# Royalty Pharma (RPRX)

Sector: Biopharmaceutical royalties

| Field | Value |
|---|---|
| Price | $70.01 |
| Market cap | $40B |
| Intrinsic value source | Analysts |
| Data as of | 2026-11-12 |
| Next earnings | 2027-02-10 (estimate) |

Analysts: Bullish

Picks: Research only

Discount category: Close to intrinsic value

## In short

The market prices Royalty Pharma on the end of some royalties and its large debt, and new royalty purchases that replace those cash flows can lift its value.

## Themes and gap

- Themes: Interest rates (interest-rates), High debt (leverage), Regulation and courts (regulation-legal)
- Gap type: Slow (slow)
- Why: Only several years of new royalty purchases and approvals can replace the royalties that end and pay down the debt.

## About

Royalty Pharma plc (Royalty Pharma) buys royalties on drugs and funds the development of new drugs. It earns a share of the sales of drugs that other companies sell, such as the cystic fibrosis drugs of Vertex, Trelegy, Tremfya, Evrysdi, Tysabri, Voranigo and Xtandi. In Q3 2026, Portfolio Receipts were $890 million, of which Royalty Receipts were $883 million. The cystic fibrosis drugs of Vertex gave $225 million. Royalty Pharma ended its management fee when it completed the internalization of its manager on May 16, 2025. Pablo Legorreta is Chief Executive Officer and Chairman. The company files annual reports on Form 10-K, and its Class A ordinary shares trade on the Nasdaq in US dollars. Its Class B ordinary shares, 128.3 million at October 30, 2026, do not trade, and their holders can exchange the matching interests one for one for Class A shares.

## Thesis

The market prices Royalty Pharma on how long its royalties last and on its large debt, more than on current cash flow, which is growing. Royalty Receipts grew 9% in Q3 2026, and the company raised its 2026 Portfolio Receipts guidance to $3,500 million to $3,550 million. But some royalties fall: Promacta receipts fell 75% after generic competition in the US, and Imbruvica fell 24%. Debt has a principal of $8.8 billion, and the company expects to pay $350 million to $360 million of interest in 2026. For the price to rise, three things must be true. New and growing royalties, such as Tremfya, Voranigo, Evrysdi, Imdelltra, Amvuttra and Revolution Medicines' Rasonque, which the FDA approved in August 2026, must grow faster than the royalties that end. The company must buy new royalties at prices that earn more than its cost of debt. The Class B interests must not weigh on the Class A price when holders exchange them. The next tests are the Q4 2026 report in February 2027, which shows if 2026 receipts reach the guidance, and the guidance for 2027.

## Checkpoints

- Feb 10, 2027 (estimate): Q4 2026 results and 2027 guidance. Status: Pending. Watch: 2026 Portfolio Receipts inside or above the range of $3,500 million to $3,550 million, with growth in the 2027 guidance, passes; a result below the range fails.
- 2027 (estimate): New royalties replace ending royalties. Status: Pending. Watch: New royalty purchases and approvals of royalty drugs raise Royalty Receipts after the fall of Promacta and Imbruvica, and this passes; a flat or lower total fails.

## Balance sheet

Royalty Pharma had cash and cash equivalents of $514 million and total debt with a principal of $8.8 billion at September 30, 2026. The carrying value of debt was $8,587.5 million, of which $997.0 million is current. The company paid a $380 million term loan in July 2026. Accrued compensation liabilities, which are the fair value of employee economic profit awards, were $774.4 million. Total shareholders' equity was $9,795.3 million, including $2,958.3 million of non-controlling interests. The company expects to pay $350 million to $360 million of interest in 2026. Portfolio Cash Flow, which is Adjusted EBITDA less net interest paid, was $673 million in Q3 2026.

As of 2026-09-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/1802768/000180276826000026/rprx-20260930rpplcpressxre.htm
- https://www.sec.gov/Archives/edgar/data/1802768/000180276826000028/rprx-20260930.htm

## Dividends

- Dividend yield: 1.3% (last 12 months, at the current price)
- Paid per share, last 12 months: $0.925 (4 payments)
- Current annual rate: $0.94 ($0.235 x 4 a year)
- Payout ratio: 49% of the earnings of the last fiscal year (the year ended 2025-12-31)
- Latest ex-dividend date: 2026-08-14, $0.235 per share
- Growth from 2020 to 2025: 24.0% a year

Dividends per share by year: 2016: $0.00, 2017: $0.00, 2018: $0.00, 2019: $0.00, 2020: $0.30, 2021: $0.68, 2022: $0.76, 2023: $0.80, 2024: $0.84, 2025: $0.88.

Source: company filings and market data, read on 2026-11-13.

## Recent events

- 2026-11-04: Royalty Pharma reported Q3 2026 results and raised its guidance. Portfolio Receipts were $890 million, up 9%, and Royalty Receipts were $883 million, up 9%. Adjusted EBITDA was $840 million and Portfolio Cash Flow was $673 million. The company paid its $380 million term loan in July, so total debt fell to $8.8 billion from $9.2 billion at June 30. It paid a quarterly dividend of $0.235 per share and bought 1.5 million Class A shares for $87 million in the quarter.
- 2026-09-30: In Q3 2026, Royalty Pharma bought a royalty on Zoryve for $100 million, a royalty on Mimrylo for $100 million, of which $50 million is due in a year, and part of a royalty on cliramitug for up to $425 million, of which $125 million was paid at the start. Announced transactions for 2026 were up to $1.9 billion at November 3.
- 2026-08-26: The FDA approved Revolution Medicines' Rasonque (daraxonrasib) for metastatic pancreatic cancer. Royalty Pharma lists it among the drugs in its portfolio.
- 2025-05-16: Royalty Pharma completed the internalization of its manager. The management fee ended, and payments for operating and professional costs fell from 8.9% of Portfolio Receipts in 2025 to a guided 5.5% to 6.0% in 2026.

## Latest news and filings

- Last earnings: 2026-11-04 (8-K: https://www.sec.gov/Archives/edgar/data/1802768/000180276826000026/)
- Next earnings: 2027-02-10 (expected; the company has not confirmed it)

| Filed | Form | Headline | Period end | XBRL document | Link |
| --- | --- | --- | --- | --- | --- |
| 2026-11-04 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | rprx-20260930 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000028/rprx-20260930.htm |
| 2026-11-04 | 8-K | Earnings release |  | rprx-20261104 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000026/ |
| 2026-08-05 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | rprx-20260630 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000015/rprx-20260630.htm |
| 2026-08-05 | 8-K | Earnings release |  | rprx-20260805 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000014/ |
| 2026-06-04 | 8-K | Shareholder vote results |  |  | https://www.sec.gov/Archives/edgar/data/1802768/000119312526257432/d855771d8k.htm |
| 2026-05-28 | 8-K | New material agreement and New debt or financial obligation |  |  | https://www.sec.gov/Archives/edgar/data/1802768/000119312526245163/d131735d8k.htm |
| 2026-05-06 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | rprx-20260331 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000009/rprx-20260331.htm |
| 2026-05-06 | 8-K | Earnings release |  | rprx-20260506 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000008/ |
| 2026-04-13 | 8-K | Investor disclosure |  |  | https://www.sec.gov/Archives/edgar/data/1802768/000119312526152145/d871473d8k.htm |
| 2026-02-11 | 10-K | Annual report for the period ended Dec 31, 2025 | 2025-12-31 | rprx-20251231 | https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm |

Every filing on SEC EDGAR (CIK 1802768): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001802768&type=&dateb=&owner=include&count=40

## Risks

- High: Royalties end when patents end or when generics arrive. Promacta receipts fell 75% in Q3 2026 after US generic competition, and Imbruvica fell 24%. New royalties must replace the lost cash flow.
- High: A few drugs give a large part of receipts. The cystic fibrosis drugs of Vertex gave $225 million of the $883 million of Royalty Receipts in Q3 2026, about one quarter. A new treatment or a pricing rule that cuts their sales would lower the cash flow.
- Medium: Debt is large. The principal was $8.8 billion at September 30, 2026, and the current part was $997.0 million at carrying value. The company must refinance, and the cost of debt limits the return on new royalties.
- Medium: The employee economic profit awards are a liability of $774.4 million, up from $577.9 million at December 31, 2025. The value rises when the portfolio is worth more and takes cash or shares from holders.
- Medium: Drug pricing rules in the US can lower the sales on which royalties are paid, and trials can fail for drugs that Royalty Pharma funds.
- Low: Holders of 128.3 million Class B ordinary shares can exchange the matching interests for Class A shares. Sales of those shares could weigh on the price.

## Links

- Page: https://picks.utilarium.app/company/RPRX/
- History of changes: https://picks.utilarium.app/company/RPRX/history/
- JSON with full history: https://picks.utilarium.app/data/company/RPRX.json

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