (loss) on equity securities still held | (45,200) | 125,600 | $ (7,800) |
Immunomedics | |||
Liabilities: | |||
(Gain)/loss on equity securities | 292,300 | ||
Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 69,984 | ||
Total current assets | 1,229,243 | 320,781 | |
Equity securities | 298,689 | 380,756 | |
Available for sale debt securities | 144,416 | 131,280 | |
Total non-current assets | 467,144 | 554,351 | |
Liabilities: | |||
Total current liabilities | (9,215) | ||
Total non-current liabilities | (18,902) | ||
Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 32,754 | ||
Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 444,554 | 21,367 | |
Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 505,971 | 60,211 | |
Fair Value, Recurring | US Government Debt Securities | |||
Assets: | |||
Marketable securities | 12,877 | ||
Fair Value, Recurring | Forward Contracts | |||
Assets: | |||
Derivatives | 18,600 | 11,500 | |
Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 5,439 | 30,815 | |
Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | (9,215) | ||
Interest rate swaps | (18,902) | ||
Level 1 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | ||
Total current assets | 24,302 | 222,326 | |
Equity securities | 298,689 | 380,756 | |
Available for sale debt securities | 0 | 0 | |
Total non-current assets | 298,689 | 380,756 | |
Liabilities: | |||
Total current liabilities | 0 | ||
Total non-current liabilities | 0 | ||
Level 1 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Level 1 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Level 1 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Level 1 | Fair Value, Recurring | US Government Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Level 1 | Fair Value, Recurring | Forward Contracts | |||
Assets: | |||
Derivatives | 0 | 0 | |
Level 1 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 0 | 0 | |
Level 1 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | 0 | ||
Interest rate swaps | 0 | ||
Level 2 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | ||
Total current assets | 1,134,957 | 98,455 | |
Equity securities | 0 | 0 | |
Available for sale debt securities | 0 | 0 | |
Total non-current assets | 5,439 | 42,315 | |
Liabilities: | |||
Total current liabilities | (9,215) | ||
Total non-current liabilities | (18,902) | ||
Level 2 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 32,754 | ||
Level 2 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 444,554 | 21,367 | |
Level 2 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 505,971 | 60,211 | |
Level 2 | Fair Value, Recurring | US Government Debt Securities | |||
Assets: | |||
Marketable securities | 12,877 | ||
Level 2 | Fair Value, Recurring | Forward Contracts | |||
Assets: | |||
Derivatives | 0 | 11,500 | |
Level 2 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 5,439 | 30,815 | |
Level 2 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | (9,215) | ||
Interest rate swaps | (18,902) | ||
Level 3 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 69,984 | ||
Total current assets | 69,984 | 0 | |
Equity securities | 0 | 0 | |
Available for sale debt securities | 144,416 | 131,280 | |
Total non-current assets | 163,016 | 131,280 | |
Liabilities: | |||
Total current liabilities | 0 | ||
Total non-current liabilities | 0 | ||
Level 3 | Fair Value, Recurring | Corporate Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Level 3 | Fair Value, Recurring | Commercial Paper | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Level 3 | Fair Value, Recurring | Certificates of Deposit | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Level 3 | Fair Value, Recurring | US Government Debt Securities | |||
Assets: | |||
Marketable securities | 0 | ||
Level 3 | Fair Value, Recurring | Forward Contracts | |||
Assets: | |||
Derivatives | 18,600 | 0 | |
Level 3 | Fair Value, Recurring | Warrant | |||
Assets: | |||
Derivatives | 0 | 0 | |
Level 3 | Fair Value, Recurring | Interest Rate Swap | |||
Liabilities: | |||
Interest rate swaps | 0 | ||
Interest rate swaps | 0 | ||
Money Market Funds | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 24,302 | 222,326 | |
Money Market Funds | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 24,302 | 222,326 | |
Money Market Funds | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 0 | 0 | |
Money Market Funds | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 0 | 0 | |
Commercial Paper | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 77,176 | ||
Commercial Paper | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 0 | ||
Commercial Paper | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 77,176 | ||
Commercial Paper | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 0 | ||
Certificates of Deposit | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 74,502 | 4,000 | |
Certificates of Deposit | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 0 | 0 | |
Certificates of Deposit | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 74,502 | 4,000 | |
Certificates of Deposit | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Summary of Change in Carrying Value of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Available-for-sale Securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning of the period | $ 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 |
Available-for-sale Securities | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Unrealized gains on available for sale debt securities | 14,500 | |
Forward Contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning of the period | 0 | |
Unrealized gains on available for sale debt securities | 18,600 | |
Balance at the end of the period | $ 18,600 | $ 0 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Narrative (Details) $ / shares in Units, $ in Thousands | Aug. 07, 2020USD ($)$ / sharesshares | Apr. 05, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Available for sale debt securities | $ 214,400 | $ 131,280 | |||
Purchase of warrants | 0 | $ 125,121 | $ 0 | ||
Series A Preferred Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Purchase of warrants | $ 125,000 | ||||
Series B Preferred Shares | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Purchase of warrants | $ 200,000 | 200,000 | |||
Change Of Control Probability | Level 3 | Valuation Technique, Black-Derman-Troy | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Measurement input, percentage (as a percent) | 0 | ||||
Minimum | Likelihood of FDA Approval | Level 3 | Valuation Technique, Black-Derman-Troy | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Measurement input, percentage (as a percent) | 0 | ||||
Minimum | Likelihood of FDA Approval At End Of Any Given Quarter By 2024 | Level 3 | Valuation Technique, Black-Derman-Troy | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Measurement input, percentage (as a percent) | 0 | ||||
Maximum | Likelihood of FDA Approval | Level 3 | Valuation Technique, Black-Derman-Troy | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Measurement input, percentage (as a percent) | 0.86 | ||||
Maximum | Likelihood of FDA Approval At End Of Any Given Quarter By 2024 | Level 3 | Valuation Technique, Black-Derman-Troy | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Measurement input, percentage (as a percent) | 0.59 | ||||
Preferred Shares | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Available for sale debt securities | 214,400 | $ 131,280 | |||
Preferred Shares | Series A Preferred Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Redemption price, percentage | 200.00% | ||||
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 | ||||
Number of shares purchased (in shares) | shares | 2,495 | ||||
Price per share (in USD per share) | $ / shares | $ 50,100 | ||||
Preferred Shares | Series B Preferred Shares | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Number of shares purchased (in shares) | shares | 3,992 | 3,992 | |||
Price per share (in USD per share) | $ / shares | $ 50,100 | $ 50,100 | |||
Preferred Shares | Redemption, Period One | Series B Preferred Shares | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Redemption price, percentage | 180.00% | 180.00% | |||
Preferred Shares | Maximum | Redemption, Period One | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Redemption price, percentage | 200.00% | ||||
Preferred Shares | Maximum | Redemption, Period One | Series A Preferred Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Redemption price, percentage | 200.00% |
Fair Value Measurements and F_6
Fair Value Measurements and Financial Instruments - Schedule of Estimated Fair Values Based on Level 3 Inputs (Details) - Level 3 - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Estimate of Fair Value Measurement | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 18,718,179 | $ 16,501,819 |
Reported Value Measurement | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 12,368,084 | $ 10,842,052 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | Apr. 05, 2019 | Nov. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Swap termination payments | $ 35,448,000 | $ 0 | $ 0 | ||
Swap collateral received | 45,252,000 | 360,000 | 3,467,000 | ||
Unrealized Gain (Loss) on Derivatives | (18,600,000) | 0 | 0 | ||
Derivative liability, current | 0 | 9,215,000 | |||
Derivative liability, noncurrent | 0 | 18,902,000 | |||
Other assets | 23,158,000 | 45,635,000 | |||
Derivative financial instruments | 5,439,000 | 42,315,000 | |||
Preferred Shares | Series A Preferred Stock | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative instrument, exercise period (in months) | 12 months | ||||
Additional issuance, purchase price, maximum | $ 75,000,000 | ||||
Additional issuance, purchase price, minimum | $ 25,000,000 | ||||
Epizyme Common Stock Warrant | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Warrants to purchase additional shares (in shares) | 2,500,000 | ||||
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. | Epizyme Common Stock Warrant | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Exercise price of warrant (in dollars per share) | $ 20 | ||||
Term of warrant (in years) | 3 years | ||||
Equity Investment In Epizyme Inc. | Put Option | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Put option, term (in months) | 18 months | ||||
Put option to sell additional common stock | $ 50,000,000 | ||||
Put option, selling price, maximum (in dollars per share) | $ 20 | ||||
Interest Rate Swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Unrealized Gain (Loss) on Derivatives | (10,900,000) | (72,600,000) | $ 11,900,000 | ||
Derivative liability | 28,100,000 | ||||
Derivative liability, current | 9,200,000 | ||||
Derivative liability, noncurrent | 18,900,000 | ||||
Forward Contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability, noncurrent | 11,500,000 | ||||
Warrant | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Unrealized Gain (Loss) on Derivatives | (25,400,000) | 22,000,000 | |||
Derivative financial instruments | $ 5,400,000 | $ 30,800,000 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Values and Fixed Rates (Details) | Dec. 31, 2019USD ($) |
Interest Rate Swap, Due November 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 600,000,000 |
Fixed Rate (as a percent) | 2.019% |
Interest Rate Swap, Due March 2023 - 1 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 250,000,000 |
Fixed Rate (as a percent) | 2.094% |
Interest Rate Swap, Due March 2023 - 2 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 500,000,000 |
Fixed Rate (as a percent) | 2.029% |
Interest Rate Swap, Due March 2023 - 3 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 250,000,000 |
Fixed Rate (as a percent) | 2.113% |
Interest Rate Swap, Due March 2023 - 4 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 500,000,000 |
Fixed Rate (as a percent) | 2.129% |
Derivative Instruments - Summar
Derivative Instruments - Summary of Derivatives and Reclassifications (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest Rate Swap | Unrealized loss/(gain) on derivative financial instruments | Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of loss reclassified from AOCI into income | $ 4,066 | $ 6,189 | $ 8,003 |
Interest rate swaps | (73) | 16,954 | (3,357) |
Interest Rate Swap | Unrealized loss/(gain) on derivative financial instruments | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivatives not designated as hedging instruments | 6,908 | 49,472 | (16,569) |
Interest Rate Swap | Interest expense | Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Interest rate swaps | 114 | (9,565) | (9,758) |
Interest Rate Swap | Interest expense | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivatives not designated as hedging instruments | 408 | (2,681) | (440) |
Warrant | Unrealized loss/(gain) on derivative financial instruments | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivatives not designated as hedging instruments | 25,375 | (21,977) | 0 |
Forward Contracts | Unrealized loss/(gain) on derivative financial instruments | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Change in fair value of derivative contracts | $ 5,800 | $ (11,500) | $ 0 |
Available for Sale Debt Secur_3
Available for Sale Debt Securities - Summary of Available for Sale Debt Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
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 |
Available for sale debt securities, current | 69,984 | 0 |
Available for sale debt securities, noncurrent | 144,416 | 131,280 |
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 |
Available for Sale Debt Secur_4
Available for Sale Debt Securities - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 07, 2020 | Apr. 05, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Purchase of available for sale debt securities | $ 0 | $ 125,121 | $ 0 | ||
Realized gain on available for sale debt securities | 0 | 0 | 419,481 | ||
Available for sale debt securities | 214,400 | 131,280 | |||
Royalty Pharma Investment Financial Trust | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Potential milestone payments | 600,000 | ||||
Realized gain on available for sale debt securities | 419,500 | ||||
Royalty Pharma Investment Financial Trust | Tecfidera | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Available for sale debt securities | $ 180,500 | ||||
Series A Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Purchase of available for sale debt securities | $ 125,000 | ||||
Series B Preferred Shares | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Purchase of available for sale debt securities | $ 200,000 | 200,000 | |||
Preferred Shares | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Available for sale debt securities | 214,400 | $ 131,280 | |||
Preferred Shares | Series A Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares purchased (in shares) | 2,495 | ||||
Price per share (in USD per share) | $ 50,100 | ||||
Redemption price, percentage | 200.00% | ||||
Redemption default, interest rate | 18.00% | ||||
Available for sale debt securities | $ 214,400 | ||||
Preferred Shares | Series B Preferred Shares | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares purchased (in shares) | 3,992 | 3,992 | |||
Price per share (in USD per share) | $ 50,100 | $ 50,100 | |||
Redemption default, interest rate | 18.00% | ||||
Redemption default, threshold period | 1 year | ||||
Preferred Shares | Redemption, Period One | Series B Preferred Shares | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Redemption price, percentage | 180.00% | 180.00% | |||
Preferred Shares | Redemption, Period One | Maximum | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Redemption price, percentage | 200.00% | ||||
Preferred Shares | Redemption, Period One | Maximum | Series A Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Redemption price, percentage | 200.00% | ||||
Preferred Shares | Redemption, Period Two | Series A Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Redemption price, percentage | 200.00% | ||||
Preferred Shares | Redemption, Period Two | Series B Preferred Shares | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Redemption price, percentage | 180.00% |
Financial Royalty Assets, Net -
Financial Royalty Assets, Net - Summary of Financial Royalty Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | $ 14,219,101 | $ 12,163,030 | ||
Cumulative allowance for changes in expected cash flows | (940,107) | |||
Net carrying value, before cumulative allowance for credit losses | 13,278,994 | |||
Cumulative allowance for credit losses | (323,717) | |||
Cumulative allowance for changes in expected cash flows | (1,263,824) | (868,418) | $ (1,982,897) | $ (2,045,868) |
Net carrying value | 12,955,277 | 11,294,612 | ||
Cystic fibrosis franchise | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 5,274,896 | 4,639,045 | ||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value, before cumulative allowance for credit losses | 5,274,896 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value | 4,639,045 | |||
Tysabri | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 2,003,797 | 2,131,272 | ||
Cumulative allowance for changes in expected cash flows | (112,720) | |||
Net carrying value, before cumulative allowance for credit losses | 1,891,077 | |||
Cumulative allowance for changes in expected cash flows | (71,789) | |||
Net carrying value | 2,059,483 | |||
Imbruvica | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 1,406,291 | 1,332,077 | ||
Cumulative allowance for changes in expected cash flows | (46,872) | |||
Net carrying value, before cumulative allowance for credit losses | 1,359,419 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value | 1,332,077 | |||
Xtandi | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 1,150,335 | 1,193,918 | ||
Cumulative allowance for changes in expected cash flows | (145,565) | |||
Net carrying value, before cumulative allowance for credit losses | 1,004,770 | |||
Cumulative allowance for changes in expected cash flows | (332,624) | |||
Net carrying value | 861,294 | |||
Promacta | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 686,129 | 776,555 | ||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value, before cumulative allowance for credit losses | 686,129 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value | 776,555 | |||
Evrysdi | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 675,440 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value, before cumulative allowance for credit losses | 675,440 | |||
Aggregate royalty amount when patents cease | 1,300,000 | |||
Crysvita | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 321,234 | |||
Cumulative allowance for changes in expected cash flows | 0 | |||
Net carrying value | 321,234 | |||
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross carrying value | 3,022,213 | 1,768,929 | ||
Cumulative allowance for changes in expected cash flows | (634,950) | |||
Net carrying value, before cumulative allowance for credit losses | $ 2,387,263 | |||
Cumulative allowance for changes in expected cash flows | (464,005) | |||
Net carrying value | $ 1,304,924 |
Financial Royalty Assets, Net_2
Financial Royalty Assets, Net - Narrative (Details) - 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 |
Cumulative Allowance and the _3
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Cumulative adjustment to retained earnings | $ (9,895,815) | $ (6,141,438) | $ (4,552,079) | $ (4,460,546) |
Retained Earnings | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Cumulative adjustment to retained earnings | $ (1,920,635) | (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 | 0 | ||
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 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Beginning balance | $ (868,418) | $ (1,982,897) | $ (2,045,868) |
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 | 570,959 | 1,342,038 | 341,548 |
Reversal of cumulative allowance | 2,964 | 95,158 | 5,637 |
Write off of credit loss allowance | 25,174 | ||
Current period provision for credit losses (c) | (156,186) | ||
Ending balance | (1,263,824) | (868,418) | $ (1,982,897) |
Writeoff related to financial royalty asset | 90,200 | ||
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 (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 606,216 | $ 606,216 |
Accumulated amortization | 577,550 | 554,492 |
Net carrying value | 28,666 | 51,724 |
DPP-IV patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 606,216 | 606,216 |
Accumulated amortization | 577,550 | 554,492 |
Net carrying value | $ 28,666 | $ 51,724 |
Intangible Royalty Assets, Ne_3
Intangible Royalty Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
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) | 97.00% | 91.00% | 73.00% |
DPP-IV patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, useful life | 1 year 3 months | ||
Projected amortization expense, 2021 | $ 23,000 | ||
Projected amortization expense, 2022 | $ 5,700 |
Non-Consolidated Affiliates (De
Non-Consolidated Affiliates (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 11, 2020 | May 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Investments in non-consolidated affiliates | $ 454,936 | $ 124,061 | ||||
Distributions from non-consolidated affiliates | 15,084 | 0 | $ 0 | |||
Equity in income (loss) of non-consolidated affiliates | 44,459 | (32,517) | (7,023) | |||
Distributions from non-consolidated affiliates | 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 | |||||
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 | |||||
Other commitments, percentage of costs (as a percent) | 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 | 22,700 | |||||
Equity in income (loss) of non-consolidated affiliates | 62,000 | |||||
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 | 28,600 | 70,800 | ||||
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 | $ 14,100 | ||||
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 |
R&D Funding Expense (Details)
R&D Funding Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
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 | $ 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 | 18,500 | 18,200 | 6,900 |
Remaining commitment for R&D funding agreement | $ 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 | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Upfront payment and premium paid | 175,000 | ||
Funding Agreement With Biohaven | |||
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 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt | $ 0 | $ (281,984,000) |
Total long-term debt | 5,816,584,000 | 5,956,138,000 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Unamortized debt discount and issuance costs | (183,416,000) | |
Total debt carrying value | 5,816,584,000 | |
Less: Current portion of long-term debt | 0 | |
Total long-term debt | $ 5,816,584,000 | |
Unsecured Debt | Point Seven Five Percent Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 99.322% | |
Debt instrument, stated rate (as a percent) | 0.75% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | One Point Two Zero Percent Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 98.875% | |
Debt instrument, stated rate (as a percent) | 1.20% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | One Point Seven Five Percent Senior Notes Due 2027 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 98.284% | |
Debt instrument, stated rate (as a percent) | 1.75% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | Two Point Two Zero Percent Senior Notes Due 2030 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 97.76% | |
Debt instrument, stated rate (as a percent) | 2.20% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | Three Point Three Zero Percent Senior Notes Due 2040 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 95.556% | |
Debt instrument, stated rate (as a percent) | 3.30% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | Three Point Five Five Percent Senior Notes Due 2050 | ||
Debt Instrument [Line Items] | ||
Debt issued as a percent of par value (as a percent) | 95.306% | |
Debt instrument, stated rate (as a percent) | 3.55% | |
Debt issued, amount | $ 1,000,000,000 | |
Unsecured Debt | RPIFT Senior Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt issued, amount | $ 0 | 0 |
Senior Secured Debt | ||
Debt Instrument [Line Items] | ||
Unamortized debt discount and issuance costs | (34,878,000) | |
Total debt carrying value | 6,238,122,000 | |
Less: Current portion of long-term debt | (281,984,000) | |
Total long-term debt | 5,956,138,000 | |
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | ||
Debt Instrument [Line Items] | ||
Debt issued, amount | $ 4,123,000,000 | |
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (percentage) | 2.00% | |
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | ||
Debt Instrument [Line Items] | ||
Debt issued, amount | $ 2,150,000,000 | |
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (percentage) | 1.50% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | Sep. 18, 2020USD ($) | Sep. 02, 2020USD ($) | Feb. 11, 2020USD ($) | Sep. 30, 2020USD ($) | Feb. 29, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)partnership | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ 30,272,000 | $ 0 | $ 0 | |||||
Unsecured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Original issue discount | $ 183,416,000 | |||||||
Unsecured Debt | The Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued, amount | $ 6,000,000,000 | |||||||
Original issue discount | 149,000,000 | |||||||
Debt issuance costs | $ 40,400,000 | |||||||
Weighted average coupon rate (as a percent) | 2.125% | |||||||
Weighted average effective interest rate (as a percent) | 2.50% | |||||||
Unsecured Debt | The Notes | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of outstanding Notes | $ 6,200,000,000 | |||||||
Unsecured Debt | The Notes | Prior to the applicable par call date | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price (as a percent) | 100.00% | |||||||
Unsecured Debt | The Notes | Upon occurrence of a change of control triggering event | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price (as a percent) | 101.00% | |||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
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 | |||||||
Maximum consolidated leverage ratio | 4 | |||||||
Maximum consolidated leverage ratio following qualifying material acquisition | 4.50 | |||||||
Minimum consolidated coverage ratio | 2.50 | |||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility | Federal Funds Rate | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 0.50% | |||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility | Overnight Bank Funding Rate | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 0.50% | |||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 1.00% | |||||||
Unsecured Debt | RPIFT Senior Secured Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued, amount | $ 0 | 0 | ||||||
Senior Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Original issue discount | $ 34,878,000 | |||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | ||||||||
Debt Instrument [Line Items] | ||||||||
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) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 1.50% | |||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued, amount | $ 2,840,000,000 | |||||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 1.75% | |||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ 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 Instrument [Line Items] | ||||||||
Debt issued, amount | $ 2,150,000,000 | |||||||
Amortization rate (percentage) | 5.90% | |||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 1.50% | |||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued, amount | $ 4,123,000,000 | |||||||
Amortization rate (percentage) | 3.20% | |||||||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percentage) | 2.00% |
Borrowings - Schedule of Repaym
Borrowings - Schedule of Repayments of Debt by Year (Details) - Unsecured Debt - The Notes $ in Thousands | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
2021 | $ 0 |
2022 | 0 |
2023 | 1,000,000 |
2024 | 0 |
2025 | 1,000,000 |
Thereafter | 4,000,000 |
Long-term debt, gross | 6,000,000 |
Unamortized discount and loan issuance costs on long-term debt | $ 183,400 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2020$ / sharesshares | Dec. 31, 2020USD ($)noncontrolling_interest£ / sharesshares | Dec. 31, 2020USD ($)noncontrolling_interest$ / sharesshares | Jun. 15, 2020shares | Dec. 31, 2019shares | |
Class of Stock [Line Items] | |||||
Number of noncontrolling interests | noncontrolling_interest | 4 | 4 | |||
Dividends declared and paid | $ | $ 112.5 | ||||
Dividends paid (in dollars per share) | $ / shares | $ 0.15 | ||||
Share based compensation | $ | $ 5.7 | ||||
Restricted Stock Units (RSUs) | |||||
Class of Stock [Line Items] | |||||
Restricted stock granted during period (in shares) | 125,000 | ||||
Restricted stock vested during period (in shares) | 71,000 | ||||
Restricted stock units forfeited (in shares) | 0 | ||||
Unrecognized share based compensation expense | $ | $ 1 | $ 1 | |||
Unrecognized share based compensation expense, period of recognition | 6 months | ||||
Deferred Shares | |||||
Class of Stock [Line Items] | |||||
Shares, outstanding (in shares) | 316,407,000 | 316,407,000 | 0 | ||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Common shares outstanding | 388,135,000 | 388,135,000 | 0 | ||
Common Class A | Secondary Offering | |||||
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 | 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 | 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] | |||||
Number of shares authorized under plan (in shares) | 800,000 | ||||
Shares reserved for future issuance (in shares) | 675,000 | 675,000 | |||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common shares outstanding | 218,976,000 | 218,976,000 | 0 | ||
Common Class B | Secondary Offering | Continuing Investors Partnerships | |||||
Class of Stock [Line Items] | |||||
Number of shares issued (in shares) | 13,206,000 | ||||
Class R Redeemable Stock | |||||
Class of Stock [Line Items] | |||||
Common shares outstanding | 50,000 | 50,000 | 0 | ||
Shares, outstanding (in shares) | 50,000 | 50,000 | |||
Redeemable stock, redemption price (in euros per share) | £ / shares | $ 1 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Noncontrolling Interests (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | $ 6,141,438 | $ 6,141,438 | $ 4,552,079 | $ 4,460,546 | |
Contributions | 1,482,322 | ||||
Transfer of interests | 0 | ||||
Distributions | (1,105,765) | (880,142) | (1,031,823) | ||
Net income (loss) | $ 1,077,069 | 624,885 | 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/(loss) on available for sale debt securities | 83,120 | 6,159 | (402,502) | ||
Reclassification of unrealized gain on available for sale debt securities | (20,551) | 0 | 0 | ||
Ending balance | $ 9,895,815 | $ 9,895,815 | 6,141,438 | 4,552,079 | |
RP Holdings | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Noncontrolling interest (percentage) | 64.00% | 64.00% | |||
RP Holdings | Continuing Investors Partnerships | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Noncontrolling interest (percentage) | 36.00% | 36.00% | |||
Non-Controlling Interest | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 35,883 | $ 35,883 | 63,865 | 141,203 | |
Contributions | 1,174,676 | ||||
Transfer of interests | 1,037,161 | ||||
Distributions | (792,357) | (140,866) | (217,464) | ||
Net income (loss) | $ 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 | (309,566) | ||||
Unrealized gain/(loss) on available for sale debt securities | 22,503 | ||||
Reclassification of unrealized gain on available for sale debt securities | (9,630) | ||||
Ending balance | 5,077,036 | 5,077,036 | 35,883 | $ 63,865 | |
Non-Controlling Interest | RPSFT | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 35,883 | 35,883 | |||
Distributions | (112,339) | ||||
Net income (loss) | 46,741 | 42,151 | |||
Ending balance | 12,436 | 12,436 | 35,883 | ||
Non-Controlling Interest | Legacy Investors Partnerships | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Contributions | 1,165,258 | ||||
Transfer of interests | 1,037,161 | ||||
Distributions | (594,592) | ||||
Net income (loss) | 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/(loss) on available for sale debt securities | 15,015 | ||||
Reclassification of unrealized gain on available for sale debt securities | (3,612) | ||||
Ending balance | 1,939,509 | 1,939,509 | 0 | ||
Non-Controlling Interest | Continuing Investors Partnerships | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Contributions | 9,418 | ||||
Distributions | (85,426) | ||||
Net income (loss) | 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 | (309,566) | ||||
Unrealized gain/(loss) on available for sale debt securities | 7,488 | ||||
Reclassification of unrealized gain on available for sale debt securities | (6,018) | ||||
Ending balance | 3,125,091 | 3,125,091 | 0 | ||
Non-Controlling Interest | EPA Holdings | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | $ 0 | 0 | |||
Ending balance | $ 0 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Jun. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Numerator | ||||||
Net income (loss) | $ 1,077,069 | $ 624,885 | $ 1,701,954 | $ 2,461,419 | $ 1,517,855 | |
Less: net income attributable to Continuing Investors Partnerships prior to the IPO | 479,842 | |||||
Less: net income attributable to non-controlling interest | 726,914 | $ 112,884 | $ 140,126 | |||
Net income attributable to Royalty Pharma plc | $ 495,198 | |||||
Denominator | ||||||
Weighted average Class A ordinary shares outstanding - basic (in shares) | [1] | 375,444 | ||||
Earnings per Class A ordinary share - basic (in dollars per share) | [1] | $ 1.32 | ||||
Numerator | ||||||
Net income attributable to Royalty Pharma plc | $ 495,198 | |||||
Denominator | ||||||
Dilutive effect of unvested restricted units (in shares) | 11 | |||||
Weighted average Class A ordinary shares outstanding - diluted (in shares) | [1] | 375,455 | ||||
Earnings per Class A ordinary share - diluted (in dollars per share) | [1] | $ 1.32 | ||||
Common Class A | ||||||
Denominator | ||||||
Weighted average Class A ordinary shares outstanding - diluted (in shares) | 607,111 | |||||
Class B Holders | ||||||
Numerator | ||||||
Less: net income attributable to non-controlling interest | $ 316,993 | |||||
Legacy Investors Partnerships and RPSFT | ||||||
Numerator | ||||||
Less: net income attributable to non-controlling interest | $ 409,921 | |||||
[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). |
Indirect Cash Flow (Details)
Indirect Cash Flow (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Jun. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Supplemental Cash Flow Elements [Abstract] | ||||||
Net income (loss) | $ 1,077,069 | $ 624,885 | $ 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 | 0 | 0 | (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 affiliates | (44,459) | 32,517 | 7,023 | |||
Distributions from non-consolidated affiliates | 42,334 | 14,059 | 39,402 | |||
Loss on extinguishment of debt | 30,272 | 0 | 0 | |||
Share-based compensation | 5,428 | 0 | 0 | |||
Interest income accretion | (20,551) | 0 | 0 | |||
Unrealized Gain (Loss) on Derivatives | (18,600) | 0 | 0 | |||
Impairment charge | 65,053 | 0 | 0 | |||
Loss on derivative financial instruments | (34,952) | 0 | 0 | |||
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 | 0 | (150,000) | (150,000) | |||
Accrued royalty receivable | 370 | 2,471 | (27,372) | |||
Other receivables | 0 | 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) | 0 | |||
Increase (Decrease) in Operating Liabilities [Abstract] | ||||||
Accounts payable and accrued expenses | (766) | 6,496 | 1,350 | |||
Interest payable | 42,146 | 0 | 0 | |||
Net cash provided by operating activities | 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 | 0 | 0 | |||
Settlement of Epizyme forward purchase contract | 5,700 | 0 | 0 | |||
Accrued purchase obligation - Tazverik | 110,000 | 0 | 0 | |||
Repayments of long-term debt by contributions from non-controlling interest | [1] | 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) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Activity for the year | $ 60,617 | $ 6,159 | $ (402,502) |
Reclassifications to net income | (6,855) | 6,189 | 8,003 |
Reclassifications to non-controlling interest | (24,022) | ||
Reclassification of unrealized gain on available for sale debt securities | 20,551 | 0 | 0 |
Interest Income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of unrealized gain on available for sale debt securities | 20,600 | ||
Cumulative Effect, Period of Adoption, Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 2,863 | ||
Unrealized gain/(loss) on equity securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | (2,863) |
Activity for the year | 0 | 0 | 0 |
Reclassifications to net income | 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 available for sale debt securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 6,159 | 0 | 402,502 |
Activity for the year | 60,617 | 6,159 | (402,502) |
Reclassifications to net income | (10,921) | 0 | 0 |
Reclassifications to non-controlling interest | (24,022) | ||
Reclassifications from non-controlling interest | 2,562 | ||
Ending balance | 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 interest rate swaps | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (4,066) | (10,255) | (18,258) |
Activity for the year | 0 | 0 | 0 |
Reclassifications to net income | 4,066 | 6,189 | 8,003 |
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 | ||
Total Accumulated Other Comprehensive Income/(Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 2,093 | (10,255) | 381,381 |
Reclassifications from non-controlling interest | 2,562 | ||
Ending balance | 34,395 | $ 2,093 | $ (10,255) |
Reclassification of unrealized gain on available for sale debt securities | $ (10,900) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Dec. 08, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2019 |
Related Party Transaction [Line Items] | |||||
Distribution payable to non-controlling interest | $ 126,366 | $ 31,041 | $ 44,300 | ||
Investments in non-consolidated affiliates | 454,936 | 124,061 | |||
Financial royalty asset, net | 12,955,277 | 11,294,612 | |||
Treasury interests | 4,266 | ||||
Equity Investment In Epizyme Inc. | |||||
Related Party Transaction [Line Items] | |||||
Investments in non-consolidated affiliates | $ 100,000 | ||||
Bristol-Myers Squibb | |||||
Related Party Transaction [Line Items] | |||||
Installment payments made during period | 24,300 | 171,000 | |||
Treasury Stock | |||||
Related Party Transaction [Line Items] | |||||
Treasury interests | 4,266 | ||||
Payments To Related Party Funded By Acquisitions | Bristol-Myers Squibb | |||||
Related Party Transaction [Line Items] | |||||
Installment payments made during period | $ 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% | ||||
Quarterly payments to affiliates, percent of security investment (as a percent) | 0.25% | ||||
Amount calculated for operating and personal payment | $ 1,000 | ||||
Percent for calculating operating and personal payment | 0.3125% | ||||
Operating and personnel payments incurred | $ 112,500 | ||||
The Manager | Former Operating and Personnel Payments | |||||
Related Party Transaction [Line Items] | |||||
Operating and personnel payments incurred | 60,000 | $ 57,200 | |||
Increase in quarterly installment payments (as a percent) | 5.00% | ||||
Affiliated Entity | Royalty Distribution Payable to Legacy Investors Partnerships | |||||
Related Party Transaction [Line Items] | |||||
Distribution payable to non-controlling interest | $ 100,000 | ||||
Affiliated Entity | Royalty Distribution Payable to RP Select Finance Trust | |||||
Related Party Transaction [Line Items] | |||||
Distribution payable to non-controlling interest | 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% | ||||
Financial royalty asset, net | 150,600 | 150,300 | |||
Cumulative funding amount | $ 162,400 | ||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | |||||
Related Party Transaction [Line Items] | |||||
Number of limited partnership interest acquired (in shares) | 27,210 | ||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | Treasury Stock | |||||
Related Party Transaction [Line Items] | |||||
Treasury interests | $ 4,300 | ||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | Non-Controlling Interest | |||||
Related Party Transaction [Line Items] | |||||
Treasury interests | 1,900 | $ 4,300 | |||
Pablo Legorreta | Purchasing And Donating Ventilators | |||||
Related Party Transaction [Line Items] | |||||
Amount paid to CEO | $ 1,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Aug. 07, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | Jan. 31, 2020 | Nov. 30, 2019 |
Funding Agreement With Biohaven Pharmaceuticals | |||||
Long-term Purchase Commitment [Line Items] | |||||
Payment for purchase of royalties | $ 450 | ||||
Purchase commitment, upfront payment | 150 | ||||
Purchase commitment, additional payments | 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 | |||
Forecast | Purchase Of Eisai Royalties | |||||
Long-term Purchase Commitment [Line Items] | |||||
Purchase commitment, additional payments | $ 110 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Thousands | 1 Months Ended |
Jan. 31, 2021USD ($) | |
Subsequent Event [Line Items] | |
Payments to acquire royalty interests, upfront payment | $ 60,000 |
Payments to acquire royalty interests, additional milestone payments | $ 95,000 |
Uncategorized Items - rprx-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201601Member |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 495,198,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 479,842,000 |