Royalty Pharma (NASDAQ:RPRX) reported third-quarter portfolio receipts of $890 million, up 9% from a year earlier, as growth in its diversified royalty portfolio offset declines in certain products. The company raised its full-year 2026 outlook for the third consecutive quarter, citing continued momentum in recurring royalty receipts.
Chief Executive Officer and Chairman Pablo Legorreta said royalty receipts, which the company views as recurring cash flows, also increased 9% in the quarter and were up 12% through the first nine months of 2026. He said the company had deployed $1.6 billion of capital so far this year, with an announced value of $1.9 billion, while returning nearly $590 million to shareholders through dividends and share repurchases during the first nine months.
Financial performance and updated outlook
Chief Financial Officer Terry Coyne said third-quarter portfolio cash flow, defined as adjusted EBITDA less net interest paid, was $673 million. Operating and professional costs represented 5.6% of portfolio receipts in the quarter, while net interest paid totaled $167 million, reflecting the company’s semiannual debt-payment schedule.
For the first nine months, royalty receipts increased 12%, supported by growth from TREMFYA, Voranigo, Evrysdi and IMDELLTRA. Coyne said the company absorbed an approximately 5% combined headwind from declines in Promacta and IMBRUVICA while still producing double-digit royalty-receipt growth.
Royalty Pharma increased its 2026 portfolio-receipts guidance to $3.5 billion to $3.55 billion, from a prior range of $3.4 billion to $3.5 billion. The revised outlook assumes royalty-receipt growth of about 10% to 11%, compared with the previous expectation of 7% to 10%.
The company expects milestones and other contractual receipts to decline to approximately $65 million in 2026 from $128 million in 2025. Its guidance is based on the portfolio as of the call date and excludes any benefit from future royalty acquisitions.
- Return on invested capital was 14.3% for the 12 months ended in the third quarter.
- Return on invested equity was 20.2% over the same period.
- Cash and equivalents totaled $514 million at the end of September.
- Investment-grade debt outstanding was $8.8 billion, with a weighted average duration of about 12 years.
- Net leverage was 2.5 times adjusted EBITDA, and the company’s $1.8 billion revolver was undrawn.
New royalty acquisitions
The company recently acquired Zealand Pharma’s royalty interest in Takeda’s MIMRYLO for $100 million. Royalty Pharma will receive a 1% royalty on annual worldwide sales up to $1.5 billion and a 0.75% royalty on sales above that threshold, along with eligibility for up to $23 million in milestones.
Executive Vice President and Head of Research and Investments Marshall Urist said MIMRYLO, which was approved by the FDA in August 2026, is a first-in-class treatment for polycythemia vera, a chronic blood disorder characterized by excessive red blood cell production. Takeda has provided a peak-sales estimate of $1 billion to $2 billion for the therapy, according to Urist.
In a separate transaction, Royalty Pharma agreed to pay AstraZeneca $100 million upfront for a 3% royalty on worldwide sales of ZORYVE, a once-daily topical treatment marketed by Arcutis Biotherapeutics for plaque psoriasis, seborrheic dermatitis and atopic dermatitis. Urist said ZORYVE is expected to grow more than 40% in 2026 to more than $500 million in sales. Arcutis has estimated peak sales of $2.3 billion to $3 billion across its current indications.
Development portfolio updates
Management highlighted several clinical and regulatory developments across its development-stage portfolio. Revolution Medicines received FDA approval and a positive European regulatory opinion for RASONQUE in pancreatic cancer, while Teva received FDA approval for WELTRUZA in schizophrenia.
The company also cited positive phase III results for Amgen’s IMDELLTRA in first-line small cell lung cancer and Pharvaris’ deucrictibant XR in hereditary angioedema. Urist said IMDELLTRA’s maintenance-setting data were ahead of the company’s expectations and could expand the product’s commercial opportunity.
Royalty Pharma acknowledged that Novartis’ pelacarsen did not succeed in its phase III outcomes trial. However, Urist said the company’s $500 million funding agreement with Ionis included stable royalties from SPINRAZA in addition to pelacarsen-related upside. Under the agreement, the SPINRAZA royalty will revert to Ionis after Royalty Pharma receives $550 million in royalty payments, representing a 1.1-times return on the total funded amount.
Urist said the company had recorded five successful pivotal phase III trials and nine positive regulatory events in 2026, including six FDA approvals and three FDA filings. Royalty Pharma said its development-stage investment success rate has been approximately 90% and that its development pipeline could add more than $1.7 billion in peak royalties over time.
R&D co-funding and strategic initiatives
Management continued to emphasize pharmaceutical R&D co-funding as a growth opportunity. Chairman of Partnering and Investments Chris Hite said the company had announced $1 billion in such transactions this year, including $500 million agreements with Johnson & Johnson and Teva.
Hite said anticipated pharmaceutical R&D spending of more than $1 trillion over the next five years, along with accounting considerations under U.S. GAAP and IFRS, supports demand for co-funding arrangements. Royalty Pharma’s Teva arrangement includes a $500 million commitment for an IL-15 program, with a royalty covering sales across all indications, management said.
The company also discussed its expansion in China, where Hite said growing out-licensing activity has created more potential royalty opportunities. Royalty Pharma previously acquired BeOne’s royalty on Amgen’s IMDELLTRA for more than $900 million and has hired Ken Sun to lead efforts in the region.
Legorreta also said the company had received an AAA ESG rating from MSCI. He said management remains focused on maintaining Royalty Pharma’s position in the biopharma royalty market while investing in products and development programs across a broad range of therapeutic areas.
About Royalty Pharma (NASDAQ:RPRX)
Royalty Pharma plc (NASDAQ:RPRX) is a biopharmaceutical royalty investment company that provides funding to life sciences companies, academic institutions, and other organizations in exchange for rights to future payments tied to approved or development-stage medicines. Its business model gives innovators access to capital while allowing Royalty Pharma to participate in the long-term commercial success of pharmaceutical products.
The company acquires and manages royalty interests across a broad range of therapeutic areas, including immunology, oncology, neuroscience, rare diseases, and infectious diseases.
