Royalty Pharma — Q3 2026 Earnings Summary

Financial Performance:

• Portfolio Receipts grew 9% year-over-year to $890 million in Q3 2026, compared to $814 million in Q3 2025.
• Royalty Receipts increased 9% year-over-year to $883 million in Q3 2026, compared to $811 million in Q3 2025.
• Net cash provided by operating activities was $686 million in Q3 2026, a 2% decrease from $703 million in Q3 2025.
• Adjusted EBITDA (non-GAAP) was $840 million in Q3 2026, an 8% increase from $779 million in Q3 2025.
• Portfolio Cash Flow (non-GAAP) was $673 million in Q3 2026, a 2% increase from $657 million in Q3 2025.
• Payments for operating and professional costs were $50 million in Q3 2026, representing 5.6% of Portfolio Receipts.
• Cash and cash equivalents were $514 million as of September 30, 2026.
• Total debt principal was $8.8 billion as of September 30, 2026, down from $9.2 billion as of June 30, 2026.
• Net income attributable to Royalty Pharma plc was $145 million for the three months ended September 30, 2026, compared to $284 million in the same period in 2025.
• A non-cash financial royalty asset impairment charge of $150 million was recorded in Q3 2026 related to pelacarsen.

Guidance and Future Outlook:

• Full year 2026 Portfolio Receipts guidance was raised to $3,500 million to $3,550 million, previously $3,400 million to $3,500 million.
• Full year 2026 Royalty Receipts growth is expected to be 10% to 11%.
• Full year 2026 Payments for operating and professional costs guidance is 5.5% to 6.0% of Portfolio Receipts, previously 5.5% to 6.5%.
• Full year 2026 Interest paid guidance is $350 million to $360 million.
• Guidance assumes an estimated foreign exchange impact of approximately +1% to Portfolio Receipts.
• Guidance excludes contributions from transactions announced after November 4, 2026.

Business Segments and Product Lines:

• Royalty Receipts growth was driven by Tremfya (61% increase), Voranigo (65% increase), Evrysdi (38% increase), and Imdelltra (new contribution).
• Royalty Receipts declines were observed in Promacta (75% decrease) due to U.S. generic competition and Imbruvica (24% decrease).
• Milestones and other contractual receipts were $7 million in Q3 2026, up 138% from $3 million in Q3 2025.
• New royalty acquisitions in Q3 2026 included Arcutis Biotherapeutics' Zoryve ($100 million) and Takeda's Mimrylo ($100 million).
• Capital Deployment for the nine months ended September 30, 2026, was $1.2 billion, with announced transaction value of $1.9 billion.
• R&D co-funding transactions totaling $1 billion were announced in 2026.

Market and Competitive Landscape:

• The portfolio includes royalties on more than 35 commercial products and 16 development-stage candidates.
• Key therapeutic areas represented include Oncology, Respiratory, Rare Disease, Immunology, and Neuroscience.
• The company positions itself as a premier capital allocator in life sciences with a robust deal pipeline.

Risks and Challenges:

• Pelacarsen Phase 3 Lp(a)HORIZON trial did not meet its primary endpoint, resulting in a $150 million non-cash impairment charge.
• Niktimvo Phase 2 MAXPIRe trial for idiopathic pulmonary fibrosis did not meet its primary endpoint; development in this indication will not proceed.
• Promacta revenue declined due to U.S. generic competition.
• Guidance assumes no major unforeseen adverse events or changes in foreign exchange rates.

Management Commentary and Tone:

• CEO Pablo Legorreta stated the company delivered "excellent third quarter 2026 results" and highlighted double-digit year-to-date growth in Royalty Receipts.
• Management expressed excitement regarding R&D co-funding opportunities, noting $1 billion in transactions announced in 2026.
• The company noted "tremendous clinical and regulatory progress" across its portfolio, including multiple FDA approvals and positive Phase 3 results.

Other Key Points:

• FDA approvals included Revolution Medicines' Rasonque, Teva's Weltruza, and Jazz/BeOne's Ziihera.
• Positive Phase 3 results were announced for Amgen's Imdelltra and Pharvaris' deucrictibant XR.
• The company paid a quarterly dividend of $0.235 per share ($135 million total) in Q3 2026.
• Royalty Pharma repurchased 1.5 million Class A ordinary shares for $87 million in Q3 2026 and 3.5 million shares for $183 million in the first nine months of 2026.
• A $380 million term loan was repaid in July 2026.
• GSK completed the acquisition of Nuvalent for approximately $10.6 billion, including Jideytro and neladalkib.
• Teva plans to advance TEV-408 into a Phase 2b study for non-segmental vitiligo following positive Phase 2a results in celiac disease.