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What changed in Royalty Pharma plc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Royalty Pharma plc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+511 added−560 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-12)

Top changes in Royalty Pharma plc's 2025 10-K

511 paragraphs added · 560 removed · 360 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

59 edited+25 added−31 removed50 unchanged
Biggest changeWe expect to receive royalties on Skytrofa beginning in 2025. 9 Development-Stage Product Candidates The table below provides a summary of our portfolio of development-stage product candidates, which have not been approved and therefore have not generated any royalties (and we have not collected any related Royalty Receipts) to date : Product Candidates Marketer(s) Therapeutic Area Status (1) Product Description Aficamten Cytokinetics Cardiology PDUFA date Q3 2025 Cardiac myosin inhibitor for obstructive hypertrophic cardiomyopathy Ampreloxetine Theravance Neuroscience Phase 3 data expected 2026 Once-daily norepinephrine reuptake inhibitor for symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy CK-586 Cytokinetics Cardiology Phase 2 Cardiac myosin inhibitor to reduce the hypercontractility associated with heart failure with preserved ejection fraction Deucrictibant Pharvaris Rare disease Phase 3 data expected 2026 Novel, oral bradykinin B2 receptor antagonist for preventing and treating hereditary angioedema attacks Ecopipam Emalex Neuroscience Phase 3 data expected 2025 Oral dopamine-1 receptor antagonist for Tourette’s Syndrome Frexalimab Sanofi Immunology Phase 3 data expected 2027 Anti-CD40 ligand monoclonal antibody Olpasiran Amgen Cardiology Phase 3 data expected 2027 Small interfering ribonucleic acid for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease Omecamtiv mecarbil Cytokinetics Cardiology Phase 3 data expected 2027 Cardiac myosin activator for the treatment of heart failure with severely reduced ejection fraction Pelabresib Novartis Cancer Phase 3 Bromodomain and extra-terminal inhibitor for myelofibrosis Pelacarsen Novartis Cardiology Phase 3 data expected 2026 Antisense oligonucleotide for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease Seltorexant Johnson & Johnson Neuroscience Phase 3 data expected 2027 Selective orexin 2 receptor antagonist for major depressive disorder with insomnia symptoms TEV-'749 Teva Neuroscience Phase 3 data expected 2025 Long-acting subcutaneous injection of olanzapine for schizophrenia Trontinemab Roche Neuroscience Phase 1a/2b Novel Brainshuttle Aβ antibody for the treatment of Alzheimer’s disease Tulmimetostat Novartis Cancer Phase 2 Second-generation enhancer of zeste homolog 2 inhibitor for hematological malignancies and solid tumors PDUFA: Prescription Drug User Fee Act.
Biggest changeDevelopment-Stage Product Candidates The table below provides a summary of our portfolio of development-stage product candidates, which have not been approved and therefore have not generated any royalties (and we have not collected any related Royalty Receipts) to date : Product Candidates Marketer(s) Therapeutic Area Status (1) Product Description Ampreloxetine Theravance Neuroscience Phase 3 data expected Q1 2026 Once-daily norepinephrine reuptake inhibitor for symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy CK-586 Cytokinetics Cardiology Phase 2 Cardiac myosin inhibitor to reduce the hypercontractility associated with heart failure with preserved ejection fraction Daraxonrasib Revolution Medicines Oncology Phase 3 data expected H1 2026 Oral RAS(ON) multi-selective inhibitor for pancreatic and lung cancer Deucrictibant Pharvaris Rare disease FDA filing expected H1 2026 Novel, oral bradykinin B2 receptor antagonist for preventing and treating hereditary angioedema attacks Ecopipam Emalex Neuroscience FDA filing expected Oral dopamine-1 receptor antagonist for Tourette’s syndrome Frexalimab Sanofi Immunology Phase 3 data expected 2027 Anti-CD40 ligand monoclonal antibody for multiple sclerosis Litifilimab Biogen Immunology Phase 3 data expected Q4 2026 Humanized IgG1 monoclonal antibody targeting BDCA2 for lupus Neladalkib Nuvalent Oncology FDA filing expected H1 2026 Next-generation TKI for ALK mutation-positive non-small cell lung cancer Obexelimab Zenas BioPharma Immunology FDA filing expected Q2 2026 Bifunctional monoclonal antibody designed to inhibit B cell function by binding to both CD19 and FcγRIIb for IgG4-RD Olpasiran Amgen Cardiology Phase 3 data expected 2027 Small interfering ribonucleic acid for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease Omecamtiv mecarbil Cytokinetics Cardiology Phase 3 data expected 2027 Cardiac myosin activator for the treatment of heart failure with severely reduced ejection fraction Pelabresib Novartis Oncology EMA filing expected 2026 Bromodomain and extra-terminal inhibitor for myelofibrosis Pelacarsen Novartis Cardiology Phase 3 data expected H2 2026 Antisense oligonucleotide for elevated lipoprotein(a), a genetically determined independent risk factor for cardiovascular disease Seltorexant Johnson & Johnson Neuroscience Phase 3 data expected 2027 Selective orexin 2 receptor antagonist for major depressive disorder with insomnia symptoms TEV-'749 Teva Neuroscience FDA approval expected H2 2026 Long-acting subcutaneous injection of olanzapine for schizophrenia TEV-'408 (2) Teva Immunology Phase 1b data expected H1 2026 Anti-IL-15 antibody for the treatment of vitiligo and other autoimmune conditions Tividenofusp alfa Denali Rare disease PDUFA date April 5, 2026 Enzyme replacement therapy designed to cross the blood-brain barrier for MPS II, or Hunter syndrome Trontinemab Roche Neuroscience Phase 3 data expected 2028 Novel Brainshuttle Aβ antibody for the treatment of Alzheimer’s disease Tulmimetostat Novartis Oncology Phase 2 Second-generation enhancer of zeste homolog 2 inhibitor for hematological malignancies and solid tumors Zidesamtinib Nuvalent Oncology PDUFA date September 18, 2026 Next-generation TKI for ROS1 mutation-positive non-small cell lung cancer PDUFA: Prescription Drug User Fee Act, ROS1: ROS proto-oncogene 1, IgG1: Immunoglobulin G1, ALK: Anaplastic Lymphoma Kinase, TKI: Tyrosine Kinase Inhibitor, CD: Cluster of Differentiation, FcγRIIb: Fc gamma Receptor IIB, IgG4: Immunoglobulin G4 related disease, EMA: European Medicines Agency, MPS II: Mucopolysaccharidosis type II, RAS: Rat Sarcoma, IL: Interleukin.
(3) If a Phase 3 trial of omecamtiv mecarbil is positive and FDA approval is received within a specific timeframe, we will receive payments of $100 million and the greater of an incremental 2% royalty on omecamtiv mecarbil, or quarterly fixed payments ranging from $5 million to $8 million per quarter for 18 quarters and an incremental 2% royalty thereafter.
(2) If a Phase 3 trial of omecamtiv mecarbil is positive and FDA approval is received within a specific timeframe, we will receive payments of $100 million and the greater of an incremental 2% royalty on omecamtiv mecarbil, or quarterly fixed payments ranging from $5 million to $8 million per quarter for 18 quarters and an incremental 2% royalty thereafter.
This includes considering key risks and opportunities during the due diligence process and, where we believe we can have a material impact, engaging on these matters with our partners. We are committed to implementing key sustainability practices across our operations and taking steps to measure, manage and minimize our environmental impact where possible.
This includes considering key risks and opportunities during the due diligence process and, where we believe we can have a material impact, engaging on these matters with our partners. 11 We are committed to implementing key sustainability practices across our operations and taking steps to measure, manage and minimize our environmental impact where possible.
There can be no assurance that we will continue to acquire biopharmaceutical products and companies that hold biopharmaceutical royalties that are acceptable to us. The products that provide the basis for the cash flows of the biopharmaceutical products in which we invest are also subject to intense competition. The biopharmaceutical industry is a highly competitive and rapidly evolving industry.
There can be no assurance that we will continue to acquire biopharmaceutical products and companies that hold biopharmaceutical royalties that are acceptable to us. 10 The products that provide the basis for the cash flows of the biopharmaceutical products in which we invest are also subject to intense competition. The biopharmaceutical industry is a highly competitive and rapidly evolving industry.
We believe that climate change could present risks to our business. Some of the potential impacts of climate change to our business include increased operating costs due to additional regulatory requirements and the risk of disruptions to our business. We do not believe these risks are material to our business at this time. 13 U.S.
We believe that climate change could present risks to our business. Some of the potential impacts of climate change to our business include increased operating costs due to additional regulatory requirements and the risk of disruptions to our business. We do not believe these risks are material to our business at this time. U.S.
Our long history of collaboration has resulted in deep relationships with a broad range of participants across the biopharmaceutical industry. Our Strategy We intend to grow our business by continuing to partner with constituents across the biopharmaceutical value chain to fund innovation.
Our long history of collaboration has resulted in deep relationships with a broad range of participants across the biopharmaceutical industry. 4 Our Strategy We intend to grow our business by continuing to partner with constituents across the biopharmaceutical value chain to fund innovation.
We estimate expected Trikafta patent expiration in 2037 and potential generic entry thereafter leading to sales decline. For combination therapies, sales are allocated equally to each of the active pharmaceutical ingredients, with tiered royalties ranging from single digit to subteen percentages on sales of ivacaftor, lumacaftor and tezacaftor, and mid-single digit percentages on sales of elexacaftor.
We estimate expected Trikafta patent expiration in 2037 and potential generic entry thereafter leading to sales decline. For combination therapies, sales are allocated equally to each of the active pharmaceutical ingredients, with tiered royalties ranging from single digit to subteen percentages on sales of ivacaftor, lumacaftor and tezacaftor, and 4% on sales of elexacaftor.
The key growth-driving royalties in our portfolio are protected by long patent lives. The estimated weighted average duration of our portfolio is approximately 13 years based on projected cumulative cash royalty receipts. Our largest marketed royalty in 2024 was on Vertex’s cystic fibrosis franchise.
The key growth-driving royalties in our portfolio are protected by long patent lives. The estimated weighted average duration of our portfolio is approximately 13 years based on projected cumulative cash royalty receipts. Our largest marketed royalty in 2025 was on Vertex’s cystic fibrosis franchise.
Given the scale of our business relative to our competitors, we have a particularly strong market share of large transactions within the growing biopharmaceutical royalty market. Since 2020, there have been 16 large royalty transactions each with an aggregate value of $500 million or more.
Given the scale of our business relative to our competitors, we have a particularly strong market share of large transactions within the growing biopharmaceutical royalty market. Since 2020, there have been 21 large royalty transactions each with an aggregate value of $500 million or more.
The pace of innovation coupled with the proliferation of new biotechnology companies and the increasing cost of drug development has created a significant capital need over recent years that we believe will provide a sustainable tailwind for our business.
The pace of innovation coupled with the proliferation of new biotechnology companies and the increasing cost of drug development has created a significant capital need in recent years that we believe will provide a sustainable tailwind for our business.
We believe that deuterated ivacaftor (deutivacaftor) is the same as ivacaftor and is therefore royalty-bearing, which would result in a blended royalty of approximately8% for Alyftrek. Vertex has made public statements that it believes deuterated ivacaftor (deutivacaftor) is not royalty-bearing, which would result in a blended royalty of approximately 4% for Alyftrek.
We believe that deuterated ivacaftor (deutivacaftor) is the same as ivacaftor and is therefore royalty-bearing, which would result in a blended royalty of approximately 8% for Alyftrek. Vertex has made public statements that it believes deuterated ivacaftor (deutivacaftor) is not royalty-bearing, which would result in a blended royalty of approximately 4% for Alyftrek.
These other potential royalty buyers may be larger and better capitalized than us. The Manager may not be able to identify and obtain a sufficient number of asset acquisition opportunities to invest the full amount of capital that may be available to us.
These other potential royalty buyers may be larger and better capitalized than us. We may not be able to identify and obtain a sufficient number of asset acquisition opportunities to invest the full amount of capital that may be available to us.
Further, references to website URLs are intended to be inactive textual references only.
Further, references to website URLs are intended to be inactive textual references only. 13
Our growth strategy is tailored to the needs of our partners through a variety of structures: • Third-party Royalties – Existing royalties on approved or late-stage development therapies with high commercial potential. A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property.
Our growth strategy is tailored to the needs of our partners through a variety of structures: • Third-party Royalties – Existing royalties on approved or late-stage development therapies. A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property.
(1) Represents end market sales for 2024 as reported by respective product marketers or, where marketers have not reported end market sales by February 10, 2025 based on Visible Alpha projections as of February 10, 2025.
(1) Represents end market sales for 2025 as reported by respective product marketers or, where marketers have not reported end market sales by February 9, 2026, based on Visible Alpha projections as of February 10, 2026.
(3) Ownership percentages for cystic fibrosis franchise, Erleada and Nurtec ODT/Zavzpret represent blended percentages across multiple royalty interests based on 2024 Royalty Receipts. (4) Royalty is perpetual. We estimate royalty duration of 2039-2041 due to expected Alyftrek patent expiration and potential generic entry thereafter leading to sales decline.
(3) Ownership percentages for cystic fibrosis franchise and Erleada represent blended percentages across multiple royalty interests based on 2025 Royalty Receipts. (4) Royalty is perpetual. We estimate royalty duration of 2039-2041 due to expected Alyftrek patent expiration and potential generic entry thereafter leading to sales decline.
Existing patent applications covering Trikafta, the most significant product in that franchise, are expected to provide exclusivity through 2037. Several of our marketed royalties have unlimited durations and could provide cash flows for many years after key patents have expired. Our simple and efficient operating model generates substantial cash flow for reinvestment in new biopharmaceutical royalties .
Existing patent applications covering Trikafta, the most significant product in that franchise, are expected to provide exclusivity through 2037. Several of our marketed royalties have unlimited durations and could provide cash flows for many years after key patents have expired. Our simple and efficient operating model generates substantial cash flow to allocate in the best interest of our shareholders .
As of December 31, 2024, our portfolio consists of royalties on more than 35 marketed biopharmaceutical therapies which address a wide range of therapeutic areas, including rare diseases, neuroscience, cancer, hematology, immunology, respiratory and diabetes. In 2024, no individual product accounted for more than 28% of our Portfolio Receipts.
As of December 31, 2025, our portfolio consists of royalties on more than 35 marketed biopharmaceutical therapies which address a wide range of therapeutic areas, including rare diseases, neuroscience, oncology, hematology, immunology, respiratory and diabetes. In 2025, no individual product accounted for more than 26% of our Portfolio Receipts.
Our portfolio provides direct exposure to a broad array of blockbuster therapies. As of December 31, 2024, our portfolio included royalties on 15 therapies that each generated end-market sales of more than $1 billion in 2024, including seven therapies that each generated end-market sales of $3 billion or more.
Our portfolio provides direct exposure to a broad array of blockbuster therapies. As of December 31, 2025, our portfolio included royalties on 16 therapies that each generated end-market sales of more than $1 billion in 2025, including 7 therapies that each generated end-market sales of $3 billion or more.
We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 35 commercial products, including Vertex’s Trikafta, GSK’s Trelegy, Roche’s Evrysdi, Johnson & Johnson’s Tremfya, Biogen’s Tysabri and Spinraza, AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Novartis’ Promacta, Pfizer’s Nurtec ODT, Gilead’s Trodelvy, among others, and 14 development-stage product candidates.
We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 35 commercial products, including Vertex’s Trikafta and Alyftrek, GSK’s Trelegy, Biogen’s Tysabri and Spinraza, Roche’s Evrysdi, Astellas and Pfizer’s Xtandi, Johnson & Johnson’s Tremfya, AbbVie and Johnson & Johnson’s Imbruvica, Servier’s Voranigo, Gilead’s Trodelvy, Amgen’s Imdelltra and Alnylam’s Amvuttra, among others, and 20 development-stage product candidates.
We estimate that over the next decade academia and other non-profit institutions will spend over $1 trillion in R&D, unprofitable biopharmaceutical companies will spend over $1 trillion in R&D and selling, general and administrative expenses, and profitable biopharmaceutical companies will spend over $2 trillion in R&D. 2 Royalties play a fundamental and growing role in the biopharmaceutical industry.
We estimate that over the next decade academia and other non-profit institutions will spend over $1 trillion in R&D, unprofitable biopharmaceutical companies will spend over $1 trillion in R&D and selling, general and administrative expenses, and profitable biopharmaceutical companies will spend over $2 trillion in R&D.
Quarterly payments on tranche one began in the fourth quarter of 2023 and continue through the first quarter of 2032. Quarterly payments on tranche six will begin in the first quarter of 2026 and continue through the second quarter of 2034.
Quarterly payments on tranche one began in the fourth quarter of 2023 and continue through the first quarter of 2032. Quarterly payments on tranche four will begin in the first quarter of 2027 and continue through the second quarter of 2035.
Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that are attributed to Royalty Pharma.
(1) Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to us (“Royalty Receipts”). Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that are attributed to us.
Our Business Model We believe that the following elements of our business and product portfolio provide a unique and compelling proposition to investors seeking exposure to the biopharmaceutical sector. Our business model captures many of the most attractive aspects of the biopharmaceutical industry, but with reduced exposure to many common industry challenges .
Our Business Model We believe that the following elements of our business and product portfolio provide a unique and compelling proposition to investors seeking exposure to a premier capital allocator in life sciences with consistent, compounding growth. 3 Our business model captures many of the most attractive aspects of the biopharmaceutical industry, but with reduced exposure to many common industry challenges .
(5) We will pay Theravance Biopharma, Inc. 85% of the royalties in respect of ex-U.S. sales after June 30, 2029 and 85% of the royalties in respect of U.S. sales after December 31, 2030.
(5) We will return to GSK 85% of the royalties in respect of ex-U.S. sales after June 30, 2029 and 85% of the royalties in respect of U.S. sales after December 31, 2030.
(4) Other products primarily include royalties on the following products: Cimzia, Crysvita, Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Prevymis, Soliqua and distributions from the Legacy SLP Interest, which are presented as Distributions from equity method investees on the Statements of Cash Flows. 7 Portfolio Summary The table below provides a summary of the acquisition year, estimated royalty duration, royalty rates and the ownership percentages attributable to Royalty Pharma, net of legacy non-controlling interests for selected approved products in our portfolio: Products Acquisition Year(s) Estimated Royalty Duration (1) Royalty Rates (2) Attributable to Royalty Pharma (3) Cystic fibrosis franchise (4) 2014, 2020 2039-2041 Blended royalty of slightly over 9% for Trikafta; See footnote (4) 86.5% Trelegy (5) 2022 2029-2030 Tiered royalty of 6.5% on first $750 million, up to 10% on sales >$2.25 billion 100.0% Tysabri 2017 Perpetual Tiered payments of 18% on first $2 billion and 25% on sales >$2 billion 82.4% Imbruvica 2013 2027-2032 Downward tiered mid-single digit royalty 82.4% Evrysdi (6) 2020, 2023, 2024 2035-2036 Tiered royalty of 7.2% on first $500 million, up to 14.5% on sales >$2 billion 100.0% Xtandi 2016 2027-2028 Slightly less than 4% royalty 82.4% Promacta 2019 2025-2028 Upward tiered 4.7% to 9.4% royalty 82.4% Tremfya 2021 2031-2032 Upward tiered mid-single digit royalty 100.0% Cabometyx/Cometriq (7) 2021 2026-2029 3% royalty 100.0% Spinraza (8) 2023 2030-2035 Upward tiered 2.8% to 3.8% royalty, increasing to 5% to 6.8% in 2028 100.0% Trodelvy 2018 Perpetual Tiered royalty of 4.15% on first $2 billion, down to 1.75% on sales >$6 billion 82.4% Erleada 2019, 2023 2032 Low-single digit royalty 86.7% Orladeyo (9) 2020, 2021 2036-2039 Tiered royalty of 9.5% on first $350 million and 4.5% on sales up to $550 million 100.0% Nurtec ODT/Zavzpret 2018, 2020 2034-2036 Tiered royalty of ~2.5% on first $1.5 billion and ~1.9% on sales >$1.5 billion 86.7% (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals (including the timing of such approvals), contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors.
(5) Portfolio Receipts does not include the $511 million of proceeds from our sale of the MorphoSys Development Funding Bonds because it was treated as an asset sale. 7 Portfolio Summary The table below provides a summary of the acquisition year, estimated royalty duration, royalty rates and the ownership percentages attributable to Royalty Pharma, net of legacy non-controlling interests for selected approved products in our portfolio: Products Acquisition Year(s) Estimated Royalty Duration (1) Royalty Rates (2) Attributable to Royalty Pharma (3) Cystic fibrosis franchise (4) 2014, 2020 2039-2041 Blended royalty of slightly over 9% for Trikafta; See footnote (4) 86.8% Trelegy (5) 2022 2029-2030 Tiered royalty of 6.5% on first $750 million, up to 10% on sales >$2.25 billion 100.0% Tysabri 2017 Perpetual Tiered payments of 18% on first $2 billion and 25% on sales >$2 billion 82.4% Evrysdi (6) 2020, 2023, 2024, 2025 2035-2036 Tiered royalty of 8% on first $500 million, up to 16% on sales >$2 billion 100.0% Xtandi 2016 2027-2028 Slightly less than 4% royalty 82.4% Tremfya 2021 2031-2032 ~4% royalty 100.0% Imbruvica 2013 2027-2032 Downward tiered mid-single digit royalty 82.4% Promacta 2019 2025-2028 Upward tiered 4.7% to 9.4% royalty 82.4% Voranigo 2024 2038 Tiered royalty of 15% on first $1 billion of U.S. sales, down to 12% on U.S. sales >$1 billion 100.0% Cabometyx/Cometriq (7) 2021 2026-2029 3% royalty 100.0% Spinraza (8) 2023 2030-2035 Upward tiered 2.8% to 3.8% royalty, increasing to 5% to 6.8% in 2028 100.0% Trodelvy 2018 Perpetual Tiered royalty of 4.15% on first $2 billion, down to 1.75% on sales >$6 billion 82.4% Erleada 2019, 2023 2032 Low-single digit royalty 86.2% Imdelltra (9) 2025 2038-2041 ~7% royalty with royalty sharing on sales >$1.5 billion 100.0% (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals (including the timing of such approvals), contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors.
We have executed transactions with an aggregate announced value of $15.5 billion from 2020 through 2024, which represents an estimated market share of approximately 51% of all royalty transactions during this period. In comparison, we believe our nearest competitor has executed $3.9 billion of transactions, representing an estimated market share of 13%.
We have executed transactions with an aggregate announced value of $19.4 billion from 2020 through 2025, which represents an estimated market share of approximately 48% of all royalty transactions during this period. In comparison, we believe our nearest competitor has executed $5.5 billion of transactions over the same period, representing an estimated market share of 14%.
Biotechnology companies typically in-license these new technologies, add value through applied research and early-stage clinical development, and then either out-license the resulting product candidates to large biopharmaceutical companies, or commercialize the products themselves. As new drugs are transferred along this value chain, royalties are created as compensation for the licensing or selling institutions.
Biotechnology companies typically in-license these new technologies, add value through applied research and early-stage clinical development, and then either out-license the resulting product candidates to large biopharmaceutical companies, or commercialize the products themselves.
We believe that sustainability is critical to addressing related risks and opportunities for our business. We are focused on tracking our carbon footprint, mitigating our impact through energy efficiency and identifying ways to reduce our environmental impact. 12 Employees Our directors and executive officers manage our operations and activities.
We believe that sustainability is critical to addressing related risks and opportunities for our business. We are focused on tracking our carbon footprint, mitigating our impact through energy efficiency and identifying ways to reduce our environmental impact. Employees As of December 31, 2025, we had 100 employees.
For the majority of our royalties, Royalty Receipts lag product performance by one quarter and can generally be estimated by applying our publicly disclosed royalty rate to the preceding quarter’s marketer-announced net revenues on a product-by-product basis.
For the majority of our royalties, Royalty Receipts lag product performance by one quarter and can generally be estimated by applying our publicly disclosed royalty rate to the preceding quarter’s marketer-announced net revenues on a product-by-product basis. (2) The cystic fibrosis franchise includes the following approved products: Kalydeco, Orkambi, Symdeko/Symkevi, Trikafta/Kaftrio and Alyftrek.
This allows us to quickly assess and gain conviction in the value of assets when acquisition opportunities arise. 5 We take a disciplined approach in assessing opportunities and seek to acquire exposure to therapies based on our framework of key product success factors: • Strong scientific rationale; • Significant impact on patients and/or caregivers; • Conviction in probability of clinical and regulatory success for pre-approval programs; • Mission and execution-oriented management team; • Strong marketer and global commercial opportunity; • Clear commercial positioning; • Potential for multiple indications or label expansion; • First-in-class or best-in-class; • Long duration of patent protection or exclusivity; and • Compelling value proposition for government and commercial payors.
Additionally, our focus on acquiring royalties on approved products, often in the early stages of their commercial launches, and on development-stage product candidates with strong proof of concept data, mitigates development risk and expands our opportunity set. 5 We take a disciplined approach in assessing opportunities and seek to acquire exposure to therapies based on our framework of key product success factors: • Strong scientific rationale; • Significant impact on patients and/or caregivers; • Conviction in probability of clinical and regulatory success for pre-approval programs; • Mission and execution-oriented management team; • Strong marketer and global commercial opportunity; • Clear commercial positioning; • Potential for multiple indications or label expansion; • First-in-class or best-in-class; • Long duration of patent protection or exclusivity; and • Compelling value proposition for government and commercial payors.
Adverse competition, obsolescence, governmental and regulatory action, or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which serve as the security or other support for the payments due under the biopharmaceutical products that we hold. 11 Competitive factors affecting the market position and success of each product include: • effectiveness; • safety and side effect profile; • price, including third-party insurance reimbursement policies; • timing, introduction and marketer support of the product; • efficacy and execution of marketing and commercialization strategy; • market acceptance; • manufacturing, supply and distribution; • governmental regulation, including price caps; • availability of lower-cost generics or biosimilars; • intellectual property protection and exclusivity; • treatment innovations that eliminate or minimize the need for a product; and • product liability claims.
Competitive factors affecting the market position and success of each product include: • safety, side effect profile, effectiveness and market acceptance; • price, including third-party insurance reimbursement policies; • timing, introduction and marketer support of the product; • efficacy and execution of marketing and commercialization strategy; • manufacturing, supply and distribution; • governmental regulation, including price caps; • availability of lower-cost generics or biosimilars or other alternative treatments; • intellectual property protection and exclusivity; • treatment innovations that eliminate or minimize the need for a product; and • product liability claims.
We have executed 11 of these 16 large transactions, for a total transaction value of approximately $10.5 billion of cash and an estimated market share of 75% based on the transaction value.
We have executed 13 of these 21 large transactions, for a total transaction value of approximately $12.7 billion and an estimated market share of 69% based on the transaction value.
Our team has significant experience identifying, evaluating and acquiring royalties on biopharmaceutical therapies. Together they have been responsible for $29.2 billion in announced transactions of biopharmaceutical royalties, milestones and other contractual receipts from 2012 through 2024. Our acquisitions have included many of the industry’s leading therapies such as Trikafta, Tremfya, Imbruvica and Xtandi.
Together they have been responsible for $33.9 billion in announced transactions of biopharmaceutical royalties, milestones and other contractual receipts from 2012 through 2025. Our acquisitions have included many of the industry’s leading therapies such as Trikafta, Tremfya, Evrysdi, Trelegy and Xtandi.
Alternatively, if FDA approval is not received within a specific timeframe, we will receive 18 quarterly fixed payments totaling $240 million. Alternatively, if a Phase 3 clinical trial is not positive within a specific timeframe, we will receive 22 quarterly fixed payments totaling $230 million. (4) In January 2025, the MorphoSys Development Funding Bonds were sold for approximately $511 million.
Alternatively, if FDA approval is not received within a specific timeframe, we will receive 18 quarterly fixed payments totaling $240 million. Alternatively, if a Phase 3 clinical trial is not positive within a specific timeframe, we will receive 22 quarterly fixed payments totaling $230 million.
Investment Company Act, which, according to certain SEC staff interpretations, generally may be available to an issuer that invests at least 55% of its assets in “notes, drafts, acceptances, open accounts receivable, and other obligations representing part or all of the sales price of merchandise, insurance, and services,” which we refer to as ICA Exception Qualifying Assets, and that does not issue any redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates.
Investment Company Act, which, according to certain SEC staff interpretations, generally may be available to an issuer that invests at least 55% of its assets in “notes, drafts, acceptances, open accounts receivable, and other obligations representing part or all of the sales price of merchandise, insurance, and services,” which we refer to as ICA Exception Qualifying Assets, and that does not issue any redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates. 12 In a no-action letter, dated August 13, 2010, to our predecessor, the SEC staff promulgated an interpretation that royalties that entitle an issuer to collect royalty receivables that are directly based on the sales price of specific biopharmaceutical assets that use intellectual property covered by specific license agreements are ICA Exception Qualifying Assets under Section 3(c)(5)(A).
We have a highly flexible approach that is agnostic to both therapeutic area and treatment modality, allowing us to acquire royalties on the most attractive therapies across the biopharmaceutical industry.
Our investment approach is agnostic to both therapeutic area and treatment modality, allowing us to acquire royalties on the most attractive therapies across the biopharmaceutical industry. We have a strong base of institutional knowledge of important therapeutic areas and key industry trends.
As of December 31, 2024, products underlying $6.5 billion of these acquisitions have already been approved, representing a success rate to date of 70%, while products underlying $1.0 billion were not approved and products underlying $1.8 billion are still in development.
This includes $17.9 billion on approved products and $9.6 billion on development-stage product candidates. As of December 31, 2025, products underlying $6.5 billion of these development-stage acquisitions have already been approved, representing a success rate to date of 90%, while products underlying $0.7 billion were not approved and products underlying $2.4 billion are still in development.
Our no longer qualifying for an exemption from registration as an investment company would materially and adversely affect the value of your Class A ordinary shares and our ability to pay dividends in respect of our Class A ordinary shares. 14 Corporate Information Our predecessor was founded in 1996 and we were incorporated under the laws of England and Wales on February 6, 2020.
Our no longer qualifying for an exemption from registration as an investment company would materially and adversely affect the value of your Class A ordinary shares and our ability to pay dividends in respect of our Class A ordinary shares.
Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Overview” for additional discussion regarding Portfolio Receipts. We deployed $2.8 billion of cash to acquire royalties, milestones and other contractual receipts (“Capital Deployment”) in 2024, which also includes payments made during the year for transactions from prior years.
Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Overview” for additional discussion regarding Portfolio Receipts. In 2025, we announced transactions with a total potential value of $4.7 billion and deployed $2.6 billion of cash to acquire royalties, milestones and other contractual receipts (“Capital Deployment”).
We invest significant time and resources across all levels of the organization, including senior leadership, in the evaluation of potential opportunities. 6 Approved Products Portfolio Overview The following table provides an overview of our current portfolio of royalties on approved products, including end market sales of the therapies in our portfolio: Products Marketer(s) Therapeutic Area Product Detail 2024 Portfolio Receipts (in millions) 2024 End Market Sales (in millions) (1) Cystic fibrosis franchise (2) Vertex Rare disease Cystic fibrosis $857 $11,020 Trelegy GSK Respiratory Chronic obstructive pulmonary disease and asthma 284 3,456 Tysabri Biogen Neuroscience Relapsing forms of multiple sclerosis 262 1,711 Imbruvica AbbVie, Johnson & Johnson Cancer Hematological malignancies and chronic graft versus host disease 191 4,466 Evrysdi Roche Rare disease Spinal muscular atrophy 174 1,853 Xtandi Pfizer, Astellas Cancer Prostate cancer 169 5,906 Promacta Novartis Hematology Chronic immune thrombocytopenic purpura and aplastic anemia 158 2,216 Tremfya Johnson & Johnson Immunology Plaque psoriasis, psoriatic arthritis and ulcerative colitis 140 3,670 Cabometyx/Cometriq Exelixis, Ipsen, Takeda Cancer Kidney, liver and thyroid cancers 73 2,483 Spinraza Biogen Rare disease Spinal muscular atrophy 45 1,506 Trodelvy Gilead Cancer Breast cancer 43 1,300 Erleada Johnson & Johnson Cancer Prostate cancer 39 2,999 Orladeyo BioCryst Rare disease Hereditary angioedema prophylaxis 39 437 Nurtec ODT/Zavzpret Pfizer Neuroscience Migraine 26 1,263 (3) Other products (4) 273 — Royalty Receipts $2,771 Milestones and other contractual receipts 31 — Portfolio Receipts $2,801 Amounts shown in the table may not add due to rounding.
We invest significant time and resources across all levels of the organization, including senior leadership, in the evaluation of potential opportunities. 6 Approved Products Portfolio Overview The following table provides an overview of our current portfolio of royalties on approved products, including end market sales of the therapies in our portfolio: Products Marketer(s) Therapeutic Area Product Detail 2025 Portfolio Receipts (in millions) 2025 End Market Sales (in millions) (1) Cystic fibrosis franchise (2) Vertex Rare disease Cystic fibrosis $917 $11,725 Trelegy GSK Respiratory Chronic obstructive pulmonary disease and asthma 332 3,912 Tysabri Biogen Neuroscience Relapsing forms of multiple sclerosis 250 1,665 Evrysdi Roche Rare disease Spinal muscular atrophy 202 2,121 Xtandi Pfizer, Astellas Oncology Prostate cancer 197 6,297 Tremfya Johnson & Johnson Immunology Plaque psoriasis, psoriatic arthritis, ulcerative colitis and Crohn’s disease 178 5,155 Imbruvica AbbVie, Johnson & Johnson Oncology Hematological malignancies and chronic graft versus host disease 170 3,979 Promacta Novartis Hematology Chronic immune thrombocytopenic purpura and aplastic anemia 142 1,636 Voranigo Servier Oncology Brain Cancer 118 n/a (3) Cabometyx/Cometriq Exelixis, Ipsen, Takeda Oncology Kidney, liver and thyroid cancers 85 2,993 Spinraza Biogen Rare disease Spinal muscular atrophy 52 1,547 Trodelvy Gilead Oncology Breast cancer 47 1,403 Erleada Johnson & Johnson Oncology Prostate cancer 46 3,574 Imdelltra Amgen Oncology Small cell lung cancer 10 627 Other products (4) 381 — Royalty Receipts $3,127 Milestones and other contractual receipts 128 — Portfolio Receipts (5) $3,254 Amounts shown in the table may not add due to rounding.
In 2024, we generated Portfolio Receipts of $2.8 billion. We deployed $2.8 billion of cash in 2024 to acquire royalties, milestones and other contractual receipts, paid dividends of $376.5 million and repurchased shares for $229.9 million. We have a talented, long-tenured team with extensive experience and deep industry relationships.
We deployed $2.6 billion of cash in 2025 to acquire royalties, milestones and other contractual receipts, paid dividends and distributions of $511.9 million and repurchased $1.2 billion of shares. We have a talented, long-tenured team with extensive experience and deep industry relationships. Our team has significant experience identifying, evaluating and acquiring royalties on biopharmaceutical therapies.
We are also entitled to a tiered percentage of sublicense revenue for Orladeyo in certain territories. There can be no assurance that our royalties will expire when expected. Any reductions in the durations of royalties relative to our estimates may adversely affect our financial condition or results of operations. See “Risk Factors” in Item 1A, Risk Factors for further information.
There can be no assurance that our royalties will expire when expected. Any reductions in the durations of royalties relative to our estimates may adversely affect our financial condition or results of operations.
Biotechnology companies are also increasingly creating royalties on existing products within their portfolios, known as synthetic royalties, in order to provide a source of non-dilutive capital to fund their businesses.
The royalty market in China represents an important long-term opportunity as the licensing activity has primarily been focused on therapies in early-stage development. Biotechnology companies are also increasingly creating royalties on existing therapies within their portfolios, known as synthetic royalties, in order to provide a source of non-dilutive capital to fund their businesses.
We focus on the acquisition of royalties on approved products or development-stage product candidates that have generated strong proof of concept data, avoiding the risks associated with early-stage R&D.
We focus on the acquisition of royalties on approved products or development-stage product candidates that have generated strong proof of concept data, avoiding the risks associated with early-stage R&D. By acquiring royalties, we are able to realize payments based directly on the top-line sales of leading biopharmaceutical therapies, without the costs associated with fixed R&D, manufacturing and commercial infrastructure.
Our website and the information contained therein or connected thereto is not incorporated into this Annual Report on Form 10-K. Our agent for service in the United States is CSC North America located at 251 Little Falls Drive, Wilmington, DE 19808.
Our agent for service in the United States is CSC North America located at 251 Little Falls Drive, Wilmington, DE 19808.
The majority of our current portfolio consists of third-party royalties. 4 • Synthetic Royalties – Newly-created royalties on approved or late-stage development therapies with strong proof of concept and high commercial potential. A synthetic royalty is the contractual right to a percentage of top-line sales by the developer or marketer of a therapy in exchange for funding.
The majority of our current portfolio consists of third-party royalties. • Synthetic Royalties – Newly-created royalties on approved or late-stage development therapies with strong proof of concept.
This growth is being driven by global secular trends, including population growth, increased life expectancy and growth of the middle classes in emerging markets.
Global prescription pharmaceutical sales are projected to grow from $1.2 trillion in 2025 to $2.0 trillion in 2032, representing a compound annual growth rate of 7% according to EvaluatePharma. This growth is being driven by global secular trends, including population growth, increased life expectancy and growth of the middle classes in emerging markets.
We are entitled to 25% of Ionis’ Spinraza royalty payments of 11% to 15% on sales up to $1.5 billion through 2027, increasing to 45% of royalty payments on sales up to $1.5 billion in 2028. (9) Royalty is perpetual. Years shown represent estimated U.S. patent expiration for Orladeyo and potential generic entry thereafter leading to sales decline.
We are entitled to 25% of Ionis’ Spinraza royalty payments of 11% to 15% on sales up to $1.5 billion through 2027, increasing to 45% of royalty payments on sales up to $1.5 billion in 2028. (9) We are entitled to royalties on worldwide net sales of Imdelltra, excluding sales in China.
We are a holding company and our principal asset is a controlling equity interest in Royalty Pharma Holdings Ltd (“RP Holdings”). Our principal executive offices are located at 110 East 59 th Street, New York, NY 10022, and our telephone number is (212) 883-0200. Our internet site is www.royaltypharma.com.
Our principal executive offices are located at 110 East 59 th Street, New York, NY 10022, and our telephone number is (212) 883-0200. Our internet site is www.royaltypharma.com. Our website and the information contained therein or connected thereto is not incorporated into this Annual Report on Form 10-K.
(1) Based on information disclosed by marketer of the underlying product and information available on clinicaltrials.gov as of February 10, 2025. 10 Other Significant Funding Arrangements The table below provides a summary of our significant contractual funding arrangements and related funding status as of December 31, 2024 (in thousands, unless otherwise stated): Funded Required Future Draw Potential Future Draw Total Total Repayments Based on Amounts Funded Payments Received to Date Cytokinetics Commercial Launch Funding (1) $100,000 $50,000 (2) $250,000 (2) $400,000 $190,000 $11,520 Cytokinetics Development Funding (3) 100,000 — — 100,000 Refer to footnote (3) Refer to footnote (3) MorphoSys Development Funding Bonds 300,000 — — 300,000 Refer to footnote (4) Refer to footnote (4) Teva Development Co-Funding Arrangement (5) 100,000 — — 100,000 $100 million or $125 million — (1) Comprised of seven tranches of which tranches one and six, each of $50 million, were funded.
(2) We entered into a funding agreement with Teva Pharmaceuticals for TEV-’408 in January 2026. 9 Other Significant Funding Arrangements The table below provides a summary of our significant contractual funding arrangements and related funding status as of December 31, 2025 (in millions): Funded Required Future Draw Potential Future Draw Total Total Repayments Based on Amounts Funded Payments Received to Date Cytokinetics Commercial Launch Funding (1) $ 275 $ — $ 175 $ 450 $ 523 $ 23 Cytokinetics Development Funding (2) 100 — — 100 Refer to footnote (2) — Teva Development Co-Funding Arrangement for TEV-’749 (3) 100 — — 100 100 (3) — Biogen R&D Funding Arrangement for Litifilimab (4) 200 50 250 Refer to footnote (4) — Revolution Medicines Funding Arrangement Royalty (5) 250 250 750 1,250 Refer to footnote (5) — Term loan (6) — 250 500 750 N/A - no amounts funded to date — (1) Out of the seven tranches, we have funded a total of $275 million under tranches one, four, five and six.
(6) Royalties are tiered based on sales at 7.2% up to $500 million, 10% between $500 million and $1 billion, 12.7% between $1 billion and $2 billion, and 14.5% over $2 billion. Our royalty rates are expected to be reduced by 8% in the early 2030s.
(6) Royalties are tiered based on sales at 8% up to $500 million, 11% between $500 million and $1 billion, 14% between $1 billion and $2 billion, and 16% over $2 billion. (7) We are entitled to royalties on U.S. sales of cabozantinib products through September 2026 and non-U.S. markets through the full term of the royalty.
The $511 million will be treated as an asset sale and will not be included as Portfolio Receipts. Prior to the sale, we received two quarterly payments of $19.4 million in total. (5) If TEV-'749 is approved by the FDA, we will receive payments of $100 million in addition to tiered royalty payments based on worldwide sales of TEV-'749.
(3) If TEV-'749 is approved by the FDA, we will receive payments of $100 million in addition to tiered royalty payments based on worldwide sales of TEV-'749. (4) We will provide funding of $250 million over six quarters and will receive payments of up to $250 million if certain regulatory milestones are met plus royalties.
There are a limited number of suitable and attractive acquisition opportunities available in the market. Therefore, competition to acquire such assets is intense. The Manager is subject to competition from other potential royalty buyers, including from the companies that market the products on which royalties are paid, financial institutions, investment funds and other entities.
Therefore, competition to acquire such assets is significant and may increase. We compete with a broad range of potential acquirers, including biopharmaceutical companies that market the products on which royalties are paid, investment vehicles and other pools of capital, financial institutions, institutional investors, including sovereign wealth and pension funds, and other market participants.
Given our leadership position within the biopharmaceutical royalty market, we are able to capitalize on the growing volumes of royalties created as new therapies are developed to address unmet medical needs. We estimate the market for biopharmaceutical royalties reached $6.2 billion in transaction value in 2024.
Given our leadership position within the biopharmaceutical royalty market, we are able to capitalize on the growing volumes of royalties created as new therapies are developed. Royalties play a fundamental and growing role in the biopharmaceutical industry. They are increasingly being seen as an important part of a biopharmaceutical company’s diversified capital structure and a complement to equity and debt.
None of these employees are represented by labor unions or covered by any collective bargaining agreement. We believe that the Manager’s relations with its employees are satisfactory. Human Capital Because we are “externally managed,” we do not employ our own personnel, but instead depend upon the Manager and its executive officers and employees for all of the services we require.
None of our employees are represented by labor unions or covered by any collective bargaining agreement. We believe relations with our employees are satisfactory.
Our capital-efficient operating model requires limited operating expenses and no material capital investment in fixed assets or infrastructure in order to support the ongoing growth of our business. Our high cash flow conversion provides us with significant capital that we can redeploy for new royalty acquisitions and return to shareholders through dividends or share repurchases.
Our high cash flow conversion provides us with significant capital that we can redeploy dynamically in a disciplined manner to fund new royalty acquisitions and to return to shareholders through dividends or share repurchases. Royalty Pharma employs a dynamic capital allocation framework that is designed to support long-term shareholder value creation. In 2025, we generated Portfolio Receipts of $3.3 billion.
The Manager is focused on creating a supportive and values-based culture that elevates health, well-being and growth. The Manager values diverse teams and backgrounds: as of December 31, 2024, 48% of the workforce of our Manager are women and approximately 33% of the workforce of our Manager are ethnically diverse.
We are focused on creating a supportive and values-based organization where our employees can thrive. We continue to invest in our workplace culture and support our employees across many facets of wellness and personal development. As of December 31, 2025, 48% of the workforce are women and approximately 36% of the workforce of are ethnically diverse.
By acquiring royalties, we are able to realize payments based directly on the top-line sales of leading biopharmaceutical therapies, without the costs associated with fixed R&D, manufacturing and commercial infrastructure. 3 Our unique role in the biopharmaceutical ecosystem positions us to benefit from multiple compounding growth drivers .
Our unique role in the biopharmaceutical ecosystem positions us to benefit from multiple compounding growth drivers .
Removed
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. Our industry leading royalty portfolio and capital-efficient business model drives our compounding growth.
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We strive to be the premier capital allocator in life sciences with consistent, compounding growth. Our highly selective investment approach focuses on identifying and tracking important new therapies, which allows us to act efficiently when opportunities arise.
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We have a focused strategy of actively identifying and tracking the development and commercialization of important new therapies, which allows us to move quickly to make acquisitions when opportunities arise.
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Supported by an experienced investment team, a rigorous due diligence process and a focus on high-quality therapies addressing significant unmet patient needs, we pursue royalty opportunities that best meet our investment criteria. Over more than 30 years, we have refined our business model and investment platform that creates strong competitive advantages.
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With a deep and experienced team of investment professionals, an exhaustive due diligence process and a focus on high-quality therapies that address significant unmet patient need, we sustain attractive returns above our cost of capital, which in turn propels our compounding growth.
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Our model combines a unique structure, long investment time horizon, structuring flexibility, scale and diversification, and singular focus on biopharmaceuticals. This is reinforced by our investment platform anchored in deep life sciences expertise, exceptional talent, extensive industry relationships, an industrialized investment process and proprietary data and analytics capabilities.
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Our unique business model enables us to benefit from many of the most attractive characteristics of the biopharmaceutical industry, including long product life cycles, significant barriers to entry and noncyclical revenues, but with substantially reduced exposure to many common industry challenges such as early-stage development risk, therapeutic area constraints, high research and development (“R&D”) costs, and high fixed manufacturing and marketing costs.
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In 2025, we generated $3.3 billion of Portfolio Receipts (as defined below) which does not include the $511 million of proceeds from our sale of the MorphoSys Development Funding Bonds.
Removed
Additionally, our focus on acquiring royalties on approved products, often in the early stages of their commercial launches, and on development-stage product candidates with strong proof of concept data, mitigates development risk and expands our opportunity set. In 2024, we generated $2.8 billion of Portfolio Receipts (as defined below) and announced transactions with a total potential value of $2.8 billion.
Added
Capital Deployment includes payments made during the year for transactions from prior years. Capital Deployment represents the total annual outflows that will drive future Portfolio Receipts. 1 Amounts shown in the table may not add due to rounding.
Removed
Capital Deployment represents the total outflows that will drive future Portfolio Receipts. 1 (1) Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to Royalty Pharma (“Royalty Receipts”).
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As new drugs are transferred along this value chain, royalties are created as compensation for the licensing or selling institutions. 2 China is also emerging as a strategic market for biopharmaceutical companies and there has been a recent significant increase in licensing deals between Chinese biotechnology companies and global multinational biopharmaceutical companies.
Removed
Global prescription pharmaceutical sales are projected to grow from $1.1 trillion in 2024 to $1.7 trillion in 2030, representing a compound annual growth rate of 8% according to EvaluatePharma despite more than $400 billion in cumulative sales being lost to expected patent expiries during the same period.
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Royalties offer financial flexibility, no operational restrictions and are non-dilutive to equity holders. Furthermore, royalties can be targeted and tailored to the individual needs of a company.
Removed
A synthetic royalty may also include contingent milestone payments. We also fund ongoing R&D for biopharmaceutical companies in exchange for future royalties and milestones if the product or indication we are funding is approved. • Launch and Development Capital – Tailored supplemental funding solutions, generally included as a component within a transaction, increase the scale of our capital.
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In addition, royalties are emerging as an attractive alternative to a traditional partnership with a larger global biopharmaceutical company, as they allow the biotechnology company to retain operational control of their program, a higher proportion of the economics and reduce administrative complexity.
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Launch and development capital is generally provided in exchange for a long-term stream of fixed payments with a predetermined schedule around the launch of a drug.
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We estimate the market for biopharmaceutical royalties reached $10.0 billion in transaction value in 2025, which is an approximately 40% increase over the average value of $7.1 billion over the prior five years (2021-2025).
Removed
Launch and development capital may also include a direct investment in the public equity of a company. • Mergers and Acquisitions (“M&A”) Related – We acquire royalties in connection with M&A transactions, often from the buyers of biopharmaceutical companies when they dispose of the non-strategic assets of the target company following the closing of the acquisition.
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The rapid expansion of the royalty market reflects the growing recognition in the life sciences industry of the benefits of royalty funding, and this growth has come in both strong and more restrictive capital market environments.
Removed
We also seek to partner with companies to acquire other biopharmaceutical companies that own significant royalties. We may also seek to acquire biopharmaceutical companies that have significant royalties or where we can create royalties in subsequent transactions. Additionally, we may identify additional opportunities, platforms or technologies that leverage our capabilities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

156 edited+25 added−67 removed232 unchanged
Biggest changeThese risks are discussed more fully below and include, but are not limited to, risks related to: Risks Relating to Our Business • risks related to sales of biopharmaceutical products on which we receive royalties; • the growth of the royalty market; • the ability of the Manager to identify suitable assets for us to acquire; • uncertainties related to the acquisition of interests in development-stage biopharmaceutical product candidates and our strategy to add interests in development-stage product candidates to our product portfolio; • potential strategic acquisitions of biopharmaceutical companies; • our use of leverage in connection with our capital deployment; • our ability to leverage our competitive strengths; • marketers of products that generate our royalties are outside of our control and are responsible for development, pursuit of ongoing regulatory approval, commercialization, manufacturing and marketing; • disputes with our partners or payors of our royalties; • governmental regulation of the biopharmaceutical industry; 15 • interest rate risk, foreign exchange fluctuations and inflation; • the assumptions underlying our business model; • the competitive nature of the biopharmaceutical industry; Risks Relating to Our Organization and Structure • our organizational structure, including our status as a holding company; • our reliance on the Manager for all services we require, including our reliance on key members of the Manager ’s senior advisory team; • actual and potential conflicts of interest with the Manager and its affiliates; • the ability of the Manager or its affiliates to attract and retain highly talented professionals; Risks Relating to Our Internalization • the Internalization may not close due to a variety of factors, including the failure or significant delay in obtaining regulatory approvals, and, even if it does close, we may not realize the anticipated benefits; • the Share Consideration in connection with the Internalization, and future sales of our Class A ordinary shares by the Sellers may adversely affect the market price of our Class A ordinary shares; • certain of our officers and directors have interests in the Internalization that are different from, and may potentially conflict with, the interests of us and our shareholders; • the exposure to risks to which we have not historically been exposed, including liabilities with respect to the assets acquired from the Manager; Risks Relating to Our Class A Ordinary Shares • volatility of the market price of our Class A ordinary shares; • our incorporation under English law; Risks Relating to Taxation • the effect of changes to tax legislation and our tax position; General Risk Factors • cyber-attacks or other failures in telecommunications or information technology systems; and • the outbreak of any infectious or contagious diseases.
Biggest changeThese risks are discussed more fully below and include, but are not limited to, risks related to: Risks Relating to Our Business • risks related to sales of biopharmaceutical products on which we receive royalties; • risks related to the growth and dynamics of the royalty market; • uncertainties related to acquiring interests in development-stage biopharmaceutical product candidates; • potential strategic acquisitions of operating biopharmaceutical companies; • our use of leverage in connection with our capital deployment; • our ability to leverage our competitive strengths; • our ability to generate increasing royalty receipts and to achieve attractive returns on our investments, including maintaining attractive internal rates of return and consistent returns on invested capital and returns on invested equity; • marketers of products that generate our royalties are outside of our control; • disputes with our partners or payors of our royalties; • governmental regulation of the biopharmaceutical industry; • interest rate risk, foreign exchange fluctuations and inflation; • the assumptions underlying our business model; • the competitive nature of the biopharmaceutical industry; Risks Relating to Our Organization and Structure • our organizational structure, including our status as a holding company; • our ability to attract and retain highly talented professionals; • we may not realize the anticipated benefits of the Internalization and we may be exposed to new risks and costs; Risks Relating to Our Class A Ordinary Shares • volatility of the market price of our Class A ordinary shares; • our incorporation under English law; 14 Risks Relating to Taxation • the effect of changes to tax legislation and our tax position; General Risk Factors • cyber-attacks, data breaches or other failures in information technology systems; and • legal claims and proceedings that could adversely affect our business, financial condition or results of operations.
Additional risks related to our leverage include: • to the extent that interest rates at which we borrow increase, our borrowing costs will increase and our leveraging strategy will become more costly, which could lead to diminished Portfolio Cash Flow and net profits; • we have to comply with various financial covenants in the agreements that govern our debt, including requirements to maintain certain leverage ratios and coverage ratios, which may affect our ability to achieve our business objectives; • our ability to pay dividends or make share repurchases may be restricted; • our royalties may be used as collateral for our borrowings; and 18 • in the event of a default under secured borrowings, if any, one or more of our creditors or their assignees could obtain control of our royalties and, in the event of a distressed sale, these creditors could dispose of these royalties for significantly less value than we could realize for them.
Additional risks related to our leverage include: • to the extent that interest rates at which we borrow increase, our borrowing costs will increase and our leveraging strategy will become more costly, which could lead to diminished Portfolio Cash Flow and net profits; • we have to comply with various financial covenants in the agreements that govern our debt, including requirements to maintain certain leverage ratios and coverage ratios, which may affect our ability to achieve our business objectives; • our ability to pay dividends or make share repurchases may be restricted; • our royalties may be used as collateral for our borrowings; and • in the event of a default under secured borrowings, if any, one or more of our creditors or their assignees could obtain control of our royalties and, in the event of a distressed sale, these creditors could dispose of these royalties for significantly less value than we could realize for them.
Further, if we are a PFIC for any taxable year during which a U.S. holder owns our Class A ordinary shares, we generally would continue to be treated as a PFIC with respect to that U.S. holder for all succeeding years during which such person holds our Class A ordinary shares, even if we ceased to meet the threshold requirements for PFIC status, unless the U.S. holder makes a special “purging” election on IRS Form 8621.
Further, if we are classified as a PFIC for any taxable year during which a U.S. holder owns our Class A ordinary shares, we generally would continue to be treated as a PFIC with respect to that U.S. holder for all succeeding years during which such person holds our Class A ordinary shares, even if we ceased to meet the threshold requirements for PFIC status, unless the U.S. holder makes a special “purging” election on IRS Form 8621.
If any such position is successfully challenged, our tax reporting or tax liabilities could materially increase, which would adversely affect our profitability and cash flows. There have been significant changes both made and proposed to international tax laws that increase the complexity, burden and cost of tax compliance for all multinational companies.
If any such position is successfully challenged, our tax reporting or tax liabilities could materially increase, which would adversely affect our profitability and cash flows. 35 There have been significant changes both made and proposed to international tax laws that increase the complexity, burden and cost of tax compliance for all multinational companies.
A shareholder who receives a distribution under circumstances where he or she knows or has reasonable grounds for believing that the distribution is unlawful in the circumstances is obliged to repay such distribution (or that part of it, as the case may be) to us. If we were determined to be an investment company under the U.S.
A shareholder who receives a distribution under circumstances where he or she knows or has reasonable grounds for believing that the distribution is unlawful in the circumstances is obliged to repay such distribution (or that part of it, as the case may be) to us. 27 If we were determined to be an investment company under the U.S.
Insurers and other third-party payors may also encourage the use of generic or alternate products. Any of these developments could adversely affect products on which we have a royalty, and consequently could adversely affect our business, financial condition or results of operations. Marketers of products that generate our royalties are outside of our control.
Insurers and other third-party payors may also encourage the use of generic or alternate products. Any of these developments could adversely affect products on which we have a royalty, and consequently could adversely affect our business, financial condition or results of operations. 21 Marketers of products that generate our royalties are outside of our control.
Current marketers of products may undertake these development efforts in order to improve their products or to avoid paying our royalty. Adverse competition, obsolescence or governmental and regulatory action or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which generate our royalties.
Current marketers of products may undertake these development efforts in order to improve their products or to avoid paying our royalty. Competition, obsolescence or governmental and regulatory action or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which generate our royalties.
However, if at the time of a takeover offer, the Takeover Panel determines that we have our place of central management and control in the United Kingdom (or the Channel Islands or the Isle of Man), we would be subject to a number of rules and restrictions, including but not limited to the following: (i) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) we might not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) we would be obliged to provide equality of information to all bona fide competing bidders. 37 As a result of recent updates to the Takeover Code, any change in our place of central management and control will cease to be relevant after February 2, 2027, and therefore, on the assumption that our securities remain admitted to trading on the NASDAQ (or another regulated market outside the United Kingdom, the Channel Islands or the Isle of Man), the Takeover Code will not be applicable to us.
However, if at the time of a takeover offer, the Takeover Panel determines that we have our place of central management and control in the United Kingdom (or the Channel Islands or the Isle of Man), we would be subject to a number of rules and restrictions, including but not limited to the following: (i) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) we might not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) we would be obliged to provide equality of information to all bona fide competing bidders. 33 As a result of updates to the Takeover Code, any change in our place of central management and control will cease to be relevant after February 2, 2027, and therefore, on the assumption that our securities remain admitted to trading on the NASDAQ (or another regulated market outside the United Kingdom, the Channel Islands or the Isle of Man), the Takeover Code will not be applicable to us.
The AIFM Directive sets out minimum conditions related to the marketing of interests in alternative investment funds (such as our Class A ordinary shares) in the AIFM states and may impact our ability to attract investors in the AIFM states and may significantly increase our and the Manager’s compliance costs.
The AIFM Directive sets out minimum conditions related to the marketing of interests in alternative investment funds (such as our Class A ordinary shares) in the AIFM states and may impact our ability to attract investors in the AIFM states and may significantly increase our compliance costs.
Consequently, our asset acquisitions in the future, and the cash flows from such assets, may not resemble those of the assets in our current portfolio. We and the Manager may have limited experience acquiring assets that are peripheral to or outside of the biopharmaceutical industry.
Consequently, our asset acquisitions in the future, and the cash flows from such assets, may not resemble those of the assets in our current portfolio. We may have limited experience acquiring assets that are peripheral to or outside of the biopharmaceutical industry.
License agreements relating to products may, in some instances, be unilaterally terminated or disputes may arise which may affect our royalties. 24 License agreements relating to the products generating our royalties may be terminated, which may adversely affect sales of such products and therefore the payments we receive.
License agreements relating to products may, in some instances, be unilaterally terminated or disputes may arise which may affect our royalties. License agreements relating to the products generating our royalties may be terminated, which may adversely affect sales of such products and therefore the payments we receive.
In addition, we operate a business that is highly dependent on information systems and technology. The Manager’s information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase.
In addition, we operate a business that is highly dependent on information systems and technology. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase.
Risks Relating to Our Ordinary Shares The market price of our Class A ordinary shares has been and may in the future be volatile, which could cause the value of our shareholders’ investment to decline. 35 The market price of our Class A ordinary shares has been and may be volatile and could be subject to wide fluctuations.
Risks Relating to Our Ordinary Shares The market price of our Class A ordinary shares has been and may in the future be volatile, which could cause the value of our shareholders’ investment to decline. The market price of our Class A ordinary shares has been and may be volatile and subject to wide fluctuations.
No such dividend may exceed the amount recommended by the board of directors. 29 There can be no assurance that any dividends, whether quarterly or otherwise, will or can be paid or that any shares will or can be repurchased.
No such dividend may exceed the amount recommended by the board of directors. There can be no assurance that any dividends, whether quarterly or otherwise, will or can be paid or that any shares will or can be repurchased.
The manufacture and distribution of a biopharmaceutical product may be interrupted by regulatory agencies or supplier deficiencies. 26 The manufacture of products generating our royalties is typically complex and is highly regulated.
The manufacture and distribution of a biopharmaceutical product may be interrupted by regulatory agencies or supplier deficiencies. The manufacture of products generating our royalties is typically complex and is highly regulated.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements. 33 The EU directive on alternative investment fund managers (the “AIFM Directive”) may significantly increase our compliance costs.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements. 30 The EU directive on alternative investment fund managers (the “AIFM Directive”) may significantly increase our compliance costs.
If these information technology systems suffer severe damage or disruption and the issues are not resolved in a timely manner, our business, financial condition or operations could be adversely affected. 43 In addition, the use of artificial intelligence-based software (including machine learning) is increasingly being used in our industry.
If these information technology systems suffer severe damage or disruption and the issues are not resolved in a timely manner, our business, financial condition or operations could be adversely affected. 39 In addition, the use of artificial intelligence-based software (including machine learning) is increasingly being used in our industry.
Moreover, we may need to raise additional funds through public or private debt or equity financing to acquire any businesses or products, which may result in dilution for shareholders or the incurrence of indebtedness. As a result, our acquisition of operating biopharmaceutical companies could adversely affect our business, financial condition or results of operations.
Moreover, we may need to raise additional funds through public or private debt or equity financing to acquire any businesses or products, which may result in dilution for shareholders or the incurrence of indebtedness. As a result, acquisitions of operating biopharmaceutical companies could adversely affect our business, financial condition or results of operations.
The departure of any of these individuals or competing demands on their time could adversely affect our business, financial condition or results of operations. The key advisory professionals of the Manager have relationships with participants in the biopharmaceutical industry, financial institutions and other advisory professionals, which we rely upon to source potential asset acquisition opportunities.
The departure of any of these individuals or competing demands on their time could adversely affect our business, financial condition or results of operations. Our key professionals have relationships with participants in the biopharmaceutical industry, financial institutions and other professionals, which we rely upon to source potential asset acquisition opportunities.
We intend to conduct our activities, through our subsidiaries, such that no income realized by us will be effectively connected with the conduct of a U.S. trade or business or otherwise subject to regular U.S. federal income taxation on a net basis.
With limited exceptions, we intend to conduct our activities, through our subsidiaries, such that no income realized by us will be effectively connected with the conduct of a U.S. trade or business or otherwise subject to regular U.S. federal income taxation on a net basis.
A health outbreak or another pandemic could adversely affect us due to, among other factors: • a general decline in business activity; • the destabilization of the markets could negatively impact our partners in the biopharmaceutical industry and the sales of products generating our royalties; • difficulty accessing the capital and credit markets on favorable terms, or at all, and a severe disruption and instability in the global financial markets, or deteriorations in credit and financing conditions which could affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; • the potential negative impact on the health of our Manager’s highly qualified personnel, especially if a significant number of them are impacted; • a deterioration in our ability to ensure business continuity during a disruption; • interruptions, shortages, delivery delays and potential discontinuation of supply to our partners, which could (i) delay the clinical trials of the development-stage product candidates underlying our assets and result in a loss of our market share for products generating our royalties or development-stage product candidates underlying our assets, if approved, and (ii) hinder our partners’ ability to timely distribute products generating our royalties and satisfy customer demand; 44 • travel restrictions, shelter-in-place policies or restrictions and other disruptions, which could cause or continue to cause delays and other direct impacts at our partners’ manufacturing sites, which could impact the ability of our partners to manufacture development-stage product candidates underlying our biopharmaceutical assets and products generating our royalties; and • potential interruptions to our partners’ clinical trial programs of development-stage product candidates underlying our biopharmaceutical assets, including: (i) the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns; (ii) changes in hospital or research institution policies or government regulations, which could delay or adversely impact our partners’ ability to conduct their clinical trials; and (iii) pauses to or delays of trial procedures (particularly any procedures that may be deemed non-essential), patient dosing, shipment of our partners’ development-stage product candidates, distribution of clinical trial materials, study monitoring, site inspections and data analysis due to reasons related to the pandemic, each of which could cause or continue to cause a disruption or delay to the development or the approval of development-stage product candidates underlying our biopharmaceutical assets.
A health outbreak or another pandemic could adversely affect us due to, among other factors: • a general decline in business activity; • the destabilization of the markets could negatively impact our partners in the biopharmaceutical industry and the sales of products generating our royalties; • difficulty accessing the capital and credit markets on favorable terms, or at all, and a severe disruption and instability in the global financial markets, or deteriorations in credit and financing conditions which could affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; • the potential negative impact on the health, availability or productivity of our employees, especially if a significant number of them are impacted; • a deterioration in our ability to ensure business continuity during a disruption; 40 • interruptions, shortages, delivery delays and potential discontinuation of supply to our partners, which could (i) delay the clinical trials of the development-stage product candidates underlying our assets and result in a loss of our market share for products generating our royalties or development-stage product candidates underlying our assets, if approved, and (ii) hinder our partners’ ability to timely distribute products generating our royalties and satisfy customer demand; • travel restrictions, shelter-in-place policies or restrictions and other disruptions, which could cause or continue to cause delays and other direct impacts at our partners’ manufacturing sites, which could impact the ability of our partners to manufacture development-stage product candidates underlying our biopharmaceutical assets and products generating our royalties; and • potential interruptions to our partners’ clinical trial programs of development-stage product candidates underlying our biopharmaceutical assets, including: (i) the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns; (ii) changes in hospital or research institution policies or government regulations, which could delay or adversely impact our partners’ ability to conduct their clinical trials; and (iii) pauses to or delays of trial procedures (particularly any procedures that may be deemed non-essential), patient dosing, shipment of our partners’ development-stage product candidates, distribution of clinical trial materials, study monitoring, site inspections and data analysis due to reasons related to the pandemic, each of which could cause or continue to cause a disruption or delay to the development or the approval of development-stage product candidates underlying our biopharmaceutical assets.
Even if we continue to acquire royalties, they generally will not generate a meaningful return for a period of several years, if at all, due to transaction structures, circumstances relating to the underlying products or other factors.
Even if we continue to acquire royalties, they generally will not generate a meaningful return for several years, if at all, due to transaction structures, circumstances relating to the underlying products or other factors.
We currently expect that our Class A ordinary shares and other existing indirect interests in RP Holdings and Old RPI in the aggregate will continue to be owned in sufficient amount by U.S. citizens or tax residents, and that we will be able to establish such ownership, for purposes of satisfying the 50% ownership requirement under the Treaty.
We currently expect that our Class A ordinary shares and other existing indirect interests in RP Holdings and RPI 2011 ICAV in the aggregate will continue to be owned in sufficient amount by U.S. citizens or tax residents, and that we will be able to establish such ownership, for purposes of satisfying the 50% ownership requirement under the Treaty.
As a result, it may be difficult for investors to enforce judgements obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws or otherwise.
As a result, it may be difficult for investors to enforce judgments obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws or otherwise.
In addition, sustaining our growth may require us or the Manager to commit additional management, operational and financial resources to identify new professionals to join the team and to maintain appropriate operational and financial systems to adequately support expansion.
In addition, sustaining our growth may require us to commit additional management, operational and financial resources to identify new professionals to join the team and to maintain appropriate operational and financial systems to adequately support expansion.
We cannot assure you that our business will generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs. Absent sufficient cash flow and the ability to refinance, we could also be forced to sell assets to make up for any shortfall in our payment obligations.
We cannot assure you that our business will generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs. Absent sufficient cash flow and the ability to refinance, we may be forced to sell assets to make up for any shortfall in our payment obligations.
However, there is no assurance that RP Holdings and Old RPI will continue to be owned directly or indirectly by sufficient U.S. citizens or residents or that we will be able to establish to the IRS’ satisfaction such ownership for purposes of satisfying the 50% U.S. ownership requirement under the Treaty.
However, there is no assurance that RP Holdings and RPI 2011 ICAV will continue to be owned directly or indirectly by sufficient U.S. citizens or residents or that we will be able to establish to the IRS’ satisfaction such ownership for purposes of satisfying the 50% U.S. ownership requirement under the Treaty.
Since the market for hiring talented professionals is competitive, we may not be able to grow at the pace we desire. 32 We are subject to the U.K. Bribery Act, the U.S.
Since the market for hiring talented professionals is competitive, we may not be able to grow at the pace we desire. 29 We are subject to the U.K. Bribery Act, the U.S.
Uncertainty relating to development-stage product candidates makes it more difficult to develop accurate assumptions for our internal models, which can result in reduced royalties compared to estimates.
Uncertainty relating to development-stage product candidates makes it more difficult to develop accurate assumptions for our internal models, which may result in reduced royalties compared to our estimates.
As proposals to change tax laws and the implementation of the BEPS framework remain subject to further negotiation, we are currently unable to predict the extent to which any changes to tax laws, statutes, rules, regulations or ordinances will occur and, if so, the ultimate impact on our business.
As proposals to change tax laws and implement the BEPS framework remain subject to further negotiation, we are currently unable to predict the extent to which any changes to tax laws, statutes, rules, regulations or ordinances will occur and, if so, the ultimate impact on our business.
Our disaster recovery programs and those of the Manager may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.
Our disaster recovery programs may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.
In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against public companies.
Following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against public companies.
We may acquire more royalties on development-stage product candidates that have not yet received marketing approval by any regulatory authority or been commercialized.
We acquire royalties on development-stage product candidates that have not yet received marketing approval by any regulatory authority or been commercialized.
The investigation of each specific target royalty and the negotiation, drafting and execution of relevant agreements requires substantial management time and attention and results in substantial costs for accountants, attorneys, consultants and other advisors. If a decision is made not to complete a specific acquisition, the costs incurred for the proposed transaction would not be recoverable from a third party.
The evaluation of each potential royalty acquisition and the negotiation, drafting and execution of relevant agreements requires substantial management time and attention and results in substantial costs for accountants, attorneys, consultants and other advisors. If a decision is made not to complete a specific acquisition, the costs incurred for the proposed transaction would not be recoverable from a third party.
The risks relating to these assumptions may be exacerbated for development-stage product candidates due to the uncertainties around their development, labeling, regulatory approval, commercialization timing, anticipated pricing, manufacturing and supply, competing products or related factors.
The risks relating to these assumptions are exacerbated for development-stage product candidates due to the uncertainties around their development, labeling, regulatory approval, commercialization timing, anticipated pricing, manufacturing and supply, competing products or related factors.
There can be no assurance that the assumptions underlying our financial models, including those regarding product sales or competition, patent expirations, exclusivity terms, license terms or license terminations for the products underlying our portfolio, are accurate.
There can be no assurance that the assumptions underlying our financial models, including those regarding product pricing, reimbursement rates or sales, competition, patent expirations, exclusivity terms, license terms or license terminations for the products underlying our portfolio, are accurate.
In addition, our results of operations are subject to foreign currency exchange risk through transactional exposure resulting from movements in exchange rates between the time we recognize royalty income or royalty revenue and the time at which the transaction settles, or we receive the royalty payment.
In addition, our results of operations are subject to foreign currency exchange risk through transactional exposure resulting from movements in exchange rates between the time we recognize income on financial royalty assets and the time at which the transaction settles, or we receive the royalty payment.
The various agreements relating to our borrowings may impose operating and financial restrictions on us which could affect the number and size of the royalties that we may pursue. Therefore, no assurance can be given that we will be able to take advantage of favorable conditions or opportunities as a result of any restrictive covenants under our indebtedness.
The agreements governing our borrowings may impose operating and financial restrictions which could affect the number and size of the royalties that we may pursue. Therefore, no assurance can be given that we will be able to take advantage of favorable conditions or opportunities as a result of any restrictive covenants under our indebtedness.
U.S. holders who do not make a QEF election with respect to us or a mark-to-market election with respect to our Class A ordinary shares will be subject to potentially material adverse tax consequences, including (i) the treatment of any gain on disposition of our Class A ordinary shares as ordinary income and (ii) the application of a deferred interest charge on such gain and the receipt of certain distributions on our Class A ordinary shares.
So long as we are classified as a PFIC, U.S. holders who do not make a QEF election with respect to us or a mark-to-market election with respect to our Class A ordinary shares will be subject to potentially material adverse tax consequences, including (i) the treatment of any gain on disposition of our Class A ordinary shares as ordinary income and (ii) the application of a deferred interest charge on such gain and the receipt of certain distributions on our Class A ordinary shares.
The diversion of our management’s attention and any delay or difficulties encountered in connection with any future acquisitions we may consummate could result in the disruption of our on-going business operations.
The diversion of our management’s attention and any delay or difficulties encountered in connection with any future acquisitions could result in the disruption of our on-going business operations.
There can also be no assurance that additional debt financing, either to replace or increase existing debt financing, will be available when needed or, if available, will be obtainable on terms that are commercially reasonable.
There can also be no assurance that additional debt financing, either to replace or increase existing debt financing, will be available when needed or on commercially reasonable terms.
Under certain circumstances, the use of borrowed money may pose higher risks for our business or increase the likelihood of default, which would disfavor our shareholders. In addition, there is no correlation between our profits and the obligation of our board of directors to pay dividends to shareholders.
Under certain circumstances, the use of borrowed money may pose higher risks for our business or increase the likelihood of default, which would disfavor our shareholders. In addition, there is no correlation between our profits and the obligation of our board of directors to pay dividends to shareholders. Consequently, shareholders may receive limited or no dividends while Mr.
Investment Company Act and the rules and regulations promulgated thereunder. 30 If the SEC or its staff in the future adopts a contrary interpretation to that provided in the no-action letter to our predecessor or otherwise restricts the conclusions in the SEC staff’s no-action letter such that royalty interests are no longer treated as ICA Exception Qualifying Assets for purposes of Section 3(c)(5)(A) and Section 3(c)(6), or the SEC or its staff in the future determines that the no-action letter does not apply to some or all types of royalty receivables relating to biopharmaceutical assets, our business will be materially and adversely affected.
If the SEC or its staff in the future adopts a contrary interpretation to that provided in the no-action letter to our predecessor or otherwise restricts the conclusions in the SEC staff’s no-action letter such that royalty interests are no longer treated as ICA Exception Qualifying Assets for purposes of Section 3(c)(5)(A) and Section 3(c)(6), or the SEC or its staff in the future determines that the no-action letter does not apply to some or all types of royalty receivables relating to biopharmaceutical assets, our business will be materially and adversely affected.
However, we may not be able to identify and acquire a sufficient number of royalties, or royalties of sufficient scale, to invest the full amount of capital that may be available to us in the future, or at our targeted amount and rate of capital deployment, which could prevent us from executing our growth strategy and negatively impact our business.
However, we may not be able to identify and acquire a sufficient number of royalties, or royalties of sufficient scale, to invest the capital available to us at our targeted rate of capital deployment, which could prevent us from executing our growth strategy and negatively impact our business.
Funds used by RP Holdings to satisfy its tax distribution obligations will not be available for reinvestment in our business, dividends or share repurchases. Our ability to pay periodic dividends to our shareholders or make share repurchases may be limited by applicable provisions of English law and contractual restrictions and obligations.
The cash used by RP Holdings to satisfy these tax distribution obligations will not be available for reinvestment in our business, dividends or share repurchases. Our ability to pay periodic dividends to our shareholders or make share repurchases may be limited by applicable provisions of English law and contractual restrictions and obligations.
This type of litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. 36 Our Articles of Association provide that the courts of England and Wales will be the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. federal district courts will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act and the Exchange Act.
If such litigation is instituted against us, it could result in substantial costs and a diversion of our management’s attention and resources. 32 Our Articles of Association provide that the courts of England and Wales will be the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. federal district courts will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act and the Exchange Act.
For example, we do not always know the results of studies conducted by marketers of the products or others or the nature or amount of any complaints from doctors or users of such products. In addition, the market data that we obtain independently may also prove to be incomplete or incorrect.
For example, we may not have access to the results of studies conducted by marketers of the products or others or the nature or amount of any complaints from doctors or users of such products. In addition, the market data that we obtain independently may also prove to be incomplete or incorrect.
Legorreta, our Chief Executive Officer, is also a co-founder of and has significant influence over Pharmakon Advisors, which shares physical premises with the Manager. Pharmakon manages BioPharma Credit PLC (LSE: BPCR) and other investment vehicles that collectively are leading providers of debt capital to the biopharmaceutical industry. Mr. Legorreta has a substantial investment in BioPharma Credit. In addition, Mr.
Legorreta, our Chief Executive Officer, is also a co-founder of and has significant influence over Pharmakon Advisors, which manages BioPharma Credit PLC (LSE: BPCR) and other investment vehicles that collectively are leading providers of debt capital to the biopharmaceutical industry and he has a substantial investment in BioPharma Credit. In addition, Mr.
RP Holdings is required to make cash distributions, or tax distributions, to the direct owner or beneficial owners of the RP Holdings Class C Special Interest, calculated using an assumed tax rate that is generally uniform for all recipients regardless of their tax status.
RP Holdings is required to make distributions of cash to the direct owner or beneficial owners of the RP Holdings Class C Special Interest to cover such owner’s taxes, calculated using an assumed tax rate that is generally uniform for all recipients regardless of their individual tax status.
In addition, even though Equity Performance Awards are payable on a portfolio-by-portfolio basis (with portfolios comprised of investments made during sequential two-year periods) in order to reduce the risks that affiliates of the Manager will be paid Equity Performance Awards on individual investments even though our overall portfolio of investments is not performing well, Equity Performance Awards may nevertheless be payable to affiliates of the Manager when our overall portfolio of investments is not performing as well as the individual portfolios that are used as the basis for measuring the Equity Performance Awards.
Further, even though Equity Performance Awards are payable on a portfolio-by-portfolio basis (with portfolios comprised of investments made during sequential two-year periods) in order to reduce the risks that we will pay Equity Performance Awards on individual investments even though our overall portfolio of investments is not performing well, Equity Performance Awards may nevertheless be payable when our overall portfolio of investments is not performing as well as the individual portfolios that are used as the basis for measuring the Equity Performance Awards.
We have discretion as to the types of assets that we may acquire. While we expect the Manager to acquire assets that primarily fall within the biopharmaceutical industry, we are not obligated to do so and may acquire other types of assets that are peripheral to or outside of the biopharmaceutical industry.
While we expect to acquire assets that primarily fall within the biopharmaceutical industry, we are not obligated to do so and may acquire other types of assets that are peripheral to or outside of the biopharmaceutical industry.
If the key advisory professionals of the Manager fail to maintain such relationships, or to develop new relationships with other sources, we may not be able to grow our portfolio.
If our key professionals fail to maintain such relationships, or to develop new relationships with other sources, we may not be able to grow our portfolio.
Our board of directors is under no obligation to pay dividends, make distributions or repurchase our ordinary shares and it may decide to use cash to fund asset acquisitions or operations in lieu of paying dividends, making distributions or repurchasing our ordinary shares.
Our board of directors is under no obligation to pay dividends, make distributions or repurchase our ordinary shares and it may decide to use cash to fund asset acquisitions or operations in lieu of paying dividends, making distributions or repurchasing our ordinary shares. We will pay Equity Performance Awards to Mr.
We have obtained authority from our shareholders to disapply preemptive rights until the end of the next annual general meeting of the Company or, if earlier, the close of business on September 6, 2025, which is the date that is 15 months after June 6, 2024, which disapplication will need to be renewed upon expiration to remain effective, but may be sought more frequently for additional five-year terms (or any shorter period).
We have obtained authority from our shareholders to disapply preemptive rights until the end of the next annual general meeting of the Company or, if earlier, August 12, 2026, which is the date that is 15 months after May 12, 2025, which disapplication will need to be renewed upon expiration to remain effective, but may be sought more frequently for additional five-year terms (or any shorter period).
Our business is subject to interest rate, foreign exchange, inflation and banking industry risk. We are subject to interest rate fluctuation exposure through any borrowings under our Revolving Credit Facility and our investments in money market accounts and marketable securities, the majority of which bear a variable interest rate.
Our business is subject to interest rate, foreign exchange, inflation and banking industry risk. We are subject to interest rate fluctuations through any borrowings under our Revolving Credit Facility, Term Loan and through investments in money market accounts and marketable securities, the majority of which bear variable interest rates.
We cannot know at this time whether or when the United States will adopt any such protective measures, or whether or how Ireland may change its interpretation or enforcement of the Treaty or other tax laws in response to the executive order, or to any action taken thereunder.
We cannot know at this time whether or when the United States will adopt any such protective measures, or whether or how Ireland may change its interpretation or enforcement of the Treaty or other tax laws in response to any action taken by U.S. authorities.
Except for RP Holdings, our subsidiaries that do not guarantee the senior unsecured notes will have no obligation, contingent or otherwise, to pay amounts due under the senior unsecured notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment.
Except for RP Holdings and RP Manager, our subsidiaries that do not guarantee our indebtedness will have no obligation, contingent or otherwise, to pay amounts due under our indebtedness or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment.
While our current asset portfolio includes royalties relating to over 35 marketed products, the top five product franchises accounted for 64% of our Royalty Receipts in the year ended December 31, 2024. In addition, our asset portfolio may not be fully diversified by geographic region or other criteria.
Although our current asset portfolio includes royalties relating to over 35 marketed products, the top five product franchises accounted for 61% of our Royalty Receipts in the year ended December 31, 2025. In addition, our asset portfolio may not be fully diversified by geographic region or other factors.
In addition to the factors discussed in this Annual Report on Form 10-K, our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including: • market conditions in the broader stock market in general, or in our industry in particular; • variations in our quarterly operating results or dividends to shareholders or share repurchases; • additions or departures of key management personnel at the Manager; • the process surrounding, and the impact of, the potential internalization of the Manager; • timing and rate of capital deployment, including relative to estimates; • changes in our portfolio mix or acquisition strategy; • failure to meet analysts’ earnings estimates; • publication of research reports about our industry; • third-party healthcare reimbursement policies and practices; • litigation and government investigations; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • results, or projected results, from marketers of products that generate our royalties; • results from, and any delays to, the clinical trial programs of development-stage product candidates underlying our biopharmaceutical assets or other issues relating to such products, including regulatory approval or commercialization; • adverse market reaction to any indebtedness that we may incur or securities we may issue in the future; • changes in market valuations of similar companies or speculation in the press or investment community; • announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • economic and political conditions or events, such as pandemics, inflation and interest volatility and global conflicts; and • adverse publicity about us or the industries in which we participate or individual scandals.
In addition to the other factors discussed in this Annual Report on Form 10-K, our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including: • market conditions in the broader stock market in general, or in our industry in particular; 31 • variations in our quarterly operating results or dividends to shareholders or share repurchases or exchanges for our Class A ordinary shares; • future sales of our Class A ordinary shares by our affiliates; • additions or departures of key management personnel; • timing and rate of capital deployment, including relative to estimates; • changes in our portfolio mix or acquisition strategy; • failure to meet analysts’ earnings estimates; • analyst or media reports or other adverse publicity about us, our industry or related sectors; • third-party healthcare reimbursement policies and practices; • litigation and government investigations; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof; • results, or projected results, from marketers of products that generate our royalties; • results from, and any delays to, the clinical trial programs of development-stage product candidates underlying our biopharmaceutical assets or other issues relating to such products, including regulatory approval or commercialization; • adverse market reaction to any indebtedness that we may incur or securities we may issue in the future; • changes in market valuations of similar companies or speculation in the press or investment community; • announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; and • economic or political developments, such as pandemics, inflation and interest rate volatility and geopolitical conflicts.
We are also subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to geopolitical events, including the Russia-Ukraine conflict, conflicts in the Middle East, tensions between China and Taiwan, trade and other international disputes, including new or increased tariffs and other barriers to trade, rising inflation and interest rates, monetary policy changes, financial services sector instability, recessions, global pandemics, significant natural disasters and foreign currency fluctuations.
Therefore, cash received may differ from the estimated amount we expected to receive based on fluctuations in currency. 18 We are also subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to geopolitical events, including the Russia-Ukraine conflict, conflicts in the Middle East, tensions between China and Taiwan, trade and other international disputes, including new or increased tariffs and other barriers to trade, rising inflation and interest rates, monetary policy changes, financial services sector instability, recessions, global pandemics, significant natural disasters and foreign currency fluctuations.
There can be no assurance that the FDA, the Medicines and Healthcare products Regulatory Agency (“MHRA”), the European Medicines Agency (“EMA”), Pharmaceuticals and Medical Devices Agency (“PMDA”) or other regulatory authorities will approve such products or that such products will be brought to market on a timely basis or at all, or that the market will be receptive to such products.
There can be no assurance that the FDA, the Medicines and Healthcare products Regulatory Agency (“MHRA”), the EMA, Pharmaceuticals and Medical Devices Agency (“PMDA”) or other regulatory authorities will approve such products or that such products will be brought to market on a timely basis or at all, the pricing or reimbursement of such products, if approved, or that the market will be receptive to such products.
It is possible that any changes in U.S. or non-U.S. tax law could have material adverse effect on our eligibility for benefits under the Treaty. If our subsidiaries are considered to be engaged in a U.S. trade or business, we could be liable for significant U.S. taxation.
It is possible that any changes in U.S. or non-U.S. tax law could adversely affect our eligibility for benefits under the Treaty. 36 If our subsidiaries are considered to be engaged in a U.S. trade or business, we could be liable for significant U.S. taxation.
Our treaty position is based on the current U.S. status of the majority of the existing indirect investors in RP Holdings and Old RPI. Subject to certain exceptions, the existing indirect U.S. investors in RP Holdings have the right to exchange their interests for our publicly traded Class A ordinary shares.
Our treaty position is based on the current U.S. status of the majority of the existing indirect investors in RP Holdings and Royalty Pharma Investments 2011 ICAV (“RPI 2011 ICAV”). Subject to certain exceptions, the existing indirect U.S. investors in RP Holdings have the right to exchange their interests for our publicly traded Class A ordinary shares.
Because we are entitled to royalties on worldwide sales for various products, there is an underlying exposure to foreign currency as the marketer converts payment amounts from local currencies to U.S. dollars using a quarterly average exchange rate. Therefore, cash received may differ from the estimated receivable based on fluctuations in currency.
Because we are entitled to royalties on worldwide sales for various products, there is an underlying exposure to foreign currency as the marketer converts payment amounts from local currencies to U.S. dollars using a quarterly average exchange rate.
Subject to certain conditions, at the end of each fiscal quarter, an affiliate of the Manager is entitled to a distribution in the form of equity 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”).
Legorreta and certain employees are entitled to a distribution in the form of equity 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”).
In the event of any such termination, a licensor may no longer receive all of the payments it expected to receive from the licensee and may also be unable to find another company to continue developing and commercializing the product on the same or similar terms as those under the license agreement that has been terminated.
In the event of any such termination, a licensor may no longer receive all of the payments it expected to receive from the licensee and may also be unable to find another company to continue developing and commercializing the product on the same or similar terms as those under the license agreement that has been terminated. 22 In addition, license agreements may fail to provide significant protection for the licensor in case of the licensee’s failure to perform or in the event of disputes.
In addition, we can offer no assurance that these relationships, even if maintained, will generate royalty acquisition opportunities for us in the future. 19 There can be no assurance that the policies and procedures we have established to mitigate conflicts of interest will be effective in doing so.
In addition, we can offer no assurance that these relationships, even if maintained, will generate royalty acquisition opportunities. 17 There can be no assurance that the policies and procedures we have established to mitigate conflicts of interest will be effective. There could be conflicts of interest between us and our personnel.
We obtained shareholder authority to allot additional shares until the end of the next annual general meeting of the Company or, if earlier, the close of business on September 6, 2025, the date that is 15 months after June 6, 2024. We intend to seek renewal of this authorization at each year’s annual general meeting of shareholders.
We obtained shareholder authority to allot additional shares until the end of the next annual general meeting of the Company or, if earlier, August 12, 2026, the date that is 15 months after May 12, 2025. We intend to seek renewal of this authorization at each year’s annual general meeting of shareholders.
However, the terms of the agreements that govern our existing outstanding debt limit our and our subsidiaries’ ability to sell assets and also restrict the use of proceeds from such a sale. Accordingly, we may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations on our indebtedness.
However, the agreements governing our outstanding indebtedness limit our and our subsidiaries’ ability to sell assets and also restrict the use of proceeds from such a sale. Accordingly, we may be unable to sell assets quickly enough or for sufficient amounts to meet our obligations on our indebtedness.
Such proceedings could adversely affect the ability of a payor to make payments with respect to a royalty, and could consequently adversely affect our business, financial condition or results of operations. Unsuccessful attempts to acquire new royalties could result in significant costs and negatively impact subsequent attempts to locate and acquire other assets.
Such proceedings could adversely affect the ability of a payor to make payments with respect to a royalty, and could consequently adversely affect our business, financial condition or results of operations. Unsuccessful attempts to acquire new royalties could result in significant costs, divert management attention and adversely affect our ability to pursue other investment opportunities.
There can be no assurance that our assumptions around the likelihood of a development-stage product candidate’s approval or achieving significant sales will prove correct, that regulatory authorities will approve such development-stage product candidates, that such development-stage product candidates will be brought to market on a timely basis or at all, or that such products will achieve commercial success or result in royalties consistent with our estimates. 17 We may undertake strategic acquisitions of operating biopharmaceutical companies or acquire securities of biopharmaceutical companies.
There can be no assurance that our assumptions around the likelihood of a development-stage product candidate’s approval, expected pricing or achieving our forecasted sales will prove correct, that regulatory authorities will approve such development-stage product candidates, that such development-stage product candidates will be brought to market on a timely basis or at all, or that such products will achieve commercial success or result in royalties consistent with our estimates.
We cannot predict whether the U.S. will adopt any such protective measures or whether any such legislation will be adopted, or whether or how any non-U.S. countries may change their tax laws, including with respect to taxes imposed under Pillar Two, in response to the executive order, any action taken thereunder or the legislation described above.
We cannot predict whether the United States will adopt any such protective measures or whether any such legislation will be adopted, or whether or how any non-U.S. countries may change their tax laws, including with respect to taxes imposed under Pillar Two.
Changes in the value of currencies relative to the U.S. dollar, or high inflation in countries using a currency other than the U.S. dollar, can impact our revenues, costs and expenses and our financial guidance. Other events that affect the banking industry may adversely affect the banking institutions that hold our cash.
Changes in the value of currencies relative to the U.S. dollar, or high inflation in countries using a currency other than the U.S. dollar, can impact our revenues, costs and expenses and our financial guidance.
It is possible that any changes in U.S. or non-U.S. tax law could have material adverse effect on our future tax liabilities and our effective tax rate.
It is possible that any changes in U.S. or non-U.S. tax law could adversely affect our future tax liabilities and our effective tax rate.
We intend to annually furnish U.S. holders a “PFIC Annual Information Statement” with the information required to allow shareholders to make a qualified electing fund (“QEF”) election for United States federal income tax purposes on our website.
Our PFIC classification is unrelated to our corporate tax status. 38 So long as we are classified as a PFIC, we intend to furnish annually to U.S. holders a “PFIC Annual Information Statement” with the information required to allow shareholders to make a qualified electing fund (“QEF”) election for United States federal income tax purposes on our website.
Other U.S. federal or state legislative or regulatory action or policy efforts could adversely affect the healthcare industry, including, among others, additional transparency and limitations related to product pricing, review the relationship between pricing and manufacturer patient programs, general budget control actions, changes in patent laws, changing interpretations of competition law, exercise by the government of march-in rights in respect of government funded innovations, the importation of prescription drugs from outside the United States at prices that are regulated by governments of various foreign countries, revisions to reimbursement of biopharmaceutical products under government programs, restrictions on U.S. direct-to-consumer advertising or limitations on interactions with healthcare professionals.
Patient Protection and Affordable Care Act, as amended (the “ACA”) established a major expansion of healthcare coverage, financed in part by several new rebates, discounts and taxes that had a significant effect on the expenses and profitability on the companies that manufacture the products that generate our royalties. 23 Other U.S. federal or state legislative or regulatory action or policy efforts could adversely affect the healthcare industry, including, among others, additional transparency and limitations related to product pricing, review the relationship between pricing and manufacturer patient programs, general budget control actions, changes in patent laws, changing interpretations of competition law, exercise by the government of march-in rights in respect of government funded innovations, the importation of prescription drugs from outside the United States at prices that are regulated by governments of various foreign countries, revisions to reimbursement of biopharmaceutical products under government programs, restrictions on U.S. direct-to-consumer advertising or limitations on interactions with healthcare professionals.
In cases where our contractual arrangements with our partner permit us to do so, we could participate in patent suits brought by third parties but this could result in substantial litigation costs, divert management’s attention from our core business and there can be no assurance that such suits would be successful.
In cases where our contractual arrangements with our partner permit us to do so, we could participate in patent suits brought by third parties but this could result in substantial litigation costs, divert management’s attention from our core business and there can be no assurance that such suits would be successful. 25 The existence of third-party patents in relation to products may result in additional costs for the marketer and reduce the amount of royalties paid to us.
General Risk Factors Cybersecurity vulnerabilities or other failures in information systems could result in information theft, data corruption and significant disruption of our business operations.
General Risk Factors Cybersecurity vulnerabilities, failures in information systems or risks associated with the use of artificial intelligence could result in information theft, data corruption and significant disruption of our business operations.
Biopharmaceutical product sales may be lower than expected due to a number of reasons, including pricing pressures, insufficient demand, product competition, failure of clinical trials, lack of market acceptance, changes in the marketer’s strategic priorities, obsolescence, lack of acceptance by healthcare programs or insurance plans, loss of patent protection, government regulations or other factors, and development-stage product candidates may fail to reach the market.
Biopharmaceutical product sales may be lower than expected due to a number of reasons, including pricing pressures, insufficient demand, product competition, failure of clinical trials, delays or failures in obtaining marketing approval in one or more jurisdictions or for additional product indications, lack of market acceptance, changes in the marketer’s strategic priorities, obsolescence, lack of coverage or insufficient reimbursement by healthcare programs or insurance plans, loss of patent protection, government regulations and other factors.
Therefore, if our subsidiaries failed to qualify for an exemption from U.S. withholding tax under the Treaty (by satisfying either the 50% U.S. ownership requirement or an alternative Treaty exemption) and such types of income were subject to a 30% U.S. withholding tax, our financial position, profitability and cash flows could be adversely affected. 40 On August 25, 2016, the Irish Department of Finance announced that, in the context of the publication by the United States Treasury Department of a revised U.S.
Therefore, if our subsidiaries failed to qualify for an exemption from U.S. withholding tax under the Treaty (by satisfying either the 50% U.S. ownership requirement or an alternative Treaty exemption) and such types of income were subject to a 30% U.S. withholding tax, our financial position, profitability and cash flows could be adversely affected.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur security awareness platform aims to reduce vulnerabilities in our systems if they are the target of phishing or social engineering through simulations of attacks coupled with employee training.
Biggest changeOur security awareness program utilizes simulations of attacks coupled with employee training in order to reduce risks to our systems if they are the target of phishing or social engineering.
In 2024 and 2023, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
In 2025, 2024 and 2023, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
The audit committee receives updates about the results of assessments conducted by outside advisors who provide independent assessments of our technology systems.
The audit committee receives updates about the results of assessments conducted by outside advisors who provide independent assessments of our technology systems. 42
We examine and validate our program with third parties, measuring it against industry standards and established frameworks to help identify areas for focus, improvement and compliance. We have comprehensive plans to ensure that any non-routine events are properly escalated.
We examine and validate our program with third parties, measuring it against industry standards and established frameworks to help identify areas for focus, improvement and compliance. We have comprehensive incident response plans to ensure that any non-routine events are properly escalated and addressed.
For more information about these risks, please see “Risk Factors—Cybersecurity vulnerabilities or other failures in information systems could result in information theft, data corruption and significant disruption of our business operations.” Governance The board of directors has adopted a Cyber Security and Personal Data Breach Policy in order to reflect the importance of appropriate security, processes and procedures to the protection of data and assets, and in an effort to establish a foundation for successful protection against cyber-crime and to minimize any potential negative impacts of a successful cyber-attack.
For more information about these risks, please see “Risk Factors—Cybersecurity vulnerabilities, failures in information systems or risks associated with the use of artificial intelligence could result in information theft, data corruption and significant disruption of our business operations.” Governance The board of directors has adopted a Cyber Security and Personal Data Breach Policy in order to reflect the importance of appropriate security, processes and procedures to the protection of data and assets, and in an effort to establish a foundation for successful protection against cyber-crime and to minimize any potential negative impacts of a successful cyber-attack.
Our cybersecurity program is led by our Chief Technology Officer, who is a part of our senior leadership team and works closely with our team to develop and advance our cybersecurity strategy and regularly reports to our board of directors and the audit committee of our board of directors on cybersecurity matters. 45 Cybersecurity threats are assessed as part of our enterprise risk management assessments.
Our cybersecurity program is led by our Chief Technology Officer, who is a part of our senior leadership team and works closely with our team to develop and advance our cybersecurity strategy and regularly reports to our board of directors and the audit committee of our board of directors on cybersecurity matters.
Our cybersecurity strategy includes procedures for identifying material cybersecurity risks, prioritizing risks and analyzing risk mitigation. Our cybersecurity strategy also includes developing and implementing policies and procedures, escalating any issues as necessary that present a material risk and ensuring that all employees have sufficient cybersecurity training.
Cybersecurity threats are assessed as part of our enterprise risk management assessments. Our cybersecurity strategy includes procedures for identifying material cybersecurity risks, and prioritizing appropriate risk mitigations. Our cybersecurity strategy also includes developing and implementing policies, procedures, and controls, escalating issues as necessary that present a material risk, and ensuring that all employees have sufficient cybersecurity training.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile we cannot feasibly predict the outcome of these matters with certainty, we believe, based on examination of these matters, experience to date and discussions with counsel, that the ultimate liability, individually or in the aggregate, will not adversely affect our business, financial condition or results of operations. 46 Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II.
Biggest changeWhile we cannot feasibly predict the outcome of these matters with certainty, we believe, based on examination of these matters, experience to date and discussions with counsel, that the ultimate liability, individually or in the aggregate, will not adversely affect our business, financial condition or results of operations. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A ordinary shares. 47 The above performance graph shall not be deemed soliciting material or to be filed with the SEC for purposes of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any of our other filings under the Exchange Act or the Securities Act.
Biggest changeThe above performance graph shall not be deemed soliciting material or to be filed with the SEC for purposes of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any of our other filings under the Exchange Act or the Securities Act. Recent Sales of Unregistered Securities None.
The graph assumes an initial investment of $100 in our Class A ordinary shares at the market close on June 16, 2020, which was our initial trading day and its relative performance is tracked through December 31, 2024.
The graph assumes an initial investment of $100 in our Class A ordinary shares at the market close on December 31, 2020, which was our initial trading day and its relative performance is tracked through December 31, 2025.
As of February 7, 2025, there were 2 shareholders of record of our Class A ordinary shares and 2 shareholders of record of our Class B ordinary shares. The number of record holders does not include persons who held our Class A ordinary shares in nominee or “street name” accounts through brokers or other institutions on behalf of shareholders.
As of February 6, 2026, there were 2 shareholders of record of our Class A ordinary shares and 5 shareholders of record of our Class B ordinary shares. The number of record holders does not include persons who held our Class A ordinary shares in nominee or “street name” accounts through brokers or other institutions on behalf of shareholders.
Use of Proceeds None. Dividends In 2024, we declared and paid four quarterly cash dividends of $0.21 per Class A ordinary share for an aggregate amount of $376.5 million to holders of our Class A ordinary shares. Future dividends are subject to declaration by the board of directors.
Use of Proceeds None. Dividends In 2025, we declared and paid four quarterly cash dividends of $0.22 per Class A ordinary share for an aggregate amount of $378.3 million to holders of our Class A ordinary shares. Future dividends are subject to declaration by the board of directors.
Under the share repurchase program, Class A ordinary shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. 48 Item 6. [Reserved]
The share repurchase program does not obligate us to acquire a minimum amount of our Class A ordinary shares. Under the share repurchase program, Class A ordinary shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
Issuer Purchases of Equity Securities Share repurchase activities of our Class A ordinary shares during the fourth quarter of 2024 are as follows (in thousands, except per share amounts): Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1, 2024 - October 31, 2024 1,662 $ 27.81 1,662 $ 469,356 November 1, 2024 - November 30, 2024 147 27.35 147 465,335 December 1, 2024 - December 31, 2024 — — — 465,335 Total 1,809 27.78 1,809 (1) On March 27, 2023, we announced 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.
Issuer Purchases of Equity Securities Share repurchase activities of our Class A ordinary shares during the fourth quarter of 2025 are as follows (in thousands, except per share amounts): Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1, 2025 - October 31, 2025 1,784 $ 36.59 1,784 $ 1,793,008 November 1, 2025 - November 30, 2025 260 38.66 260 1,782,965 December 1, 2025 - December 31, 2025 — — — 1,782,965 Total 2,044 36.85 2,044 (1) On January 10, 2025, our board of directors authorized a new share repurchase program under which we may repurchase up to $3.0 billion of our Class A ordinary shares.
Stock Performance Graph The graph below compares the cumulative total stockholder return, calculated on a dividend-reinvested basis, on our Class A ordinary shares, the Standard & Poor’s 500 Index (“S&P 500”) and the Nasdaq Composite Index (“Nasdaq Composite”).
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding securities authorized for issuance. 43 Stock Performance Graph The graph below compares the cumulative total stockholder return, calculated on a dividend-reinvested basis, on our Class A ordinary shares, the Standard & Poor’s 500 Index (“S&P 500”) and the Nasdaq Composite Index (“Nasdaq Composite”).
Removed
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding securities authorized for issuance.
Added
The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A ordinary shares.
Removed
The share repurchase program expires on June 23, 2027. The share repurchase program does not obligate us to acquire a minimum amount of our Class A ordinary shares.
Added
This new share repurchase program replaces the unused capacity under the previous share repurchase program that was announced on March 27, 2023. The new share repurchase program has been approved by our board of directors through June 2027 and shareholders have approved the terms of our share repurchase contracts and counterparties thereto through May 2030.
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The maximum dollar value of shares that may yet be purchased under the program represents the remaining amount available under the new share repurchase program. 44 Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdditionally, performance was also positively impacted by favorable U.S. pricing and adjustments to returns and rebates. • Tysabri – Royalty Receipts from Tysabri, which is marketed by Biogen for the treatment of multiple sclerosis, decreased by $17.8 million in 2024 as compared to 2023, primarily due to pricing pressure and competition. • Imbruvica – Royalty Receipts from Imbruvica, which is marketed by AbbVie and Johnson & Johnson for the treatment of blood cancers and chronic graft versus host disease, decreased by $19.3 million in 2024 as compared to 2023, primarily due to competitive pressures. • Evrysdi – Royalty Receipts from Evrysdi, which is marketed by Roche for the treatment of spinal muscular atrophy, increased by $107.4 million in 2024 as compared to 2023, primarily attributable to the incremental royalties acquired in the fourth quarter of 2023 and the second quarter of 2024 and gains in patient share across all regions. • Xtandi – Royalty Receipts from Xtandi, which is marketed by Pfizer and Astellas for the treatment of prostate cancer, increased by $22.2 million in 2024 as compared to 2023, primarily attributed to growth in all regions, especially in the United States, driven by strong uptake of the non-metastatic castration-sensitive prostate cancer indication following approval in the fourth quarter of 2023, which also increased demand in other indications, and overall market growth. • Promacta – Royalty Receipts from Promacta, which is marketed by Novartis for the treatment of chronic immune thrombocytopenia purpura (ITP) and aplastic anemia, decreased by $2.7 million in 2024 as compared to 2023, primarily due to higher revenue deductions, partially offset by an increased use of Promacta in chronic ITP and severe aplastic anemia in the United States.
Biggest changeThe increase was primarily due to strong cystic fibrosis patient demand globally and higher net realized pricing in the United States, while Ex-U.S. saw strong performance across multiple markets, partially offset by a revenue decline in Russia. • Trelegy – Royalty Receipts from Trelegy, which is marketed by GSK for the maintenance treatment of chronic obstructive pulmonary disease and asthma, increased by $48.7 million in 2025 as compared to 2024, primarily driven by continued growth across all regions, reflecting patient demand, single inhaler triple therapy class growth, and increased market share. • Tysabri – Royalty Receipts from Tysabri, which is marketed by Biogen for the treatment of multiple sclerosis, decreased by $12.1 million in 2025 as compared to 2024, due to increased competition in rest of world, partially offset by a favorable U.S. rebate estimate change and inventory dynamic s . 55 • Evrysdi – Royalty Receipts from Evrysdi, which is marketed by Roche for the treatment of spinal muscular atrophy, increased by $28.1 million in 2025 as compared to 2024, attributable to strong growth globally, partially offset by tender-related buying patterns in international sales. • Xtandi – Royalty Receipts from Xtandi, which is marketed by Pfizer and Astellas for the treatment of prostate cancer, increased by $28.3 million in 2025 as compared to 2024, attributable to sales growth across all regions, particularly in the United States. • Tremfya – Royalty Receipts from Tremfya, which is marketed by Johnson & Johnson for the treatment of plaque psoriasis, active psoriatic arthritis and inflammatory bowel disease, increased by $38.8 million in 2025 as compared to 2024, driven by share gains and market growth, including strong uptake across recently launched inflammatory bowel disease indications, partially offset by the impact of Medicare Part D redesign. • Imbruvica – Royalty Receipts from Imbruvica, which is marketed by AbbVie and Johnson & Johnson for the treatment of blood cancers and chronic graft versus host disease, decreased by $20.7 million in 2025 as compared to 2024, reflecting competitive pressures and the impact of Medicare Part D redesign. • Promacta – Royalty Receipts from Promacta, which is marketed by Novartis for the treatment of chronic immune thrombocytopenia purpura (“ITP”) and aplastic anemia, decreased by $16.6 million in 2025 as compared to 2024, due to discontinued promotion in most markets and the U.S. launch of generic competition in May 2025. • Voranigo – Royalty Receipts from Voranigo, which is marketed by Servier for the treatment of low-grade glioma, increased by $113.3 million in 2025 as compared to 2024, primarily driven by its strong launch in the United States.
Other income, net Other income, net of $234.3 million in 2024 was primarily comprised of $154.9 million of gains on available for sale debt securities, $47.3 million of interest income earned on cash and cash equivalents and $39.5 million of gains on equity securities.
Other income, net of $234.3 million in 2024 was primarily comprised of $154.9 million of gains on available for sale debt securities, $47.3 million of interest income earned on cash and cash equivalents and $39.5 million of gains on equity securities.
Senior Unsecured Revolving Credit Facility Our subsidiary, RP Holdings, as borrower, initially entered into the Amended and Restated Credit Agreement (the “Credit Agreement”) on September 15, 2021, which provides for an unsecured revolving credit facility (the “Revolving Credit Facility”).
Senior Unsecured Revolving Credit Facility Our subsidiary, RP Holdings, as borrower, initially entered into the Amended and Restated Revolving Credit Agreement (the “Credit Agreement”) on September 15, 2021, which provides for an unsecured revolving credit facility (the “Revolving Credit Facility”).
Small declines in sell-side equity research analysts’ consensus sales forecasts over a long time horizon can result in an immediate non-cash income statement expense recognition, even though the applicable cash inflows will not be realized for many years into the future.
Small declines in sell-side equity research analysts’ consensus sales forecasts over a long time horizon can result in an immediate non-cash income statement expense recognition, even though the applicable cash inflows will not be realized for many years into the future.
Following our acquisition of the remaining non-controlling interest in RPCT held by RPSFT in December 2023, and since the Legacy Investors Partnerships no longer participate in investment opportunities, the related net income attributable to the legacy non-controlling interests is expected to continue to decline over time as the assets held by Old RPI and RPI ICAV mature.
Following our acquisition of the remaining non-controlling interest in RPCT held by RPSFT in December 2023, and since the Legacy Investors Partnerships no longer participate in investment opportunities, the related net income attributable to the legacy non-controlling interests is expected to continue to decline over time as the assets held by Old RPI mature.
We believe that our existing capital resources, cash provided by operating activities and access to our Revolving Credit Facility (defined below) will continue to allow us to meet our operating and working capital requirements, to fund planned strategic acquisitions and R&D funding arrangements, and to meet our debt service obligations for the foreseeable future.
We believe that our existing capital resources, cash provided by operating activities and access to our Revolving Credit Facility (as defined below) will continue to allow us to meet our operating and working capital requirements, to fund planned strategic acquisitions and R&D funding arrangements, and to meet our debt service obligations for the foreseeable future.
Portfolio Receipts also enables management to better analyze our liquidity and long-term growth prospects by providing a more granular product-by-product presentation of the underlying cash generation of our royalty investments. 57 Portfolio Receipts is defined as the sum of royalty receipts and milestones and other contractual receipts.
Portfolio Receipts also enables management to better analyze our liquidity and long-term growth prospects by providing a more granular product-by-product presentation of the underlying cash generation of our royalty investments. Portfolio Receipts is defined as the sum of royalty receipts and milestones and other contractual receipts.
Both the new cash flow streams and the cessation of cash flow streams related to a product’s performance in the market over the royalty term can materially affect our forecast of expected future cash flows, which directly impacts the measurement of interest income. 72 • Royalty duration.
Both the new cash flow streams and the cessation of cash flow streams related to a product’s performance in the market over the royalty term can materially affect our forecast of expected future cash flows, which directly impacts the measurement of interest income. • Royalty duration.
Portfolio Receipts does not include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are not central to our fundamental business strategy.
Portfolio Receipts also does not include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are not central to our fundamental business strategy.
These estimates and judgments arise because of the inherent uncertainty in predicting future events. 71 We evaluate financial royalty assets for impairment on an individual basis by comparing the effective interest rate at each reporting date to that of the prior period.
These estimates and judgments arise because of the inherent uncertainty in predicting future events. 68 We evaluate financial royalty assets for impairment on an individual basis by comparing the effective interest rate at each reporting date to that of the prior period.
For a discussion of cash flow activities for 2023 compared to 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
For a discussion of cash flow activities for 2024 compared to 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
(2) Capital Deployment is calculated as the summation of the following line items from our GAAP consolidated statements of cash flows: Investments in equity method investees, Purchases of available for sale debt securities, Acquisitions of financial royalty assets, Acquisitions of other financial assets, Milestone payments, Development-stage funding payments - ongoing, Development-stage funding payments - upfront and milestone less Contributions from legacy non-controlling interests - R&D.
(2) Capital Deployment is calculated as the summation of the following line items from our GAAP consolidated statements of cash flows: Investments in equity method investees, Purchases of available for sale debt securities, Acquisitions of financial royalty assets, Acquisitions of other financial assets, Milestone payments, Development-stage funding payments less Contributions from legacy non-controlling interests - R&D.
Below is a summary of the sensitivity of our current year results in relation to the royalty duration for our top three financial royalty assets that are uncapped based on net carrying value as of December 31, 2024.
Below is a summary of the sensitivity of our current year results in relation to the royalty duration for our top three financial royalty assets that are uncapped based on net carrying value as of December 31, 2025.
We were in compliance with the financial covenants as of December 31, 2024. 67 Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures that are key components of certain material covenants contained within the Credit Agreement. Noncompliance with the financial covenants under the Credit Agreement could result in our lenders requiring us to immediately repay all amounts borrowed.
We were in compliance with the financial covenants as of December 31, 2025. Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures that are key components of certain material covenants contained within the Credit Agreement. Noncompliance with the financial covenants under the Credit Agreement could result in our lenders requiring us to immediately repay all amounts borrowed.
The therapies in our portfolio address therapeutic areas such as rare disease, cancer, neuroscience, infectious disease, hematology and diabetes, and are delivered to patients across both primary and specialty care settings.
The therapies in our portfolio address therapeutic areas such as rare disease, oncology, neuroscience, infectious disease, hematology and diabetes, and are delivered to patients across both primary and specialty care settings.
Reconciling Adjustment Statements of Cash Flows Classification Interest paid, net Operating activities ( Interest paid less Interest received ) Distributions from equity method investees Investing activities Proceeds from available for sale debt securities Investing activities Distributions to legacy non-controlling interests - Portfolio Receipts Financing activities 68 Uses of Capital Acquisitions of Royalties We acquire product royalties in ways that can be tailored to the needs of our partners through a variety of structures: • Third-party Royalties – Existing royalties on approved or late-stage development therapies with high commercial potential.
Reconciling Adjustment Statements of Cash Flows Classification Interest paid, net Operating activities ( Interest paid less Interest received ) Distributions from equity method investees Investing activities Proceeds from available for sale debt securities Investing activities Distributions to legacy non-controlling interests - Portfolio Receipts Financing activities Uses of Capital Acquisitions of Royalties We acquire product royalties in ways that can be tailored to the needs of our partners through a variety of structures: • Third-party Royalties – Existing royalties on approved or late-stage development therapies.
With respect to the cystic fibrosis franchise, forecasted expected future cash flows in 2024 are significantly impacted by prong 5 from above, the estimated royalty bearing sales.
With respect to the cystic fibrosis franchise, forecasted expected future cash flows in 2025 are significantly impacted by prong 5 from above, the estimated royalty bearing sales.
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 Adjusted EBITDA, each as defined and calculated as set forth in the Credit Agreement, (ii) a consolidated coverage ratio at or above 2.50 to 1.00 of Adjusted EBITDA to consolidated interest expense, each as defined and calculated as set forth in the Credit Agreement and (iii) a consolidated Portfolio Cash Flow Ratio at or below 5.00 to 1.00 (or at or below 5.50 to 1.00 following a qualifying material acquisition) of consolidated funded debt to Portfolio Cash Flow, each as defined and calculated as set forth in the Credit Agreement.
The Credit Agreement that governs the Revolving Credit Facility and the amended loan agreement that governs the Term Loan contain 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 Adjusted EBITDA, each as defined and calculated as set forth in the Credit Agreement, (ii) a Consolidated Coverage Ratio at or above 2.50 to 1.00 of Adjusted EBITDA to consolidated interest expense, each as defined and calculated as set forth in the Credit Agreement and (iii) a Consolidated Portfolio Cash Flow Ratio at or below 5.00 to 1.00 (or at or below 5.50 to 1.00 following a qualifying material acquisition) of consolidated funded debt to Portfolio Cash Flow, each as defined and calculated as set forth in the Credit Agreement.
As our committed capital requirements are based on phases of development, the completion of which is highly uncertain, only the capital required to fund the current stage of development under such funding arrangements is considered committed capital, which was approximately $17.3 million as of December 31, 2024.
As our committed capital requirements are based on phases of development, the completion of which is highly uncertain, only the capital required to fund the current stage of development under such funding arrangements is considered committed capital, which was approximately $63.3 million as of December 31, 2025.
A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property. The majority of our current portfolio consists of third-party royalties. • Synthetic Royalties – Newly-created royalties on approved or late-stage development therapies with strong proof of concept and high commercial potential.
A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property. The majority of our current portfolio consists of third-party royalties. 65 • Synthetic Royalties – Newly-created royalties on approved or late-stage development therapies with strong proof of concept.
The weighted average coupon rate on our senior unsecured notes outstanding as of December 31, 2024 and 2023 was 3.06% and 2.48%, respectively. Refer to the “Liquidity and Capital Resources” section for additional discussion of our debt financing arrangements.
The weighted average coupon rate on our senior unsecured notes outstanding as of December 31, 2025 and 2024 was 3.75% and 3.06%, respectively. Refer to the “Liquidity and Capital Resources” section for additional discussion of our debt financing arrangements.
The gains on available for sale debt securities were primarily driven by the changes in fair value of the MorphoSys Development Funding Bonds. Net income attributable to non-controlling interests Net income attributable to the Legacy Investors Partnerships increased by $27.5 million in 2024 as compared to 2023, primarily driven by higher net income attributable to Old RPI.
The gains on available for sale debt securities were primarily driven by the changes in fair value of the MorphoSys Development Funding Bonds. Net income attributable to non-controlling interests Net income attributable to the Legacy Investors Partnerships increased by $37.6 million in 2025 as compared to 2024, primarily driven by higher net income attributable to Old RPI.
In projecting future cash flows, our policy is to rely on sell-side research analysts’ consensus sales forecasts to derive annual sales projections for each financial royalty asset over the periods for which we are entitled to royalties or milestones.
Our policy is to rely on sell-side research analysts’ consensus sales forecasts to derive annual sales projections for each financial royalty asset over the periods for which we are entitled to royalties or milestones.
Additionally, we recorded provision expense for Crysvita due to declines in sales forecasts. The provision expense for changes in expected cash flows was partially offset by provision income for changes in expected cash flows related to Tysabri due increases in sales forecasts. The provision expense for credit losses was primarily driven by the addition of Niktimvo to our portfolio.
The provision expense for changes in expected cash flows was partially offset by provision income for changes in expected cash flows related to Tysabri due increases in sales forecasts. The provision expense for credit losses was primarily driven by the addition of Niktimvo to our portfolio.
All intercompany balances and transactions between Royalty Pharma plc and RP Holdings are eliminated in the presentation of the combined financial statements. RP Holdings’ most significant asset is its investment in operating subsidiaries, which has been eliminated in the table below to exclude investments in Non-Guarantor Subsidiaries.
All intercompany balances and transactions between these entities are eliminated in the presentation of the combined financial statements. RP Holdings’ most significant asset is its investment in operating subsidiaries, which has been eliminated in the table below to exclude investments in Non-Guarantor Subsidiaries.
We consider a variety of metrics in assessing the performance of our business. Portfolio Receipts is a key performance metric that represents our ability to generate cash from our portfolio investments, the primary source of capital that we can deploy to make new portfolio investments.
We use the cash generated by our existing royalties to fund investments in new royalties. We consider a variety of metrics in assessing the performance of our business. Portfolio Receipts is a key performance metric that represents our ability to generate cash from our portfolio investments, the primary source of capital that we can deploy to make new portfolio investments.
In 2024, cash provided by financing activities was primarily driven by the net proceeds of $1.5 billion from issuance of the 2024 Notes (as further described below), partially offset by the use of cash for dividends and distributions and repurchases of Class A ordinary shares.
In 2024, cash provided by financing activities was primarily driven by the net proceeds from the issuance of $1.5 billion of senior unsecured notes, partially offset by the use of cash for dividends and distributions and repurchases of Class A ordinary shares.
As of December 31, 2024, the par value and carrying value of the total outstanding and guaranteed Notes was $7.8 billion and $7.6 billion, respectively. 70 The following financial information presents summarized combined balance sheet information as of December 31, 2024, and summarized combined statement of operations information for 2024 for Royalty Pharma plc and RP Holdings.
As of December 31, 2025, the total outstanding and guaranteed Notes had a par value and carrying value was $8.8 billion and $8.6 billion, respectively. The following financial information presents summarized combined balance sheet information as of December 31, 2025, and summarized combined statement of operations information for 2025 for Royalty Pharma plc, RP Holdings and RP Manager.
On January 24, 2024, we entered into Amendment No. 4 to the Credit Agreement to make certain technical modifications. As of December 31, 2024, we have a borrowing capacity of $1.8 billion under the Revolving Credit Facility.
On January 24, 2024 and April 8, 2025, we entered into Amendments No. 4 and 5, respectively, to the Credit Agreement to make certain technical modifications. As of December 31, 2025, we have a borrowing capacity of $1.8 billion under the Revolving Credit Facility.
The forecasted expected cash flows for the cystic fibrosis franchise included consensus estimates for Vertex’s Alyftrek following disclosure of its Phase 3 clinical data and also included the conservative assumption that royalties will only be collected on the tezacaftor component of Alyftrek and not on the deuterated ivacaftor component.
The forecasted expected cash flows for the cystic fibrosis franchise included consensus estimates for Vertex’s Alyftrek and also included the conservative assumption that royalties will only be collected on the tezacaftor component of Alyftrek and not on the deuterated ivacaftor component.
We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 35 commercial products, including Vertex’s Trikafta, GSK’s Trelegy, Roche’s Evrysdi, Johnson & Johnson’s Tremfya, Biogen’s Tysabri and Spinraza, AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Novartis’ Promacta, Pfizer’s Nurtec ODT, Gilead’s Trodelvy, among others, and 14 development-stage product candidates.
We have assembled a portfolio of royalties which entitles us to payments based directly on the top-line sales of many of the industry’s leading therapies, which includes royalties on more than 35 commercial products, including Vertex’s Trikafta and Alyftrek, GSK’s Trelegy, Biogen’s Tysabri and Spinraza, Roche’s Evrysdi, Astellas and Pfizer’s Xtandi, Johnson & Johnson’s Tremfya, AbbVie and Johnson & Johnson’s Imbruvica, Servier’s Voranigo, Gilead’s Trodelvy, Amgen’s Imdelltra and Alnylam’s Amvuttra, among others, and 20 development-stage product candidates.
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 repurchases may be made in the open market or in privately negotiated transactions.
Class A Ordinary Share Repurchases In January 2025, our board of directors authorized a new share repurchase program, which replaced the share repurchase program announced on March 27, 2023, under which we may repurchase up to $3.0 billion of our Class A ordinary shares. The repurchases may be made in the open market or in privately negotiated transactions.
The gains on available for sale debt securities were primarily driven by the changes in fair value of the MorphoSys Development Funding Bonds.
The gains on available for sale debt securities were primarily driven by the changes in fair value of the Cytokinetics Funding Arrangements.
In 2024, we recorded an income allocation of $19.2 million from the Avillion Entities primarily driven by a gain related to the positive result of Airsupra’s Phase III clinical trial which triggered a milestone payment from AstraZeneca to the Avillion Entities.
In 2024, we recorded income allocations from the Legacy SLP Interest of $10.4 million and $19.2 million from the Avillion Entities, primarily driven by a gain related to the positive result of Airsupra’s Phase III clinical trial which triggered a milestone payment from AstraZeneca to the Avillion Entities.
Provision for changes in expected cash flows from financial royalty assets The Provision for changes in expected cash flows from financial royalty assets includes the following: • non-cash expense or income related to the current period activity resulting from adjustments to the cumulative allowance for changes in expected cash flows; and • non-cash expense or income related to the provision for current expected credit losses, which reflects the activity for the period, primarily due to new financial royalty assets with limited protective rights and changes to cash flow estimates for financial royalty assets with limited protective rights. 52 As discussed above, income is accreted on our financial royalty assets using the effective interest method.
Provision for changes in expected cash flows from financial royalty assets The Provision for changes in expected cash flows from financial royalty assets includes the following: • non-cash expense or income related to the current period activity resulting from adjustments to the cumulative allowance for changes in expected cash flows; and • non-cash expense or income related to the provision for current expected credit losses, which reflects the activity for the period, primarily due to new financial royalty assets with limited protective rights and changes to cash flow estimates for financial royalty assets with limited protective rights.
Under 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 (as defined in the Management Agreement), or Portfolio Receipts for such quarter, and 0.25% of the value of our security investments under GAAP as of the end of such quarter.
Under the Legacy Management Agreement, we paid a quarterly operating and personnel payment to RPM or its affiliates equal to 6.5% of the cash receipts from Royalty Investments (as defined in the Legacy Management Agreement) and 0.25% of the value of our security investments under GAAP as of the end of such quarter (“Management Fees”).
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Special Note Regarding Forward-Looking Statements and the section titled “Risk Factors” in Part I, Item 1A.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Special Note Regarding Forward-Looking Statements and the section titled “Risk Factors” in Part I, Item 1A. Royalty Pharma plc is a public limited company incorporated under the laws of England and Wales.
We also have certain milestones payable to our counterparties that are contingent on the successful achievement of certain development, regulatory approval or commercial milestones. These contingent milestone payments are not considered contractual obligations. In 2024, we paid regulatory milestones of $50 million related to olpasiran and $25 million related to Cobenfy.
We also have certain milestones payable to our counterparties that are contingent on the successful achievement of certain development, regulatory approval or commercial milestones. These contingent milestone payments are not considered contractual obligations.
We have historically funded our investments through operating cash flows, equity contributions and debt. Our low operating costs coupled with a lack of capital expenditures and low taxes have contributed to our strong financial profile, resulting in high operating leverage and high cash flow conversion.
Our low operating costs coupled with a lack of capital expenditures and low taxes have contributed to our strong financial profile, resulting in high operating leverage and high cash flow conversion.
Portfolio Receipts is calculated as the sum of the following line items from our GAAP statements of cash flows: Cash collections from financial royalty assets , Cash collections from intangible royalty assets , Other royalty cash collections , Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts , which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to RPSFT and the Legacy Investors Partnerships.
Portfolio Receipts is calculated as the sum of the following line items from our GAAP consolidated statements of cash flows: Cash collections from financial royalty assets , Cash collections from intangible royalty assets , Other royalty cash collections , Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts , which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to the Legacy Investors Partnerships. 54 Our portfolio consists of royalties on more than 35 marketed therapies and 20 development-stage product candidates.
Because these are long-dated financial royalty assets, we have assumed a change of two years in the estimated duration to sensitize the financial statement impact. There have not been any significant changes to the estimated duration of expected future cash flows for our top three financial royalty assets during 2023 and 2022.
Because these are long-dated financial royalty assets, we have assumed a change of two years in the estimated duration to sensitize the financial statement impact. There have not been any significant changes to the estimated duration of expected future cash flows between 2023 and 2025 for the financial royalty assets displayed below except for the cystic fibrosis franchise.
The recognition of the associated non-cash provision income of $1.10 billion in 2019 was not tied to royalty receipts, but rather to the increase in sales forecasts due to the U.S. Food and Drug Administration (“FDA”) approval of Trikafta.
The recognition of the associated non-cash provision income of $1.10 billion in 2019 was not tied to royalty receipts, but rather to the increase in sales forecasts due to the U.S. Food and Drug Administration (“FDA”) approval of Trikafta. This example illustrates the volatility caused by our accounting model in our consolidated statements of operations.
Ecopipam is in Phase 3 development by Emalex Biosciences for the treatment of Tourette Syndrome. Liquidity and Capital Resources Overview Our primary source of liquidity is cash provided by operations. For 2024 and 2023, we generated $2.8 billion and $3.0 billion, respectively, in Net cash provided by operating activities .
Litifilimab is in Phase 3 development for the treatment of lupus. Liquidity and Capital Resources Overview Our primary source of liquidity is cash provided by operations. For 2025 and 2024, we generated $2.5 billion and $2.8 billion, respectively, in Net cash provided by operating activities .
Under the terms of the indenture governing the Notes, Royalty Pharma plc and the Guarantor Subsidiary each fully and unconditionally, jointly and severally, guarantee the payment of interest, principal and premium, if any, on the Notes.
Our remaining subsidiaries (the “Non-Guarantor Subsidiaries”) do not guarantee the Notes. 67 Under the terms of the indenture governing the Notes, Royalty Pharma plc and the Guarantor Subsidiaries each fully and unconditionally, jointly and severally, guarantee the payment of interest, principal and premium, if any, on the Notes.
Our contractual royalty terms, rates, and any milestones are then applied to the adjusted sales projections to calculate the expected royalty or milestone payments over the term of the financial royalty asset’s life, forming the basis for our forecast of expected future cash flows used to calculate and measure interest income. • Commercial performanc e.
Contractual royalty rates, terms and milestones are then applied to the adjusted sales projections to estimate the royalty or milestone payments over the asset’s life, forming the basis for expected future cash flows used in calculating and measuring interest income. • Commercial performanc e.
The impact of these sensitivity assumptions is summarized as follows (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2024 Estimated Royalty Duration (1) Change in Duration Assumption Applied Provision Income for Changes in Expected Cash Flows Change in Duration Assumption Applied Provision Expense for Changes in Expected Cash Flows Cystic fibrosis franchise 2039-2041 (2) + 2 years $ (160,723) - 2 years $ 283,088 Trelegy 2029-2030 + 2 years (66,647) - 2 years 281,188 Tysabri (3) + 2 years (31,357) - 2 years 46,844 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors.
The impact of these sensitivity assumptions is summarized as follows (in thousands): Year Ended December 31, 2025 Year Ended December 31, 2025 Estimated Royalty Duration (1) Change in Duration Assumption Applied Provision Income for Changes in Expected Cash Flows Change in Duration Assumption Applied Provision Expense for Changes in Expected Cash Flows Cystic fibrosis franchise 2039-2041 (2) + 2 years $ — - 2 years $ 216,527 Evrysdi 2035-2036 + 2 years (169,874) - 2 years 218,787 Voranigo 2038 + 2 years — - 2 years 50,424 (1) Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors.
Other income, net Other income, net primarily includes the changes in fair market value of our equity securities, derivative instruments and available for sale debt securities, including related forwards and funding commitments, and interest income.
Other income, net Other income, net primarily includes the changes in fair value of our equity securities and available for sale debt securities, including related forwards and funding commitments, and interest income. Net income attributable to non-controlling interests The net income attributable to non-controlling interests includes income attributable to the legacy non-controlling interests and the continuing non-controlling interests.
Our ability to satisfy our working capital needs, debt service and other obligations, and to comply with the financial covenants under our financing agreements depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions and other factors, many of which are beyond our control. 65 Cash Flows The following table and analysis of cash flow changes presents a summary of our cash flow activities for 2024 as compared to 2023 (in thousands).
Our ability to satisfy our working capital needs, debt service and other obligations, and to comply with the financial covenants under our financing agreements depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions and other factors, many of which are beyond our control.
Significant Assumptions Applied in Developing Forecasted Expected Future Cash Flows As part of the preparation of the forecasted expected future cash flows, which relies on the sources and variables discussed above, management is required to make assumptions around the following forecast inputs: (1) estimates of the duration of the royalty, which includes consideration of the strength of patent protection and anticipated timing for entry of generics, (2) product growth rates and sales trends in outer years, generally projected through statistical curves, (3) the product and pricing mix for franchised products, (4) the geographical allocation of annual sales data from sell-side equity research analysts’ models, and (5) the portion of sales that are subject to royalties, which is referred to as royalty bearing sales.
Macroeconomic factors, such as changes in economies or the competitive landscape, including the unexpected loss of exclusivity to the products underlying our portfolio of royalties, changes in government legislation, product life cycles, industry consolidations and other changes beyond our control could result in a positive or negative impact on our forecast of expected future cash flows and the related measurement of interest income. 69 Significant Assumptions Applied in Developing Forecasted Expected Future Cash Flows As part of the preparation of the forecasted expected future cash flows, which relies on the sources and variables discussed above, management is required to make assumptions around the following forecast inputs: (1) estimates of the duration of the royalty, which includes consideration of the strength of patent protection and anticipated timing for entry of generics, (2) product growth rates and sales trends in outer years, generally projected through statistical curves, (3) the product and pricing mix for franchised products, (4) the geographical allocation of annual sales data from sell-side equity research analysts’ models, and (5) the portion of sales that are subject to royalties, which is referred to as royalty bearing sales.
The net income attributable to the continuing non-controlling interests includes RP Holdings Class B Interests held by the Continuing Investors Partnerships for which the related future net income will decline over time if the investors who indirectly own RP Holdings Class B Interests conduct exchanges for our Class A ordinary shares.
The net income attributable to the continuing non-controlling interests related to the Continuing Investors Partnerships and the Holders of RP Holdings Class E Interests is expected to decline over time if the investors who indirectly own the RP Holdings Class B Interests and the Holders of RP Holdings Class E Interests, respectively, conduct exchanges for our Class A ordinary shares.
Most of the royalties we acquire are treated as investments in cash flow streams and are classified as financial assets measured under the effective interest method in accordance with generally accepted accounting principles in the United States (“GAAP”).
Understanding Our Financial Reporting Our portfolio of investments contains royalties and royalty-like terms held through different forms or instruments. Most of the royalties we acquire are treated as investments in cash flow streams and are classified as financial assets measured under the effective interest method in accordance with generally accepted accounting principles in the United States (“GAAP”).
Average 2024 2023 2022 2021 2020 Announced Transactions Upfront payments $ 2,125,400 $ 2,325,000 $ 2,109,000 $ 1,963,000 $ 2,161,000 $ 2,069,000 Potential payments/milestones 973,200 493,000 1,850,000 1,443,000 705,000 375,000 Total announced transaction value $ 3,098,600 $ 2,818,000 $ 3,959,000 $ 3,406,000 $ 2,866,000 $ 2,444,000 Capital Deployment Approved/marketed royalties $ 1,732,145 $ 1,775,545 $ 1,875,232 $ 1,920,958 $ 1,684,769 $ 1,404,222 Development-stage royalties (1) 693,762 985,364 316,689 507,399 823,374 835,986 Total Capital Deployment (2) $ 2,425,907 $ 2,760,909 $ 2,191,921 $ 2,428,357 $ 2,508,143 $ 2,240,208 (1) Development-stage royalties include: direct R&D funding arrangements and funding arrangements executed through our joint venture partnership with the Avillion Entities, investments in development-stage product candidates and investments in debt securities primarily made in connection with acquisitions of royalties on development-stage products from the seller.
Average 2025 2024 2023 2022 2021 Announced Transactions Upfront payments $ 2,104,600 $ 1,965,000 $ 2,325,000 $ 2,109,000 $ 1,963,000 $ 2,161,000 Potential payments/milestones 1,445,200 2,735,000 493,000 1,850,000 1,443,000 705,000 Total announced transaction value $ 3,549,800 $ 4,700,000 $ 2,818,000 $ 3,959,000 $ 3,406,000 $ 2,866,000 Capital Deployment Approved/marketed royalties $ 1,776,045 $ 1,733,720 $ 1,775,545 $ 1,875,232 $ 1,920,958 $ 1,574,769 Development-stage royalties (1) 720,986 862,102 985,364 316,689 507,399 933,374 Total Capital Deployment (2) $ 2,497,031 $ 2,595,822 $ 2,760,909 $ 2,191,921 $ 2,428,357 $ 2,508,143 (1) Development-stage royalties include: direct R&D funding arrangements and funding arrangements executed through our joint venture partnership with the Avillion Entities, investments in development-stage product candidates and investments in debt securities primarily made in connection with acquisitions of royalties on development-stage products from the seller.
If the duration of these financial royalty assets were extended two years by assuming the statistically projected growth trends continue and all other royalty terms and assumptions remain unchanged, any impact to interest income would be recognized prospectively over the remaining expected life of the financial asset.
During 2024, the estimated duration for the cystic fibrosis franchise was extended from 2037 to a range of 2039 to 2041, reflecting the approval of Alyftrek. 70 If the duration of these financial royalty assets were extended two years by assuming the statistically projected growth trends continue and all other royalty terms and assumptions remain unchanged, any impact to interest income would be recognized prospectively over the remaining expected life of the financial asset.
Additionally, we have up to $1.8 billion of available revolving commitments under our Revolving Credit Facility. A summary of our borrowing activities, balances and compliance with certain debt covenants under various financing arrangements is included in Note 10–Borrowings of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
A summary of our borrowing activities, balances and compliance with certain debt covenants under various financing arrangements is included in Note 12-Borrowings of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. We have historically funded our investments through operating cash flows, equity contributions and debt.
Portfolio Overview Our business model is different from that of traditional operating companies in the biopharmaceutical industry. Our operating performance is a function of our liquidity as our operations have historically been financed primarily with cash flows generated by our royalties. We use the cash generated by our existing royalties to fund investments in new royalties.
The RP Holdings Class E Interests were issued in connection with the Internalization. Portfolio Overview Our business model is different from that of traditional operating companies in the biopharmaceutical industry. Our operating performance is a function of our liquidity as our operations have historically been financed primarily with cash flows generated by our royalties.
We recorded provision expense for changes in expected cash flows primarily related to Evrysdi due to declines in sell-side equity research analysts’ consensus sales forecasts.
We recorded provision income for changes in expected cash flows primarily related to the cystic fibrosis franchise, Tremfya, and Xtandi due to increases in sell-side equity research analysts’ consensus sales forecasts, partially offset by provision expense related to Evrysdi due to declines in sell-side equity research analysts’ consensus sales forecasts.
The Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of RP Holdings Class B Interests was approximately 24% as of December 31, 2024. RP Holdings Class B Interests are exchangeable into our Class A ordinary shares.
The Continuing Investors Partnerships’ indirect ownership in RP Holdings through their indirect ownership of RP Holdings’ Class B ordinary shares (the “RP Holdings Class B Interests”). RP Holdings Class B Interests are exchangeable into our Class A ordinary shares.
In each scenario where a financial royalty asset has been fully amortized, income from such royalty is recognized as Other royalty income and revenues . Other royalty income and revenues also includes revenues from intangible royalty assets and income from royalties that are recorded at fair value.
In each scenario where a financial royalty asset has been fully amortized, income from such royalty is recognized as Other royalty income and revenues .
Net income attributable to non-controlling interests above can fluctuate significantly from period to period, primarily driven by volatility in the income statement activity of the respective underlying entity as a result of the non-cash charges associated with applying the effective interest accounting methodology to our financial royalty assets as described in the section titled “Understanding Our Financial Reporting.” Further, the net income attributable to the continuing non-controlling interests will include net income attributable to the RP Holdings Class C Special Interest held by EPA Vehicle once certain performance conditions of the Equity Performance Awards have been met, which is expected to occur in 2025.
Net income attributable to non-controlling interests above can fluctuate significantly from period to period, primarily driven by volatility in the income statement activity of the respective underlying entity as a result of the non-cash charges associated with applying the effective interest accounting methodology to our financial royalty assets as described in the section titled “Understanding Our Financial Reporting.” Further, the net income attributable to the continuing non-controlling interests includes EPAs attributable to Founder’s Equity that we began recognizing in the first quarter of 2025 as certain conditions were met.
We intend to fund short-term and long-term financial obligations as they mature through cash and cash equivalents, future cash flows from operations or the issuance of additional debt.
Sources of Capital As of December 31, 2025 and 2024, our cash and cash equivalents totaled $618.7 million and $929.0 million, respectively. We intend to fund short-term and long-term financial obligations as they mature through cash and cash equivalents, future cash flows from operations or the issuance of additional debt.
There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual. We estimate royalty duration of 2039-2041 due to expected Alyftrek patent expiration and potential generic entry thereafter leading to sales decline. (3) Royalty is perpetual.
There can be no assurances that our royalties will expire when expected. (2) Royalty is perpetual. We estimate royalty duration of 2039-2041 due to expected Alyftrek patent expiration and potential generic entry thereafter leading to sales decline. Recent Accounting Pronouncements See Note 2-Summary of Significant Accounting Policies to our consolidated financial statements for additional information on recently issued accounting standards.
Although we believe that the deuterated ivacaftor component of Alyftrek is the same as ivacaftor and is therefore royalty-bearing, Vertex has made public statements that it believes the deuterated ivacaftor component is not royalty-bearing. If deuterated ivacaftor is determined to be royalty-bearing, we may recognize provision income in our results of operations at that time.
Although we believe that the deuterated ivacaftor component of Alyftrek is the same as ivacaftor and is therefore royalty-bearing, Vertex has made public statements that it believes the deuterated ivacaftor component is not royalty-bearing.
In 2023, we recorded provision expense of $560.7 million, comprised of $538.4 million in provision expense for changes in expected cash flows and $22.3 million in provision expense for current expected credit losses. We recorded provision expense for changes in expected cash flows for Tysabri, Imbruvica and Tremfya primarily due to declines in sell-side equity research analysts’ consensus sales forecasts.
In 2024, we recorded provision expense of $732.5 million, comprised of $632.0 million in provision expense for changes in expected cash flows and $100.4 million in provision expense for current expected credit losses. We recorded provision expense for changes in expected cash flows primarily related to Evrysdi due to declines in sell-side equity research analysts’ consensus sales forecasts.
We invest in approved products and development-stage product candidates that have generated robust proof of concept data. We invest in these therapies through the purchase of royalties, milestones and other contractual receipts by making hybrid investments and by acquiring businesses with significant existing royalty assets or the potential for the creation of such assets.
We invest in these therapies through the purchase of royalties, milestones and other contractual receipts by making hybrid investments and by acquiring businesses with significant existing royalty assets or the potential for the creation of such assets. In 2025, we invested $2.6 billion in royalties, milestones and other contractual receipts.
(2) The table below shows the line item for each adjustment and the direct location for such line item on the statements of cash flows.
The MorphoSys Development Funding Bonds were sold in January 2025. (2) The table below shows the line item for each adjustment and the direct location for such line item in the consolidated statements of cash flows.
Currently, we believe that we have sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support our growth objectives. 66 Borrowings Our borrowings consisted of the following (in thousands): Type of Borrowing Date of Issuance Maturity As of December 31, 2024 As of December 31, 2023 Senior Unsecured Notes: $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 $500,000, 5.15% (issued at 98.758% of par) 6/2024 9/2029 500,000 — $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 $500,000, 5.40% (issued at 97.872% of par) 6/2024 9/2034 500,000 — $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 $500,000, 5.90% (issued at 97.617% of par) 6/2024 9/2054 500,000 — Total senior unsecured debt 7,800,000 6,300,000 Unamortized debt discount and issuance costs (187,574) (164,715) Total debt carrying value 7,612,426 6,135,285 Less: Current portion of long-term debt (997,773) — Total long-term debt $ 6,614,653 $ 6,135,285 Senior Unsecured Notes In June 2024, we issued $1.5 billion of senior unsecured notes (the “2024 Notes”) with a weighted average coupon rate of 5.48%.
Borrowings Our borrowings consisted of the following (in thousands): Type of Borrowing Date of Issuance Maturity As of December 31, 2025 As of December 31, 2024 Senior Unsecured Notes: $1,000,000, 1.20% (issued at 98.875% of par) 9/2020 9/2025 $ — $ 1,000,000 $1,000,000, 1.75% (issued at 98.284% of par) 9/2020 9/2027 1,000,000 1,000,000 $500,000, 5.15% (issued at 98.758% of par) 6/2024 9/2029 500,000 500,000 $1,000,000, 2.20% (issued at 97.760% of par) 9/2020 9/2030 1,000,000 1,000,000 $600,000, 4.45% (issued at 98.909% of par) 9/2025 3/2031 600,000 — $600,000, 2.15% (issued at 98.263% of par) 7/2021 9/2031 600,000 600,000 $500,000, 5.40% (issued at 97.872% of par) 6/2024 9/2034 500,000 500,000 $900,000, 5.20% (issued at 97.989% of par) 9/2025 9/2035 900,000 — $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 $500,000, 5.90% (issued at 97.617% of par) 6/2024 9/2054 500,000 500,000 $500,000, 5.95% (issued at 95.824% of par) 9/2025 9/2055 500,000 — Term Loan See below 7/2026 380,000 — Total senior unsecured debt 9,180,000 7,800,000 Unamortized debt discount and issuance costs (229,083) (187,574) Total debt carrying value 8,950,917 7,612,426 Less: Current portion of long-term debt $ (380,000) $ (997,773) Total long-term debt $ 8,570,917 $ 6,614,653 Senior Unsecured Notes As of December 31, 2025, our total principal amount of senior unsecured notes outstanding was $8.8 billion (the “Notes”) with a weighted average coupon rate of 3.75%.
Our approach is rooted in a highly disciplined evaluation process that is not dictated by a minimum annual investment threshold. 63 Included below are tables of investment activities over each of the last five years (in thousands). Announced transactions amounts reflect maximum transaction value for transactions entered into over each of the periods presented.
Included below are tables of investment activities over each of the last five years (in thousands). Announced transactions amounts reflect maximum transaction value for transactions entered into over each of the periods presented.
If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a credit to the provision, or provision income.
If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a credit to the provision, or provision income. 48 The same variables and management’s estimates affecting the recognition of interest income on our financial royalty assets noted above also directly impact the provision.
Provision for changes in expected cash flows from financial royalty assets Provision activity is a combination of income and expense items.
Other royalty income and revenues Other royalty inco me and revenues were relatively flat in 2025 as compared to 2024. 51 Provision for changes in expected cash flows from financial royalty assets Provision activity is a combination of income and expense items.
A reconciliation of Adjusted EBITDA and Portfolio Cash Flow to Net cash provided by operating activities , the closest GAAP measure, is presented below (in thousands): Years Ended December 31, 2024 2023 Net cash provided by operating activities (GAAP) $ 2,768,986 $ 2,987,802 Adjustments: Proceeds from available for sale debt securities (1), (2) 19,786 1,440 Distributions from equity method investees (2) 23,641 43,882 Interest paid, net (2) 113,088 97,564 Development-stage funding payments - ongoing 2,000 2,000 Development-stage funding payments - upfront and milestone — 50,000 Distributions to legacy non-controlling interests - Portfolio Receipts (2) (362,280) (376,987) Adjusted EBITDA (non-GAAP) $ 2,565,221 $ 2,805,701 Interest paid, net (2) (113,088) (97,564) Portfolio Cash Flow (non-GAAP) $ 2,452,133 $ 2,708,137 (1) In the fourth quarter of 2023, we began receiving quarterly repayments on tranche one of the Cytokinetics Commercial Launch Funding.
A reconciliation of Adjusted EBITDA and Portfolio Cash Flow to Net cash provided by operating activities , the closest GAAP measure, is presented below (in thousands): Years Ended December 31, 2025 2024 Net cash provided by operating activities (GAAP) $ 2,489,823 $ 2,768,986 Adjustments: Proceeds from available for sale debt securities (1), (2) 21,226 19,786 Distributions from equity method investees (2) 105,149 23,641 Interest paid, net (2) 241,983 113,088 Development-stage funding payments 452,000 2,000 Distributions to legacy non-controlling interests - Portfolio Receipts (2) (354,901) (362,280) Payments for Employee EPAs 10,943 — Adjusted EBITDA (non-GAAP) $ 2,966,223 $ 2,565,221 Interest paid, net (2) (241,983) (113,088) Portfolio Cash Flow (non-GAAP) $ 2,724,240 $ 2,452,133 (1) Amounts include quarterly repayments on the Cytokinetics Commercial Launch Funding and a quarterly repayment on the MorphoSys Development Funding Bonds in each of 2025 and 2024.
Given the importance of cash flows and their predictability to management’s operation of the business, management uses Portfolio Receipts (as defined below) as a primary measure of our operating performance. See “ — Portfolio Overview” for additional discussion regarding Portfolio Receipts.
Our operations have historically been financed primarily with cash flows generated by our royalties. Given the importance of cash flows and their predictability to management’s operation of the business, management uses Portfolio Receipts (as defined below) as a primary measure of our operating performance.
When royalty-bearing pharmaceutical products have limited or no coverage by sell-side equity research analysts, or where sell-side equity research analyst estimates are not available for the full term of our royalty, particularly for the later years in a product’s life, we generally incorporate a statistical curve developed using historical sales data and available consensus sales projections to forecast product sales over the remaining life of the product. 73 Even though we believe interest income from financial royalty assets and the associated non-cash provision for changes in expected cash flows are not indicative of our near-term financial performance and should not be used as a source for predicting future income or growth trends, changes in the aforementioned assumptions could result in a material impact to our financial statements.
When royalty-bearing pharmaceutical products have limited or no coverage by sell-side equity research analysts, or where sell-side equity research analyst estimates are not available for the full term of our royalty, particularly for the later years in a product’s life, we generally incorporate a statistical curve developed using historical sales data and available consensus sales projections to forecast product sales over the remaining life of the product.
The provision breakdown by royalty asset (exclusive of the provision for current expected credit losses) based on the largest contributors to each year’s provision income or expense (in thousands) is as follows: Royalty 2024 Royalty 2023 Evrysdi $ 378,565 Tysabri $ 222,285 Cystic fibrosis franchise 256,814 Imbruvica 220,127 Crysvita 164,265 Tremfya 120,733 IDHIFA (75,059) Promacta (41,617) Tysabri (158,433) Evrysdi (46,077) Other 65,894 Other 62,920 Total provision, exclusive of provision for credit losses 632,046 Total provision, exclusive of provision for credit losses 538,371 Provision for current expected credit losses 100,415 Provision for current expected credit losses 22,285 Total provision $ 732,461 Total provision $ 560,656 In 2024, we recorded provision expense of $732.5 million, comprised of $632.0 million in provision expense for changes in expected cash flows and $100.4 million in provision expense for current expected credit losses.
The provision breakdown by royalty asset (exclusive of the provision for current expected credit losses) based on the largest contributors to each year’s provision income or expense (in thousands) is as follows: Royalty 2025 Royalty 2024 Cystic fibrosis franchise $ (259,353) Evrysdi $ 378,565 Tremfya (77,895) Cystic fibrosis franchise 256,814 Xtandi (64,368) Crysvita 164,265 Promacta 54,772 IDHIFA (75,059) Evrysdi 115,558 Tysabri (158,433) Other (38,389) Other 65,894 Total provision, exclusive of provision for credit losses (269,675) Total provision, exclusive of provision for credit losses 632,046 Provision for current expected credit losses (26,163) Provision for current expected credit losses 100,415 Total provision $ (295,838) Total provision $ 732,461 In 2025, we recorded provision income of $295.8 million, comprised of $269.7 million in provision income for changes in expected cash flows and $26.2 million in provision income for current expected credit losses.
Understanding Our Results of Operations We report non-controlling interests related to the portion of ownership interests of consolidated subsidiaries not owned by us and which are attributable to: 1. The Legacy Investors Partnerships’ ownership of approximately 18% of Old RPI and RPI ICAV.
See “ — Portfolio Overview” for additional discussion regarding Portfolio Receipts. 46 Understanding Our Results of Operations We report non-controlling interests related to the portion of ownership interests of consolidated subsidiaries not owned by us and which are attributable to: 1.
Amounts presented below do not represent our total consolidated amounts (in thousands): Summarized Combined Balance Sheet As of December 31, 2024 Current assets $ 53,380 Current interest receivable on intercompany notes due from Non-Guarantor Subsidiaries 23,908 Current intercompany notes receivable due from Non-Guarantor Subsidiaries 242,476 Non-current assets 3,074 Non-current intercompany notes receivable due from Non-Guarantor Subsidiaries 2,430,894 Current liabilities 1,100,681 Current interest payable on intercompany notes due to Non-Guarantor Subsidiaries 23,905 Current intercompany notes payable due to Non-Guarantor Subsidiaries 242,476 Non-current liabilities 6,613,747 Non-current intercompany notes payable due to Non-Guarantor Subsidiaries 1,609,898 Summarized Combined Statement of Operations Year Ended December 31, 2024 Interest income on intercompany notes receivable due from Non-Guarantor Subsidiaries $ 104,167 Other income 822 Operating expenses 251,831 Interest expense on intercompany notes due to Non-Guarantor Subsidiaries 53,798 Net loss 200,640 Critical Accounting Policies and Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses.
Amounts presented below do not represent our total consolidated amounts (in thousands): Summarized Combined Balance Sheet As of December 31, 2025 Current assets $ 27,054 Current interest receivable on intercompany notes due from Non-Guarantor Subsidiaries 26,932 Non-current assets 926,732 Non-current intercompany notes receivable due from Non-Guarantor Subsidiaries 3,011,820 Current liabilities 515,312 Current interest payable on intercompany notes due to Non-Guarantor Subsidiaries 26,932 Non-current liabilities 9,147,894 Non-current intercompany notes payable due to Non-Guarantor Subsidiaries 2,208,840 Summarized Combined Statement of Operations Year Ended December 31, 2025 Interest income on intercompany notes receivable due from Non-Guarantor Subsidiaries $ 146,611 Other income 72,196 Operating expenses 725,272 Interest expense on intercompany notes due to Non-Guarantor Subsidiaries 72,010 Net loss 578,475 Critical Accounting Policies and Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses.
Investments Overview Ongoing investment in new royalties is fundamental to the long-term prospects of our business. New investments provide a source of growth for our Royalty Receipts, supplementing growth within our existing portfolio and offsetting declines for royalties on products that have lost market exclusivity.
New investments provide a source of growth for our Royalty Receipts, supplementing growth within our existing portfolio and offsetting declines for royalties on products that have lost market exclusivity. We evaluate an array of royalty acquisition opportunities on a continuous basis and expect to continue to make acquisitions in the ordinary course of our business.
Royalty Pharma plc is a public limited company that was incorporated under the laws of England and Wales to facilitate our initial public offering (“IPO”) in 2020. “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis.
“Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis. Our principal asset is a controlling equity interest in Royalty Pharma Holdings Ltd (“RP Holdings”), a private limited company incorporated under the laws of England and Wales. We conduct our business through RP Holdings and its subsidiaries.
Following the acquisition, personnel costs will comprise the most significant component of G&A expenses. 53 Equity in (earnings)/losses of equity method investees Equity in (earnings)/losses of equity method investees primarily includes the results of our share of income or loss from the following non-consolidated affiliates: 1. Legacy SLP Interest.
Lastly, G&A expenses include rent, legal fees and other expenses for professional services. 49 Equity in earnings of equity method investees Equity in earnings of equity method investees primarily includes the results of our share of income or loss from the following non-consolidated affiliates: 1. Legacy SLP Interest.
In certain instances, we may acquire a royalty that includes more substantial rights or ownership of the underlying intellectual property, we classify such royalties as intangible assets and recognize revenue from these intangible royalty assets. 51 The royalty payors that accounted for greater than 10% of our total income and other revenues are shown in the table below: Years Ended December 31, Royalty Payor Royalty 2024 2023 Vertex Cystic fibrosis franchise 36 % 36 % Roche Evrysdi, Mircera 10 % * *Represents less than 10%.
Most of our royalties are classified as financial assets as our ownership rights are generally passive in nature. 47 The royalty payors that accounted for greater than 10% of our total income and other revenues are shown in the table below: Year ended December 31, Royalty Payor Royalty 2025 2024 Vertex Cystic fibrosis franchise 35 % 36 % Roche Evrysdi, Mircera * 10 % *Represents less than 10%.
The higher net income is a result of provision income recognized in 2024 as compared to provision expense recognized in 2023. Net income attributable to the Continuing Investors Partnerships decreased by $115.8 million in 2024 as compared to 2023, primarily due to lower net income attributable to RP Holdings as a result of higher provision expense in the current period.
Net income attributable to the Continuing Investors Partnerships decreased by $45.6 million in 2025 as compared to 2024, primarily driven by lower net income attributable to RP Holdings as a result of higher R&D expense and share-based compensation expense recognized in 2025, which was partially offset by provision income.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−2 removed8 unchanged
Biggest changeWe have a $1.8 billion Revolving Credit Facility with a variable interest rate that had no outstanding borrowing balance as of December 31, 2024.
Biggest changeWe have a $1.8 billion Revolving Credit Facility, a $350 million Uncommitted Credit Facility and a $380 million Term Loan with variable interest rates. The Revolving Credit Facility and the Uncommitted Credit Facility had no outstanding borrowings as of December 31, 2025. We are subject to interest rate fluctuation exposure related to the amounts drawn under the credit facilities.
Our debt portfolio is managed on a consolidated basis and management makes financing decisions to achieve the lowest cost of debt capital and to maximize portfolio objectives. As of December 31, 2024, 100% of our outstanding Notes have fixed interest rates.
Our debt portfolio is managed on a consolidated basis and management makes financing decisions to achieve the lowest cost of debt capital and to maximize portfolio objectives. As of December 31, 2025, 100% of our outstanding Notes have fixed interest rates.
As of December 31, 2024 and 2023 , Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise, accounted for 34% and 32% of our current portion of financial royalty assets, respectively, and represented the largest individual marketer and payor of our royalties.
As of December 31, 2025 and 2024 , Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise, accounted for 32% and 34% of our current portion of financial royalty assets, respectively, and represented the largest individual marketer and payor of our royalties.
We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements, derivative financial instruments, and available for sale debt securities so that we can properly assess and respond to changes in their credit profile.
We monitor the financial performance and creditworthiness of the counterparties to our royalty agreements and available for sale debt securities so that we can properly assess and respond to changes in their credit profile.
Refer to “Understanding Our Results of Operations” within this MD&A for a discussion of the royalty payors accounting for 10% or more of our total income and other revenues for 2024 and 2023.
Refer to “Understanding Our Results of Operations” within this MD&A for a discussion of the royalty payors accounting for 10% or more of our total income and other revenues for 2025 and 2024.
The products in which we hold royalties are marketed by leading biopharmaceutical industry participants, including, among others, Vertex, GSK, Roche, Johnson & Johnson, Biogen, AbbVie, Astellas, Pfizer, Novartis and Gilead.
The products in which we hold royalties are marketed by leading biopharmaceutical industry participants, including, among others, Vertex, GSK, Biogen, Roche, Astellas, Pfizer, Johnson & Johnson, AbbVie, Servier, Gilead, Amgen and Alnylam.
To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets or available for sale debt securities or on the settlement of our derivative financial instruments.
To date, we have not experienced any significant losses with respect to the collection of income or revenue on our royalty assets or available for sale debt securities. 72
In order to manage our exposures, we follow established risk management policies and procedures, including the use of derivative financial instruments, such as swaps, rate locks and forwards. We do not enter into derivative instruments for trading or speculative purposes. The counterparties to these contracts are all major financial institutions.
In order to manage our exposures, we follow established risk management policies and procedures, including the use of derivative financial instruments, such as swaps, rate locks and forwards. We do not enter into derivative instruments for trading or speculative purposes.
Foreign Currency Exchange Risk Our results of operations are subject to foreign currency exchange risk through transactional exposure resulting from movements in exchange rates between the time we recognize royalty income or royalty revenue and the time at which the transaction settles, or we receive the royalty payment.
The counterparties to these contracts are all major financial institutions. 71 Foreign Currency Exchange Risk Our results of operations are subject to foreign currency exchange risk through transactional exposure resulting from movements in exchange rates between the time we recognize royalty income or royalty revenue and the time at which the transaction settles, or we receive the royalty payment.
As of December 31, 2024, we held cash and cash equivalents of $929.0 million, of which $360.7 million was cash and $568.3 million was invested in interest-bearing money market funds. As of December 31, 2023, we had cash and cash equivalents of $477.0 million, of which $319.6 million was cash and $157.4 million was invested in interest-bearing money market funds.
As of December 31, 2025, we held cash and cash equivalents of $618.7 million, of which $235.1 million was cash and $383.6 million was invested in interest-bearing money market funds. As of December 31, 2024, we had cash and cash equivalents of $929.0 million, of which $360.7 million was cash and $568.3 million was invested in interest-bearing money market funds.
We are subject to credit risk from our royalty assets, our receivables and our financial instruments, primarily derivative and available for sale debt securities.
Credit and Counterparty Risk We are exposed to credit risk related to the counterparties with which we do business. We are subject to credit risk from our royalty assets, our receivables and our financial instruments, primarily available for sale debt securities.
Removed
We are subject to interest rate fluctuation exposure related to the Revolving Credit Facility for the amounts drawn. 75 Credit and Counterparty Risk We are exposed to credit risk related to the counterparties with which we do business.
Removed
If a counterparty becomes bankrupt, or otherwise fails to perform its obligations under a derivative financial instruments due to financial difficulties, we may experience significant delays in obtaining any recovery under the derivative financial instruments in a bankruptcy or other reorganization proceeding. 76

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