Latest news with #RoyaltyPharmaplc
Associated Press
08-05-2025
- Business
- Associated Press
Royalty Pharma Reports First Quarter 2025 Results
NEW YORK, May 08, 2025 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today reported financial results for the first quarter of 2025 and raised full year 2025 guidance for Portfolio Receipts. 'Our business momentum continued in the first quarter of 2025 as we delivered double-digit growth in Portfolio Receipts and raised our financial guidance,' said Pablo Legorreta, Royalty Pharma's founder and Chief Executive Officer. 'Guided by our dynamic capital allocation framework, we repurchased over $700 million of our Class A ordinary shares given our attractive outlook, we expanded our development-stage portfolio with an R&D funding partnership with Biogen and we again increased our quarterly dividend. Looking ahead, we have strong fundamental tailwinds underpinning our business with a robust deal pipeline and we remain on track to acquire our external manager in the second quarter. We plan to share further details on our attractive long-term outlook at our upcoming Investor Day in September.' Double-digit growth in Royalty Receipts and Portfolio Receipts Significant repurchase activity under recently announced $3 billion authorization Positive clinical and regulatory updates across royalty portfolio Raised financial guidance for full year 2025 (excludes contribution from future transactions) Financial & Liquidity Summary *See 'Liquidity and Capital Resources' section. Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures calculated in accordance with the credit agreement. Portfolio Receipts Highlights Amounts shown in the table may not add due to rounding. Royalty Receipts was $788 million in the first quarter of 2025, an increase of 12% compared to $705 million in the first quarter of 2024. The increase was primarily driven by strong growth from the cystic fibrosis franchise, Trelegy and Xtandi, as well as royalties from the 2024 launch of Voranigo. Portfolio Receipts was $839 million in the first quarter of 2025, an increase of 17% compared to $717 million in the first quarter of 2024, primarily driven by the same Royalty Receipts increases noted above and a milestone payment of $27 million related to Airsupra. Liquidity and Capital Resources Royalty Pharma's liquidity and capital resources are summarized below: As of March 31, 2025, Royalty Pharma had cash and cash equivalents of $1.1 billion and total debt with principal value of $7.8 billion. In January 2025, Royalty Pharma completed the sale of the MorphoSys Development Funding Bonds for $511 million in upfront cash. This payment, combined with quarterly repayments received prior to the sale, resulted in total cash proceeds of $530 million on the $300 million investment that was made in September 2022. The proceeds provide added flexibility to pursue the company's dynamic capital allocation strategy. In January 2025, Royalty Pharma announced a new share repurchase program under which it may repurchase up to $3.0 billion of its Class A ordinary shares. During the first quarter of 2025, Royalty Pharma repurchased approximately 23 million Class A ordinary shares for $723 million. During the first quarter of 2024, Royalty Pharma did not repurchase any Class A ordinary shares. The weighted-average number of diluted Class A ordinary shares outstanding for the first quarter of 2025 was 578 million as compared to 597 million for the first quarter of 2024. Liquidity Summary Amounts may not add due to rounding. Refer to Table 4 for Royalty Pharma's reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure, net cash provided by operating activities. Capital Deployment reflects cash payments during the period for new and previously announced transactions. Capital Deployment was $101 million in the first quarter of 2025, consisting primarily of the upfront research and development ('R&D') funding for litifilimab (discussed further below) and a milestone payment related to Trelegy. In April 2025, Ferring Pharmaceuticals announced U.S. Food and Drug Administration ('FDA') approval of a new manufacturing hub in Parsippany, NJ for Adstiladrin, its novel gene therapy for bladder cancer. The approval triggered a $200 million milestone payment that was paid in the second quarter of 2025 as part of the royalty agreement announced in 2023. The table below details Capital Deployment by category: Capital Deployment Amounts may not add due to rounding. Royalty Transactions In February 2025, Royalty Pharma entered into an R&D funding arrangement with Biogen to provide up to $250 million over six quarters, including $50 million upfront for the development of litifilimab. Litifilimab is in Phase 3 development for the treatment of lupus. The announced transaction amount reflects the entire amount of capital committed for new transactions during the year, including potential future milestones. The information in this section should be read together with Royalty Pharma's reports and documents filed with the SEC at and the reader is also encouraged to review all other press releases and information available in the Investors section of Royalty Pharma's website at Internalization Transaction In January 2025, Royalty Pharma agreed to acquire its external manager, RP Management, LLC (the 'Manager') ( press release ). This transaction to simplify Royalty Pharma's corporate structure is expected to result in multiple benefits for shareholders. On a financial basis, the acquisition is expected to reduce costs and enhance economic returns on investments. Specifically, the acquisition will generate cash savings of greater than $100 million in 2026, rising to greater than $175 million in 2030 and driving cumulative savings of greater than $1.6 billion over ten years. The acquisition also increases shareholder alignment, enhances corporate governance, ensures management continuity and simplifies Royalty Pharma's corporate structure. The total transaction value of approximately $1.1 billion(7) consists of approximately 24.5 million shares of Royalty Pharma equity that will vest over five to nine years, approximately $100 million in cash(8), and the assumption of $380 million of the Manager's existing debt. The closing of the internalization transaction is subject to shareholders' approval of the issuance of the share consideration and other customary closing conditions, including required regulatory approvals. The shareholder meeting will take place on May 12, 2025 and the transaction is estimated to close during the second quarter of 2025. Key Developments Relating to the Portfolio The key developments related to Royalty Pharma's royalty interests are discussed below based on disclosures from the marketers of the products. 2025 Financial Outlook Royalty Pharma has provided guidance for full year 2025, excluding new transactions and borrowings announced after the date of this release, as follows: The above Portfolio Receipts guidance represents expected growth of 6% to 12% in 2025. Royalty Pharma's full year 2025 guidance reflects a negligible estimated foreign exchange impact to Portfolio Receipts, assuming current foreign exchange rates prevail for the rest of 2025. 2025 guidance for payments for operating and professional costs and interest paid does not reflect the impact of the internalization transaction announced on January 10, 2025 and will be updated following the closing of the internalization transaction, which is expected in the second quarter of 2025. Total interest paid is based on the semi-annual interest payment schedule of Royalty Pharma's existing notes and is anticipated to be approximately $260 million in 2025. Interest paid in the third quarter of 2025 is anticipated to be $119 million. De minimis amounts are anticipated in the second and fourth quarter of 2025. These projections assume no additional debt financing in 2025, including no drawdown on the revolving credit facility. In the first quarter of 2025, Royalty Pharma collected interest of $12 million on its cash and cash equivalents, which partially offset interest paid. Royalty Pharma today provides this guidance based on its most up-to-date view of its prospects. This guidance assumes no major unforeseen adverse events or changes in foreign exchange rates and excludes the contributions from transactions announced subsequent to the date of this press release. Financial Results Call Royalty Pharma will host a conference call and simultaneous webcast to discuss its first quarter 2025 results today at 8:30 a.m., Eastern Time. Please visit the 'Investors' page of the company's website at to obtain conference call information and to view the live webcast. A replay of the conference call and webcast will be archived on the company's website for at least 30 days. About Royalty Pharma plc Founded in 1996, Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry, collaborating with innovators from academic institutions, research hospitals and non-profits through small and mid-cap biotechnology companies to leading global pharmaceutical companies. Royalty Pharma has assembled a portfolio of royalties which entitles it to payments based directly on the top-line sales of many of the industry's leading therapies. Royalty Pharma funds innovation in the biopharmaceutical industry both directly and indirectly - directly when it partners with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when it acquires existing royalties from the original innovators. Royalty Pharma's current portfolio includes royalties on more than 35 commercial products, including Vertex's Trikafta, GSK's Trelegy, Roche's Evrysdi, Johnson & Johnson's Tremfya, Biogen's Tysabri and Spinraza, AbbVie and Johnson & Johnson's Imbruvica, Astellas and Pfizer's Xtandi, Novartis' Promacta, Pfizer's Nurtec ODT and Gilead's Trodelvy, and 15 development-stage product candidates. Forward-Looking Statements The information set forth herein does not purport to be complete or to contain all of the information you may desire. Statements contained herein are made as of the date of this document unless stated otherwise, and neither the delivery of this document at any time, nor any sale of securities, shall under any circumstances create an implication that the information contained herein is correct as of any time after such date or that information will be updated or revised to reflect information that subsequently becomes available or changes occurring after the date hereof. This document contains statements that constitute 'forward-looking statements' as that term is defined in the United States Private Securities Litigation Reform Act of 1995, including statements that express the company's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results, in contrast with statements that reflect historical facts. Examples include discussion of Royalty Pharma's strategies, financing plans, growth opportunities, market growth and plans for capital deployment, plus the benefits of the internalization transaction, including expected accretion, enhanced alignment with shareholders, increased investment returns, expectations regarding management continuity, transparency and governance, and the benefits of simplification to its structure. In some cases, you can identify such forward-looking statements by terminology such as 'anticipate,' 'intend,' 'believe,' 'estimate,' 'plan,' 'seek,' 'project,' 'expect,' 'may,' 'will,' 'would,' 'could' or 'should,' the negative of these terms or similar expressions. Forward-looking statements are based on management's current beliefs and assumptions and on information currently available to the company. However, these forward-looking statements are not a guarantee of Royalty Pharma's performance, and you should not place undue reliance on such statements. Forward-looking statements are subject to many risks, uncertainties and other variable circumstances, and other factors. Such risks and uncertainties may cause the statements to be inaccurate and readers are cautioned not to place undue reliance on such statements. Many of these risks are outside of the company's control and could cause its actual results to differ materially from those it thought would occur. The forward-looking statements included in this document are made only as of the date hereof. The company does not undertake, and specifically declines, any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments, except as required by law. Certain information contained in this document relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the company's own internal estimates and research. While the company believes these third-party sources to be reliable as of the date of this document, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy or completeness of, any information obtained from third-party sources. In addition, all of the market data included in this document involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while the company believes its own internal research is reliable, such research has not been verified by any independent source. For further information, please reference Royalty Pharma's reports and documents filed with the U.S. Securities and Exchange Commission ('SEC') by visiting EDGAR on the SEC's website at Portfolio Receipts Portfolio Receipts is a key performance metric that represents Royalty Pharma's ability to generate cash from Royalty Pharma's portfolio investments, the primary source of capital that is deployed to make new portfolio investments. Portfolio Receipts is defined as the sum of Royalty Receipts and Milestones and other contractual receipts. Royalty Receipts includes variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to Royalty Pharma. Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed contractual receipts, net of contractual payments to legacy non-controlling interests, that are attributed to Royalty Pharma. Portfolio Receipts does not include royalty receipts and milestones and other contractual receipts that were received on an accelerated basis under the terms of the agreement governing the receipt or payment. Portfolio Receipts also does not include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are not central to Royalty Pharma's fundamental business strategy. Portfolio Receipts is calculated as the sum of the following line items from Royalty Pharma's GAAP condensed consolidated statements of cash flows: Cash collections from financial royalty assets, Cash collections from intangible royalty assets, Other royalty cash collections, Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts, which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to the Legacy Investors Partnerships. Use of Non-GAAP Measures Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures that exclude the impact of certain items and therefore have not been calculated in accordance with GAAP. Management believes that Adjusted EBITDA and Portfolio Cash Flow are important non-GAAP measures used to analyze liquidity because they are key components of certain material covenants contained within Royalty Pharma's credit agreement. Royalty Pharma cautions readers that amounts presented in accordance with the definitions of Adjusted EBITDA and Portfolio Cash Flow may not be the same as similar measures used by other companies or analysts. These non-GAAP liquidity measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for the analysis of Royalty Pharma's results as reported under GAAP. The definitions of Adjusted EBITDA and Portfolio Cash Flow used by Royalty Pharma are the same as the definitions in the credit agreement. Noncompliance with the interest coverage ratio, leverage ratio and Portfolio Cash Flow ratio covenants under the credit agreement could result in lenders requiring the company to immediately repay all amounts borrowed. If Royalty Pharma cannot satisfy these covenants, it would be prohibited under the credit agreement from engaging in certain activities, such as incurring additional indebtedness, paying dividends, making certain payments, and acquiring and disposing of assets. Consequently, Adjusted EBITDA and Portfolio Cash Flow are critical to the assessment of Royalty Pharma's liquidity. Adjusted EBITDA and Portfolio Cash Flow are used by management as key liquidity measures in the evaluation of the company's ability to generate cash from operations. Management uses Adjusted EBITDA and Portfolio Cash Flow when considering available cash, including for decision-making purposes related to funding of acquisitions, debt repayments, dividends and other discretionary investments. Further, these non-GAAP liquidity measures help management, the audit committee and investors evaluate the company's ability to generate liquidity from operating activities. The company has provided reconciliations of these non-GAAP liquidity measures to the most directly comparable GAAP financial measure, being net cash provided by operating activities in Table 4. Royalty Pharma Investor Relations and Communications +1 (212) 883-6772 [email protected] Amounts may not add due to rounding. Amounts may not add due to rounding. Amounts may not add due to rounding. Notes (1) Portfolio Receipts is a key performance metric that represents our ability to generate cash from Royalty Pharma's portfolio investments, the primary source of capital that Royalty Pharma can deploy to make new portfolio investments. Portfolio Receipts is defined as the sum of Royalty Receipts and Milestones and other contractual receipts. Royalty Receipts includes variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to Royalty Pharma ('Royalty Receipts'). Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that are attributed to Royalty Pharma. Portfolio Receipts does not include royalty receipts and milestones and other contractual receipts that were received on an accelerated basis under the terms of the agreement governing the receipt or payment. Portfolio Receipts also does not include proceeds from equity securities or marketable securities, both of which are not central to Royalty Pharma's fundamental business strategy. Portfolio Receipts is calculated as the sum of the following line items from Royalty Pharma's GAAP condensed consolidated statements of cash flows: Cash collections from financial royalty assets, Cash collections from intangible royalty assets, Other royalty cash collections, Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts, which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to the Legacy Investors Partnerships. (2) Adjusted EBITDA is defined under the credit agreement as Portfolio Receipts minus payments for operating and professional costs. Operating and professional costs reflect Payments for operating and professional costs from the GAAP statements of cash flows. See GAAP to Non-GAAP reconciliation in Table 4. (3) Portfolio Cash Flow is defined under the credit agreement as Adjusted EBITDA minus interest paid or received, net. See GAAP to Non-GAAP reconciliation in Table 4. Portfolio Cash Flow reflects the cash generated by Royalty Pharma's business that can be redeployed into value-enhancing royalty acquisitions, used to repay debt, returned to shareholders through dividends or share purchases or utilized for other discretionary investments. (4) Capital Deployment is calculated as the summation of the following line items from Royalty Pharma's GAAP condensed consolidated statements of cash flows: Investments in equity method investees, Purchases of available for sale debt securities, Acquisitions of financial royalty assets, Acquisitions of other financial assets, Milestone payments, Development-stage funding payments less C ontributions from legacy non-controlling interests - R&D. (5) Other products primarily include Royalty Receipts on the following products: Cimzia, Crysvita, Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Nesina, Nurtec ODT, Orladeyo, Rytelo, Soliqua, Voranigo and distributions from the Legacy SLP Interest, which is presented as Distributions from equity method investees on the GAAP condensed consolidated statements of cash flows. (6) The table below shows the line item for each adjustment and the direct location for such line item on the GAAP condensed consolidated statements of cash flows. (7) The total transaction value of approximately $1.1 billion is based on the closing price of Royalty Pharma plc common stock of $26.20 on January 8, 2025. (8) Consists of $200 million in cash less the amount of the management fees paid to the Manager from January 1, 2025 through the closing of the transaction.
Yahoo
24-04-2025
- Business
- Yahoo
Royalty Pharma PLC (RPRX) Surged Following an Acquisition Announcement
Patient Capital Management, a value investing firm, released its 'Patient Capital Opportunity Equity Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500's -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio's performance, which were partially offset by selection effects. In addition, you can check the fund's top 5 holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Royalty Pharma plc (NASDAQ:RPRX). Royalty Pharma plc (NASDAQ:RPRX) is a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry. The one-month return of Royalty Pharma plc (NASDAQ:RPRX) was 0.13%, and its shares gained 12.74% of their value over the last 52 weeks. On April 23, 2025, Royalty Pharma plc (NASDAQ:RPRX) stock closed at $31.69 per share with a market capitalization of $18.2 billion. Patient Capital Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q1 2025 investor letter: "Royalty Pharma plc (NASDAQ:RPRX) was up nicely in the first quarter following the announced acquisition of its external manager. The market responded positively, pushing the stock up +23% as the new structure simplifies the business model and more closely aligns management with shareholders. We remain strong believers in the business and the high-quality management team running it. We view this as just another step in the company's journey toward maximizing shareholder value. The company has an impressive track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only expanded as early-stage start-ups need capital and established players look to reduce debt levels. Royalty Pharma is ideally positioned as the partner of choice. The company maintains strong discipline, consistently achieving deal internal rate of returns (IRRs) in the low teens (unlevered). As they continue delivering results as a public company, we expect the market will increasingly take notice." A scientist in a laboratory looking through a microscope, surrounded by petri dishes and beakers while researching new biopharmaceutical advances. Royalty Pharma plc (NASDAQ:RPRX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Royalty Pharma plc (NASDAQ:RPRX) at the end of the fourth quarter, compared to 33 in the third quarter. While we acknowledge the potential of Royalty Pharma plc (NASDAQ:RPRX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Royalty Pharma plc (NASDAQ:RPRX) and shared the list of most undervalued healthcare stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
02-04-2025
- Business
- Yahoo
Is Royalty Pharma plc (RPRX) The Most Profitable Biotech Stock To Buy Right Now?
We recently published a list of . In this article, we are going to take a look at where Royalty Pharma plc (NASDAQ:RPRX) stands against other most profitable biotech stocks to buy right now. With improved market conditions, innovative breakthroughs, and more investor interest, the biotechnology industry is gaining new traction. The sector has bounced back from a difficult 2024 and is set to grow significantly, thanks to developments in AI-driven drug discovery, personalized medicine, and the rising demand for biologics. The global biotech market was expected to grow by a robust 13%, from $483.0 billion in 2024 to $546.0 billion in 2025, according to MarketsandMarkets. The sector's resilience and growth potential are demonstrated by this expansion. One of the main causes of this upturn is the expected change in the Federal Reserve's interest rate policies. Because biotech involves expensive R&D and clinical testing, it is susceptible to shifting rate patterns. According to Genetic Engineering and Biotechnology News, lower rates increase the amount of cash available, which aids biotech companies in growing, attracting venture capital, and accelerating drug development. Analysts predict that a rate decline might free up billions of dollars in investment money set aside for nascent biotech companies seeking stable funding. The global biotechnology sector is undergoing transformative growth in 2025, driven by scientific breakthroughs and shifting market dynamics. Key trends, treatments, financial metrics, and the US regulatory landscape significantly impact the industry. Genetic engineering is becoming a dominant force in biotech, with CRISPR-based therapies like Casgevy—approved for sickle cell disease and beta-thalassemia—expanding into polygenic disorders such as diabetes. Synthetic biology is also projected to experience tremendous growth, with expectations to reach $100 billion by 2030, enabling sustainable pharmaceutical and biofuel production. Another important development is AI-driven drug discovery, which has reduced drug discovery costs by 30-50% while accelerating timelines. Startups are increasingly leveraging machine learning for precision oncology and protein design. The RNA therapeutics sector is also booming, particularly following the success of mRNA vaccines, which paved the way for RNA interference (RNAi) therapies like Fitusiran. Fitusiran has shown an impressive 89.9% reduction in bleeding events in hemophilia A/B patients. Regenerative medicine is also advancing, with innovations such as 3D bioprinting and CAR-T cell therapies entering clinical trials for organ repair and cancer treatment. The regenerative medicine market is expected to reach $37.27 billion by 2031. Several biotech therapies are showing significant efficacy across various medical conditions, driving both medical advancements and investor enthusiasm. CRISPR-Cas9 treatments, aimed at genetic disorders, have over 1,200 clinical trials ongoing. mRNA vaccines, used for infectious diseases and cancer, have already administered more than 29 million doses globally by 2024. Imdelltra, a treatment for small cell lung cancer, has achieved a 40% objective response rate. It is estimated that 90,000 patients globally use gene and cell therapies annually. The biotech sector continues to thrive with groundbreaking treatments, including Imdelltra, which is projected to generate $2.1 billion in sales by 2030. Meanwhile, analysts at William Blair foresee significant potential for zanzalintinib, estimating it could reach $5 billion in net U.S. sales by 2033. This promising drug is expected to target multiple indications, such as renal cell carcinoma, colorectal cancer, neuroendocrine tumors, and head-and-neck cancer, further solidifying its blockbuster status. As these groundbreaking innovations reshape the medical landscape, they are also fueling a surge in investor interest in biotech equities, positioning the industry as a high-growth space despite its inherent volatility. Leading investment banks, including Goldman Sachs, see biotech as an 'undervalued opportunity' with strong fundamentals, improved clinical outcomes, and favorable regulations. JPMorgan analysts anticipate a rebound in biotech funding, with signs of stability in manufacturing and research. Declining interest rates could also reopen the IPO window for biotech firms. Meanwhile, innovations in gene editing, AI-powered drug discovery, and precision medicine are driving biotech's expansion, revolutionizing treatments for genetic disorders, autoimmune diseases, and cancer. For our methodology, we screened for biotech companies with a market capitalization of over $10 billion and a net income exceeding $100 million. From that group, we identified the stocks with the highest net income and ranked them accordingly. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A scientist in a laboratory looking through a microscope, surrounded by petri dishes and beakers while researching new biopharmaceutical advances. Latest Net Income: $858.98 million Royalty Pharma plc (NASDAQ:RPRX) operates uniquely in the biotech industry by acquiring royalty interests in marketed or late-stage biopharmaceutical products rather than developing or marketing drugs. This model allows the company to provide capital to innovators while earning a percentage of future sales, typically ranging from 2% to 20%. By avoiding the risks and costs of drug development, the company benefits from successful pharmaceutical products through strategic investments. At the upper end of its guidance range, Royalty Pharma plc (NASDAQ:RPRX)'s fiscal year 2024 portfolio receipts came to $2.8 billion. This represents a 13% increase, much beyond its original forecast of 5% to 9%. The business anticipates $2.9 billion to $3.05 billion in portfolio receipts in 2025. Its portfolio now includes four development space treatments and royalties on AD medication. The FDA has approved Tremfya for ulcerative colitis, Cobenfy for schizophrenia, and Voranigo for brain cancer, among other favorable developments for the company's portfolio. In addition to $230 million for share repurchases, it invested $2.8 billion to expand its holdings. A fresh $3 billion share repurchase plan was recently approved by its Board, and Royalty Pharma Plc (NASDAQ:RPRX) plans to buy back $2 billion of its shares in 2025. Patient Capital Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q2 2024 investor : 'While Royalty Pharma plc (NASDAQ:RPRX) is in the healthcare space, it is more like an investment firm that buys royalty assets in the healthcare space. The company has an extremely strong track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only grown as early-stage start-ups need funding and legacy players are looking to lower their debt levels. We think Royalty Pharma is perfectly positioned as the partner of choice. The company is disciplined, maintaining deal internal rate of returns (IRRs) in the low-teens despite the higher interest rate environment. We think as the company continues to deliver as a public company, the market will start paying attention.' Overall, RPRX ranks 4th on our list of most profitable biotech stocks to buy right now. While we acknowledge the potential of biotech companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RPRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
