Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 02, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 $0.0001 | |
Trading Symbol | RPRX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001802768 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Ordinary Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 448,926,604 | |
Class B Ordinary Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 152,896,046 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 2,173,077 | $ 1,710,751 |
Marketable securities | 0 | 24,421 |
Financial royalty assets | 729,910 | 691,319 |
Accrued royalty receivable | 16,358 | 16,830 |
Available for sale debt securities | 5,100 | 1,300 |
Other royalty income receivable | 18,870 | 19,767 |
Other current assets | 10,224 | 90,520 |
Total current assets | 2,953,539 | 2,554,908 |
Financial royalty assets, net | 13,267,734 | 13,493,106 |
Equity securities | 142,800 | 112,348 |
Available for sale debt securities | 343,700 | 226,300 |
Equity method investments | 384,301 | 397,175 |
Other assets | 29,408 | 29,629 |
Total assets | 17,121,482 | 16,813,466 |
Current liabilities | ||
Distributions payable to legacy non-controlling interests | 112,881 | 94,803 |
Accounts payable and accrued expenses | 5,809 | 7,906 |
Interest payable | 54,162 | 54,162 |
Current portion of long-term debt | 999,370 | 997,512 |
Other current liabilities | 0 | 12,400 |
Total current liabilities | 1,172,222 | 1,166,783 |
Long-term debt | 6,127,074 | 6,118,810 |
Other liabilities | 8,500 | 2,500 |
Total liabilities | 7,307,796 | 7,288,093 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Deferred shares, $0.000001 par value; issued and outstanding: 2023–382,487 and 2022–371,325 | 0 | 0 |
Additional paid-in capital | 4,031,242 | 3,666,160 |
Retained earnings | 2,252,945 | 1,964,689 |
Non-controlling interests | 3,532,019 | 3,897,223 |
Treasury interests | (2,629) | (2,806) |
Total shareholders’ equity | 9,813,686 | 9,525,373 |
Total liabilities and shareholders’ equity | 17,121,482 | 16,813,466 |
Class A Ordinary Shares | ||
Shareholders’ equity | ||
Common stock | 46 | 44 |
Class B Ordinary Shares | ||
Shareholders’ equity | ||
Common stock | 0 | 0 |
Class R Redeemable Shares | ||
Shareholders’ equity | ||
Common stock | $ 63 | $ 63 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) shares in Thousands | Jun. 30, 2023 $ / shares shares | Jun. 30, 2023 £ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 £ / shares shares |
Deferred stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Deferred stock, issued (in shares) | 382,487 | 382,487 | 371,325 | 371,325 |
Deferred stock, outstanding (in shares) | 382,487 | 382,487 | 371,325 | 371,325 |
Class A Ordinary Shares | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (in shares) | 450,352 | 450,352 | 443,166 | 443,166 |
Common stock, outstanding (in shares) | 450,352 | 450,352 | 443,166 | 443,166 |
Class B Ordinary Shares | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Common stock, issued (in shares) | 152,896 | 152,896 | 164,058 | 164,058 |
Common stock, outstanding (in shares) | 152,896 | 152,896 | 164,058 | 164,058 |
Class R Redeemable Shares | ||||
Common stock, par value (in dollars/pounds per share) | £ / shares | £ 1 | £ 1 | ||
Common stock, issued (in shares) | 50 | 50 | 50 | 50 |
Common stock, outstanding (in shares) | 50 | 50 | 50 | 50 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | $ 538,202 | $ 535,955 | $ 1,222,173 | $ 1,098,004 |
Operating expenses | ||||
Provision for changes in expected cash flows from financial royalty assets | 241,228 | 105,714 | 360,032 | 290,335 |
Research and development funding expense | 500 | 606 | 1,000 | 101,106 |
Amortization of intangible assets | 0 | 0 | 0 | 5,670 |
General and administrative expenses | 47,634 | 51,843 | 133,329 | 103,383 |
Total operating expenses, net | 289,362 | 158,163 | 494,361 | 500,494 |
Operating income | 248,840 | 377,792 | 727,812 | 597,510 |
Other expense/(income) | ||||
Equity in losses/(earnings) of equity method investees | 770 | (737) | (33,836) | (1,134) |
Interest expense | 46,949 | 46,966 | 93,899 | 94,029 |
Losses/(gains) on derivative financial instruments | 700 | (71,805) | (6,390) | (71,805) |
(Gains)/losses on equity securities | (41,271) | (8,024) | (30,453) | 28,138 |
Gains on available for sale debt securities | (82,900) | (70,321) | (115,200) | (53,742) |
Interest income | (25,653) | (10,919) | (42,355) | (20,448) |
Other non-operating (income)/expense, net | (1,091) | 1,035 | 1,722 | 2,792 |
Total other income, net | (102,496) | (113,805) | (132,613) | (22,170) |
Consolidated net income before tax | 351,336 | 491,597 | 860,425 | 619,680 |
Income tax expense | 0 | 0 | 0 | 0 |
Consolidated net income | 351,336 | 491,597 | 860,425 | 619,680 |
Net income attributable to non-controlling interests | 123,711 | 187,093 | 292,045 | 263,415 |
Net income attributable to Royalty Pharma plc | $ 227,625 | $ 304,504 | $ 568,380 | $ 356,265 |
Earnings per Class A ordinary share: | ||||
Basic (in dollars per share) | $ 0.51 | $ 0.70 | $ 1.27 | $ 0.82 |
Diluted (in dollars per share) | $ 0.50 | $ 0.70 | $ 1.27 | $ 0.82 |
Weighted average Class A ordinary shares outstanding: | ||||
Basic (in shares) | 450,405 | 436,318 | 448,022 | 435,144 |
Diluted (in shares) | 605,860 | 607,214 | 606,551 | 607,207 |
Financial Royalty Assets | ||||
Revenues | $ 501,345 | $ 515,350 | $ 1,166,032 | $ 1,026,873 |
Intangible Royalty Assets | ||||
Revenues | 202 | 2,537 | 345 | 36,123 |
Other Royalty Income | ||||
Revenues | $ 36,655 | $ 18,068 | $ 55,796 | $ 35,008 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Consolidated net income | $ 351,336 | $ 491,597 | $ 860,425 | $ 619,680 |
Other comprehensive income/(loss): | ||||
Unrealized gains on available for sale debt securities | 0 | 9,325 | 0 | 10,950 |
Reclassification of unrealized gains on available for sale debt securities | 0 | (7,988) | 0 | (16,942) |
Other comprehensive income/(loss): | 0 | 1,337 | 0 | (5,992) |
Comprehensive income | 351,336 | 492,934 | 860,425 | 613,688 |
Comprehensive income attributable to non-controlling interests | 123,711 | 187,638 | 292,045 | 260,948 |
Comprehensive income attributable to Royalty Pharma plc | $ 227,625 | $ 305,296 | $ 568,380 | $ 352,740 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Class A Ordinary Shares | Class R Redeemable Shares | Common Stock Class A Ordinary Shares | Common Stock Class B Ordinary Shares | Common Stock Class R Redeemable Shares | Deferred Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-Controlling Interests | Treasury Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 432,963 | 174,213 | 50 | 361,170 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 10,248,545 | $ 43 | $ 0 | $ 63 | $ 0 | $ 3,507,533 | $ 2,255,179 | $ 16,491 | $ 4,471,951 | $ (2,715) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Contributions | 6,203 | 6,203 | ||||||||||
Distributions | (295,942) | (295,942) | ||||||||||
Dividends | (165,312) | (165,312) | ||||||||||
Other exchanges (in shares) | 4,132 | (4,132) | 4,132 | |||||||||
Other exchanges | 0 | $ 1 | 62,047 | 211 | (62,222) | (37) | ||||||
Share-based compensation and related issuances of Class A ordinary shares (in shares) | 44 | |||||||||||
Share-based compensation and related issuances of Class A ordinary shares | 1,005 | 1,005 | ||||||||||
Net income | 619,680 | 356,265 | 263,415 | |||||||||
Other comprehensive income/(loss): | ||||||||||||
Unrealized gains on available for sale debt securities | 10,950 | 6,480 | 4,470 | |||||||||
Reclassification of unrealized gains on available for sale debt securities | (16,942) | (10,005) | (6,937) | |||||||||
Ending balance (in shares) at Jun. 30, 2022 | 437,139 | 170,081 | 50 | 365,302 | ||||||||
Ending balance at Jun. 30, 2022 | 10,408,187 | $ 44 | $ 0 | $ 63 | $ 0 | 3,570,585 | 2,446,132 | 13,177 | 4,380,938 | (2,752) | ||
Beginning balance (in shares) at Mar. 31, 2022 | 435,316 | 171,862 | 50 | 363,521 | ||||||||
Beginning balance at Mar. 31, 2022 | 10,141,879 | $ 43 | $ 0 | $ 63 | $ 0 | 3,543,204 | 2,224,677 | 12,304 | 4,364,324 | (2,736) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Contributions | 2,881 | 2,881 | ||||||||||
Distributions | (146,967) | (146,967) | ||||||||||
Dividends | (83,049) | (83,049) | ||||||||||
Other exchanges (in shares) | 1,781 | (1,781) | 1,781 | |||||||||
Other exchanges | 0 | $ 1 | 26,872 | 81 | (26,938) | (16) | ||||||
Share-based compensation and related issuances of Class A ordinary shares (in shares) | 42 | |||||||||||
Share-based compensation and related issuances of Class A ordinary shares | 509 | 509 | ||||||||||
Net income | 491,597 | 304,504 | 187,093 | |||||||||
Other comprehensive income/(loss): | ||||||||||||
Unrealized gains on available for sale debt securities | 9,325 | 5,523 | 3,802 | |||||||||
Reclassification of unrealized gains on available for sale debt securities | (7,988) | (4,731) | (3,257) | |||||||||
Ending balance (in shares) at Jun. 30, 2022 | 437,139 | 170,081 | 50 | 365,302 | ||||||||
Ending balance at Jun. 30, 2022 | 10,408,187 | $ 44 | $ 0 | $ 63 | $ 0 | 3,570,585 | 2,446,132 | $ 13,177 | 4,380,938 | (2,752) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 443,166 | 164,058 | 50 | 371,325 | ||||||||
Beginning balance at Dec. 31, 2022 | 9,525,373 | $ 44 | $ 0 | $ 63 | $ 0 | 3,666,160 | 1,964,689 | 3,897,223 | (2,806) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Contributions | 6,840 | 6,840 | ||||||||||
Distributions | (266,391) | (266,391) | ||||||||||
Dividends | (179,238) | (179,238) | ||||||||||
Other exchanges (in shares) | 11,162 | (11,162) | 11,162 | |||||||||
Other exchanges | 0 | $ 2 | 397,519 | (397,698) | 177 | |||||||
Share-based compensation and related issuances of Class A ordinary shares (in shares) | 51 | |||||||||||
Share-based compensation and related issuances of Class A ordinary shares | $ 1,159 | 1,159 | ||||||||||
Repurchases of Class A ordinary shares (in shares) | (4,027) | |||||||||||
Repurchases of Class A ordinary shares | $ (134,482) | (33,596) | (100,886) | |||||||||
Net income | 860,425 | 568,380 | 292,045 | |||||||||
Other comprehensive income/(loss): | ||||||||||||
Unrealized gains on available for sale debt securities | 0 | |||||||||||
Reclassification of unrealized gains on available for sale debt securities | 0 | |||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 50 | 450,352 | 152,896 | 50 | 382,487 | |||||||
Ending balance at Jun. 30, 2023 | 9,813,686 | $ 46 | $ 0 | $ 63 | $ 0 | 4,031,242 | 2,252,945 | 3,532,019 | (2,629) | |||
Beginning balance (in shares) at Mar. 31, 2023 | 448,287 | 158,939 | 50 | 376,444 | ||||||||
Beginning balance at Mar. 31, 2023 | 9,822,000 | $ 45 | $ 0 | $ 63 | $ 0 | 3,739,658 | 2,216,811 | 3,868,251 | (2,828) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Contributions | 2,131 | 2,131 | ||||||||||
Distributions | (137,281) | (137,281) | ||||||||||
Dividends | (90,605) | (90,605) | ||||||||||
Other exchanges (in shares) | 6,043 | (6,043) | 6,043 | |||||||||
Other exchanges | 0 | $ 1 | 324,593 | (324,793) | 199 | |||||||
Share-based compensation and related issuances of Class A ordinary shares (in shares) | 49 | |||||||||||
Share-based compensation and related issuances of Class A ordinary shares | $ 587 | 587 | ||||||||||
Repurchases of Class A ordinary shares (in shares) | (4,027) | (4,027) | ||||||||||
Repurchases of Class A ordinary shares | $ (134,482) | $ (134,500) | (33,596) | (100,886) | ||||||||
Net income | 351,336 | 227,625 | 123,711 | |||||||||
Other comprehensive income/(loss): | ||||||||||||
Unrealized gains on available for sale debt securities | 0 | |||||||||||
Reclassification of unrealized gains on available for sale debt securities | 0 | |||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 50 | 450,352 | 152,896 | 50 | 382,487 | |||||||
Ending balance at Jun. 30, 2023 | $ 9,813,686 | $ 46 | $ 0 | $ 63 | $ 0 | $ 4,031,242 | $ 2,252,945 | $ 3,532,019 | $ (2,629) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Dividends declared and paid (in dollars per share) | $ 0.20 | |||
Class A Ordinary Shares | ||||
Dividends declared and paid (in dollars per share) | $ 0.20 | $ 0.19 | $ 0.40 | $ 0.38 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Cash collections from financial royalty assets | $ 1,746,391 | $ 1,181,354 |
Cash collections from intangible royalty assets | 817 | 71,377 |
Other royalty cash collections | 59,553 | 32,716 |
Distributions from equity method investees | 18,510 | 27,502 |
Interest received | 34,513 | 3,262 |
Development-stage funding payments - ongoing | (1,000) | (1,106) |
Development-stage funding payments - upfront and milestone | 0 | (100,000) |
Payments for operating and professional costs | (133,878) | (93,003) |
Interest paid | (83,252) | (86,880) |
Net cash provided by operating activities | 1,641,654 | 1,035,222 |
Cash flows from investing activities: | ||
Distributions from equity method investees | 34,767 | 0 |
Investments in equity method investees | (6,566) | (3,050) |
Purchases of equity securities | 0 | (62,785) |
Purchases of available for sale debt securities | 0 | (79,158) |
Proceeds from available for sale debt securities | 0 | 31,250 |
Purchases of marketable securities | 0 | (234,869) |
Proceeds from sales and maturities of marketable securities | 24,391 | 525,907 |
Acquisitions of financial royalty assets | (662,151) | (175,093) |
Acquisitions of other financial assets | 0 | (21,215) |
Milestone payments | (12,400) | 0 |
Net cash used in investing activities | (621,959) | (19,013) |
Cash flows from financing activities: | ||
Distributions to legacy non-controlling interests - royalty receipts | (184,391) | (215,543) |
Distributions to continuing non-controlling interests | (63,923) | (72,343) |
Dividends to shareholders | (179,238) | (165,312) |
Repurchases of Class A ordinary shares | (134,442) | 0 |
Contributions from legacy non-controlling interests - R&D | 367 | 731 |
Contributions from non-controlling interests - other | 4,258 | 3,247 |
Net cash used in financing activities | (557,369) | (449,220) |
Net change in cash and cash equivalents | 462,326 | 566,989 |
Cash and cash equivalents, beginning of period | 1,710,751 | 1,541,048 |
Cash and cash equivalents, end of period | $ 2,173,077 | $ 2,108,037 |
Organization and Purpose
Organization and Purpose | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Purpose | Organization and Purpose Royalty Pharma plc is a public limited company incorporated under the laws of England and Wales that was created to facilitate the initial public offering (“IPO”) of our Class A ordinary shares. “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis. We control Royalty Pharma Holdings Ltd. (“RP Holdings”), a private limited company incorporated under the laws of England and Wales and U.K. tax resident, through our ownership of RP Holdings’ Class A ordinary shares (the “RP Holdings Class A Interests”) and RP Holdings’ Class B ordinary shares (the “RP Holdings Class B Interests”). We conduct our business through RP Holdings and its subsidiaries and include RP Holdings and its subsidiaries in our condensed consolidated financial statements. RP Holdings is the sole owner of Royalty Pharma Investments 2019 ICAV (“RPI 2019 ICAV”), which is an Irish collective asset management vehicle, and is the successor to Royalty Pharma Investments, an Irish unit trust (“Old RPI”). RP Holdings is owned by RPI US Partners 2019, LP, a Delaware limited partnership, RPI International Holdings 2019, LP, a Cayman Islands exempted limited partnership (together, the “Continuing Investors Partnerships”) and Royalty Pharma plc. Prior to the Exchange Offer (defined below), Old RPI was owned by various partnerships (the “Legacy Investors Partnerships”). RP Management, LLC (the “Manager”), a Delaware limited liability company, is responsible for our management, including our day-to-day operations, pursuant to advisory and management agreements (collectively, the “Management Agreement”). 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. Exchange Offer We consummated an exchange offer on February 11, 2020 (the “Exchange Offer”) to facilitate the IPO. Through the Exchange Offer, investors which represented 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. Following the Exchange Offer, we became the indirect owner of an 82% economic interest in Old RPI through our subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust (“RPI Intermediate FT”). We are entitled to 82% of the economics of Old RPI’s wholly-owned subsidiary RPI Finance Trust, a Delaware statutory trust (“RPIFT”), 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Preparation and Use of Estimates The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under GAAP. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in our Annual Report on Form 10-K. The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. Basis of Consolidation The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling interests in our condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. In 2022, we became an indirect owner of an 82% economic interest in Royalty Pharma Investments ICAV (“RPI ICAV”), which previously was owned directly by Old RPI. We report four non-controlling interests: (1) the Legacy Investors Partnerships’ ownership of approximately 18% in Old RPI and RPI ICAV and (2) a de minimis interest in RPCT held by RPSFT (together, the “legacy non-controlling interests”). The legacy non-controlling interests are the only historical non-controlling interests existing prior to our IPO. Additionally, following the consummation of our IPO, we also report non-controlling interests related to (3) the Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of RP Holdings Class B Interests (the “continuing non-controlling interests”) and (4) RPI EPA Holdings, LP’s (“EPA Holdings”) ownership of the RP Holdings’ Class C ordinary share (the “RP Holdings Class C Special Interest”). Income will not be allocated to EPA Holdings until certain performance conditions are met. All intercompany transactions and balances have been eliminated in consolidation. Concentrations of Credit Risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, available for sale debt securities, financial royalty assets, derivatives and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances as of June 30, 2023 and December 31, 2022 were held with Bank of America, Scotiabank, TD Bank, Citibank, DNB Bank and U.S. Bank. Our primary operating accounts significantly exceed the Federal Deposit Insurance Corporation 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, Vertex, Biogen, AbbVie, Johnson & Johnson, Merck & Co., Pfizer, Astellas, Novartis and Gilead. As of June 30, 2023 and December 31, 2022, Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise, represented the largest individual marketer and payor of our royalties, accounting for 31% of our current portion of financial royalty assets. We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. Significant Accounting Policies There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the year ended December 31, 2022. |
Available for Sale Debt Securit
Available for Sale Debt Securities | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for Sale Debt Securities | Available for Sale Debt Securities Cytokinetics Commercial Launch Funding On January 7, 2022, we entered into a long-term funding agreement, which was later amended in 2022, with Cytokinetics, Incorporated (“Cytokinetics”). We agreed to provide funding of up to $300 million (“Cytokinetics Commercial Launch Funding”) in five tranches. The initial tranche of $50 million was funded upon closing. Cytokinetics is required to draw $50 million if a certain contingency is met and has the option to draw the remaining $200 million upon the occurrence of certain regulatory and clinical development milestones (“Cytokinetics Funding Commitments”). Because the regulatory milestones for the second and third tranches were not met, $75 million of the optional funding became unavailable. For tranches one, four and five, we expect to receive a return of 1.9 times the amount drawn in 34 consecutive quarterly payments beginning on the last business day of the seventh quarter following the quarter of the funding date. As of June 30, 2023, $125 million of the optional $200 million remained available under the Cytokinetics Funding Commitments. We elected the fair value option to account for the Cytokinetics Commercial Launch Funding as it most accurately reflects the nature of the funding arrangement. The funded Cytokinetics Commercial Launch Funding is recorded within Available for sale debt securities on the condensed consolidated balance sheets. The Cytokinetics Funding Commitments, which include options and forwards over the subsequent tranches, are recognized at fair value within Other liabilities on the condensed consolidated balance sheets. The changes in the fair value of the funded Cytokinetics Commercial Launch Funding and the Cytokinetics Funding Commitments are recorded within Gains on available for sale debt securities in the condensed consolidated statements of operations. MorphoSys Development Funding Bonds On June 2, 2021, we announced a long-term strategic funding agreement with MorphoSys AG (“MorphoSys”) to support its acquisition of Constellation Pharmaceuticals, Inc. which closed on July 15, 2021. As part of the funding agreement, we agreed to provide MorphoSys up to $350 million of capital, of which MorphoSys was required to draw a minimum of $150 million. We elected the fair value option to account for our forward commitment to fund at least $150 million of capital and recorded the related change in fair value within Gains on available for sale debt securities in the condensed consolidated statements of operations. In September 2022, we funded $300 million of capital (“Development Funding Bonds”) and settled our forward commitment. We expect to receive a return of 2.2 times the funded amount of the Development Funding Bonds, payable on a quarterly basis over nine years, with the first payment beginning in the fourth quarter of 2024. We elected the fair value option to account for the Development Funding Bonds as it most accurately reflects the nature of the instruments. The Development Funding Bonds are recorded within Available for sale debt securities on the condensed consolidated balance sheets. The changes in the fair value of the Development Funding Bonds are recorded within Gains on available for sale debt securities in the condensed consolidated statements of operations. The table below summarizes our available for sale debt securities recorded at fair value as of June 30, 2023 and December 31, 2022 (in thousands): Cost Unrealized(Losses)/Gains Fair Value Current Assets Non-Current Assets Non-Current Liabilities Total As of June 30, 2023 Debt securities (1) $ 359,400 $ (10,600) $ 348,800 $ 5,100 $ 343,700 $ — $ 348,800 Funding commitments (2) (9,400) 900 (8,500) — — (8,500) (8,500) Total available for sale debt securities $ 350,000 $ (9,700) $ 340,300 $ 5,100 $ 343,700 $ (8,500) $ 340,300 As of December 31, 2022 Debt securities (1) $ 359,400 $ (131,800) $ 227,600 $ 1,300 $ 226,300 $ — $ 227,600 Funding commitments (2) (9,400) 6,900 (2,500) — — (2,500) (2,500) Total available for sale debt securities $ 350,000 $ (124,900) $ 225,100 $ 1,300 $ 226,300 $ (2,500) $ 225,100 (1) The cost associated with the funded Cytokinetics Commercial Launch Funding reflects the fair value on the purchase date. The cost of the Development Funding Bonds represents the amount funded. (2) The cost associated with the Cytokinetics Funding Commitments represents the fair value on the purchase date. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): As of June 30, 2023 As of December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 1,818,681 $ — $ — $ 1,818,681 $ 5,068 $ — $ — $ 5,068 Marketable securities Certificates of deposit — — — — — 11,501 — 11,501 U.S. government securities — — — — — 12,920 — 12,920 Available for sale debt securities (2) — — 5,100 5,100 — — 1,300 1,300 Derivative instruments (3) — — — — — — 86,150 86,150 Total current assets $ 1,818,681 $ — $ 5,100 $ 1,823,781 $ 5,068 $ 24,421 $ 87,450 $ 116,939 Equity securities 137,082 — 5,718 142,800 103,876 — 8,472 112,348 Available for sale debt securities (2) — — 343,700 343,700 — — 226,300 226,300 Derivative instruments (3) — — 8,680 8,680 — — 10,460 10,460 Royalty at fair value (4) — — 16,583 16,583 — — 14,500 14,500 Total non-current assets $ 137,082 $ — $ 374,681 $ 511,763 $ 103,876 $ — $ 259,732 $ 363,608 Liabilities: Funding commitments (5) — — (8,500) (8,500) — — (2,500) (2,500) Total non-current liabilities $ — $ — $ (8,500) $ (8,500) $ — $ — $ (2,500) $ (2,500) (1) Recorded within Cash and cash equivalents on the condensed consolidated balance sheets. (2) Reflects the fair values of the Development Funding Bonds and the funded portion of the Cytokinetics Commercial Launch Funding. (3) Reflects the fair value of the Milestone Acceleration Option (defined below) which was recorded within Other assets as of June 30, 2023 and within Other assets and Other current assets as of December 31, 2022 on the condensed consolidated balance sheets. As of June 30, 2023, the fair value was related to the oral indication of zavegepant. As of December 31, 2022, the fair value for the current portion was related to Zavzpret and the fair value of the non-current portion was related to the oral indication of zavegepant. See below for further discussion. (4) Recorded within Other assets on the condensed consolidated balance sheets. See Note 7–Non-Consolidated Affiliates for additional discussion. (5) Related to the fair value of the Cytokinetics Funding Commitments recorded within Other liabilities on the condensed consolidated balance sheets. For the second quarter and first six months of 2023, we recognized gains of $41.3 million and $30.5 million, respectively, on equity securities still held as of June 30, 2023. For the second quarter and first six months of 2022, we recognized losses of $32.3 million and $26.8 million, respectively, on equity securities still held as of June 30, 2023. The tables presented below summarize the change in the combined fair value (current and non-current) of Level 3 financial instruments (in thousands): For the Three Months Ended June 30, 2023 Equity Securities Debt Securities Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 8,035 $ 269,700 $ (12,300) $ 9,380 $ 14,244 Losses on equity securities (2,317) — — — — Losses on derivative financial instruments — — — (700) — Gains on available for sale debt securities included in earnings — 79,100 3,800 — — Other non-operating income — — — — 2,339 Balance at the end of the period $ 5,718 $ 348,800 $ (8,500) $ 8,680 $ 16,583 For the Three Months Ended June 30, 2022 Equity Securities Debt Securities Forwards Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 62,538 $ 314,000 $ (1,200) $ (8,400) $ — $ — Purchases 28,785 14,579 — — — 21,215 Losses on equity securities (21,846) — — — — — Gains on derivative financial instruments — — — — 71,800 — Unrealized gains on available for sale debt securities included in other comprehensive income/(loss) — 9,325 — — — — Gains on available for sale debt securities included in earnings — 31,800 38,221 300 — — Settlement (1) — 8,921 (8,921) — — — Transfer out of Level 3 (2) (40,692) — — — — — Redemptions — (15,625) — — — — Balance at the end of the period $ 28,785 $ 363,000 $ 28,100 $ (8,100) $ 71,800 $ 21,215 (1) Reflects the fair value attributed to our commitment to purchase Series B Biohaven Preferred Shares that were settled simultaneously with the acquisition of the Series B Biohaven Preferred Shares. Following Pfizer’s acquisition of Biohaven in October 2022, we purchased all remaining unissued Series B Biohaven Preferred Shares and we received accelerated redemption payments for all outstanding Series B Biohaven Preferred Shares. (2) Related to the expiration of the transfer restriction on BioCryst common stock. For the Six Months Ended June 30, 2023 Equity Securities Debt Securities Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 8,472 $ 227,600 $ (2,500) $ 96,610 $ 14,500 Losses on equity securities (2,754) — — — — Gains on derivative financial instruments — — — 6,390 — Gains/(losses) on available for sale debt securities included in earnings — 121,200 (6,000) — — Other non-operating income — — — — 2,083 Settlement (1) — — — (94,320) — Balance at the end of the period $ 5,718 $ 348,800 $ (8,500) $ 8,680 $ 16,583 (1) Represents the fair value of the Milestone Acceleration Option (defined below) attributable to the intranasal indication of zavegepant which was settled when the U.S. Food and Drug Administration (“FDA”) approved Zavzpret in March 2023. For the Six Months Ended June 30, 2022 Equity Securities Debt Securities Forwards Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 43,013 $ 253,700 $ 16,700 $ — $ — $ — Purchases 28,785 79,158 — — — 21,215 Gains/(losses) on initial recognition (1) — 9,400 — (9,400) — — Losses on equity securities (2,321) — — — — — Gains on derivative financial instruments — — — — 71,800 — Unrealized gains on available for sale debt securities included in other comprehensive income/(loss) — 10,950 — — — — Gains on available for sale debt securities included in earnings — 30,200 22,242 1,300 — — Settlements (2) — 10,842 (10,842) — — — Transfer out of Level 3 (3) (40,692) — — — — — Redemptions — (31,250) — — — — Balance at the end of the period $ 28,785 $ 363,000 $ 28,100 $ (8,100) $ 71,800 $ 21,215 (1) Represents the purchase price allocation to arrive at the appropriate fair value on initial recognition. (2) Reflects the fair value attributed to our commitment to purchase Series B Biohaven Preferred Shares that were settled simultaneously with the acquisition of the Series B Biohaven Preferred Shares. Following Pfizer’s acquisition of Biohaven in October 2022, we purchased all remaining unissued Series B Biohaven Preferred Shares and we received accelerated redemption payments for all outstanding Series B Biohaven Preferred Shares. (3) Related to the expiration of the transfer restriction on BioCryst common stock. Valuation Inputs for Recurring Fair Value Measurements Below is a discussion of the valuation inputs used for financial instruments classified as Level 2 and Level 3 measurements as of June 30, 2023 and December 31, 2022 in the fair value hierarchy. ApiJect Investment We estimated the fair value of the equity securities and revenue participation right that we acquired from ApiJect Holdings, Inc. (“ApiJect”), a private company, as of June 30, 2023 and December 31, 2022 by utilizing a discounted cash flow calculation using Level 3 inputs, including forecasted cash flows and the weighted average cost of capital. Our estimate of the forecasted cash flows and the weighted average cost of capital could reasonably be different than those selected by a market participant, which would mean that the estimated fair value could be significantly higher or lower. Refer to Note 7–Non-Consolidated Affiliates for additional discussion. Cytokinetics Commercial Launch Funding and Cytokinetics Funding Commitments We estimated the fair value of the funded Cytokinetics Commercial Launch Funding as of June 30, 2023 and December 31, 2022 by utilizing probability-adjusted discounted cash flow calculations using Level 3 inputs, including an estimated risk-adjusted discount rate and the probability that there will be a change of control event, which would result in accelerated payments. Developing a risk-adjusted discount rate and assessing the probability that there will be a change of control event over the duration of the Cytokinetics Commercial Launch Funding require significant judgement. Our estimate of the risk-adjusted discount rate could reasonably be different than the discount rate selected by a market participant, which would mean that the estimated fair value could be significantly higher or lower. 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 estimated fair value could be significantly higher or lower than the fair value determined by management at any particular date. We estimated the fair value of the Cytokinetics Funding Commitments as of June 30, 2023 and December 31, 2022 using a Monte Carlo simulation methodology that includes simulating the interest rate movements using a Geometric Brownian Motion-based pricing model. This methodology simulates the likelihood of future discount rates exceeding the counterparty’s assumed cost of debt, which would impact Cytokinetics’ decision to exercise its option to draw on each respective tranche. As of June 30, 2023 and December 31, 2022, this methodology incorporates Level 3 fair value measurements and inputs, including an assumed risk-adjusted discount rate of 14.1% and 13.5%, respectively, and an assumed interest rate volatility of 30% as of each reporting date. We also assumed probabilities for the occurrence of each regulatory or clinical milestone, which impacts the availability of each future tranche of funding. Our estimate of the risk-adjusted discount rate, the interest rate volatility and the probabilities of each underlying milestone could reasonably be different than the assumptions selected by a market participant, which would mean that the estimated fair value could be significantly higher or lower. MorphoSys Development Funding Bonds We estimated the fair value of the Development Funding Bonds as of June 30, 2023 and December 31, 2022 based on a discounted cash flow calculation using estimated risk-adjusted discount rates, which are Level 3 fair value inputs. Our estimate of the risk adjusted discount rates could reasonably be different than the discount rates selected by a market participant, which would mean that the estimated fair value could be significantly higher or lower. Milestone Acceleration Option On August 7, 2020, we entered into an expanded funding agreement with Biohaven to fund the development of zavegepant and the commercialization of Nurtec ODT in exchange for royalties and success-based milestones payable over time. Following Pfizer’s acquisition of Biohaven on October 2, 2022, which was a change of control event, we elected to accelerate the payment of the zavegepant milestone payments, if triggered, into a lump sum amount (“Milestone Acceleration Option”). The Milestone Acceleration Option is an embedded derivative instrument for which the associated fair value was not material prior to the second quarter of 2022, when Pfizer announced its intended acquisition of Biohaven. In March 2023, the FDA approved Zavzpret (zavegepant), a calcitonin gene-related peptide receptor antagonist nasal spray for the acute treatment of migraine with or without aura in adults, which triggered a milestone payment of $475 million that we received in the same month and resulted in a partial settlement of the derivative instrument. The remaining fair value of the Milestone Acceleration Option as of June 30, 2023 was related to the oral indication of zavegepant. We estimated the fair value of the Milestone Acceleration Option as of June 30, 2023 and December 31, 2022 using the “with-and-without” methodology, which is a variation of the income approach and is based on the difference between cash flows for two different scenarios. The prospective cash flows for the success-based milestone payments include the Milestone Acceleration Option in the first scenario. For the second scenario, the prospective cash flows are estimated assuming they remain payable over time. The difference between the fair value of these two scenarios represents the fair value of the Milestone Acceleration Option. This methodology includes the use of Level 3 fair value measurements and inputs, including estimated risk-adjusted discount rate which was primarily based on Pfizer’s cost of debt and management’s estimated probabilities of achieving the success-based milestones. Assessing the likelihood that the success-based milestones are achieved over the duration of the Milestone Acceleration Option and developing a risk-adjusted discount rate require significant judgement. Our estimate of a risk adjusted discount rate and the probabilities of achieving marketing approval could reasonably be different than those determined by a market participant, which would mean that the estimated fair value could be significantly higher or lower. Other Financial Instruments As of June 30, 2023, we did not have any financial instruments recorded at fair value using Level 2 inputs. As of December 31, 2022, financial instruments whose fair values are measured on a recurring basis using Level 2 inputs primarily consisted of certificates of deposit and U.S. government securities. We measure the fair value of these financial instruments with the help of third-party pricing services that provide quoted market prices in active markets for similar securities or observable inputs for their pricing without applying significant adjustments. Financial Assets Not Measured at Fair Value Financial royalty assets are measured and carried on the condensed consolidated balance sheets at amortized cost using the effective interest method. The current portion of financial royalty assets approximates fair value. Management calculates the fair value of financial royalty assets using the forecasted royalty payments that are expected to be received based on the projected product sales for all royalty bearing products which are estimated using sell-side equity research analysts’ consensus sales forecasts. These projected future royalty payments by asset along with any projected incoming or outgoing milestone payments, are then discounted to a present value using appropriate individual discount rates. The fair value of 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. The estimated fair values and related carrying values of the non-current portion of financial royalty assets as of June 30, 2023 and December 31, 2022 are presented below (in thousands): As of June 30, 2023 As of December 31, 2022 Fair Value Carrying Value, net Fair Value Carrying Value, net Financial royalty assets, net $ 17,925,687 $ 13,267,734 $ 17,314,094 $ 13,493,106 |
Financial Royalty Assets
Financial Royalty Assets | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Financial Royalty Assets | Financial Royalty Assets 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 such products by third parties. 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 as of June 30, 2023 and December 31, 2022 are as follows (in thousands): As of June 30, 2023 Estimated Royalty Duration (1) Gross Carrying Value Cumulative Allowance for Changes in Expected Cash Flows (Note 6) Net Carrying Value (5) Cystic fibrosis franchise 2037 (2) $ 5,323,638 $ — $ 5,323,638 Tysabri (3) 1,601,190 (211,276) 1,389,914 Trelegy 2029-2030 1,263,520 (63,666) 1,199,854 Tremfya 2031-2032 917,721 (105,690) 812,031 Evrysdi 2030-2035 (4) 767,897 — 767,897 Xtandi 2027-2028 966,909 (243,455) 723,454 Other 2024-2041 6,021,290 (2,123,519) 3,897,771 Total $ 16,862,165 $ (2,747,606) $ 14,114,559 Less: Cumulative allowance for credit losses (Note 6) (116,915) Total current and non-current financial royalty assets, net $ 13,997,644 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry. (3) RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. (4) Key U.S. patents on Evrysdi expire in 2035. Our royalty will end when aggregate royalties paid to us equal $1.3 billion. (5) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 6–Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. As of June 30, 2023, the balance of $14.0 billion above for total current and non-current financial royalty assets, net included $562.1 million in unapproved financial royalty assets held at cost related to seltorexant, olpasiran, pelacarsen and KarXT. As of December 31, 2022 Estimated Royalty Duration (1) Gross Carrying Value Cumulative Allowance for Changes in Expected Cash Flows (Note 6) Net Carrying Value (4) Cystic fibrosis franchise 2037 (2) $ 5,333,535 $ (10,908) $ 5,322,627 Tysabri (3) 1,683,441 (212,283) 1,471,158 Trelegy 2029-2030 1,284,054 (24,126) 1,259,928 Tremfya 2031-2032 894,160 — 894,160 Imbruvica 2027-2032 1,436,969 (660,703) 776,266 Xtandi 2027-2028 1,009,168 (235,625) 773,543 Other 2024-2041 5,134,980 (1,332,815) 3,802,165 Total $ 16,776,307 $ (2,476,460) $ 14,299,847 Less: Cumulative allowance for credit losses (Note 6) (115,422) Total current and non-current financial royalty assets, net $ 14,184,425 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry. (3) RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. (4) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 6–Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. |
Cumulative Allowance and the Pr
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets | 6 Months Ended |
Jun. 30, 2023 | |
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 on the condensed consolidated balance sheets and includes the following: • the movement in the cumulative allowance related to changes in forecasted royalty payments expected to be received based on projected product sales for royalty bearing products which are estimated by sell-side equity research analysts’ consensus sales forecasts, • the write-off of cumulative allowance at the end of a royalty asset’s life which only impacts the condensed consolidated balance sheets, and • the movement in the cumulative allowance for current expected credit losses, primarily associated with new financial royalty assets with limited protective rights and changes in the underlying cash flow forecasts of financial royalty assets with limited protective rights. 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 Period Balance at December 31, 2022 (1) $ (2,591,882) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (591,972) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 233,433 Write-off of cumulative allowance 87,393 Current period provision for credit losses, net (1,493) Balance at June 30, 2023 $ (2,864,521) (1) Includes $115.4 million related to cumulative allowance for credit losses. |
Non-Consolidated Affiliates
Non-Consolidated Affiliates | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Non-Consolidated Affiliates | Non-Consolidated Affiliates We have equity investments in certain entities at a level that provide us with significant influence. We account for such investments as equity method investments or as equity securities over which we have elected the fair value option. ApiJect In April 2022, we acquired common stock and a revenue participation right from ApiJect. We elected the fair value option to account for our investments in ApiJect because it is more reflective of current values for such investments. We are also required to purchase additional common stock from ApiJect if certain milestones are achieved. The fair value of our equity investment in ApiJect is recorded within Equity securities and the change in fair value is recorded within (Gains)/losses on equity securities . The fair value of the revenue participation right is recorded within Other assets and the change in fair value is recorded within Other non-operating (income)/expense, net . No amounts were due from ApiJect as of June 30, 2023. The Legacy SLP Interest In connection with the Exchange Offer, 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, net of amortization of the basis difference. The Legacy SLP Interest is accounted for under the equity method as our Manager is also the Manager of the Legacy Investors Partnerships and has the ability to exercise significant influence. The Legacy Investors Partnerships no longer participate in investment opportunities from June 30, 2020 and, as such, the value of the Legacy SLP Interest is expected to decline over time. The Legacy Investors Partnerships also indirectly own a non-controlling interest in Old RPI and RPI ICAV. The income allocation from the Legacy SLP Interest is based on an estimate as the Legacy Investors Partnerships are private partnerships that are expected to report on a lag subsequent to the date of this quarterly report. Management’s estimate of equity in earnings from the Legacy SLP Interest for the current period will be updated for historical results in the subsequent period. We recorded income allocations from the Legacy SLP Interest of $1.2 million and $2.8 million within Equity in losses/(earnings) of equity method investees in the second quarter and first six months of 2023, respectively. We recorded income allocations from the Legacy SLP Interest of $4.7 million and $9.3 million within Equity in losses/(earnings) of equity method investees in the second quarter and first six months of 2022, respectively. We collected cash receipts from the Legacy SLP Interest of $2.2 million and $4.9 million in the second quarter and first six months of 2023, respectively. We collected cash receipts from the Legacy SLP Interest of $6.8 million and $14.1 million in the second quarter and first six months of 2022, respectively. The Avillion Entities We account for our partnership interests in Avillion Financing I, LP and its related entities (“Avillion I”) and BAv Financing II, LP and its related entities (“Avillion II” and, together with Avillion I, the “Avillion Entities”) as equity method investments because RPIFT has the ability to exercise significant influence over the Avillion Entities. During the second quarter of 2023 and first six months of 2023, we recorded a loss allocation of $1.9 million and an income allocation of $31.0 million, respectively, from the Avillion Entities within Equity in losses/(earnings) of equity method investees . We recorded loss allocations from the Avillion Entities of $4.0 million and $8.2 million within Equity in losses/(earnings) of equity method investees in the second quarter and first six months of 2022, respectively. On December 19, 2017, the FDA approved a supplemental New Drug Application for Pfizer’s Bosulif. Avillion I is eligible to receive fixed payments from Pfizer based on this approval under its co-development agreement with Pfizer. The only operations of Avillion I are the collection of cash and unwinding of the discount on the series of fixed annual payments due from Pfizer. We received distributions from Avillion I of $13.6 million and $13.4 million in the first six months of 2023 and 2022, respectively. |
Research & Development ("R&D")
Research & Development ("R&D") Funding Expense | 6 Months Ended |
Jun. 30, 2023 | |
Research and Development [Abstract] | |
Research & Development ("R&D") Funding Expense | Research & Development (“R&D”) Funding Expense R&D funding expense consists of payments that we have made to counterparties to acquire royalties or milestones on product candidates. R&D funding expense includes development-stage funding payments that are made upfront or upon pre-approval milestones and development-stage funding payments that are made over time as the related product candidates undergo clinical trials with our counterparties. During the first six months of 2023 and 2022, we did not enter into any new ongoing R&D funding arrangements. We recognized R&D funding expense of $0.5 million and $1.0 million in the second quarter and first six months of 2023, respectively, related to ongoing development-stage funding payments. We recognized R&D funding expense of $0.6 million and $101.1 million in the second quarter and first six months of 2022, respectively. During the first six months of 2022, R&D funding expense primarily related to upfront and milestone development-stage funding payments of $100.0 million to Cytokinetics to acquire a royalty on a development-stage product candidate. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Our borrowings as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands): Type of Borrowing Date of Issuance Maturity As of June 30, 2023 As of December 31, 2022 Senior Unsecured Notes: $1,000,000, 0.75% (issued at 99.322% of par) 9/2020 9/2023 $ 1,000,000 $ 1,000,000 $1,000,000, 1.20% (issued at 98.875% of par) 9/2020 9/2025 1,000,000 1,000,000 $1,000,000, 1.75% (issued at 98.284% of par) 9/2020 9/2027 1,000,000 1,000,000 $1,000,000, 2.20% (issued at 97.760% of par) 9/2020 9/2030 1,000,000 1,000,000 $600,000, 2.15% (issued at 98.263% of par) 7/2021 9/2031 600,000 600,000 $1,000,000, 3.30% (issued at 95.556% of par) 9/2020 9/2040 1,000,000 1,000,000 $1,000,000, 3.55% (issued at 95.306% of par) 9/2020 9/2050 1,000,000 1,000,000 $700,000, 3.35% (issued at 97.565% of par) 7/2021 9/2051 700,000 700,000 Unamortized debt discount and issuance costs (173,556) (183,678) Total debt carrying value 7,126,444 7,116,322 Less: Current portion of long-term debt (999,370) (997,512) Total long-term debt $ 6,127,074 $ 6,118,810 Senior Unsecured Notes On July 26, 2021, we issued $1.3 billion of senior unsecured notes (the “2021 Notes”) comprised of $600.0 million principal amount of notes due September 2031 and $700.0 million principal amount of notes due September 2051. Interest on each series of the 2021 Notes accrues at the respective rate per annum and is payable semi-annually in arrears on March 2 and September 2 of each year, which began on March 2, 2022. The 2021 Notes were issued at a total discount of $27.5 million and we capitalized approximately $12.3 million in debt issuance costs primarily composed of underwriting fees. The 2021 Notes were issued with a weighted average coupon rate and a weighted average effective interest rate of 2.80% and 3.06%, respectively. On September 2, 2020, we issued $6.0 billion of senior unsecured notes (the “2020 Notes” and, together with the 2021 Notes, the “Notes”). Interest on each series of the 2020 Notes accrues at the respective rate per annum and is payable semi-annually in arrears on March 2 and September 2 of each year. The 2020 Notes were issued at a total discount of $149.0 million and we capitalized approximately $40.4 million in debt issuance costs primarily comprised of underwriting fees. The 2020 Notes were issued with a weighted average coupon rate and a weighted average effective interest rate of 2.13% and 2.50%, respectively. On August 3, 2021, we completed an exchange offer for the 2020 Notes where certain holders elected to tender their unregistered outstanding notes for freely tradable exchange notes that were registered under the Securities Act of 1933. The 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. In each case, accrued and unpaid interest is also required to be redeemed to the date of redemption. Upon the occurrence of a change of control triggering event and downgrade in the rating of our Notes by two of three credit agencies, the holders may require us to repurchase all or part of their Notes at a price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. Our obligations under the Notes are fully and unconditionally guaranteed by RP Holdings, a non-wholly-owned subsidiary. We are required to comply with certain covenants under our Notes and as of June 30, 2023, we were in compliance with all applicable covenants. As of June 30, 2023 and December 31, 2022, the fair value of our outstanding Notes using Level 2 inputs was approximately $5.8 billion and $5.7 billion, respectively. Senior Unsecured Revolving Credit Facility On September 15, 2021, we entered into an amended and restated revolving credit agreement, which was further amended on October 31, 2022 (the “Credit Agreement”). The Credit Agreement amended and restated the prior credit agreement that our subsidiary RP Holdings, as borrower, entered into on September 18, 2020, which provided for a five-year unsecured revolving credit facility (the “Revolving Credit Facility”) with borrowing capacity of up to $1.5 billion for general corporate purposes. The Revolving Credit Facility has a maturity date of October 31, 2027. As of June 30, 2023 and December 31, 2022, 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 rate plus 0.5% and (3) Term SOFR plus 1% or (b) Daily SOFR, Term SOFR, the Alternative Currency Term Rate or the Alternative Currency Daily Rate (each as defined in the Credit Agreement), plus in each case, the applicable margin. The applicable margin for the Revolving Credit Facility varies based on our public debt rating. Accordingly, the interest rates for the Revolving Credit Facility fluctuate during the term of the facility based on changes in the applicable interest rate and future changes in our public debt rating. 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 interest expense, 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. Noncompliance with the leverage ratio and interest coverage ratio covenants under the Credit Agreement could result in our lenders requiring us to immediately repay all amounts borrowed. The Credit Agreement includes customary covenants for credit facilities of this type that limit our ability to engage in certain activities, such as incurring additional indebtedness, paying dividends, making certain payments and acquiring and disposing of assets. As of June 30, 2023, RP Holdings was in compliance with these covenants. Principal Payments on the Notes The future principal payments for our borrowings as of June 30, 2023 over the next five years and thereafter are as follows (in thousands): Year Principal Payments Remainder of 2023 $ 1,000,000 2024 — 2025 1,000,000 2026 — 2027 1,000,000 Thereafter 4,300,000 Total (1) $ 7,300,000 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Capital Structure We have two classes of voting shares: Class A ordinary shares and Class B ordinary shares, each of which has one vote per ordinary share. The Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of shareholders, except as otherwise required by applicable law. Our Class B ordinary shares are not publicly traded and holders of Class B ordinary shares only have limited rights to receive a distribution equal to their nominal value upon a liquidation, dissolution or winding up. As of June 30, 2023, we have 450,352 thousand Class A ordinary shares and 152,896 thousand Class B ordinary shares outstanding. An exchange agreement entered into in connection with the IPO by us, RP Holdings, the Continuing Investors Partnerships, RPI International Partners 2019, LP and EPA Holdings (the “Exchange Agreement”) governs the exchange of RP Holdings Class B Interests held by the Continuing Investors Partnerships for Class A ordinary shares. Pursuant to the Exchange Agreement, RP Holdings Class B interests are exchangeable on a one-for-one basis for Class A ordinary shares on a quarterly basis. Each such exchange also results in the re-designation of the same number of our Class B ordinary shares as deferred shares. As of June 30, 2023, we have 382,487 thousand deferred shares outstanding. In addition, we have in issue 50 thousand Class R redeemable shares, which do not entitle the holder to voting or dividend rights. The Class R redeemable shares may be redeemed at our option in the future. Any such redemption would be at the nominal value of £1 each. Class A Ordinary Share Repurchases In March 2023, our board of directors authorized a share repurchase program under which we may repurchase up to $1.0 billion of our Class A ordinary shares. The authorization for the share repurchase program expires on June 23, 2027 and repurchases may be made in the open market or in privately negotiated transactions. Amounts paid to repurchase shares in excess of the par value are allocated between Additional paid-in capital and Retained earnings . We began repurchasing our Class A ordinary shares in April 2023. In the second quarter of 2023, we repurchased and retired 4,027 thousand shares at a cost of approximately $134.5 million. Non-Controlling Interests The changes in the balance of our four non-controlling interests for the second quarter and first six months of 2023 and 2022 are as follows (in thousands): RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total March 31, 2023 $ (140) $ 1,480,585 $ 2,387,806 $ — $ 3,868,251 Contributions — 1,406 725 — 2,131 Distributions (3,339) (103,413) (30,529) — (137,281) Other exchanges — — (324,793) — (324,793) Net income 3,376 42,286 78,049 — 123,711 June 30, 2023 $ (103) $ 1,420,864 $ 2,111,258 $ — $ 3,532,019 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total March 31, 2022 $ 8,409 $ 1,756,269 $ 2,599,646 $ — $ 4,364,324 Contributions — 1,425 1,456 — 2,881 Distributions (5,754) (103,385) (37,828) — (146,967) Other exchanges — — (26,938) — (26,938) Net income 6,227 61,642 119,224 — 187,093 Other comprehensive income/(loss): Unrealized gains on available for sale debt securities — 1,639 2,163 — 3,802 Reclassification of unrealized gains on available for sale debt securities — (1,404) (1,853) — (3,257) June 30, 2022 $ 8,882 $ 1,716,186 $ 2,655,870 $ — $ 4,380,938 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total December 31, 2022 $ (597) $ 1,527,887 $ 2,369,933 $ — $ 3,897,223 Contributions — 5,201 1,639 — 6,840 Distributions (3,907) (198,562) (63,922) — (266,391) Other exchanges — — (397,698) — (397,698) Net income 4,401 86,338 201,306 — 292,045 June 30, 2023 $ (103) $ 1,420,864 $ 2,111,258 $ — $ 3,532,019 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total December 31, 2021 $ 13,528 $ 1,809,269 $ 2,649,154 $ — $ 4,471,951 Contributions — 3,395 2,808 — 6,203 Distributions (16,013) (207,586) (72,343) — (295,942) Other exchanges — — (62,222) — (62,222) Net income 11,367 112,162 139,886 — 263,415 Other comprehensive income/(loss): Unrealized gains on available for sale debt securities — 1,925 2,545 — 4,470 Reclassification of unrealized gains on available for sale debt securities — (2,979) (3,958) — (6,937) June 30, 2022 $ 8,882 $ 1,716,186 $ 2,655,870 $ — $ 4,380,938 The Continuing Investors Partnerships hold a number of our Class B ordinary shares equal to the number of RP Holdings Class B Interests held by them. As the Continuing Investors Partnerships exchange RP Holdings Class B Interests held for Class A ordinary shares, the Continuing Investors Partnerships’ ownership in RP Holdings decreases. We operate and control the business affairs of RP Holdings through our ownership of RP Holdings Class A Interests and RP Holdings Class B Interests. In connection with our repurchase of Class A ordinary shares, RP Holdings also began to retire RP Holdings Class A Interests held by us which reduces our ownership in RP Holdings. The change in RP Holdings ownership between the Continuing Investors Partnerships and us as a result of (1) the exchanges of RP Holding Class B Interests for Class A ordinary shares and (2) retirement of RP Holdings Class A Interest is reflected through Other exchanges in the above tables and in our condensed consolidated statements of shareholders’ equity. As of June 30, 2023, the Continuing Investors Partnerships owned approximately 25% of RP Holdings with the remaining 75% owned by Royalty Pharma plc. As of June 30, 2022, the Continuing Investors Partnerships owned approximately 28% of RP Holdings with the remaining 72% owned by Royalty Pharma plc. RP Holdings Class C Special Interest Held by EPA Holdings EPA Holdings, an affiliate of the Manager, 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 are 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 that will be exchanged upon issuance for Class A ordinary shares. EPA Holdings may also receive a periodic cash advance in respect of the RP Holdings Class C Special Interest to the extent necessary for EPA Holdings or any of its beneficial owners to pay when due any income tax imposed on it or them as a result of holding such RP Holdings Class C Special Interest. We do not expect any material Equity Performance Awards to be payable until certain performance conditions discussed above are met. Similarly, we do not expect any material income to be allocated to EPA Holdings until such performance conditions are met. Dividends The holders of Class A ordinary shares are entitled to receive dividends subject to approval by our board of directors. The holders of Class B ordinary shares do not have any rights to receive dividends; however, RP Holdings Class B Interests are entitled to dividends and distributions from RP Holdings. In the first six months of 2023, we declared and paid two quarterly cash dividends of $0.20 per Class A ordinary share for an aggregate amount of $179.2 million to holders of our Class A ordinary shares. 2020 Independent Directors Equity Incentive Plan On June 15, 2020, our 2020 Independent Director Equity Incentive Plan was approved and became effective, whereby 800 thousand Class A ordinary shares have been reserved for future issuance to our independent directors. RSU Activity and Share-based Compensation We grant RSUs to 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 as part of General and administrative expenses |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share For the second quarter and first six months of 2023 and 2022, Class B ordinary shares contingently issuable to EPA Holdings were evaluated and were determined not to have any dilutive impact. The following table sets forth reconciliations of the numerators and denominators used to calculate basic and diluted earnings per Class A ordinary share for the second quarter and first six months of 2023 and 2022 (in thousands, except per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator Consolidated net income $ 351,336 $ 491,597 $ 860,425 $ 619,680 Less: Net income attributable to continuing non-controlling interests 78,049 119,224 201,306 139,886 Less: Net income attributable to legacy non-controlling interests 45,662 67,869 90,739 123,529 Net income attributable to Royalty Pharma plc - basic 227,625 304,504 568,380 356,265 Add: Reallocation of net income attributable to non-controlling interest from the assumed conversion of Class B ordinary shares 78,049 119,224 201,306 139,886 Net income attributable to Royalty Pharma plc - diluted $ 305,674 $ 423,728 $ 769,686 $ 496,151 Denominator Weighted average Class A ordinary shares outstanding - basic 450,405 436,318 448,022 435,144 Add: Dilutive effects as shown separately below Class B ordinary shares exchangeable for Class A ordinary shares 155,419 170,864 158,499 172,035 Unvested RSUs 36 32 30 28 Weighted average Class A ordinary shares outstanding - diluted 605,860 607,214 606,551 607,207 Earnings per Class A ordinary share - basic $ 0.51 $ 0.70 $ 1.27 $ 0.82 Earnings per Class A ordinary share - diluted $ 0.50 $ 0.70 $ 1.27 $ 0.82 |
Indirect Cash Flow
Indirect Cash Flow | 6 Months Ended |
Jun. 30, 2023 | |
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 Six Months Ended June 30, 2023 2022 Cash flow from operating activities: Consolidated net income $ 860,425 $ 619,680 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Income from financial royalty assets (1,166,032) (1,026,873) Provision for changes in expected cash flows from financial royalty assets 360,032 290,335 Amortization of intangible assets — 5,670 Amortization of debt discount and issuance costs 10,647 10,683 Gains on derivative financial instruments (6,390) (71,805) (Gains)/losses on equity securities (30,453) 28,138 Equity in earnings of equity method investees (33,836) (1,134) Distributions from equity method investees 18,510 27,502 Share-based compensation 1,159 1,005 Interest income accretion — (16,942) Gains on available for sale debt securities (115,200) (53,742) Other 1,906 2,657 Changes in operating assets and liabilities: Cash collected on financial royalty assets 1,746,391 1,181,354 Accrued royalty receivable 472 35,254 Other royalty income receivable 2,014 (2,292) Other current assets (5,854) 2,711 Accounts payable and accrued expenses (2,137) 6,555 Interest payable — (3,534) Net cash provided by operating activities $ 1,641,654 $ 1,035,222 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Cytokinetics Funding Commitments As of June 30, 2023, $125 million of the optional $200 million remained available under the Cytokinetics Funding Commitments. Additionally, Cytokinetics is required to draw $50 million if a certain contingency is met. Other Commitments We have commitments to advance funds to counterparties through our investment in the Avillion Entities. Please refer to Note 7–Non-Consolidated Affiliates for details of these arrangements. We also have requirements to make Operating and Personnel Payments (defined below) over the life of the Management Agreement as described in Note 14–Related Party Transactions. Indemnifications In the ordinary course of our 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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Manager The Manager is the investment manager of Royalty Pharma plc and its subsidiaries. The sole member of the Manager, Pablo Legorreta, holds an interest in us and serves as our Chief Executive Officer and Chairman of our board of directors. In connection with the Exchange Offer (discussed in Note 1–Organization and Purpose), the Manager entered into the Management Agreement with us and our subsidiaries, the Continuing Investors Partnerships, and with the Legacy Investors Partnerships. Pursuant to the Management Agreement, we pay a quarterly operating and personnel payment to the Manager or its affiliates (“Operating and Personnel Payments”) equal to 6.5% of the cash receipts from royalty investments for such quarter and 0.25% of the value of our security investments under GAAP 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 on our consolidated net income, is calculated as the greater of $1 million per quarter and 0.3125% of royalties from Royalty Investments (as defined in the limited partnership agreements of the Legacy Investor Partnerships) during the previous twelve calendar months. Additionally, we also pay certain costs and expenses of the Manager. During the second quarter and first six months of 2023, total operating and personnel payments incurred were $37.0 million and $111.9 million, respectively, including the amounts attributable to Old RPI, and were recognized within General and administrative expenses in the condensed consolidated statements of operations. During the second quarter and first six months of 2022, total operating and personnel payments incurred were $36.0 million and $77.2 million, respectively, including the amounts attributable to Old RPI, and were recognized within General and administrative expenses in the condensed consolidated statements of operations. Distributions Payable to Legacy Non-Controlling Interests The distributions payable to legacy non-controlling interests represent the contractual cash flows required to be distributed based on the Legacy Investors Partnerships’ non-controlling interest in Old RPI and RPI ICAV and RPSFT’s non-controlling interest in RPCT. The distributions payable to legacy non-controlling interests include the following (in thousands): As of June 30, 2023 As of December 31, 2022 Due to Legacy Investors Partnerships $ 109,609 $ 87,522 Due to RPSFT 3,272 7,281 Total distributions payable to legacy non-controlling interests $ 112,881 $ 94,803 Acquisition from Bristol Myers Squibb In November 2017, RPI Acquisitions (Ireland), Limited (“RPI Acquisitions”), a consolidated subsidiary, 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”). 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 entity related to us. 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. As of June 30, 2023 and December 31, 2022, the financial royalty asset of $89.4 million and $103.4 million, respectively, on the condensed consolidated balance sheets represented only our right to the future payment streams acquired from BMS. Other Transactions Henry Fernandez, the lead independent director of our board of directors, serves as the chairman and chief executive officer of MSCI Inc. (“MSCI”). On April 16, 2021, we entered into an agreement with MSCI with an initial term of seven years to develop thematic life sciences indexes. In return, we will receive a percentage of MSCI’s revenues from those indexes. No amounts were due from MSCI as of both June 30, 2023 and December 31, 2022. The financial impact associated with this transaction has not been material to date. In connection with the Exchange Offer, 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 and RPI ICAV. Refer to Note 7–Non-Consolidated Affiliates for additional discussion of the Legacy SLP Interest and our investments in other non-consolidated entities. 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 was recorded as treasury interests, of which $1.6 million and $1.5 million were held by non-controlling interests as of June 30, 2023 and December 31, 2022, respectively. Each Continuing Investor Partnership pays a pro rata portion based on its ownership percentage of RP Holdings of any costs and expenses in connection with the contemplation of, formation of, listing and ongoing operation of us and any of our subsidiaries, including any third-party expenses of managing us and any of our subsidiaries, such as accounting, audit, legal, reporting, compliance, administration (including directors’ fees), financial advisory, consulting, investor relations and insurance expenses relating to our affairs and those of any subsidiary. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Preparation | The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under GAAP. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in our Annual Report on Form 10-K. |
Use of Estimates | The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of income, revenues and expenses during the reporting period. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. |
Basis of Consolidation | The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma and all majority-owned and controlled subsidiaries, as well as variable interest entities, where we are the primary beneficiary. We consolidate based upon evaluation of our power, through voting rights or similar rights, to direct the activities of another entity that most significantly impact the entity’s economic performance. For consolidated entities where we own or are exposed to less than 100% of the economics, we record Net income attributable to non-controlling interests in our condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. In 2022, we became an indirect owner of an 82% economic interest in Royalty Pharma Investments ICAV (“RPI ICAV”), which previously was owned directly by Old RPI. We report four non-controlling interests: (1) the Legacy Investors Partnerships’ ownership of approximately 18% in Old RPI and RPI ICAV and (2) a de minimis interest in RPCT held by RPSFT (together, the “legacy non-controlling interests”). The legacy non-controlling interests are the only historical non-controlling interests existing prior to our IPO. Additionally, following the consummation of our IPO, we also report non-controlling interests related to (3) the Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of RP Holdings Class B Interests (the “continuing non-controlling interests”) and (4) RPI EPA Holdings, LP’s (“EPA Holdings”) ownership of the RP Holdings’ Class C ordinary share (the “RP Holdings Class C Special Interest”). Income will not be allocated to EPA Holdings until certain performance conditions are met. All intercompany transactions and balances have been eliminated in consolidation. |
Concentrations of Credit Risk | Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, available for sale debt securities, financial royalty assets, derivatives and receivables. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents and marketable securities balances as of June 30, 2023 and December 31, 2022 were held with Bank of America, Scotiabank, TD Bank, Citibank, DNB Bank and U.S. Bank. Our primary operating accounts significantly exceed the Federal Deposit Insurance Corporation 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, Vertex, Biogen, AbbVie, Johnson & Johnson, Merck & Co., Pfizer, Astellas, Novartis and Gilead. As of June 30, 2023 and December 31, 2022, Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise, represented the largest individual marketer and payor of our royalties, accounting for 31% of our current portion of financial royalty assets. We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements so that we can properly assess and respond to changes in their credit profile. To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets. |
Available for Sale Debt Secur_2
Available for Sale Debt Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available for Sale Debt Securities | The table below summarizes our available for sale debt securities recorded at fair value as of June 30, 2023 and December 31, 2022 (in thousands): Cost Unrealized(Losses)/Gains Fair Value Current Assets Non-Current Assets Non-Current Liabilities Total As of June 30, 2023 Debt securities (1) $ 359,400 $ (10,600) $ 348,800 $ 5,100 $ 343,700 $ — $ 348,800 Funding commitments (2) (9,400) 900 (8,500) — — (8,500) (8,500) Total available for sale debt securities $ 350,000 $ (9,700) $ 340,300 $ 5,100 $ 343,700 $ (8,500) $ 340,300 As of December 31, 2022 Debt securities (1) $ 359,400 $ (131,800) $ 227,600 $ 1,300 $ 226,300 $ — $ 227,600 Funding commitments (2) (9,400) 6,900 (2,500) — — (2,500) (2,500) Total available for sale debt securities $ 350,000 $ (124,900) $ 225,100 $ 1,300 $ 226,300 $ (2,500) $ 225,100 (1) The cost associated with the funded Cytokinetics Commercial Launch Funding reflects the fair value on the purchase date. The cost of the Development Funding Bonds represents the amount funded. (2) The cost associated with the Cytokinetics Funding Commitments represents the fair value on the purchase date. |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy | The following table summarizes assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): As of June 30, 2023 As of December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 1,818,681 $ — $ — $ 1,818,681 $ 5,068 $ — $ — $ 5,068 Marketable securities Certificates of deposit — — — — — 11,501 — 11,501 U.S. government securities — — — — — 12,920 — 12,920 Available for sale debt securities (2) — — 5,100 5,100 — — 1,300 1,300 Derivative instruments (3) — — — — — — 86,150 86,150 Total current assets $ 1,818,681 $ — $ 5,100 $ 1,823,781 $ 5,068 $ 24,421 $ 87,450 $ 116,939 Equity securities 137,082 — 5,718 142,800 103,876 — 8,472 112,348 Available for sale debt securities (2) — — 343,700 343,700 — — 226,300 226,300 Derivative instruments (3) — — 8,680 8,680 — — 10,460 10,460 Royalty at fair value (4) — — 16,583 16,583 — — 14,500 14,500 Total non-current assets $ 137,082 $ — $ 374,681 $ 511,763 $ 103,876 $ — $ 259,732 $ 363,608 Liabilities: Funding commitments (5) — — (8,500) (8,500) — — (2,500) (2,500) Total non-current liabilities $ — $ — $ (8,500) $ (8,500) $ — $ — $ (2,500) $ (2,500) (1) Recorded within Cash and cash equivalents on the condensed consolidated balance sheets. (2) Reflects the fair values of the Development Funding Bonds and the funded portion of the Cytokinetics Commercial Launch Funding. (3) Reflects the fair value of the Milestone Acceleration Option (defined below) which was recorded within Other assets as of June 30, 2023 and within Other assets and Other current assets as of December 31, 2022 on the condensed consolidated balance sheets. As of June 30, 2023, the fair value was related to the oral indication of zavegepant. As of December 31, 2022, the fair value for the current portion was related to Zavzpret and the fair value of the non-current portion was related to the oral indication of zavegepant. See below for further discussion. (4) Recorded within Other assets on the condensed consolidated balance sheets. See Note 7–Non-Consolidated Affiliates for additional discussion. (5) Related to the fair value of the Cytokinetics Funding Commitments recorded within Other liabilities on the condensed consolidated balance sheets. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The tables presented below summarize the change in the combined fair value (current and non-current) of Level 3 financial instruments (in thousands): For the Three Months Ended June 30, 2023 Equity Securities Debt Securities Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 8,035 $ 269,700 $ (12,300) $ 9,380 $ 14,244 Losses on equity securities (2,317) — — — — Losses on derivative financial instruments — — — (700) — Gains on available for sale debt securities included in earnings — 79,100 3,800 — — Other non-operating income — — — — 2,339 Balance at the end of the period $ 5,718 $ 348,800 $ (8,500) $ 8,680 $ 16,583 For the Three Months Ended June 30, 2022 Equity Securities Debt Securities Forwards Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 62,538 $ 314,000 $ (1,200) $ (8,400) $ — $ — Purchases 28,785 14,579 — — — 21,215 Losses on equity securities (21,846) — — — — — Gains on derivative financial instruments — — — — 71,800 — Unrealized gains on available for sale debt securities included in other comprehensive income/(loss) — 9,325 — — — — Gains on available for sale debt securities included in earnings — 31,800 38,221 300 — — Settlement (1) — 8,921 (8,921) — — — Transfer out of Level 3 (2) (40,692) — — — — — Redemptions — (15,625) — — — — Balance at the end of the period $ 28,785 $ 363,000 $ 28,100 $ (8,100) $ 71,800 $ 21,215 (1) Reflects the fair value attributed to our commitment to purchase Series B Biohaven Preferred Shares that were settled simultaneously with the acquisition of the Series B Biohaven Preferred Shares. Following Pfizer’s acquisition of Biohaven in October 2022, we purchased all remaining unissued Series B Biohaven Preferred Shares and we received accelerated redemption payments for all outstanding Series B Biohaven Preferred Shares. (2) Related to the expiration of the transfer restriction on BioCryst common stock. For the Six Months Ended June 30, 2023 Equity Securities Debt Securities Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 8,472 $ 227,600 $ (2,500) $ 96,610 $ 14,500 Losses on equity securities (2,754) — — — — Gains on derivative financial instruments — — — 6,390 — Gains/(losses) on available for sale debt securities included in earnings — 121,200 (6,000) — — Other non-operating income — — — — 2,083 Settlement (1) — — — (94,320) — Balance at the end of the period $ 5,718 $ 348,800 $ (8,500) $ 8,680 $ 16,583 (1) Represents the fair value of the Milestone Acceleration Option (defined below) attributable to the intranasal indication of zavegepant which was settled when the U.S. Food and Drug Administration (“FDA”) approved Zavzpret in March 2023. For the Six Months Ended June 30, 2022 Equity Securities Debt Securities Forwards Funding Commitments Derivative Instruments Royalty at Fair Value Balance at the beginning of the period $ 43,013 $ 253,700 $ 16,700 $ — $ — $ — Purchases 28,785 79,158 — — — 21,215 Gains/(losses) on initial recognition (1) — 9,400 — (9,400) — — Losses on equity securities (2,321) — — — — — Gains on derivative financial instruments — — — — 71,800 — Unrealized gains on available for sale debt securities included in other comprehensive income/(loss) — 10,950 — — — — Gains on available for sale debt securities included in earnings — 30,200 22,242 1,300 — — Settlements (2) — 10,842 (10,842) — — — Transfer out of Level 3 (3) (40,692) — — — — — Redemptions — (31,250) — — — — Balance at the end of the period $ 28,785 $ 363,000 $ 28,100 $ (8,100) $ 71,800 $ 21,215 (1) Represents the purchase price allocation to arrive at the appropriate fair value on initial recognition. (2) Reflects the fair value attributed to our commitment to purchase Series B Biohaven Preferred Shares that were settled simultaneously with the acquisition of the Series B Biohaven Preferred Shares. Following Pfizer’s acquisition of Biohaven in October 2022, we purchased all remaining unissued Series B Biohaven Preferred Shares and we received accelerated redemption payments for all outstanding Series B Biohaven Preferred Shares. (3) Related to the expiration of the transfer restriction on BioCryst common stock. |
Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | The estimated fair values and related carrying values of the non-current portion of financial royalty assets as of June 30, 2023 and December 31, 2022 are presented below (in thousands): As of June 30, 2023 As of December 31, 2022 Fair Value Carrying Value, net Fair Value Carrying Value, net Financial royalty assets, net $ 17,925,687 $ 13,267,734 $ 17,314,094 $ 13,493,106 |
Financial Royalty Assets (Table
Financial Royalty Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 as of June 30, 2023 and December 31, 2022 are as follows (in thousands): As of June 30, 2023 Estimated Royalty Duration (1) Gross Carrying Value Cumulative Allowance for Changes in Expected Cash Flows (Note 6) Net Carrying Value (5) Cystic fibrosis franchise 2037 (2) $ 5,323,638 $ — $ 5,323,638 Tysabri (3) 1,601,190 (211,276) 1,389,914 Trelegy 2029-2030 1,263,520 (63,666) 1,199,854 Tremfya 2031-2032 917,721 (105,690) 812,031 Evrysdi 2030-2035 (4) 767,897 — 767,897 Xtandi 2027-2028 966,909 (243,455) 723,454 Other 2024-2041 6,021,290 (2,123,519) 3,897,771 Total $ 16,862,165 $ (2,747,606) $ 14,114,559 Less: Cumulative allowance for credit losses (Note 6) (116,915) Total current and non-current financial royalty assets, net $ 13,997,644 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry. (3) RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. (4) Key U.S. patents on Evrysdi expire in 2035. Our royalty will end when aggregate royalties paid to us equal $1.3 billion. (5) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 6–Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. As of June 30, 2023, the balance of $14.0 billion above for total current and non-current financial royalty assets, net included $562.1 million in unapproved financial royalty assets held at cost related to seltorexant, olpasiran, pelacarsen and KarXT. As of December 31, 2022 Estimated Royalty Duration (1) Gross Carrying Value Cumulative Allowance for Changes in Expected Cash Flows (Note 6) Net Carrying Value (4) Cystic fibrosis franchise 2037 (2) $ 5,333,535 $ (10,908) $ 5,322,627 Tysabri (3) 1,683,441 (212,283) 1,471,158 Trelegy 2029-2030 1,284,054 (24,126) 1,259,928 Tremfya 2031-2032 894,160 — 894,160 Imbruvica 2027-2032 1,436,969 (660,703) 776,266 Xtandi 2027-2028 1,009,168 (235,625) 773,543 Other 2024-2041 5,134,980 (1,332,815) 3,802,165 Total $ 16,776,307 $ (2,476,460) $ 14,299,847 Less: Cumulative allowance for credit losses (Note 6) (115,422) Total current and non-current financial royalty assets, net $ 14,184,425 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of patent expiration dates (which may include estimated patent term extensions) or other factors and may vary by geography. There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual; year shown represents Trikafta expected patent expiration and potential sales decline based on timing of potential generic entry. (3) RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed. (4) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 6–Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information. |
Cumulative Allowance and the _2
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 Period Balance at December 31, 2022 (1) $ (2,591,882) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (591,972) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 233,433 Write-off of cumulative allowance 87,393 Current period provision for credit losses, net (1,493) Balance at June 30, 2023 $ (2,864,521) (1) Includes $115.4 million related to cumulative allowance for credit losses. |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | Our borrowings as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands): Type of Borrowing Date of Issuance Maturity As of June 30, 2023 As of December 31, 2022 Senior Unsecured Notes: $1,000,000, 0.75% (issued at 99.322% of par) 9/2020 9/2023 $ 1,000,000 $ 1,000,000 $1,000,000, 1.20% (issued at 98.875% of par) 9/2020 9/2025 1,000,000 1,000,000 $1,000,000, 1.75% (issued at 98.284% of par) 9/2020 9/2027 1,000,000 1,000,000 $1,000,000, 2.20% (issued at 97.760% of par) 9/2020 9/2030 1,000,000 1,000,000 $600,000, 2.15% (issued at 98.263% of par) 7/2021 9/2031 600,000 600,000 $1,000,000, 3.30% (issued at 95.556% of par) 9/2020 9/2040 1,000,000 1,000,000 $1,000,000, 3.55% (issued at 95.306% of par) 9/2020 9/2050 1,000,000 1,000,000 $700,000, 3.35% (issued at 97.565% of par) 7/2021 9/2051 700,000 700,000 Unamortized debt discount and issuance costs (173,556) (183,678) Total debt carrying value 7,126,444 7,116,322 Less: Current portion of long-term debt (999,370) (997,512) Total long-term debt $ 6,127,074 $ 6,118,810 |
Schedule of Repayments of Debt by Year | The future principal payments for our borrowings as of June 30, 2023 over the next five years and thereafter are as follows (in thousands): Year Principal Payments Remainder of 2023 $ 1,000,000 2024 — 2025 1,000,000 2026 — 2027 1,000,000 Thereafter 4,300,000 Total (1) $ 7,300,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Balance Of Non-controlling Interests | The changes in the balance of our four non-controlling interests for the second quarter and first six months of 2023 and 2022 are as follows (in thousands): RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total March 31, 2023 $ (140) $ 1,480,585 $ 2,387,806 $ — $ 3,868,251 Contributions — 1,406 725 — 2,131 Distributions (3,339) (103,413) (30,529) — (137,281) Other exchanges — — (324,793) — (324,793) Net income 3,376 42,286 78,049 — 123,711 June 30, 2023 $ (103) $ 1,420,864 $ 2,111,258 $ — $ 3,532,019 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total March 31, 2022 $ 8,409 $ 1,756,269 $ 2,599,646 $ — $ 4,364,324 Contributions — 1,425 1,456 — 2,881 Distributions (5,754) (103,385) (37,828) — (146,967) Other exchanges — — (26,938) — (26,938) Net income 6,227 61,642 119,224 — 187,093 Other comprehensive income/(loss): Unrealized gains on available for sale debt securities — 1,639 2,163 — 3,802 Reclassification of unrealized gains on available for sale debt securities — (1,404) (1,853) — (3,257) June 30, 2022 $ 8,882 $ 1,716,186 $ 2,655,870 $ — $ 4,380,938 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total December 31, 2022 $ (597) $ 1,527,887 $ 2,369,933 $ — $ 3,897,223 Contributions — 5,201 1,639 — 6,840 Distributions (3,907) (198,562) (63,922) — (266,391) Other exchanges — — (397,698) — (397,698) Net income 4,401 86,338 201,306 — 292,045 June 30, 2023 $ (103) $ 1,420,864 $ 2,111,258 $ — $ 3,532,019 RPSFT Legacy Investors Partnerships Continuing Investors Partnerships EPA Holdings Total December 31, 2021 $ 13,528 $ 1,809,269 $ 2,649,154 $ — $ 4,471,951 Contributions — 3,395 2,808 — 6,203 Distributions (16,013) (207,586) (72,343) — (295,942) Other exchanges — — (62,222) — (62,222) Net income 11,367 112,162 139,886 — 263,415 Other comprehensive income/(loss): Unrealized gains on available for sale debt securities — 1,925 2,545 — 4,470 Reclassification of unrealized gains on available for sale debt securities — (2,979) (3,958) — (6,937) June 30, 2022 $ 8,882 $ 1,716,186 $ 2,655,870 $ — $ 4,380,938 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to calculate basic and diluted earnings per Class A ordinary share for the second quarter and first six months of 2023 and 2022 (in thousands, except per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator Consolidated net income $ 351,336 $ 491,597 $ 860,425 $ 619,680 Less: Net income attributable to continuing non-controlling interests 78,049 119,224 201,306 139,886 Less: Net income attributable to legacy non-controlling interests 45,662 67,869 90,739 123,529 Net income attributable to Royalty Pharma plc - basic 227,625 304,504 568,380 356,265 Add: Reallocation of net income attributable to non-controlling interest from the assumed conversion of Class B ordinary shares 78,049 119,224 201,306 139,886 Net income attributable to Royalty Pharma plc - diluted $ 305,674 $ 423,728 $ 769,686 $ 496,151 Denominator Weighted average Class A ordinary shares outstanding - basic 450,405 436,318 448,022 435,144 Add: Dilutive effects as shown separately below Class B ordinary shares exchangeable for Class A ordinary shares 155,419 170,864 158,499 172,035 Unvested RSUs 36 32 30 28 Weighted average Class A ordinary shares outstanding - diluted 605,860 607,214 606,551 607,207 Earnings per Class A ordinary share - basic $ 0.51 $ 0.70 $ 1.27 $ 0.82 Earnings per Class A ordinary share - diluted $ 0.50 $ 0.70 $ 1.27 $ 0.82 |
Indirect Cash Flow (Tables)
Indirect Cash Flow (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 Six Months Ended June 30, 2023 2022 Cash flow from operating activities: Consolidated net income $ 860,425 $ 619,680 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Income from financial royalty assets (1,166,032) (1,026,873) Provision for changes in expected cash flows from financial royalty assets 360,032 290,335 Amortization of intangible assets — 5,670 Amortization of debt discount and issuance costs 10,647 10,683 Gains on derivative financial instruments (6,390) (71,805) (Gains)/losses on equity securities (30,453) 28,138 Equity in earnings of equity method investees (33,836) (1,134) Distributions from equity method investees 18,510 27,502 Share-based compensation 1,159 1,005 Interest income accretion — (16,942) Gains on available for sale debt securities (115,200) (53,742) Other 1,906 2,657 Changes in operating assets and liabilities: Cash collected on financial royalty assets 1,746,391 1,181,354 Accrued royalty receivable 472 35,254 Other royalty income receivable 2,014 (2,292) Other current assets (5,854) 2,711 Accounts payable and accrued expenses (2,137) 6,555 Interest payable — (3,534) Net cash provided by operating activities $ 1,641,654 $ 1,035,222 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The distributions payable to legacy non-controlling interests include the following (in thousands): As of June 30, 2023 As of December 31, 2022 Due to Legacy Investors Partnerships $ 109,609 $ 87,522 Due to RPSFT 3,272 7,281 Total distributions payable to legacy non-controlling interests $ 112,881 $ 94,803 |
Organization and Purpose (Detai
Organization and Purpose (Details) | Feb. 11, 2020 | Jun. 30, 2023 | Dec. 31, 2022 |
Old RPI | |||
Subsidiary, Sale of Stock [Line Items] | |||
Noncontrolling interest (percentage) | 82% | ||
RPCT | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage (as a percent) | 66% | ||
Legacy Investors Partnerships | Old RPI | |||
Subsidiary, Sale of Stock [Line Items] | |||
Noncontrolling interest (percentage) | 18% | ||
RPSFT | RPCT | |||
Subsidiary, Sale of Stock [Line Items] | |||
Noncontrolling interest (percentage) | 34% | ||
Exchange Offer | Old RPI | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage (as a percent) | 82% | ||
Exchange Offer | Legacy Investors Partnerships | |||
Subsidiary, Sale of Stock [Line Items] | |||
Exchange offering, ownership percentage | 82% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - noncontrolling_interest | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Old RPI | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Noncontrolling interest (percentage) | 82% | |
Number of noncontrolling interests created | 4 | |
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) | 31% | 31% |
Legacy Investors Partnerships | Old RPI | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Noncontrolling interest (percentage) | 18% |
Available for Sale Debt Secur_3
Available for Sale Debt Securities - Narrative (Details) $ in Millions | 1 Months Ended | 6 Months Ended | ||
Jan. 07, 2022 USD ($) tranche payment | Jun. 02, 2021 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | ||||
Long term funding partnership, amount | $ 300 | |||
Long term funding partnership, number of tranches | tranche | 5 | |||
Long term funding partnership, initial payment | $ 50 | |||
Required amount to be drawn | 50 | |||
Long term funding partnership, additional payments, aggregate amount | 200 | |||
Long term funding partnership, optional amount unavailable | $ 75 | |||
Installment repayments, percentage of amount drawn | 1.9 | |||
Number of consecutive quarterly payments | payment | 34 | |||
Long term funding partnership, expected payment | $ 125 | |||
MorphoSys | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Maximum commitment to fund collaborative arrangement | $ 150 | |||
Redemption price, percentage | 2.2 | |||
MorphoSys | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Payment of capital | 350 | |||
Maximum commitment to fund collaborative arrangement | $ 150 | |||
Period of return | 9 years | |||
Development fund bond | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Maximum commitment to fund collaborative arrangement | $ 300 |
Available for Sale Debt Secur_4
Available for Sale Debt Securities - Summary of Available for Sale Debt Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | $ 350,000 | $ 350,000 |
Unrealized(Losses)/Gains | (9,700) | (124,900) |
Fair Value | 340,300 | 225,100 |
Available for sale debt securities, current | 5,100 | 1,300 |
Available for sale debt securities, noncurrent | 343,700 | 226,300 |
Available for sale debt securities, liabilities noncurrent | (8,500) | (2,500) |
Debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | 359,400 | 359,400 |
Unrealized(Losses)/Gains | (10,600) | (131,800) |
Fair Value | 348,800 | 227,600 |
Available for sale debt securities, current | 5,100 | 1,300 |
Available for sale debt securities, noncurrent | 343,700 | 226,300 |
Available for sale debt securities, liabilities noncurrent | 0 | 0 |
Funding Commitments | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | (9,400) | (9,400) |
Unrealized(Losses)/Gains | 900 | 6,900 |
Fair Value | (8,500) | (2,500) |
Available for sale debt securities, current | 0 | 0 |
Available for sale debt securities, noncurrent | 0 | 0 |
Available for sale debt securities, liabilities noncurrent | $ (8,500) | $ (2,500) |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Assets: | |||
Marketable securities | $ 0 | $ 24,421 | |
Available for sale debt securities | 5,100 | 1,300 | |
Equity securities | 142,800 | 112,348 | |
Available for sale debt securities | 343,700 | 226,300 | |
Liabilities: | |||
Available for sale debt securities, liabilities noncurrent | $ 8,500 | 2,500 | |
Fair value asset liability recurring basis still held unrealized gain loss statement of income extensible list not disclosed flag | fair values | fair values | |
Fair Value, Recurring | |||
Assets: | |||
Derivative instruments, current | $ 0 | 86,150 | |
Total current assets | 1,823,781 | 116,939 | |
Equity securities | 142,800 | 112,348 | |
Derivative financial instruments | 8,680 | 10,460 | |
Total non-current assets | 511,763 | 363,608 | |
Liabilities: | |||
Available for sale debt securities, liabilities noncurrent | (8,500) | (2,500) | |
Fair Value, Recurring | Royalty Investments | |||
Assets: | |||
Available for sale debt securities | 16,583 | 14,500 | |
Fair Value, Recurring | Cytokinetics Funding Commitment | |||
Liabilities: | |||
Available for sale debt securities, liabilities current | (8,500) | (2,500) | |
Level 1 | Fair Value, Recurring | |||
Assets: | |||
Derivative instruments, current | 0 | 0 | |
Total current assets | 1,818,681 | 5,068 | |
Equity securities | 137,082 | 103,876 | |
Derivative financial instruments | 0 | 0 | |
Total non-current assets | 137,082 | 103,876 | |
Liabilities: | |||
Available for sale debt securities, liabilities noncurrent | 0 | 0 | |
Level 1 | Fair Value, Recurring | Royalty Investments | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | |
Level 1 | Fair Value, Recurring | Cytokinetics Funding Commitment | |||
Liabilities: | |||
Available for sale debt securities, liabilities current | 0 | 0 | |
Level 2 | Fair Value, Recurring | |||
Assets: | |||
Derivative instruments, current | 0 | 0 | |
Total current assets | 0 | 24,421 | |
Equity securities | 0 | 0 | |
Derivative financial instruments | 0 | 0 | |
Total non-current assets | 0 | 0 | |
Liabilities: | |||
Available for sale debt securities, liabilities noncurrent | 0 | 0 | |
Level 2 | Fair Value, Recurring | Royalty Investments | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | |
Level 2 | Fair Value, Recurring | Cytokinetics Funding Commitment | |||
Liabilities: | |||
Available for sale debt securities, liabilities current | 0 | 0 | |
Level 3 | Fair Value, Recurring | |||
Assets: | |||
Derivative instruments, current | 0 | 86,150 | |
Total current assets | 5,100 | 87,450 | |
Equity securities | 5,718 | 8,472 | |
Derivative financial instruments | 8,680 | 10,460 | |
Total non-current assets | 374,681 | 259,732 | |
Liabilities: | |||
Available for sale debt securities, liabilities noncurrent | (8,500) | (2,500) | |
Level 3 | Fair Value, Recurring | Royalty Investments | |||
Assets: | |||
Available for sale debt securities | 16,583 | 14,500 | |
Level 3 | Fair Value, Recurring | Cytokinetics Funding Commitment | |||
Liabilities: | |||
Available for sale debt securities, liabilities current | (8,500) | (2,500) | |
Certificates of deposit | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 11,501 | |
Certificates of deposit | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Certificates of deposit | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 11,501 | |
Certificates of deposit | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 0 | |
U.S. government securities | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 12,920 | |
U.S. government securities | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 0 | |
U.S. government securities | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 12,920 | |
U.S. government securities | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Marketable securities | 0 | 0 | |
Debt Securities | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 5,100 | 1,300 | |
Available for sale debt securities | 343,700 | 226,300 | |
Debt Securities | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | |
Available for sale debt securities | 0 | 0 | |
Debt Securities | Level 2 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 0 | 0 | |
Available for sale debt securities | 0 | 0 | |
Debt Securities | Level 3 | Fair Value, Recurring | |||
Assets: | |||
Available for sale debt securities | 5,100 | 1,300 | |
Available for sale debt securities | 343,700 | 226,300 | |
Money market funds | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 1,818,681 | 5,068 | |
Money market funds | Level 1 | Fair Value, Recurring | |||
Assets: | |||
Cash equivalents | 1,818,681 | 5,068 | |
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 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gain (loss) on equity securities still held | $ 41.3 | $ (32.3) | $ 30.5 | $ (26.8) | ||
Fair Value, Recurring | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Milestone payment received | $ 475 | |||||
Cytokinetics Commercial Launch Funding | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Risk-adjusted discount rate (as a percent) | 14.10% | 13.50% | ||||
Interest rate volatility (as a percent) | 30% | 30% |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Summary of Change in Carrying Value of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Gains (losses) on derivative financial instruments | $ (700) | $ 71,805 | $ 6,390 | $ 71,805 |
Equity Securities | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | 8,035 | 62,538 | 8,472 | 43,013 |
Purchases | 28,785 | 28,785 | ||
Losses on equity securities | (2,317) | (21,846) | (2,754) | (2,321) |
Transfer out of level 3 | (40,692) | (40,692) | ||
Balance at the end of the period | 5,718 | 28,785 | 5,718 | 28,785 |
Debt Securities | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | 269,700 | 314,000 | 227,600 | 253,700 |
Purchases | 14,579 | 79,158 | ||
Gains/(losses) on initial recognition | 9,400 | |||
Unrealized gains on available for sale debt securities included in other comprehensive income/(loss) | 9,325 | 10,950 | ||
Gains/(losses) on available for sale debt securities included in earnings | 79,100 | 31,800 | 121,200 | 30,200 |
Settlement | 8,921 | 10,842 | ||
Redemptions | (15,625) | (31,250) | ||
Balance at the end of the period | 348,800 | 363,000 | 348,800 | 363,000 |
Forwards | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | (1,200) | 16,700 | ||
Gains/(losses) on available for sale debt securities included in earnings | 38,221 | 22,242 | ||
Settlement | (8,921) | (10,842) | ||
Balance at the end of the period | 28,100 | 28,100 | ||
Funding Commitments | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | (12,300) | (8,400) | (2,500) | 0 |
Gains/(losses) on initial recognition | (9,400) | |||
Gains/(losses) on available for sale debt securities included in earnings | 3,800 | 300 | (6,000) | 1,300 |
Balance at the end of the period | (8,500) | (8,100) | (8,500) | (8,100) |
Derivative Instruments | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | 9,380 | 0 | 96,610 | 0 |
Gains (losses) on derivative financial instruments | (700) | 71,800 | 6,390 | 71,800 |
Settlement | (94,320) | |||
Balance at the end of the period | 8,680 | 71,800 | 8,680 | 71,800 |
Royalty at Fair Value | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | 14,244 | 0 | 14,500 | 0 |
Purchases | 21,215 | 21,215 | ||
Other non-operating income | 2,339 | 2,083 | ||
Balance at the end of the period | $ 16,583 | $ 21,215 | $ 16,583 | $ 21,215 |
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 17,925,687 | $ 17,314,094 |
Carrying Value, net | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 13,267,734 | $ 13,493,106 |
Financial Royalty Assets (Detai
Financial Royalty Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | $ 16,862,165 | $ 16,776,307 |
Cumulative allowance for changes in expected cash flows | (2,747,606) | (2,476,460) |
Net carrying value, before cumulative allowance for credit losses | 14,114,559 | 14,299,847 |
Cumulative allowance for credit losses | (116,915) | (115,422) |
Total current and non-current financial royalty assets, net | 13,997,644 | 14,184,425 |
Cystic fibrosis franchise | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 5,323,638 | 5,333,535 |
Cumulative allowance for changes in expected cash flows | 0 | (10,908) |
Net carrying value, before cumulative allowance for credit losses | 5,323,638 | 5,322,627 |
Tysabri | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 1,601,190 | 1,683,441 |
Cumulative allowance for changes in expected cash flows | (211,276) | (212,283) |
Net carrying value, before cumulative allowance for credit losses | 1,389,914 | 1,471,158 |
Trelegy | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 1,263,520 | 1,284,054 |
Cumulative allowance for changes in expected cash flows | (63,666) | (24,126) |
Net carrying value, before cumulative allowance for credit losses | 1,199,854 | 1,259,928 |
Tremfya | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 917,721 | 894,160 |
Cumulative allowance for changes in expected cash flows | (105,690) | 0 |
Net carrying value, before cumulative allowance for credit losses | 812,031 | 894,160 |
Imbruvica | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 1,436,969 | |
Cumulative allowance for changes in expected cash flows | (660,703) | |
Net carrying value, before cumulative allowance for credit losses | 776,266 | |
Evrysdi | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 767,897 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value, before cumulative allowance for credit losses | 767,897 | |
Aggregate royalty amount when patents cease | 1,300,000 | |
Xtandi | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 966,909 | 1,009,168 |
Cumulative allowance for changes in expected cash flows | (243,455) | (235,625) |
Net carrying value, before cumulative allowance for credit losses | 723,454 | 773,543 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross Carrying Value | 6,021,290 | 5,134,980 |
Cumulative allowance for changes in expected cash flows | (2,123,519) | (1,332,815) |
Net carrying value, before cumulative allowance for credit losses | $ 3,897,771 | $ 3,802,165 |
Financial Royalty Assets - Narr
Financial Royalty Assets - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current and non-current financial royalty assets, net | $ 13,997,644 | $ 14,184,425 |
Seltorexant, Olpasiran, Pelacarsen and KarXT | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, unapproved financial assets held at cost | $ 562,100 |
Cumulative Allowance and the _3
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ (2,591,882) | |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (591,972) | |
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 233,433 | |
Write-off of cumulative allowance | 87,393 | |
Current period provision for credit losses, net | (1,493) | |
Ending balance | (2,864,521) | |
Cumulative allowance for credit losses | $ 116,915 | $ 115,422 |
Non-Consolidated Affiliates (De
Non-Consolidated Affiliates (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2023 | Jan. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Feb. 11, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity method investments | $ 384,301 | $ 384,301 | $ 397,175 | |||||
Equity in losses/(earnings) of equity method investees | (770) | $ 737 | 33,836 | $ 1,134 | ||||
Distributions from equity method investees | 34,767 | 0 | ||||||
Distributions from equity method investees | 18,510 | 27,502 | ||||||
Legacy Investors Partnerships | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity method investments | $ 303,700 | |||||||
Equity in losses/(earnings) of equity method investees | (1,200) | 4,700 | 2,800 | 9,300 | ||||
Distributions from equity method investees | 2,200 | 6,800 | 4,900 | 14,100 | ||||
Avillion Entities | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity in losses/(earnings) of equity method investees | 1,900 | (4,000) | 31,000 | (8,200) | ||||
Equity method investment, unfunded commitments | $ 22,300 | 22,300 | $ 28,800 | |||||
Avillion I | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions from equity method investees | $ 13,600 | 13,400 | ||||||
Avillion II | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Proceeds exercise fee | $ 80,000 | |||||||
Exercise fee, pro rata amount | $ 34,800 | |||||||
Avillion II | Merck Asset - Phase II Clinical Trial | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Other commitment | $ 150,000 | $ 150,000 |
Research & Development ("R&D"_2
Research & Development ("R&D") Funding Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development funding expense | $ 500 | $ 606 | $ 1,000 | $ 101,106 |
Cytokinetics | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development funding expense | $ 100,000 |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Unamortized debt discount and issuance costs | $ (173,556,000) | $ (183,678,000) |
Total debt carrying value | 7,126,444,000 | 7,116,322,000 |
Less: Current portion of long-term debt | (999,370,000) | (997,512,000) |
Total long-term debt | $ 6,127,074,000 | 6,118,810,000 |
Unsecured Debt | Point Seven Five Percent Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 0.75% | |
Debt issued as a percent of par value (as a percent) | 99.322% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | One Point Two Zero Percent Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 1.20% | |
Debt issued as a percent of par value (as a percent) | 98.875% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | One Point Seven Five Percent Senior Notes Due 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 1.75% | |
Debt issued as a percent of par value (as a percent) | 98.284% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | Two Point Two Zero Percent Senior Notes Due 2030 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 2.20% | |
Debt issued as a percent of par value (as a percent) | 97.76% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | Two Point One Five Zero Percent Senior Notes Due 2031 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 2.15% | |
Debt issued as a percent of par value (as a percent) | 98.263% | |
Debt issued, amount | $ 600,000,000 | 600,000,000 |
Unsecured Debt | Three Point Three Zero Percent Senior Notes Due 2040 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 3.30% | |
Debt issued as a percent of par value (as a percent) | 95.556% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | Three Point Five Five Percent Senior Notes Due 2050 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 3.55% | |
Debt issued as a percent of par value (as a percent) | 95.306% | |
Debt issued, amount | $ 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | Three Point Three Five Zero Percent Due 2051 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate (as a percent) | 3.35% | |
Debt issued as a percent of par value (as a percent) | 97.565% | |
Debt issued, amount | $ 700,000,000 | $ 700,000,000 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | Oct. 31, 2022 USD ($) | Sep. 02, 2020 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 26, 2021 USD ($) |
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued, amount | $ 1,300,000,000 | ||||
Unamortized discount and loan issuance costs on long-term debt | 27,500,000 | ||||
Senior Notes | Senior Notes Due 2031 | |||||
Debt Instrument [Line Items] | |||||
Debt issued, amount | 600,000,000 | ||||
Senior Notes | Senior Notes Due 2051 | |||||
Debt Instrument [Line Items] | |||||
Debt issued, amount | 700,000,000 | ||||
Debt issuance costs | $ 12,300,000 | ||||
Weighted average coupon rate (as a percent) | 2.80% | ||||
Weighted average effective interest rate (as a percent) | 3.06% | ||||
Unsecured Debt | The Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued, amount | $ 6,000,000,000 | ||||
Unamortized discount and loan issuance costs on long-term debt | 149,000,000 | $ 173,600,000 | |||
Debt issuance costs | $ 40,400,000 | ||||
Weighted average coupon rate (as a percent) | 2.13% | ||||
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 | 5,800,000,000 | $ 5,700,000,000 | |||
Unsecured Debt | The Notes | Prior to the applicable par call date | |||||
Debt Instrument [Line Items] | |||||
Redemption price (as a percent) | 100% | ||||
Unsecured Debt | The Notes | Upon occurrence of a change of control triggering event | |||||
Debt Instrument [Line Items] | |||||
Redemption price (as a percent) | 101% | ||||
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 | ||||
Outstanding borrowings | $ 0 | $ 0 | |||
Maximum consolidated leverage ratio | 4 | ||||
Maximum consolidated leverage ratio following qualifying material acquisition | 4.50 | ||||
Minimum consolidated coverage ratio | 2.50 | ||||
Unsecured Debt | 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 | Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (percentage) | 1% |
Borrowings - Schedule of Repaym
Borrowings - Schedule of Repayments of Debt by Year (Details) - Unsecured Debt - The Notes - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 02, 2020 |
Debt Instrument [Line Items] | ||
Remainder of 2023 | $ 1,000,000 | |
2024 | 0 | |
2025 | 1,000,000 | |
2026 | 0 | |
2027 | 1,000,000 | |
Thereafter | 4,300,000 | |
Total | 7,300,000 | |
Unamortized discount and loan issuance costs on long-term debt | $ 173,600 | $ 149,000 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2023 USD ($) shares vote class noncontrolling_interest $ / shares | Jun. 30, 2022 noncontrolling_interest $ / shares shares | Jun. 30, 2023 USD ($) vote class payment noncontrolling_interest shares $ / shares | Jun. 30, 2023 shares vote class noncontrolling_interest £ / shares | Jun. 30, 2022 USD ($) noncontrolling_interest $ / shares shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2022 shares | Mar. 31, 2022 shares | Dec. 31, 2021 shares | Jun. 15, 2020 shares | |
Class of Stock [Line Items] | ||||||||||
Number of classes of stock | class | 2 | 2 | 2 | |||||||
Number of votes per share | vote | 1 | 1 | 1 | |||||||
Quarterly conversion basis (in shares) | 1 | 1 | 1 | |||||||
Stock repurchased during the period (in shares) | 4,027,000 | 4,027,000 | ||||||||
Stock repurchased during the period | $ | $ 134,482 | $ 134,482 | ||||||||
Number of noncontrolling interests | noncontrolling_interest | 4 | 4 | 4 | 4 | 4 | |||||
Percentage of net economic profit | 20% | |||||||||
Number of dividend payments | payment | 2 | |||||||||
Dividends declared and paid (in dollars per share) | $ / shares | $ 0.20 | |||||||||
Dividends to shareholders | $ | $ 179,238 | $ 165,312 | ||||||||
Requisite service period | 1 year | |||||||||
Deferred Shares | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares, outstanding (in shares) | 382,487,000 | 365,302,000 | 382,487,000 | 382,487,000 | 365,302,000 | 376,444,000 | 371,325,000 | 363,521,000 | 361,170,000 | |
Class A Ordinary Shares | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common shares outstanding (in shares) | 450,352,000 | 450,352,000 | 450,352,000 | 443,166,000 | ||||||
Stock repurchase program, authorized repurchase amount | $ | $ 1,000,000 | |||||||||
Stock repurchased during the period (in shares) | 4,027,000 | |||||||||
Stock repurchased during the period | $ | $ 134,500 | |||||||||
Dividends declared and paid (in dollars per share) | $ / shares | $ 0.20 | $ 0.19 | $ 0.40 | $ 0.38 | ||||||
Class A Ordinary Shares | 2020 Equity Incentive Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares reserved for future issuance (in shares) | 800,000 | |||||||||
Class B Ordinary Shares | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common shares outstanding (in shares) | 152,896,000 | 152,896,000 | 152,896,000 | 164,058,000 | ||||||
Class R Redeemable Shares | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common shares outstanding (in shares) | 50,000 | 50,000 | 50,000 | 50,000 | ||||||
Shares, outstanding (in shares) | 50,000 | 50,000 | 50,000 | |||||||
Redeemable stock, redemption price (in pound per share) | £ / shares | £ 1 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 9,822,000 | $ 10,141,879 | $ 9,525,373 | $ 10,248,545 |
Contributions | 2,131 | 2,881 | 6,840 | 6,203 |
Distributions | (137,281) | (146,967) | (266,391) | (295,942) |
Other exchanges | 0 | 0 | 0 | 0 |
Net income | 351,336 | 491,597 | 860,425 | 619,680 |
Unrealized gains on available for sale debt securities | 0 | 9,325 | 0 | 10,950 |
Reclassification of unrealized gains on available for sale debt securities | 0 | (7,988) | 0 | (16,942) |
Ending balance | 9,813,686 | 10,408,187 | 9,813,686 | 10,408,187 |
Non-Controlling Interests | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | 3,868,251 | 4,364,324 | 3,897,223 | 4,471,951 |
Contributions | 2,131 | 2,881 | 6,840 | 6,203 |
Distributions | (137,281) | (146,967) | (266,391) | (295,942) |
Other exchanges | (324,793) | (26,938) | (397,698) | (62,222) |
Net income | 123,711 | 187,093 | 292,045 | 263,415 |
Unrealized gains on available for sale debt securities | 3,802 | 4,470 | ||
Reclassification of unrealized gains on available for sale debt securities | (3,257) | (6,937) | ||
Ending balance | $ 3,532,019 | $ 4,380,938 | $ 3,532,019 | $ 4,380,938 |
Non-Controlling Interests | RP Holdings | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Noncontrolling interest (percentage) | 75% | 72% | 75% | 72% |
Non-Controlling Interests | RPSFT | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ (140) | $ 8,409 | $ (597) | $ 13,528 |
Contributions | 0 | 0 | 0 | 0 |
Distributions | (3,339) | (5,754) | (3,907) | (16,013) |
Other exchanges | 0 | 0 | 0 | 0 |
Net income | 3,376 | 6,227 | 4,401 | 11,367 |
Unrealized gains on available for sale debt securities | 0 | 0 | ||
Reclassification of unrealized gains on available for sale debt securities | 0 | 0 | ||
Ending balance | (103) | 8,882 | (103) | 8,882 |
Non-Controlling Interests | Legacy Investors Partnerships | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | 1,480,585 | 1,756,269 | 1,527,887 | 1,809,269 |
Contributions | 1,406 | 1,425 | 5,201 | 3,395 |
Distributions | (103,413) | (103,385) | (198,562) | (207,586) |
Other exchanges | 0 | 0 | 0 | 0 |
Net income | 42,286 | 61,642 | 86,338 | 112,162 |
Unrealized gains on available for sale debt securities | 1,639 | 1,925 | ||
Reclassification of unrealized gains on available for sale debt securities | (1,404) | (2,979) | ||
Ending balance | 1,420,864 | 1,716,186 | 1,420,864 | 1,716,186 |
Non-Controlling Interests | Continuing Investors Partnerships | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | 2,387,806 | 2,599,646 | 2,369,933 | 2,649,154 |
Contributions | 725 | 1,456 | 1,639 | 2,808 |
Distributions | (30,529) | (37,828) | (63,922) | (72,343) |
Other exchanges | (324,793) | (26,938) | (397,698) | (62,222) |
Net income | 78,049 | 119,224 | 201,306 | 139,886 |
Unrealized gains on available for sale debt securities | 2,163 | 2,545 | ||
Reclassification of unrealized gains on available for sale debt securities | (1,853) | (3,958) | ||
Ending balance | $ 2,111,258 | $ 2,655,870 | $ 2,111,258 | $ 2,655,870 |
Non-Controlling Interests | Continuing Investors Partnerships | RP Holdings | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Noncontrolling interest (percentage) | 25% | 28% | 25% | 28% |
Non-Controlling Interests | EPA Holdings | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 0 | $ 0 | $ 0 | $ 0 |
Contributions | 0 | 0 | 0 | 0 |
Distributions | 0 | 0 | 0 | 0 |
Other exchanges | 0 | 0 | 0 | 0 |
Net income | 0 | 0 | 0 | 0 |
Unrealized gains on available for sale debt securities | 0 | 0 | ||
Reclassification of unrealized gains on available for sale debt securities | 0 | 0 | ||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator | ||||
Consolidated net income | $ 351,336 | $ 491,597 | $ 860,425 | $ 619,680 |
Less: net income attributable to non-controlling interests | 123,711 | 187,093 | 292,045 | 263,415 |
Net income attributable to Royalty Pharma plc - basic | 227,625 | 304,504 | 568,380 | 356,265 |
Add: Reallocation of net income attributable to non-controlling interest from the assumed conversion of Class B ordinary shares | 78,049 | 119,224 | 201,306 | 139,886 |
Net income attributable to Royalty Pharma plc - diluted | $ 305,674 | $ 423,728 | $ 769,686 | $ 496,151 |
Denominator | ||||
Weighted average Class A ordinary shares outstanding - basic (in shares) | 450,405 | 436,318 | 448,022 | 435,144 |
Class B ordinary shares exchangeable for Class A ordinary shares (in shares) | 155,419 | 170,864 | 158,499 | 172,035 |
Unvested RSUs (in shares) | 36 | 32 | 30 | 28 |
Weighted average Class A ordinary shares outstanding - diluted (in shares) | 605,860 | 607,214 | 606,551 | 607,207 |
Earnings per Class A ordinary share - basic (in dollars per share) | $ 0.51 | $ 0.70 | $ 1.27 | $ 0.82 |
Earnings per Class A ordinary share - diluted (in dollars per share) | $ 0.50 | $ 0.70 | $ 1.27 | $ 0.82 |
Continuing non-controlling interests | ||||
Numerator | ||||
Less: net income attributable to non-controlling interests | $ 78,049 | $ 119,224 | $ 201,306 | $ 139,886 |
Legacy non-controlling interests | ||||
Numerator | ||||
Less: net income attributable to non-controlling interests | $ 45,662 | $ 67,869 | $ 90,739 | $ 123,529 |
Indirect Cash Flow (Details)
Indirect Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Consolidated net income | $ 351,336 | $ 491,597 | $ 860,425 | $ 619,680 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||
Income from financial royalty assets | (1,166,032) | (1,026,873) | ||
Provision for changes in expected cash flows from financial royalty assets | 241,228 | 105,714 | 360,032 | 290,335 |
Amortization of intangible assets | 0 | 0 | 0 | 5,670 |
Amortization of debt discount and issuance costs | 10,647 | 10,683 | ||
Gains on derivative financial instruments | (6,390) | (71,805) | ||
(Gains)/losses on equity securities | (41,271) | (8,024) | (30,453) | 28,138 |
Equity in earnings of equity method investees | 770 | (737) | (33,836) | (1,134) |
Distributions from equity method investees | 18,510 | 27,502 | ||
Share-based compensation | 1,159 | 1,005 | ||
Interest income accretion | 0 | (16,942) | ||
Gains on available for sale debt securities | $ (82,900) | $ (70,321) | (115,200) | (53,742) |
Other | 1,906 | 2,657 | ||
Changes in operating assets and liabilities: | ||||
Cash collected on financial royalty assets | 1,746,391 | 1,181,354 | ||
Accrued royalty receivable | 472 | 35,254 | ||
Other royalty income receivable | 2,014 | (2,292) | ||
Other current assets | (5,854) | 2,711 | ||
Accounts payable and accrued expenses | (2,137) | 6,555 | ||
Interest payable | 0 | (3,534) | ||
Net cash provided by operating activities | $ 1,641,654 | $ 1,035,222 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jan. 07, 2022 | Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Long term funding partnership, expected payment | $ 125 | |
Long term funding partnership, additional payments, aggregate amount | $ 200 | |
Required amount to be drawn | $ 50 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Apr. 16, 2021 | Dec. 08, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||||||
Distributions payable to legacy non-controlling interests | $ 112,881,000 | $ 112,881,000 | $ 94,803,000 | |||||||
Total current and non-current financial royalty assets, net | 13,997,644,000 | 13,997,644,000 | 14,184,425,000 | |||||||
Shareholders' equity | 9,813,686,000 | $ 10,408,187,000 | 9,813,686,000 | $ 10,408,187,000 | 9,525,373,000 | $ 9,822,000,000 | $ 10,141,879,000 | $ 10,248,545,000 | ||
Treasury Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Shareholders' equity | (2,629,000) | (2,752,000) | (2,629,000) | (2,752,000) | (2,806,000) | (2,828,000) | (2,736,000) | (2,715,000) | ||
Non-Controlling Interests | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Shareholders' equity | 3,532,019,000 | 4,380,938,000 | 3,532,019,000 | 4,380,938,000 | 3,897,223,000 | $ 3,868,251,000 | $ 4,364,324,000 | $ 4,471,951,000 | ||
Assignment Agreement - Benefit of Payment Stream | Bristol-Myers Squibb | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, rate (as a percent) | 50% | |||||||||
Assignment Agreement - Funding Obligations | Bristol-Myers Squibb | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, rate (as a percent) | 50% | |||||||||
Agreement with MSCI | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Initial term | 7 years | |||||||||
Amounts of transaction, related parties | 0 | 0 | ||||||||
Related Party | Due to Legacy Investors Partnerships | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Distributions payable to legacy non-controlling interests | 109,609,000 | 109,609,000 | 87,522,000 | |||||||
Related Party | Due to RPSFT | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Distributions payable to legacy non-controlling interests | 3,272,000 | 3,272,000 | 7,281,000 | |||||||
Related Party | Bristol-Myers Squibb | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Total current and non-current financial royalty assets, net | $ 89,400,000 | $ 89,400,000 | 103,400,000 | |||||||
Related Party | Operating and Personnel Payments | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Quarterly payments to affiliates, percent of adjusted cash receipts (as a percent) | 6.50% | 6.50% | ||||||||
Quarterly payments to affiliates, percent of security investment (as a percent) | 0.25% | 0.25% | ||||||||
Amount calculated for operating and personal payment | $ 1,000,000 | |||||||||
Percent calculated for operating and personal payment | 0.3125% | |||||||||
Operating and personnel payments incurred | $ 37,000,000 | $ 111,900,000 | ||||||||
Related Party | Former Operating and Personnel Payments | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Operating and personnel payments incurred | $ 36,000,000 | $ 77,200,000 | ||||||||
Related Party | Acquisition Of Limited Partnership Interests In Affiliate | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of limited partnership interest acquired (in shares) | 27,210 | |||||||||
Related Party | Acquisition Of Limited Partnership Interests In Affiliate | Treasury Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Shareholders' equity | 4,300,000 | $ 4,300,000 | ||||||||
Related Party | Acquisition Of Limited Partnership Interests In Affiliate | Non-Controlling Interests | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Shareholders' equity | $ 1,600,000 | $ 1,600,000 | $ 1,500,000 |