Royalty Pharma PLC (RPRX) Q4 2025 Earnings Call Highlights: Strong Growth and Strategic Capital …

GuruFocus News

Thu, February 12, 2026 at 4:02 AM GMT+9 5 min read

In this article:

RPRX

+1.38%

This article first appeared on GuruFocus.

**Portfolio Receipts Growth:** 16% for the year, 18% in the fourth quarter.

**Royalty Receipts Growth:** 13% for the year, 17% in the fourth quarter.

**Return on Invested Capital:** 15.8% for 2025.

**Return on Invested Equity:** 22.8% for 2025.

**Capital Deployment:** $2.6 billion for the year, $887 million in the fourth quarter.

**Share Repurchases:** 37 million shares for $1.2 billion.

**Dividends Paid:** Over $500 million, with a 7% increase in the first quarter of 2026.

**Cash and Equivalents:** $619 million at the end of 2025.

**Debt Outstanding:** $9.2 billion, with a leverage ratio of around 3 times total Debt to Adjusted EBITDA.

**2026 Guidance for Portfolio Receipts:** $3.275 billion to $3.425 billion.

**Operating and Professional Costs:** 8.9% of Portfolio Receipts for 2025, expected to reduce to 5.5% to 6.5% in 2026.

**Interest Paid:** $242 million for 2025, expected to be $350 million to $360 million in 2026.

Warning! GuruFocus has detected 10 Warning Signs with RPRX.

Is RPRX fairly valued? Test your thesis with our free DCF calculator.

Release Date: February 11, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Royalty Pharma PLC (NASDAQ:RPRX) delivered strong double-digit growth in both Portfolio Receipts and Royalty Receipts, exceeding guidance expectations.

The company achieved a Return on Invested Capital of 15.8% and Return on Invested Equity of 22.8% for the year, indicating strong financial performance.

Royalty Pharma PLC (NASDAQ:RPRX) completed $4.7 billion in transactions on attractive therapies and returned $1.7 billion to shareholders through share repurchases and dividends.

The company reported multiple positive clinical and regulatory updates, including FDA approval of Myqorzo and positive Phase 3 results for several therapies.

Royalty Pharma PLC (NASDAQ:RPRX) reached its five-year Capital Deployment target of $10 billion to $12 billion one year ahead of schedule, showcasing effective capital allocation.

Negative Points

The company's 2026 guidance reflects a modest growth expectation of 3% to 8% in Royalty Receipts, indicating potential challenges in maintaining high growth rates.

Royalty Pharma PLC (NASDAQ:RPRX) faces the impact of loss of exclusivity for Promacta and the launch of biosimilar Tysabri in the United States.

The expected decrease in milestones and other contractual receipts from $128 million in 2025 to approximately $60 million in 2026 could impact overall revenue.

Interest payments are expected to increase in 2026 due to the $2 billion of notes issued in September 2025, potentially affecting net income.

The company's reliance on synthetic royalties, which accounted for a significant portion of transactions, may introduce higher risk compared to traditional royalties.

 






Story continues  

Q & A Highlights

Q: How sustainable are the dividend and buybacks, and could they have been better spent on royalty deals? A: Terry Coyne, Chief Financial Officer, explained that their capital allocation is dynamic, based on the relative attractiveness of royalty opportunities versus stock price. In 2025, they accelerated share repurchases when the stock was attractively valued and increased investments as deal activity picked up. Going forward, they will continue this approach, with a current bias towards royalties.

Q: With the thawing of capital markets, is there an opportunity for Royalty Pharma to get involved in privates or IPOs? A: Christopher Hite, Vice Chairman, Executive Vice President, stated that they focus on high-quality pharmaceutical products, whether in private or public companies. They have made small equity investments associated with potential royalties and are excited about the growth of opportunities in any market environment.

Q: How has Vertex’s conversion of CF patients to Alyftrek been tracking, and do you agree with Vertex’s outlook? A: Terrance Coyne, Chief Financial Officer, noted that the conversion has been gradual but steady, consistent with their expectations. They anticipate CF to remain a significant contributor, with Royalty Receipts from the CF franchise expected to be around $800 million by 2030, even with patient switching to Alyftrek.

Q: What is Royalty Pharma’s view on drug delivery formats in cardiometabolic diseases? A: Marshall Urist, Executive Vice President - Research & Investments, highlighted that the diversity of patient needs allows for multiple delivery formats to succeed. They will continue to seek differentiated products that meet patient needs and maximize value.

Q: Will synthetic royalties continue to exceed traditional royalties in the future? A: Christopher Hite, Vice Chairman, Executive Vice President, expressed excitement about the growth of the synthetic royalty market. They see increasing awareness and demand for synthetic royalties as a better solution compared to debt or equity financing, and expect this growth to continue.

Q: How important is the treatment effect size in Lp(a) lowering class readouts for commercial peak sales opportunity? A: Marshall Urist, Executive Vice President - Research & Investments, acknowledged that effect size matters and will influence discussions on patient benefit. They are eager to see the upcoming data and its implications for the potential of the Lp(a) class.

Q: How does Royalty Pharma view the potential of Myqorzo in non-obstructive HCM? A: Marshall Urist, Executive Vice President - Research & Investments, stated that their investment was based on the currently approved indication of obstructive disease. While they are excited about the potential in non-obstructive HCM, their base case did not assume a positive trial outcome for this indication.

Q: How does Royalty Pharma view the impact of J&J’s oral IL-23 on Tremfya? A: Marshall Urist, Executive Vice President - Research & Investments, sees the oral IL-23 as market expanding rather than cannibalizing Tremfya. They believe both products have significant potential and are enthusiastic about Tremfya’s trajectory.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Terms and Privacy Policy

Privacy Dashboard

More Info