Royalty Pharma plc

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma second quarter earnings conference call. I would now like to turn the call over to George Grofik, SVP, head of investor relations and communications. Please go ahead, sir.

Good morning and good afternoon to everyone on the call. Thank you for joining us to review Royalty Pharma's second quarter 2022 results. You can find the press release for their earnings results and slides to this call on the investors page of our website at royaltypharma.com. Moving to slide three, I would like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from these statements. I refer you to our 10-K on file with the SEC for a description of these risks. All forward-looking statements are based on information currently available to Royalty Pharma, and we assume no obligation to update any such forward-looking statements. Non-GAAP financial measures will be used to help you understand our financial performance, and the GAAP to non-GAAP reconciliations are provided in the earnings press release available on our website. With that, please advance to slide four. Our speakers on the call today are Pablo Legareta, Founder and Chief Executive Officer, Marshall Uris, EVP, Head of Research and Investment, and Terry Coyne, EVP, Chief Financial Officer. Pablo will discuss the key highlights, after which Marshall will provide a portfolio update, and Terry will review the financials. Following concluding remarks from Pablo, we will hold a Q&A session. Chris Tite, our Vice Chairman, will also join the Q&A session. And with that, I'd like to turn the call over to Pablo.

Thank you, Joe, and welcome to everyone on the call. I am delighted to report another quarter of strong execution on our strategy as a leading funder of innovation and , the part of choice, all innovative in the lifetime ecosystem. Slide six summarizes our financial and portfolio achievements and quarter, which again, of course, the in our business. First, we delivered 10% growth in adjusted cash receipts, our top, our impressive track record of double digit growth. Second, We have announced transactions of $2.5 billion year-to-date, including the trilogy royalty acquisition, which we completed just after the quarter end. This reflects the strong growth in demand for our innovative royalty-based funding solutions. Third, we saw positive progress across our portfolio. Pfizer's proposed acquisition of BioHeaven will accelerate value creation to Royal Pharma, and Marshall will walk you through this shortly. In addition, we were pleased to see the FDA acceptance of the regulatory filings of PTO27 and asthma, as well as intranasal sub-EGP and migraine. These important milestones potentially bring this importance closer to the table. Lastly, raising our full-year guidance for cash receipts based on the strong underlying performance of our existing portfolio and the addition of the trilogy royalties. and we now expect 7% to 10% top-line growth. This growth reflects a roughly 3% to 4% unfavorable impact from foreign exchange that we expect to face this year, which Terry will talk to you more about in a minute. I would also remind you that our guidance excludes the impact of any investments that we make over the remainder of 2022. On slide seven, you can see our financials in a little more detail. In the second quarter, we delivered 10% growth in our top line. We estimate that foreign exchange had a negative 2% to 3% impact in the quarter. The strong double-digit momentum positions us to achieve another year of impressive top line performance in 2022. Below our top line, I am also pleased to report that we grew our adjusted EBITDA by 10%. Adjusted EBITDA is an important non-gap measure for us. which has arrived at by deducting operating and professional expenses from our top line. Lastly, our adjusted cash flow, our bottom line, grew by 12%. So another quarter of strong double-digit growth across all our key non-GAAP metrics, even with clear foreign exchange headwinds that have been felt across the industry. Slide 8 shows our impressive track record of strong top-line growth since our IPO in June of 2020. This track record reflects the power of our business model and our ability to execute successfully against our strategy. As many of you heard at our May 17 Investor Day, by consistently innovating funding solutions and replenishing our portfolio, we're able to drive compounding growth and absorb losses of exclusivity in a way that is not possible for most biopharma companies. An important element of this, shown on slide nine, is our unique ability to identify and add blockbuster therapies to our portfolio. Trilogy, of course, is the most recent example of this unique attribute of our model. Blockbusters bring a number of key advantages to Royalty Pharma. They typically receive heightened market focus and investment. They enhance our scale and diversification of our portfolio with some of the most transformative therapies in the industry. They often have leveraged capacity and cash flows that we can deploy to further diversify our portfolio. Lastly, they provide a strong foundation to continue to build our portfolio across different stages of development with different risk profiles. Today, around a quarter of our streams come from Blockbuster products. In fact, 13 products in our portfolio have end market sales of more than $1 billion, and of these, four have end market sales greater than $3 billion. This means our portfolio has around 1.6 times the exposure to Blockbusters compared to the top 15 biopharma companies. Furthermore, we continue to add to this list of transformative therapies. Since 2020, we have added and future potential blockbusters to our portfolio based on the sense of sales. Constantly identifying and adding on marquee products to our portfolio, we're able to drive continued portfolio replenishment, diversify the business, reduce risk, and ultimately grow our top line and generate the value. With that, I will hand it over to Marshall to update you on our portfolio.