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This statistic highlights Royalty Pharma’s Revenue by Segment, split across Financial royalty assets, Intangible royalty assets, and Other royalty income, reported on a quarterly basis from 2019 onwards.
|Revenue by Segment||Q3 2020||Q2 2021||Q3 2021||Contribution in Q3 2021|
|Financial royalty assets||$498.50||$503.40||$505.80||86%|
|Intangible royalty assets||$34.50||$40.10||$63.40||11%|
|Other royalty income||$5.50||$11.40||$16.50||3%|
(All figures are in millions, except percentages)
Royalty Pharma’s total revenue increased from $538.5 million earned in Q3 2020 to $585.7 million earned in Q3 2021, marking an 8.7% growth on a year-on-year basis. It also grew by 5.5% on a quarterly basis, as compared to $554.9 million earned in Q2 2021.
Royalty Pharma’s revenue is further bifurcated into the following segments:
Financial royalty assets
The most substantial decisions and estimates applied by the management are connected to the dimension of income derived from its financial royalty assets, with management’s judgment in estimating the probable future cash flows of the principal royalties and the expected period of the financial royalty asset. Its cash flow projections are derived and reorganized each reporting period by manually collecting sell-side equity research analysts’ agreement sales estimates for each of the products in which it owns royalties
The majority of Royalty Pharma’s revenue is generated through the Financial royalty assets segment, accounting for 86.4% of the company’s total revenue, amounting to $505.8 million in Q3 2021. It has grown by 1.4% on a year-on-year basis, as compared to $498.5 million earned in Q3 2020. Additionally, it grew by 0.5% on a quarter-on-quarter basis, as compared to $503.4 million earned in Q2 2021.
Intangible royalty assets
Revenue from intangible royalty assets is generated from the supply of Januvia, Janumet, and other DPP-IV products by the company’s licensees.
The company’s intangible royalty assets segment contributes 10.8% to the total revenue in Q3 2021, amounting to $63.4 million. Royalty Pharma’s revenue from the intangible royalty assets segment increased by 83.8%, from $34.5 million earned in Q3 2020 to $63.4 million earned in Q3 2021, on a year-on-year basis. It also grew by 58.1% on a quarterly basis, as compared to $40.1 million earned in Q2 2021.
Other royalty income
Other royalty income comprises primarily of income from financial royalty assets that have been completely amortized by the anticipated expiry date and royalty income from synthetic royalties arising out of R&D funding measures. In each situation where a financial royalty asset has been entirely amortized, income from such royalty is known as Other royalty income.
In Q3 2021, Royalty Pharma’s revenue from Other royalty income stood at $16.5 million, contributing 2.8% to the company’s total revenue in Q3 2021. It increased by 66.66% on a year-on-year basis, as compared to $5.5 million earned in Q3 2020. Further, it grew by 30.9% on a quarterly basis, as compared to $11.4 million earned in Q2 2021.
Former investment banker Pablo Legorreta started Royalty Pharma as a private equity business in 1996. Although it doesn’t produce or promote the pharmaceuticals, it has bought the rights to significant drugs such as Humira, Imbruvica, Lyrica, and Xtandi. Royalty Pharma got listed on the New York Stock Exchange in June 2020, generating $2.2 billion in the process. Royalty Pharma is the leading buyer of biopharmaceutical royalties and the foremost funder of innovation across the biopharmaceutical industry. Since its founding in 1996, it has been an innovator in the royalty market, working together with innovators from academic institutions, research hospitals, and not-for-profits through small and mid-cap biotechnology corporations to foremost global pharmaceutical companies.
It has assembled a portfolio of royalties which sanctions it to payments based directly on the top-line transactions of many of the industry’s leading therapies, which comprises royalties on more than 35 commercial products, including AbbVie and Johnson & Johnson’s Imbruvica, Astellas, and Pfizer’s Xtandi, Biogen’s Tysabri, Johnson & Johnson’s Tremfya, Gilead’s Trodelvy, Merck’s Januvia, Novartis’ Promacta, Vertex’s Kalydeco, Orkambi, Symdeko and Trikafta, and ten development-stage product entrants. The company funds innovation in the biopharmaceutical business both directly as well as indirectly-directly when it partners with companies to co-fund late-stage clinical trials and new product unveilings in exchange for upcoming royalties, and indirectly when it acquires existing royalties from the original innovators. Royalty Pharma goes by the symbol ‘RPRX’ and is listed on the NASDAQ stock exchange.
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