Royalty Pharma Announces Shareholder Approval of its External Manager Acquisition
Royalty Pharma (NASDAQ: RPRX) has received overwhelming shareholder approval (99.9% of votes) to acquire its external manager. The internalization transaction, valued at approximately $1.1 billion, will be paid primarily through 24.5 million shares of equity (vesting over 5-9 years), $100 million in cash, and assumption of $380 million in Manager debt.
The acquisition brings significant benefits including projected cash savings of over $100 million in 2026, growing to over $175 million by 2030, with cumulative savings exceeding $1.6 billion over ten years. The transaction will transform Royalty Pharma from an external management model to an integrated corporate structure, with all Manager employees becoming direct company employees.
Royalty Pharma (NASDAQ: RPRX) ha ottenuto un consenso schiacciante dagli azionisti (99,9% dei voti) per acquisire il proprio gestore esterno. L'operazione di internalizzazione, valutata circa 1,1 miliardi di dollari, sarà principalmente finanziata con 24,5 milioni di azioni (con un periodo di maturazione da 5 a 9 anni), 100 milioni di dollari in contanti e l'assunzione di un debito di 380 milioni di dollari del gestore.
L'acquisizione offre vantaggi significativi, tra cui risparmi di cassa previsti di oltre 100 milioni di dollari nel 2026, che cresceranno fino a oltre 175 milioni di dollari entro il 2030, con risparmi cumulativi superiori a 1,6 miliardi di dollari in dieci anni. L'operazione trasformerà Royalty Pharma da un modello di gestione esterna a una struttura aziendale integrata, con tutti i dipendenti del gestore che diventeranno dipendenti diretti della società.
Royalty Pharma (NASDAQ: RPRX) ha recibido una aprobación abrumadora de los accionistas (99,9% de los votos) para adquirir a su gestor externo. La transacción de internalización, valorada en aproximadamente 1.100 millones de dólares, se pagará principalmente con 24,5 millones de acciones (con un período de consolidación de 5 a 9 años), 100 millones de dólares en efectivo y la asunción de una deuda del gestor de 380 millones de dólares.
La adquisición aporta beneficios significativos, incluyendo ahorros de efectivo proyectados de más de 100 millones de dólares en 2026, que crecerán a más de 175 millones de dólares para 2030, con ahorros acumulados que superan los 1.600 millones de dólares en diez años. La transacción transformará a Royalty Pharma de un modelo de gestión externa a una estructura corporativa integrada, con todos los empleados del gestor convirtiéndose en empleados directos de la empresa.
Royalty Pharma (NASDAQ: RPRX)는 외부 관리자 인수를 위해 주주들의 압도적인 찬성(99.9%의 찬성표)을 받았습니다. 약 11억 달러로 평가된 내부화 거래는 주로 2,450만 주의 주식(5~9년 동안 베스팅), 1억 달러 현금, 그리고 관리자 부채 3억 8천만 달러 인수로 지급됩니다.
이번 인수는 2026년 1억 달러 이상의 현금 절감을 시작으로 2030년에는 1억 7,500만 달러 이상으로 증가하며, 10년간 누적 절감액이 16억 달러를 초과하는 등 상당한 이점을 제공합니다. 이 거래는 Royalty Pharma를 외부 관리 모델에서 통합된 기업 구조로 전환시키며, 모든 관리자 직원은 회사의 직접 직원이 됩니다.
Royalty Pharma (NASDAQ : RPRX) a obtenu une approbation écrasante des actionnaires (99,9 % des voix) pour acquérir son gestionnaire externe. La transaction d'internalisation, évaluée à environ 1,1 milliard de dollars, sera principalement réglée par 24,5 millions d'actions (avec une période d'acquisition de droits de 5 à 9 ans), 100 millions de dollars en espèces et la prise en charge d'une dette de 380 millions de dollars du gestionnaire.
L'acquisition apporte des avantages significatifs, notamment des économies de trésorerie projetées de plus de 100 millions de dollars en 2026, qui augmenteront à plus de 175 millions de dollars d'ici 2030, avec des économies cumulées dépassant 1,6 milliard de dollars sur dix ans. La transaction transformera Royalty Pharma d'un modèle de gestion externe à une structure d'entreprise intégrée, tous les employés du gestionnaire devenant des employés directs de la société.
Royalty Pharma (NASDAQ: RPRX) hat eine überwältigende Zustimmung der Aktionäre (99,9 % der Stimmen) für die Übernahme seines externen Managers erhalten. Die Internalisationstransaktion, die auf etwa 1,1 Milliarden US-Dollar geschätzt wird, wird hauptsächlich durch 24,5 Millionen Aktien (mit einer Vesting-Periode von 5 bis 9 Jahren), 100 Millionen US-Dollar in bar und die Übernahme von 380 Millionen US-Dollar Manager-Schulden bezahlt.
Die Übernahme bringt erhebliche Vorteile mit sich, darunter prognostizierte Barmittel-Einsparungen von über 100 Millionen US-Dollar im Jahr 2026, die bis 2030 auf über 175 Millionen US-Dollar steigen und kumulierte Einsparungen von über 1,6 Milliarden US-Dollar in zehn Jahren erreichen. Die Transaktion wandelt Royalty Pharma von einem externen Managementmodell in eine integrierte Unternehmensstruktur um, wobei alle Manager-Mitarbeiter zu direkten Angestellten des Unternehmens werden.
- None.
- Substantial upfront cost of $1.1B for the acquisition
- 4% shareholder dilution from new equity issuance
- Assumption of $380M in Manager debt
Insights
Royalty Pharma's manager internalization delivers $1.6B in decade-long savings while strengthening governance and shareholder alignment.
Royalty Pharma's overwhelmingly approved manager internalization transaction represents a transformative corporate restructuring with substantial financial benefits. The acquisition eliminates the external management fee structure - previously 6.5% of Portfolio Receipts plus 0.25% of security investments - resulting in projected cash savings of
The
This restructuring addresses a key corporate governance concern inherent in externally-managed companies. External management structures create potential conflicts of interest and reduced transparency, as shareholders lack direct influence over compensation structures. By internalizing management, Royalty Pharma eliminates these structural concerns, enhances leadership accountability, and improves cost structure - all without disrupting operational continuity.
The overwhelmingly positive shareholder vote (
- Received overwhelming shareholder approval with
99.9% of votes cast in favor - Simplified structure benefits shareholders through strengthened shareholder alignment, enhanced governance, significant cash savings and increased economic return on investments
- Significant annual cash savings of greater than
$100 million in 2026 growing to over$175 million in 2030, with cumulative savings of more than$1.6 billion over ten years - Royalty Pharma’s diversified royalty portfolio to be combined with intellectual capital and investment platform of the Manager to advance shareholder value creation
NEW YORK, May 12, 2025 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today announced that shareholders overwhelmingly approved its previously announced external manager acquisition, with
“We are pleased to announce shareholder approval of our manager internalization, an important step that strengthens our corporate governance, enhances transparency, and further aligns our leadership team with shareholder interests,” said Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma. “We are grateful for the strong support from our shareholders, and remain focused on delivering long-term value through our differentiated, innovation-focused business model.”
With shareholder approval, Royalty Pharma will proceed with its transition from an external manager model to an integrated corporate structure, with the Royalty Pharma executive team and employees becoming direct employees of the company.
Key Benefits to Shareholders
The transaction 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
Meeting Results
At the Meeting held on May 12, 2025,
RP Management Internalization Transaction Terms
Royalty Pharma will acquire the Manager for approximately 24.5 million shares of Royalty Pharma equity that will vest over 5 to 9 years, approximately
The closing of the internalization transaction will be subject to customary closing conditions, including required regulatory approvals. Royalty Pharma anticipates the transaction will close in May 2025.
Background on the Manager
Since its founding in 1996, Royalty Pharma had operated under an external management model, relying on a separate Manager, owned by Pablo Legorreta and other members of senior management, for all operations and personnel. The company paid quarterly fees to the Manager equal to
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 15 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, plus the benefits of the internalization transaction, including cash savings, 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 “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, including because the internalization transaction is subject to shareholder approval. 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.
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.
Royalty Pharma Investor Relations and Communications
+1 (212) 883-6637
ir@royaltypharma.com
1 The cash component of the consideration consists of
FAQ
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