Royalty Pharma plc Q1 FY2026 earnings call

• Strong business momentum in first quarter with 10% growth in portfolio receipts and 13% in royalty receipts. • Busy quarter with 1.25 billion of announced transactions on three therapies, repurchased shares and increased dividend. • Positive clinical and regulatory updates including Extraordinary Phase III results for Revolution Medicines and FDA approval of Denali's Aviyaya. • Expanded portfolio to R&D co-funding agreements with Teva and J&J. • Acquired a royalty on Jazz and D1 Sahara. • Strengthened global platform and capabilities in Asia-Pacific and AI, brought in new leaders. • Focus on R&D co-funding with Global Biopharma as win-win solution with potential benefits. • Portfolio updates including royalty deal for Syhera, Phase III data from Revolution Medicines, and upcoming events in development stage pipeline. • Efficient business model generates substantial cash flow, operating and professional costs 3.9% of portfolio receipts, net margin around 78%.

Portfolio receipts grew 10%, royalty receipts grew 13%. Returns on invested capital around 14% and returns on invested equity around 20%. Capital deployed over half a billion dollars in the quarter, repurchased 1 million shares for 50 million and increased dividend by 7%.

• Raised 2026 full-year guidance for portfolio receipts to $3.325 billion to $3.45 billion from $3.275 billion to $3.425 billion. • Expect growth in royalty receipts of around 4% to 8%. • Guidance for second quarter portfolio receipts between $740 million and $760 million. • Expenses for operating and professional costs expected to be 5.5% to 6.5% of portfolio receipts in 2026. • Interest paid expected to be around $350 million to $360 million in 2026.

• Information presented contains forward-looking statements that may cause actual results to differ materially. • Refer to most recent 10-K for description of risks. • Timing of arbitration with Vertex pushed to around middle of 2027.

Q: Can you talk about how much of the 2030 portfolio receipts target is de-risked and from already commercial?

A: Barry said they feel on track to meet or exceed target, portfolio is doing well with positive developments and great deals.

Q: On arbitration update, reason for push-out?

A: Simply based on availability of arbitration panel.

Q: On my CORSO, advantage of approval in non-obstructive HCM and if assumed success in internal valuation?

A: Terry said base investment was premised on obstructive indication, early evidence from launch is good, adding non-obstructive is helpful.

Q: On Frexalamab, any change in competitive positioning?

A: Marshall said no real change, still excited about novel mechanisms.

Q: On leverage and capital deployment, are you at upper end of leverage range?

A: Terry said leverage is 2.9 times total debt to adjusted EBITDA, have financial flexibility.

Q: On R&D co-funding deals, IRR expectations vs traditional royalty and capping?

A: Marshall said IRR expectations consistent with communicated returns, structure philosophy consistent.

Q: On potential royalty streams from mycorso and competition from smaller realty players?

A: Terry said consolidation may reduce competition, Marshall said positive data gives advantage.

Q: On R&D co-funding portfolio shift and China market progress?

A: Chris said expanding opportunity, monitoring China out-licensing, Ken Sun joining.

Q: On AI implementation and J&J duet data impact?

A: Terry said AI investments in data, Lucas Glass hired for AI, Marshall said excited about J&J deal and potential.

Q: On capital deployment split and IRR for R&D co-funding?

A: Pablo said flexible approach, critical thing is product, J&J 4804 example shows opportunity.