- Royalty Pharma invests in biopharmaceutical royalty streams and has deployed $18bn of capital into the space since 1996 - ~50% of all deployed capital.
- Its portfolio of assets includes royalties from AbbVie's Imbruvica, Vertex' Cystic Fibrosis franchise and Biogen's Tysabri - all of which make multi-blockbuster sales.
- In June, the company IPO'd, raising $1.9bn, and has issued $6bn of debt, giving it a substantial war chest to make further acquisitions.
- Royalty management say their business model has all the benefits of sharing in the profits of successful new drug launches, with fewer risks - but I see Royalty's exposure to risk as quite high.
- Nevertheless, based on its current portfolio of assets and recent investments I would argue the company's shares are undervalued and would set a price target ~$80 - despite falling volumes of Receipts.
For further details see:
Royalty Pharma: Business Model May Be Over-Sold, But Shares Are Undervalued & Could Trade >$80