Royalty Pharma plc

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma first quarter earnings conference call. I would now like to turn the call over to George Grothick, 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 first quarter 2023 results. You can find the press release with our 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. The GAAP to non-GAAP reconciliations are provided in the earnings press release available on our website. And 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 Investments, and Terry Coyne, EVP, Chief Financial Officer. Pablo will discuss the key highlights. Mark will then provide a portfolio update, after which Terry will review the financials. Following the concluding remarks from Pablo, we will hold a Q&A session when we will be joined by Chris Height, EVP, Vice Chairman. With that, I'd like to turn the call over to Pablo.

Thank you, George, and welcome to everyone on the call. I am delighted to report a strong start to 2023 as we deliver on our strategy as a leading funder of innovation and life sciences. Slide 6 summarizes our financial and portfolio achievements in the first quarter, which again highlights our strong momentum and the power of our business model. First, we delivered strong performance. Adjusted cash receipts, our top line, grew by 11%. Adjusted EBITDA, also by 11%. And adjusted cash flow grew by 49%. All the strong metrics were prior to the Biohaven-related payments. which I will discuss on the next slide. Second, on capital allocation, we announced royalty positions of up to $1.6 billion, including $600 million in upfront payments and a multi-year share repurchase program of up to $1 billion. I also personally intend to acquire up to an additional $50 million of royalty farmer stock, given the compelling value I believe the share represents. We strengthened our royalty portfolio. We added three new therapies, including the SMA blockbuster SpinRasa and the exciting development stage therapies, Pella-Carson and CAR-XT, both of which are potential future blockbusters on consensus estimates. Additionally, three medicines in our portfolio were approved by the FDA, and Stanley had a positive phase three readout for a potential label expansion with the EnVIR study. we are reaffirming our increased full-year guidance for adjusted cash receipts. Our guidance reflects expected underlying growth from our portfolio of between four and nine percent prior to the Biohaven-related payments. Consistent with our standard practice, our guidance is based on our current portfolio and does not include the benefit of any future acquisitions this year. On slide seven, you can see our financials in more detail. We delivered 11% growth in our top line prior to the BioHaven-related payments and 87% growth if we include this payment. As a reminder, the major non-recurring items here are the $475 million milestone we received from Pfizer in March 2023, following the approval of SAP spread for migraine, as well as the $13 million fixed BioHaven-related payment we received in the same period a year ago. Foreign exchange continued to represent the headwind, impacting our top line by around minus 3 to minus 4% in the quarter. Consistent with our top line, we grew our adjusted EBITDA by 11% in the quarter prior to the biohabit-related payment, and 88% including this payment. Adjusted EBITDA is an important non-GAAP measure for us, which is arrived at by deducting payments for operating and professional costs from our top line. Lastly, our adjusted cash flow, our bottom line, grew by 49% in the quarter prior to the Biohaven-related payments, and 165%, including this payment. The substantial increase in the quarter also reflected the $100 million upfront and milestone development stage payments to cytokinetics in the prior year. Slide 8. shows our impressive track record of strong top-line growth since our IPO in June of 2020, including our double-digit growth in the first quarter. This reflects our ability to execute successfully and consistently against our strategy. Slide 9 provides a deeper dive into our top-line performance in the quarter to show the various moving parts. The strong performance of our base business and our acquisition of the trilogy royalties allowed us to deliver 11% top-line growth before taking into account the impact of the biohaven-related payment. Royalty expiration and foreign exchange together represented a combined headwind to growth in the 7% to 8% range. The strong underlying dynamics in the quarter once again underscore the unique power of our business model to replenish our portfolio and to drive compounding growth. With that, I will hand it over to Marshall to update you on our portfolio.