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1. Company Snapshot

1.a. Company Description

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.


Its portfolio consists of royalties on approximately 35 marketed therapies and 10 development-stage product candidates that address various therapeutic areas, such as rare disease, cancer, neurology, infectious disease, hematology, and diabetes.The company was founded in 1996 and is based in New York, New York.

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1.b. Last Insights on RPRX

Royalty Pharma's recent momentum is driven by increased institutional investment, with Cullen Frost Bankers Inc. and Allstate Corp boosting their stakes by 44.4% and acquiring a new position, respectively. The company's upcoming fourth-quarter and full-year 2025 financial results announcement on February 11, 2026, is also anticipated to be a catalyst. Insider transactions, such as CFO Terrance Coyne's sale of 69,582 shares, have occurred, but the overall sentiment remains positive, with multiple presentations at prominent healthcare conferences showcasing the company's accomplishments.

1.c. Company Highlights

2. Royalty Pharma's Strong 2025 Results and Promising 2026 Outlook

Royalty Pharma delivered a robust financial performance in 2025, with double-digit growth in portfolio receipts and royalty receipts, resulting in a 15.8% return on invested capital and a 22.8% return on invested equity. The company's margin for the year was around 84%, demonstrating the high underlying level of cash conversion and efficiency in the business. Earnings per share (EPS) came in at $1.46, beating analyst estimates of $1.33. The company's efficient business model generates substantial cash flow, which is reinvested to drive value creation.

Publication Date: Feb -15

📋 Highlights
  • Strong Financial Performance:: Achieved 15.8% return on invested capital (ROIC) and 22.8% return on invested equity (ROIE), with full-year results exceeding the top end of revised guidance.
  • Capital Deployment and Shareholder Returns:: Deployed $2.6 billion in capital for transactions and returned $1.7 billion to shareholders via $1.2 billion in share repurchases and $500 million in dividends.
  • Operational Efficiency:: Maintained an 84% margin in 2025, reflecting high cash conversion efficiency, and reduced weighted average share count by 5% through buybacks.
  • Development Pipeline Momentum:: Delivered multiple Phase III approvals in 2025 and anticipates pivotal readouts in 2026, including trials for Rasib (pancreatic cancer) and litifilimab (lupus).
  • Financial Flexibility and Guidance:: Ended 2025 with $619 million in cash, $9.2 billion in investment-grade debt, and provided 2026 guidance for 3–8% growth in royalty receipts, despite challenges like Promacta's loss of exclusivity.

Financial Highlights

The company's financials show strong double-digit growth, with a 15.8% return on invested capital and a 22.8% return on invested equity. The weighted average share count declined by approximately 5% in the quarter and for the year, reflecting the impact of the share buyback program. At the end of 2025, the company had cash and equivalents of $619 million, with investment-grade debt outstanding of $9.2 billion.

Portfolio Performance

The company's diversified portfolio drove this tremendous momentum, with multiple positive clinical and regulatory updates across the portfolio. The development stage pipeline already delivered a number of successful Phase III readouts and regulatory approvals in 2025. The company expects 2026 to be an exciting year with multiple pivotal readouts, including data for Revolution Medicine's directs on Rasib in pancreatic cancer and Biogen's litifilimab in lupus.

Valuation and Outlook

With a P/E Ratio of 25.21 and an EV/EBITDA of 11.93, the company's valuation multiples indicate a premium, likely due to its strong growth prospects and efficient business model. Analysts estimate next year's revenue growth at 6.8%, which is slightly higher than the company's guided range of 3% to 8% growth in royalty receipts for 2026. The company's return on invested capital has been remarkably stable, at around 15% on average from 2019 to 2025, and its return on invested equity has been consistently in the low 20% range.

Growth Drivers

The company's royalty receipts are expected to benefit from multiple growth drivers, including established royalty streams on Trelegy, Tremfya, and Evrysdi, as well as the strong launch trajectory of Voronega and the recent royalty acquisitions on Ambeltra and Ambutra. The company is confident in its ability to execute its strategy and deliver long-term value for its shareholders.

Capital Deployment

The company takes a dynamic approach to deploying capital, weighing the relative attractiveness of royalty opportunities against its share price relative to intrinsic value. The company prioritizes investing in high-quality assets, focusing on high-quality pharmaceutical products and biopharmaceutical products.

Synthetic Royalties and China Opportunity

The company is excited about the growth and awareness of synthetic royalties, and is maintaining discipline in investing in high-quality opportunities. The company also sees significant potential for value creation in China and is working to add these opportunities to its transaction pipeline.

3. NewsRoom

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Heartland Advisors Inc. Purchases New Shares in Royalty Pharma PLC $RPRX

Feb -18

Source: defenseworld.net

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Royalty Pharma: 2025 Financial Performance And Strategic Outlook

Feb -16

Source: seekingalpha.com

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Royalty Pharma Q4 Earnings Call Highlights

Feb -13

Source: defenseworld.net

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Royalty Pharma: Strong Execution And Visible Pipeline Support Our Buy View

Feb -12

Source: seekingalpha.com

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Royalty Pharma plc (RPRX) Q4 2025 Earnings Call Transcript

Feb -11

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Royalty Pharma (RPRX) Q4 Earnings

Feb -11

Source: zacks.com

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Royalty Pharma Reports Q4 and Full Year 2025 Results

Feb -11

Source: globenewswire.com

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Exploring Analyst Estimates for Royalty Pharma (RPRX) Q4 Earnings, Beyond Revenue and EPS

Feb -10

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.00%)

6. Segments

Biopharmaceutical Royalties

Expected Growth: 14%

Strong pipeline of approved and pending products, increasing demand for rare disease treatments, and strategic partnerships driving licensing agreements. Growing importance of biopharmaceuticals in healthcare, rising R&D investments, and favorable regulatory environment also contribute to the 14% growth.

7. Detailed Products

Trevicta

A treatment for epilepsy and partial onset seizures

Tymlos

A treatment for osteoporosis in postmenopausal women

Evomela

A treatment for multiple myeloma and lymphoma

Methazolamide

A treatment for glaucoma and epilepsy

Orfadin

A treatment for hereditary tyrosinemia type 1 (HT-1)

Royalty streams

A financial product providing a steady stream of revenue

8. Royalty Pharma plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Royalty Pharma plc has a moderate threat of substitutes due to the presence of alternative pharmaceutical companies and generic drug manufacturers.

Bargaining Power Of Customers

Royalty Pharma plc has a low bargaining power of customers due to its strong brand recognition and limited customer concentration.

Bargaining Power Of Suppliers

Royalty Pharma plc has a moderate bargaining power of suppliers due to its dependence on a few key suppliers for raw materials and manufacturing services.

Threat Of New Entrants

Royalty Pharma plc has a high threat of new entrants due to the increasing trend of pharmaceutical companies acquiring or partnering with royalty-based companies.

Intensity Of Rivalry

Royalty Pharma plc operates in a highly competitive industry with intense rivalry among pharmaceutical companies, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.46%
Debt Cost 4.57%
Equity Weight 51.54%
Equity Cost 6.30%
WACC 5.46%
Leverage 94.01%

11. Quality Control: Royalty Pharma plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Royalty Pharma

A-Score: 6.4/10

Value: 4.7

Growth: 3.8

Quality: 7.4

Yield: 4.0

Momentum: 9.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Exelixis

A-Score: 5.9/10

Value: 4.1

Growth: 8.0

Quality: 9.4

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Novavax

A-Score: 4.7/10

Value: 9.4

Growth: 5.4

Quality: 8.5

Yield: 0.0

Momentum: 3.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Corcept Therapeutics

A-Score: 4.6/10

Value: 0.0

Growth: 7.8

Quality: 8.4

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Arcellx

A-Score: 4.2/10

Value: 6.2

Growth: 5.8

Quality: 5.0

Yield: 0.0

Momentum: 4.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Alpine Immune Sciences

A-Score: 4.0/10

Value: 6.0

Growth: 6.6

Quality: 4.2

Yield: 0.0

Momentum: 6.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

45.12$

Current Price

45.12$

Potential

-0.00%

Expected Cash-Flows