Royalty Pharma plc

Ladies and gentlemen, thank you for standing by. Welcome to Royalty Farmer's second quarter earnings conference call. I would like now to turn the conference over to George Grofik, Senior Vice President, 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 Farmer's second quarter 2024 results. You can find the press release with our earnings results and slides to this call on the investor's page of our website at royaltypharma.com. Moving to slide three, I'd 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 liquidity measures will be used to help you understand our financial performance. The reconciliation of these measures to our GAAP financials is 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, Chris Tite, EVP Vice Chairman, and Terry Coyne, EVP Chief Financial Officer. Pablo will discuss the key highlights, after which Marshall and Chris will provide portfolio updates, highlighting three important recent transactions. Terry will then review the financials, and following concluding remarks from Pablo, we will hold a Q&A session. And 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 successful quarter of execution against our vision to be the leading partner funding innovation in life sciences. Slide six summarizes our strong business momentum in the second quarter. In terms of the financials, we delivered 12% growth in portfolio receipts, our top line. This was significantly above our guidance of high single-digit growth, which we provided last quarter. the bedrock of this strong performance was an impressive 11% growth in royalty receipts. This represents our recurring cash flows and are driven by our high-quality portfolio of more than 35 commercial products. Turning to capital allocation, we had a very active quarter for new royalty transactions. Capital deployment was approximately $2 billion, including the cash to be paid for U.S. royalties on Varanego. which was just approved a couple of days ago. In addition, we continue to pursue our balance capital location strategy, and we stepped up the pace of share repurchases given the disconnect of our share price with our strong fundamental outlook. Looking at our portfolio, we acquired royalties on six therapies in the quarter, including one approved and five development stage therapies. More specifically, We increased our royalty exposure to the blockbuster Ebrisi for spinal muscular atrophy and to Africampton, an exciting cardiovascular therapy, which is expected to be filed with regulators imminently. Chris will expand on those details as we, as well as highlight the multiple upcoming events for our development stage portfolio, which has the potential to unlock significant value for royalty pharma. In this regard, we were pleased to see FDA approval of Voronego this week, as well as the positive phase three results for celtorexant in depression and for Trenfaya and Crohn's disease, all of which could represent important new growth drivers for Royalty Pharma. Lastly, I'm happy to report that we're raising our full year 2024 guidance by 3% at the midpoint. following our excellent performance in the first six months of the year, driven by the strong momentum of our diversified portfolio. We now expect portfolio receipts to be between $2.7 billion and $2.775 billion. This is based on expected growth in royalty receipts of around 9% to 12%, which compares with our previous guidance of 5% to 9%. Consistent with our standard practice, this guidance is based on our current portfolio and does not include the benefit of future transactions. Slide seven shows our impressive track record of strong growth since our IPO. As I noted earlier, we delivered 11% growth in royalty receipts in the second quarter. Taken together with our double digit performance in royalty receipts in the first quarter, This sets us up well to deliver our new full-year guidance. This consistent track record of strong growth speaks to our ability to execute successfully against our strategy in the growing market for biopharma royalties. Slide eight shows that we continue to be the clear leader in the market for large royalty transactions, with two more transactions north of $500 million announced this year. Of the 26 royalty transactions to date valued at $500 million or more, we have executed 20 with a market share of 77%. You will also note that half of our transactions have taken place in the four years since our IPO. This, in part, reflects an important competitive advantage of our business, namely our scale and rapid access to substantial capital. It also reflects the talent and creativity of our team as we strive to create win-win solutions for our partners in the growing biopharma royalty market. Finally, it reflects the acceleration of the biopharma royalty market as a whole, where we are the clear market leader. With that, I will hand it over to Marshall.