Royalty Pharma Announces Sale of MorphoSys Development Funding Bonds
Royalty Pharma (RPRX) has completed the monetization of MorphoSys Development Funding Bonds, receiving $511 million in upfront cash. Combined with previous payments, this brings total proceeds to $530 million on their original $300 million investment made in September 2022.
The monetization was executed at a 5.35% discount rate, following Novartis' acquisition of MorphoSys. Prior to this transaction, RPRX received two quarterly payments of $9.7 million each in Q4 2024 and January 2025. The company plans to reinvest the proceeds into share repurchases and new royalty acquisitions as part of their updated capital allocation strategy.
The Development Funding Bonds were part of a larger 2021 strategic partnership where RPRX provided up to $2.025 billion for MorphoSys' acquisition of Constellation Pharmaceuticals, including royalties on Tremfya and other development-stage assets.
Royalty Pharma (RPRX) ha completato la monetizzazione dei MorphoSys Development Funding Bonds, ricevendo 511 milioni di dollari in contante iniziale. Combinato con i pagamenti precedenti, questo porta il totale a 530 milioni di dollari rispetto all'investimento originale di 300 milioni di dollari effettuato nel settembre 2022.
La monetizzazione è stata eseguita a un tasso di sconto del 5,35%, in seguito all'acquisizione di MorphoSys da parte di Novartis. Prima di questa transazione, RPRX ha ricevuto due pagamenti trimestrali di 9,7 milioni di dollari ciascuno nel quarto trimestre del 2024 e a gennaio 2025. L'azienda prevede di reinvestire i proventi in riacquisti di azioni e nuove acquisizioni di royalty come parte della loro strategia aggiornata di allocazione del capitale.
I Development Funding Bonds facevano parte di una partnership strategica più ampia del 2021, in cui RPRX ha fornito fino a 2,025 miliardi di dollari per l'acquisizione da parte di MorphoSys di Constellation Pharmaceuticals, incluse le royalty su Tremfya e altri beni in fase di sviluppo.
Royalty Pharma (RPRX) ha completado la monetización de los MorphoSys Development Funding Bonds, recibiendo 511 millones de dólares en efectivo por adelantado. Combinado con los pagos anteriores, esto eleva el total a 530 millones de dólares de su inversión original de 300 millones de dólares realizada en septiembre de 2022.
La monetización se ejecutó a una tasa de descuento del 5,35%, tras la adquisición de MorphoSys por Novartis. Antes de esta transacción, RPRX recibió dos pagos trimestrales de 9,7 millones de dólares cada uno en el cuarto trimestre de 2024 y en enero de 2025. La empresa planea reinvertir los ingresos en recompra de acciones y nuevas adquisiciones de regalías como parte de su estrategia actualizada de asignación de capital.
Los Development Funding Bonds fueron parte de una asociación estratégica más amplia en 2021, donde RPRX proporcionó hasta 2.025 millones de dólares para la adquisición de Constellation Pharmaceuticals por parte de MorphoSys, incluidas las regalías sobre Tremfya y otros activos en etapa de desarrollo.
로얄티 제약 (RPRX)는 MorphoSys 개발 자금 채권의 사용을 완료하고, 5억 1,100만 달러를 선불로 받았습니다. 이전 지급금과 결합하여, 이로 인해 총 수익이 5억 3천만 달러로 증가했으며, 이는 2022년 9월에 이루어진 원래 3억 달러 투자에 해당합니다.
이 자산화는 노바르티스의 MorphoSys 인수 이후 5.35%의 할인율로 실행되었습니다. 이번 거래 이전에, RPRX는 2024년 4분기 및 2025년 1월에 각각 970만 달러의 분기별 두 개의 지급금을 받았습니다. 회사는 수익을 주식 매입 및 새로운 로열티 인수에 재투자할 계획이며, 이는 그들의 업데이트된 자본 배분 전략의 일환입니다.
개발 자금 채권은 2021년의 더 큰 전략적 파트너십의 일환으로, RPRX가 Morphosys의 Constellation Pharmaceuticals 인수에 대해 최대 20억 2,500만 달러를 제공한 것으로, Tremfya와 기타 개발 중인 자산에 대한 로열티가 포함됩니다.
Royalty Pharma (RPRX) a terminé la monétisation des MorphoSys Development Funding Bonds, recevant 511 millions de dollars en espèces à l'avance. Combiné aux paiements précédents, cela porte le produit total à 530 millions de dollars par rapport à l'investissement initial de 300 millions de dollars réalisé en septembre 2022.
La monétisation a été exécutée à un taux d'escompte de 5,35 %, après l'acquisition de MorphoSys par Novartis. Avant cette transaction, RPRX a reçu deux paiements trimestriels de 9,7 millions de dollars chacun au quatrième trimestre de 2024 et en janvier 2025. L'entreprise prévoit de réinvestir les produits dans des rachats d'actions et de nouvelles acquisitions de redevances dans le cadre de sa stratégie actualisée d'allocation de capital.
Les Development Funding Bonds faisaient partie d'un partenariat stratégique plus large en 2021, où RPRX a fourni jusqu'à 2,025 milliards de dollars pour l'acquisition par MorphoSys de Constellation Pharmaceuticals, y compris des redevances sur Tremfya et d'autres actifs en phase de développement.
Royalty Pharma (RPRX) hat die Monetarisierung der MorphoSys Development Funding Bonds abgeschlossen und 511 Millionen US-Dollar in Barzahlungen erhalten. Zusammen mit vorherigen Zahlungen ergibt sich ein Gesamterlös von 530 Millionen US-Dollar auf die ursprüngliche Investition von 300 Millionen US-Dollar, die im September 2022 getätigt wurde.
Die Monetarisierung wurde zu einem Abschlag von 5,35 % durchgeführt, nach der Übernahme von MorphoSys durch Novartis. Vor dieser Transaktion erhielt RPRX zwei vierteljährliche Zahlungen von jeweils 9,7 Millionen US-Dollar im 4. Quartal 2024 und im Januar 2025. Das Unternehmen plant, die Erlöse in Aktienrückkäufe und neue Lizenzakquisitionen als Teil seiner aktualisierten Kapitalallokationsstrategie zu reinvestieren.
Die Development Funding Bonds waren Teil einer größeren strategischen Partnerschaft im Jahr 2021, in der RPRX bis zu 2,025 Milliarden US-Dollar für die Übernahme von Constellation Pharmaceuticals durch MorphoSys bereitstellte, einschließlich Lizenzen für Tremfya und andere Vermögenswerte in der Entwicklungsphase.
- Secured $530 million total return on $300 million investment (77% return)
- Favorable 5.35% discount rate on monetization
- Immediate access to substantial cash for share repurchases and new investments
- Strategic conversion of fixed-payment stream into upfront cash
- Loss of future recurring quarterly payments from Development Funding Bonds
Insights
This strategic monetization by Royalty Pharma demonstrates exceptional capital management, delivering a
The transaction's timing is especially strategic following Novartis' acquisition of MorphoSys. By converting fixed-payment streams into immediate capital, Royalty Pharma has created significant financial flexibility without sacrificing its valuable Tremfya royalties. This move aligns perfectly with their updated capital allocation framework, potentially enabling them to:
- Execute substantial share repurchases at current market valuations
- Pursue new royalty acquisitions in a market where biotechnology companies increasingly seek funding
- Maintain strong liquidity for opportunistic investments
The decision to monetize fixed payments while retaining royalty assets with upside potential demonstrates sophisticated portfolio management. This transaction effectively transforms a predictable but capped return stream into capital that can be redeployed for potentially higher returns, whether through accretive share repurchases or new royalty investments.
This transaction exemplifies Royalty Pharma's sophisticated approach to portfolio optimization. By crystallizing value from fixed-payment instruments while retaining variable royalty streams, the company has effectively maximized the value of its MorphoSys investment. The
The strengthened balance sheet provides enhanced firepower for royalty acquisitions at a time when biotech funding conditions remain challenging, potentially allowing them to secure more favorable terms on future deals. The ability to execute share repurchases while maintaining acquisition capacity creates a balanced approach to capital deployment that can drive shareholder returns through multiple channels.
Most notably, this transaction demonstrates management's ability to capitalize on market opportunities created by M&A activity in their portfolio companies, a capability that adds another dimension to their value creation toolkit. The favorable discount rate achieved in this sale indicates strong institutional investor confidence in Royalty Pharma's business model and future prospects.
- Total proceeds of
$530 million on$300 million original 2022 investment - Proceeds strengthen balance sheet and provide added flexibility to pursue disciplined capital allocation strategy, including significant share repurchases and royalty acquisitions
NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today announced the closing of a transaction to monetize the remaining fixed payments on the MorphoSys Development Funding Bonds for
“While Royalty Pharma does not generally sell royalty investments, Novartis’ acquisition of MorphoSys created a unique opportunity to convert a fixed stream of long-term payments with no potential for outperformance into a large cash inflow today at an attractive return for shareholders,” said Pablo Legorreta, Royalty Pharma founder and Chief Executive Officer. “Earlier this year, we updated our capital allocation framework, seeking to generate attractive returns through a blend of royalty investments and share repurchases. Royalty Pharma will benefit from enhanced flexibility to pursue our disciplined capital allocation strategy.”
Transaction Details
Royalty Pharma entered into a long-term strategic funding partnership with MorphoSys in 2021 to provide up to
Prior to the monetization transaction announced today, Royalty Pharma received the first two quarterly repayments on the Development Funding Bonds, amounting to
BofA Securities, Inc. acted as placement agent on behalf of Royalty Pharma plc.
About Royalty Pharma
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 14 development-stage product candidates. For more information, visit www.royaltypharma.com.
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. In some cases, you can identify such forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “target,” “forecast,” “guidance,” “goal,” “predicts,” “project,” “potential” or “continue,” 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 Royalty Pharma’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. Royalty Pharma 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. 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 www.sec.gov.
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+1 (212) 883-6637
ir@royaltypharma.com
FAQ
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