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RPRX

Royalty Pharma NasdaqGS:RPRX Stock Report

Last Price

US$41.26

Market Cap

US$24.9b

7D

1.4%

1Y

12.5%

Updated

28 Sep, 2022

Data

Company Financials +
RPRX fundamental analysis
Snowflake Score
Valuation4/6
Future Growth5/6
Past Performance1/6
Financial Health3/6
Dividends2/6

RPRX Stock Overview

Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States.

Royalty Pharma plc Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Royalty Pharma
Historical stock prices
Current Share PriceUS$41.26
52 Week HighUS$44.75
52 Week LowUS$34.86
Beta0.30
1 Month Change-2.51%
3 Month Change-1.86%
1 Year Change12.49%
3 Year Changen/a
5 Year Changen/a
Change since IPO-7.28%

Recent News & Updates

Aug 18

Royalty Pharma: Strategic Royalty Interest Acquisition To Drive Significant Growth

Royalty Pharma has agreed to acquire a royalty interest in Trelegy treatment from Innoviva, Inc. and Theravance Biopharma, Inc. for $1.3 billion in an upfront cash payment. The company is expecting this deal to add a minimum of $200 million to the adjusted non-GAAP cash receipt of RPRX in 2025. RPRX acquired royalty interest from Blueprint Medicines for the ex-US sales of Gavreto for $175 million in an upfront cash payment. I assign a buy rating for RPRX on the basis of strong future growth prospects through strategic royalty acquisition. Investment Thesis Royalty Pharma plc (RPRX) is an active biopharmaceutical royalty buyer and funder of technologies in the biopharmaceutical space. It is headquartered in New York, United States. In this thesis, I will discuss the strategic royalty acquisitions by RPRX and their impact on the company's future performance. I assign a buy rating for RPRX on the basis of strong future growth prospects through strategic royalty acquisition. Acquisition of Royalty Interest in Trelegy Ellipta RPRX has made yet another acquisition as per its long-term growth strategy. It relies on acquisition to sustain long-term growth. The company recently has agreed to acquire royalty interest in Trelegy Ellipta, popularly known as Trelegy, from Innoviva, Inc. (INVA) and Theravance Biopharma, Inc. (TBPH). The deal is estimated to cost RPRX $1.3 billion in upfront cash payment and an additional $300 million in case the company achieves certain sales milestones in the future. Trelegy primarily treats respiratory problems like chronic obstructive pulmonary disease (COPD) and asthma for patients aged 18 years and above. As per this deal, RPRX will be entitled to 6.5%-10% royalty on the sales of Trelegy worldwide till June 30, 2029, after which RPRX will have to pay 85% of the royalty earned on the international sales of Trelegy to Theravance Biopharma and 85% royalty on the domestic (United States) sales after December 31, 2030. To put into perspective the opportunity that lies ahead of RPRX with respect to Trelegy sales, the annual sales of Trelegy in 2021 stood at $1.68 billion, up 57% from 2020. Trelegy is a treatment constantly growing its market share and sales. I believe it will diversify RPRX's respiratory treatment portfolio and help diversify its risk. The company is expecting this deal to add a minimum of $200 million to the adjusted non-GAAP cash receipt of RPRX in 2025. As per my analysis, this deal will drive future growth for the company and help it maintain its growth trajectory. Pablo Legorreta, Royalty Pharma's founder and Chief Executive Officer, stated: We are excited to acquire this royalty from Theravance and Innoviva. Trelegy is the leading triple combination therapy for COPD and asthma and adds another important, rapidly growing blockbuster therapy to our royalty portfolio. Additionally, providing capital at scale positions Theravance and Innoviva to pursue important strategic initiatives. The transaction involves multiple parties with different motivations and goals and once again highlights how Royalty Pharma can facilitate complex transactions to create win-win solutions for its partners. Acquisition of Royalty Interest in Gavreto RPRX has acquired a royalty in Gavreto; a therapy used to treat a form of lung cancer called NSCLC and other RET-altered cancers. RPRX acquired royalty interest from Blueprint Medicines for the ex-US sales of Gavreto. As per the conditions of this deal, RPRX will receive the royalty interest in the range of higher tens to mid-twenties from the sales of Gavreto outside the US, excluding China. This deal is estimated to cost RPRX a total of $340 million, out of this $175 million in upfront cash payments and $165 million in potential payments based on the sales milestone achievement. The royalty agreement for this is valid through 2036-2040 based on the agreed sales parameters. I believe this deal will help RPRX expand its royalty line in lung disease. Gavreto has also been submitted for marketing approval in Europe for the treatment of thyroid cancer; the approval is expected by the end of 2022. I believe this could multiply the potential revenues from Gavreto and help RPRX achieve long-term growth. Pablo Legorreta, Royalty Pharma's founder and Chief Executive Officer, stated: We are pleased to partner with Blueprint and help advance their innovative precision therapy pipeline for the benefit of patients worldwide. Precision therapies continue to transform the treatment paradigm in oncology and acquiring a royalty on Gavreto aligns with our strategy of investing in differentiated therapies that address unmet medical needs. Gavreto has shown consistent outcomes with deep and durable responses across several RET-altered cancers, and we look forward to its clinical development in additional tumor types and earlier-stage patients. Key Risk Factors Interest Rate and Currency Exchange Rates: Any borrowings made via the revolving credit facility and any investments made in marketable securities and money market accounts, most of which carry fluctuating interest rates, expose RPRX to the risk of volatility in interest rates. The rise in interest rate generally increases borrowing costs, and using leverage will become more expensive, reducing net earnings.

Shareholder Returns

RPRXUS PharmaceuticalsUS Market
7D1.4%3.7%-2.0%
1Y12.5%5.3%-20.3%

Return vs Industry: RPRX exceeded the US Pharmaceuticals industry which returned 4.2% over the past year.

Return vs Market: RPRX exceeded the US Market which returned -22.1% over the past year.

Price Volatility

Is RPRX's price volatile compared to industry and market?
RPRX volatility
RPRX Average Weekly Movement2.2%
Pharmaceuticals Industry Average Movement11.5%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: RPRX is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: RPRX's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1996n/aPablo Legorretahttps://www.royaltypharma.com

Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies.

Royalty Pharma plc Fundamentals Summary

How do Royalty Pharma's earnings and revenue compare to its market cap?
RPRX fundamental statistics
Market CapUS$24.88b
Earnings (TTM)US$466.10m
Revenue (TTM)US$2.26b

38.7x

P/E Ratio

8.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RPRX income statement (TTM)
RevenueUS$2.26b
Cost of RevenueUS$694.68m
Gross ProfitUS$1.56b
Other ExpensesUS$1.10b
EarningsUS$466.10m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.07
Gross Margin69.25%
Net Profit Margin20.63%
Debt/Equity Ratio68.3%

How did RPRX perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

67%

Payout Ratio