Royalty Pharma recognizes that each transaction is unique and customizes each royalty acquisition accordingly. While the details of each situation will vary, the Company utilizes a systematic evaluation process that can be concluded expeditously.

A typical process includes the following steps:

• Product Identification – the Royalty Pharma team identifies marketed and pipeline products of interest.
• Royalty Identification – public and/or private information is used to determine the royalty holders of the product.
• Stage of Development – a preliminary market analysis is done to evaluate if the market is mature and to determine the applicable patent expiration date.
• Technical/Market Analysis – a thorough assessment is done to identify current and pipeline competition, analyze clinical data, consult leading clinicians using the product, and evaluate the strength of the marketer.
• Contact the royalty holders – the Royalty Pharma team establishes contact with the royalty holder and executes a Confidential Disclosure Agreement.
• Confidential Documents released to Royalty Pharma – relevant license agreements, royalty reports, and other applicable materials are made available to the Company.
• Financial Analysis – the Company calculates the present value and future value of the royalty stream, evaluates the sales potential and computes the IRR.
• Preliminary Offer – a letter of intent is sent to the royalty holder with a preliminary purchase price.
• Patent Due Diligence – the team consults with outside patent counsel and conducts an IP/License review.
• Negotiation of the Terms of the Sale – the Company and the royalty holders will negotiate and agree on the Terms of the Sale.
• Documentation/Closing – completion of due diligence, execution of Definitive Agreement and other transaction documents and funding of the transaction.