Financial Strength
Royalty Pharma’s strategy has resulted in strong year-over-year financial performance, with substantial revenue growth, from increased royalty revenue from existing products (intrinsic growth) and the acquisition of additional royalties (acquisition growth). Royalty Pharma’s business model also provides it with significant operating leverage since the company’s operating expenses are generally fixed in nature, resulting in EBITDA growth that outstrips revenue growth each year.
| ($ in millions) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||
| Royalty Revenue | $ | 384.9 | $ | 200.0 | $ | 161.2 | $ | 122.3 | $ | 67.0 |
| Total Operating Expenses (including management fees but before amortization and net interest expense) | 11.1 | 8.9 | 7.0 | 6.9 | 5.1 | |||||
| EBITDA | 375.9 | 191.1 | 154.2 | 115.4 | 61.9 | |||||
| Total Expenses | 240.8 | 89.3 | 82.8 | 57.5 | 17.2 | |||||
| Net Income | 135.1 | 101.8 | 71.4 | 57.9 | 44.7 | |||||
| (1) Not shown in accordance with GAAP presentation for 2004 through 2007. This presentation includes data from the Irish Trust combined with the feeder entities. |
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Financial Flexibility
In July 2003, Royalty Pharma successfully completed one of the first syndicated securitization facilities that used pharmaceutical royalties as the underlying collateral. Since that time, Royalty Pharma has upsized the facility twice: from its original $225 million to $350 million and in April of 2005 to $612.5 million in total availability. Backed by a guarantee from MBIA, this facility has been rated Aaa/AAA by Moody’s Investor Service and Standard & Poor’s, affording the company low borrowing costs.
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