Royalty Pharma plc

Previous wording

Following the Exchange Offer, we became the indirect owner of an 82% economic interest in Old RPI through our subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust. We are entitled to 82% of the economics of Old RPI’s wholly-owned subsidiary RPI Finance Trust, a Delaware statutory trust (“RPIFT”), and 66% of Royalty Pharma Collection Trust, a Delaware statutory trust (“RPCT”). Prior to December 29, 2023, the remaining 34% of RPCT was owned by the Legacy Investors Partnerships and Royalty Pharma Select Finance Trust, a Delaware statutory trust (“RPSFT”), which was wholly owned by Royalty Pharma Select, an Irish unit trust.

Current wording

Following the Exchange Offer, we became the indirect owner of an 82% economic interest in Old RPI through our subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust which entitled us to 82% of the economics of Old RPI’s wholly-owned subsidiary RPI Finance Trust, a Delaware statutory trust (“RPIFT”), and 66% of Royalty Pharma Collection Trust, a Delaware statutory trust (“RPCT”). We acquired the remaining 34% interest in RPCT owned by Royalty Pharma Select Finance Trust, a Delaware statutory trust (“RPSFT”) in December 2023.

Previous wording

The measurement of income from our financial royalty assets requires significant judgments and estimates, including management’s judgment in forecasting the expected future cash flows of the underlying royalties and the expected duration of the financial royalty asset. Our cash flow forecasts are updated each reporting period primarily using sell-side equity research analysts’ consensus sales estimates for each of the products in which we own royalties. We then calculate our expected royalty receipts by applying our royalty terms to these consensus sales forecasts. As we update our forecasted cash flows on a periodic basis and recalculate the present value of the remaining future cash flows, any shortfall when compared to the carrying value of the financial royalty asset is recorded directly in the income statement as non-cash provision expense. If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a non-cash credit to the provision.

Current wording

The measurement of income from our financial royalty assets requires significant judgments and estimates, including management’s judgment in forecasting the expected future cash flows of the underlying royalties and the expected duration of each financial royalty asset. Our cash flow forecasts are updated each reporting period primarily using sell-side equity research analysts’ consensus sales estimates. We then calculate our expected royalty receipts by applying our royalty terms to these consensus sales forecasts. As we update our forecasted cash flows on a periodic basis and recalculate the present value of the remaining future cash flows, any shortfall when compared to the carrying value of the financial royalty asset is recorded directly in the condensed consolidated statements of operations as non-cash provision expense. If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a non-cash credit to the provision, or provision income.

Previous wording

As a result of the non-cash charges associated with applying the effective interest method accounting methodology to our financial royalty assets, our condensed consolidated statements of operations activity can be volatile and unpredictable. Small declines in sell-side equity research analysts’ consensus sales forecasts over a long time horizon can result in an immediate non-cash income statement expense recognition, even though the applicable cash inflows will not be realized for many years into the future. For example, in late 2014 we acquired the cystic fibrosis franchise and shortly after, declines in near-term sales forecasts of sell-side equity research analysts caused us to recognize non-cash provision expense in our condensed consolidated statements of operations. Over the course of 10 quarters, we continued to recognize non-cash provision expense because of these changes in sales forecasts, ultimately reaching a peak cumulative allowance of $1.30 billion by September 30, 2017. With the approval of the Vertex triple combination therapy, Trikafta, in October 2019, sell-side equity research analysts’ consensus sales forecasts increased to reflect the larger addressable market and the extension of the expected duration of the Trikafta royalty, resulting in the reversal of the remaining $1.10 billion cumulative allowance. The recognition of the associated non-cash provision income of $1.10 billion in 2019 was not tied to royalty receipts, but rather to the increase in sales forecasts. This example illustrates the volatility caused by our accounting model in our condensed consolidated statements of operations.

Current wording

As a result of the non-cash charges associated with applying the effective interest method accounting methodology to our financial royalty assets, our condensed consolidated statements of operations activity can be volatile and unpredictable. Small declines in sell-side equity research analysts’ consensus sales forecasts over a long time horizon can result in an immediate non-cash income statement expense recognition, even though the applicable cash inflows will not be realized for many years into the future. For example, in late 2014 we acquired the cystic fibrosis franchise and shortly after, declines in near-term sales forecasts of sell-side equity research analysts caused us to recognize non-cash provision expense in our condensed consolidated statements of operations. Over the course of the next 10 quarters, we continued to recognize non-cash provision expense because of these changes in sales forecasts, ultimately reaching a peak cumulative allowance of $1.30 billion by September 30, 2017. With the approval of Vertex’s Trikafta, in October 2019, sell-side equity research analysts’ consensus sales forecasts increased to reflect the larger addressable market and the extension of the expected duration of the Trikafta royalty, resulting in the reversal of the remaining $1.10 billion cumulative allowance. The recognition of the associated non-cash provision income of $1.10 billion in 2019 was not tied to royalty receipts, but rather to the increase in sales forecasts due to the U.S. Food and Drug Administration (“FDA”) approval of Trikafta. This example illustrates the volatility caused by our accounting model in our condensed consolidated statements of operations.

Previous wording

The Legacy Investors Partnerships’ ownership of approximately 18% of Old RPI and RPI ICAV. The value of this non-controlling interest will decline over time as the assets in Old RPI and RPI ICAV expire.

Current wording

The Legacy Investors Partnerships’ ownership of approximately 18% of Old RPI and RPI ICAV which is the only historical non-controlling interest that existed prior to our IPO. The value of this non-controlling interest will continue to decline over time as the assets in Old RPI and RPI ICAV expire. The Legacy Investors Partnerships are referred to as the “legacy non-controlling interests.”

Previous wording

The Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of RP Holdings Class B Interests was approximately 24% as of September 30, 2024. RP Holdings Class B Interests are exchangeable into Class A ordinary shares. As the Continuing Investors Partnerships conduct exchanges, the Continuing Investors Partnerships’ ownership in RP Holdings decreases and the value of this non-controlling interest decreases. Additionally, RP Holdings began to retire RP Holdings Class A Interests held by us in connection with our repurchase of Class A ordinary shares. As RP Holdings retires RP Holdings Class A Interests, our ownership in RP Holdings decreases and the value of this non-controlling interest increases.

Current wording

The Continuing Investors Partnerships’ ownership in RP Holdings through their ownership of RP Holdings Class B Interests was approximately 25% as of March 31, 2025. RP Holdings Class B Interests are exchangeable into our Class A ordinary shares. As the Continuing Investors Partnerships conduct exchanges, the Continuing Investors Partnerships’ ownership in RP Holdings decreases and the value of this non-controlling interest decreases. Additionally, RP Holdings continues to retire RP Holdings Class A Interests held by us as we repurchase our Class A ordinary shares. As RP Holdings retires RP Holdings Class A Interests, our ownership in RP Holdings decreases and the value of this non-controlling interest increases.

Previous wording

EPA Holdings is entitled to receive equity distributions through its RP Holdings Class C Special Interest (“Equity Performance Awards”). Equity Performance Awards owed to EPA Holdings will be recognized as an equity transaction when the obligation becomes due and will impact the income allocated to non-controlling interest related to the RP Holdings Class C Special Interest. The Equity Performance Awards will be payable in RP Holdings Class B Interests that will be exchanged upon issuance for Class A ordinary shares. EPA Holdings may also receive a periodic cash advance in respect of the RP Holdings Class C Special Interest to the extent necessary for EPA Holdings or any of its beneficial owners to pay when due any income tax imposed on it or them as a result of holding such RP Holdings Class C Special Interest. We currently expect Equity Performance Awards to become payable in 2025 when certain performance conditions are projected to be met.

Current wording

RPI EPA Vehicle LLC’s (the “EPA Entity”) ownership of RP Holdings’ Class C ordinary share (the “RP Holdings Class C Special Interest”). Investments made during each two-year period are grouped together as separate portfolios (each, a “Portfolio”). Subject to certain conditions, at the end of each fiscal quarter, the EPA Entity is entitled to a distribution from RP Holdings in respect of each Portfolio equal to 20% of the Net Economic Profit (defined as the aggregate cash receipts for all new portfolio investments in such Portfolio less Total Expenses (defined as interest expense, operating expense and recovery of acquisition cost in respect of such Portfolio)) for such Portfolio for the applicable measuring period (the “Equity Performance Awards”). Equity Performance Awards are recognized as an equity transaction when the obligation becomes due and income is allocated to non-controlling interest related to the RP Holdings Class C Special Interest. The Equity Performance Awards are payable in RP Holdings Class B Interests that will be exchanged upon issuance for Class A ordinary shares. The EPA Entity may also receive a periodic cash advance to the extent necessary for the EPA Entity or any of its beneficial owners to pay when due any income tax imposed on it or them as a result of holding such RP Holdings Class C Special Interest.

Previous wording

The Continuing Investors Partnerships are referred to as the “continuing non-controlling interests.”

Current wording

The Continuing Investors Partnerships, together with the EPA Entity, are referred to as the “continuing non-controlling interests.”

Previous wording

Other royalty income and revenues also includes revenues from intangible royalty assets and income from royalties that are recorded at fair value on our condensed consolidated balance sheets.

Current wording

Other royalty income and revenues also includes revenues from intangible royalty assets and income from royalties that are recorded at fair value.

Previous wording

As discussed above, income is accreted on our financial royalty assets using the effective interest method. As we update our forecasted cash flows on a periodic basis and recalculate the present value of the remaining future cash flows, any shortfall when compared to the carrying value of the financial royalty asset is recorded directly in the condensed consolidated statements of operations through the line item Provision for changes in expected cash flows from financial royalty assets. If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a credit to the provision.

Current wording

As discussed above, income is accreted on our financial royalty assets using the effective interest method. As we update our forecasted cash flows on a periodic basis and recalculate the present value of the remaining future cash flows, any shortfall when compared to the carrying value of the financial royalty asset is recorded directly in the condensed consolidated statements of operations through the line item Provision for changes in expected cash flows from financial royalty assets. If, in a subsequent period, there is an increase in expected cash flows or if actual cash flows are greater than cash flows previously expected, we reverse the provision expense previously recorded in part or in full by recording a credit to the provision, or provision income.

Previous wording

R&D funding expense consists of payments that we have made to counterparties to acquire royalties or milestones on product candidates. It includes development-stage funding payments to counterparties that are made upfront or upon pre-approval milestones, and development-stage funding payments that are made to counterparties over time as the related product candidates undergo clinical trials with our counterparties.

Current wording

R&D funding expense consists of development-stage funding payments that we have made to counterparties to acquire royalties or milestones on product candidates. The payments can be made on an upfront basis, upon pre-approval milestone or over time as the related product candidates undergo clinical trials.

Previous wording

General and administrative (“G&A”) expenses include primarily Operating and Personnel Payments (defined below), legal expenses, other expenses for professional services and share-based compensation. The expenses incurred in respect of Operating and Personnel Payments comprise the most significant component of G&A expenses on an ongoing basis.

Current wording

General and administrative (“G&A”) expenses include primarily Operating and Personnel Payments (defined below), legal expenses, other expenses for professional services and share-based compensation. The expenses incurred in respect of Operating and Personnel Payments comprise the most significant component of G&A expenses.

Previous wording

Under the Management Agreement, we pay a quarterly operating and personnel payment to the Manager or its affiliates (“Operating and Personnel Payments”) equal to 6.5% of the cash receipts from Royalty Investments (as defined in the Management Agreement), or Portfolio Receipts for such quarter, and 0.25% of the value of our security investments under GAAP as of the end of such quarter.

Current wording

Under the Management Agreement, we pay a quarterly operating and personnel payment to the Manager or its affiliates (“Operating and Personnel Payments”) equal to 6.5% of the cash receipts from Royalty Investments (as defined in the Management Agreement) and 0.25% of the value of our security investments under GAAP as of the end of such quarter.

Previous wording

Other income, net primarily includes the changes in fair market value of our equity securities, derivative instruments and available for sale debt securities, including related forwards and funding commitments, and interest income.

Current wording

Other expense/(income), net primarily includes the changes in fair market value of our equity securities, derivative instruments and available for sale debt securities, including related forwards and funding commitments, and interest income.

Previous wording

The net income attributable to non-controlling interests includes income attributable to the legacy non-controlling interests and the continuing non-controlling interests. Following our acquisition of the remaining non-controlling interest in RPCT held by RPSFT in December 2023, and since the Legacy Investors Partnerships no longer participate in investment opportunities, the related net income attributable to the legacy non-controlling interests is expected to continue to decline over time as the assets held by Old RPI and RPI ICAV mature.

Current wording

The net income attributable to non-controlling interests includes income attributable to the legacy non-controlling interests and the continuing non-controlling interests. Following our acquisition of the remaining non-controlling interest in RPCT held by RPSFT in December 2023, and since the Legacy Investors Partnerships no longer participate in investment opportunities, the related net income attributable to the legacy non-controlling interests is expected to continue to decline over time as the assets held by Old RPI and RPI ICAV mature. The net income attributable to the continuing non-controlling interests related to RP Holdings Class B Interests held by the Continuing Investors Partnerships will decline over time if the investors who indirectly own RP Holdings Class B Interests conduct exchanges for our Class A ordinary shares.

Previous wording

Net income attributable to non-controlling interests above can fluctuate significantly from period to period, primarily driven by volatility in the income statement activity of the respective underlying entity as a result of the non-cash charges associated with applying the effective interest accounting methodology to our financial royalty assets as described in section titled “Understanding Our Financial Reporting.”

Current wording

Net income attributable to non-controlling interests above can fluctuate significantly from period to period, primarily driven by volatility in the income statement activity of the respective underlying entity as a result of the non-cash charges associated with applying the effective interest accounting methodology to our financial royalty assets as described in the section titled “Understanding Our Financial Reporting.”

Previous wording

Income from financial royalty assets by top products is as follows, in order of contribution to income for the first nine months of 2024 (in thousands):

Current wording

Income from financial royalty assets by top products is as follows, in order of contribution to income for the first quarter of 2025 (in thousands):

Previous wording

Other royalty income and revenues were relatively flat in the first nine months of 2024 as compared to the first nine months of 2023.

Current wording

Other royalty income and revenues were relatively flat in the first quarter of 2025 as compared to the first quarter of 2024.

Previous wording

In the third quarter of 2024, we recorded provision income of $227.6 million, comprised of $261.3 million in provision income for changes in expected cash flows and $33.7 million in provision expense for current expected credit losses. We recorded provision income for changes in expected cash flows primarily related to Tysabri, Xtandi, cystic fibrosis franchise and Evrysdi due to increases in sell-side equity research analysts’ consensus sales forecasts. The provision expense for credit losses was primarily driven by the addition of Yorvipath to our portfolio.

Current wording

In the first quarter of 2025, we recorded provision income of $127.1 million, comprised of $113.6 million in provision income for changes in expected cash flows and $13.5 million in provision income for current expected credit losses. We recorded provision income for changes in expected cash flows primarily related to cystic fibrosis franchise due to increase in sell-side equity research analysts’ consensus sales forecasts. The provision income for changes in expected cash flows was partially offset by provision expense related to Evrysdi due to declines in sell-side equity research analysts’ consensus sales forecasts.

Previous wording

In the first nine months of 2024, we recorded provision expense of $568.4 million, comprised of $504.5 million in provision expense for changes in expected cash flows and $64.0 million in provision expense for current expected credit losses. We recorded provision expense for changes in expected cash flows primarily related to Evrysdi due to declines in sell-side equity research analysts’ consensus sales forecasts. We recorded provision expense for changes in expected cash flows related to the cystic fibrosis franchise, primarily due to the inclusion of consensus estimates for Vertex’s vanzacaftor triple following disclosure of the Phase 3 clinical data and the conservative assumption that royalties are only collected on the tezacaftor component of the vanzacaftor triple and not the deuterated ivacaftor component. Although we believe that the deuterated ivacaftor component of vanzacaftor triple is the same as ivacaftor and is therefore royalty-bearing, Vertex has made public statements that it believes the deuterated ivacaftor component is not royalty-bearing. If deuterated ivacaftor is determined to be royalty-bearing, we may recognize provision income in our results of operations at that time. Additionally, we recorded provision expense for Crysvita due to declines in sales forecasts. The provision expense for credit losses was primarily driven by the additions of Yorvipath, Voranigo and ecopipam to our portfolio.

Current wording

In the first quarter of 2024, we recorded provision expense of $583.6 million, comprised of $584.3 million in provision expense for changes in expected cash flows and $0.7 million in provision income for current expected credit losses. We recorded provision expense for changes in expected cash flows related to the cystic fibrosis franchise, primarily due to the inclusion of consensus estimates in 2024 for Vertex’s Alyftrek and the conservative assumption that royalties will only be collected on the tezacaftor component of Alyftrek and not on the deuterated ivacaftor component. Although we believe that the deuterated ivacaftor component of Alyftrek is the same as ivacaftor and is therefore royalty-bearing, Vertex has made public statements that it believes the deuterated ivacaftor component is not royalty-bearing. If deuterated ivacaftor is determined to be royalty-bearing, we may recognize provision income in our results of operations at that time. Additionally, we recorded provision expense for Crysvita due to declines in sales forecasts.

Previous wording

Equity in earnings of equity method investees was $10.4 million in the third quarter of 2024 as compared to equity in losses of equity method investees of $5.2 million in the third quarter of 2023, primarily driven by an income allocation from the Legacy SLP Interest of $10.2 million in the third quarter of 2024 as compared to a loss allocation of $2.3 million in the third quarter of 2023.

Current wording

Equity in earnings of equity method investees was $6.4 million in the first quarter of 2025 as compared to equity in losses of equity method investees of $14.1 million in the first quarter of 2024. Equity in earnings of equity method investees was primarily driven by an income allocation from the Legacy SLP Interest of $8.2 million in the first quarter of 2025. Equity in losses of equity method investees was primarily driven by a loss allocation from the Legacy SLP Interest of $9.4 million in the first quarter of 2024.

Previous wording

Interest expense increased by $19.8 million, or 14.2% in the first nine months of 2024 as compared to the first nine months of 2023, primarily driven by the issuance of the $1.5 billion of senior unsecured notes in June 2024. The weighted average coupon rate on our senior unsecured notes outstanding as of September 30, 2024 and 2023 was 3.06% and 2.24%, respectively.

Current wording

Interest expense increased by $21.0 million, or 47.5% in the first quarter of 2025 as compared to the first quarter of 2024, primarily driven by the issuance of the $1.5 billion of senior unsecured notes in June 2024. The weighted average coupon rate on our senior unsecured notes outstanding as of March 31, 2025 and 2024 was 3.06% and 2.48%, respectively.

Previous wording

Other income, net of $21.9 million in the third quarter of 2023 was primarily comprised of $23.4 million of interest income earned on cash and cash equivalents held at financial institutions.

Current wording

Other expense, net of $41.9 million in the first quarter of 2025 was primarily comprised of $45.9 million of losses on equity securities, partially offset by $11.3 million of interest income earned on cash and cash equivalents.

Previous wording

Other income, net of $214.6 million in the first nine months of 2023 was primarily comprised of $122.5 million of gains on available for sale debt securities, $65.8 million of interest income earned on cash and cash equivalents held at financial institutions and $32.0 million of gains on equity securities. The gains on available for sale debt securities were primarily driven by the change in fair value of the MorphoSys Development Funding Bonds.

Current wording

Other income, net of $127.9 million in the first quarter of 2024 was primarily comprised of $77.7 million of gains on equity securities and $46.4 million of gains on available for sale debt securities. The gains on available for sale debt securities were primarily driven by the change in fair value of the MorphoSys Development Funding Bonds.

Previous wording

Net income attributable to the Legacy Investors Partnerships increased by $61.3 million in the third quarter of 2024 as compared to the third quarter of 2023, primarily driven by higher net income attributable to Old RPI as a result of lower provision expense in the current year period.

Current wording

Net income attributable to the Legacy Investors Partnerships was $76.9 million in the first quarter of 2025 as compared to net loss attributable to the Legacy Investors Partnerships of $10.6 million the first quarter of 2024, and was primarily driven by higher net income attributable to Old RPI as a result of provision income recognized in 2025 as compared to provision expense recognized in 2024.

Previous wording

Net income attributable to the Continuing Investors Partnerships decreased by $15.5 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily due to lower net income attributable to RP Holdings as a result of lower interest income recognized in 2024. The higher interest income in 2023 was primarily driven by $153.6 million of interest income recognized following the FDA’s approval of Pfizer’s Zavzpret, which was non-recurring. Additionally, the exchanges by investors in the Continuing Investors Partnerships who indirectly own RP Holdings Class B Interests for our Class A ordinary shares resulted in a decline in the Continuing Investors Partnerships’ ownership of RP Holdings.

Current wording

Net income attributable to the Continuing Investors Partnerships increased by $75.2 million in the first quarter of 2025 as compared to the first quarter of 2024. The increase was primarily due to higher net income attributable to RP Holdings as a result of provision income recognized in 2025 as compared to provision expense recognized in 2024. Additionally, the exchanges by investors in the Continuing Investors Partnerships who indirectly own RP Holdings Class B Interests for our Class A ordinary shares resulted in a decline in the Continuing Investors Partnerships’ ownership of RP Holdings.

Previous wording

Portfolio Receipts is defined as the sum of royalty receipts and milestones and other contractual receipts. Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to us (“Royalty Receipts”). Milestones and other contractual receipts include sales-based or regulatory milestones payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that are attributed to us. Portfolio Receipts does not include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are not central to our fundamental business strategy.

Current wording

Portfolio Receipts is defined as the sum of royalty receipts and milestones and other contractual receipts. Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to us (“Royalty Receipts”). Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed contractual receipts, net of contractual payments to the legacy non-controlling interests, that are attributed to us. Portfolio Receipts does not include royalty receipts and milestones and other contractual receipts that were received on an accelerated basis under the terms of the agreement governing the receipt or payment. Portfolio Receipts also does not include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are not central to our fundamental business strategy.

Previous wording

Portfolio Receipts is calculated as the sum of the following line items from our GAAP statements of cash flows: Cash collections from financial royalty assets, Cash collections from intangible royalty assets, Other royalty cash collections, Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts, which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to RPSFT and the Legacy Investors Partnerships.

Current wording

Portfolio Receipts is calculated as the sum of the following line items from our GAAP condensed consolidated statements of cash flows: Cash collections from financial royalty assets, Cash collections from intangible royalty assets, Other royalty cash collections, Proceeds from available for sale debt securities and Distributions from equity method investees less Distributions to legacy non-controlling interests - Portfolio Receipts, which represent contractual distributions of Royalty Receipts, milestones and other contractual receipts to the Legacy Investors Partnerships.

Previous wording

Our portfolio consists of royalties on more than 35 marketed therapies and 15 development-stage product candidates. The therapies in our portfolio address therapeutic areas such as rare disease, cancer, neuroscience, infectious disease, hematology and diabetes, and are delivered to patients across both primary and specialty care settings. The table below shows Portfolio Receipts, including Royalty Receipts by product and milestones and other contractual receipts, in order of contribution to total Royalty Receipts for the first nine months of 2024 (in thousands):

Current wording

Our portfolio consists of royalties on more than 35 marketed therapies and 15 development-stage product candidates. The therapies in our portfolio address therapeutic areas such as rare disease, cancer, neuroscience, infectious disease, hematology and diabetes, and are delivered to patients across both primary and specialty care settings. The table below shows Portfolio Receipts, including Royalty Receipts by product and milestones and other contractual receipts, in order of contribution to total Royalty Receipts for the first quarter of 2025 (in thousands):

Previous wording

(1)The cystic fibrosis franchise includes the following approved products: Kalydeco, Orkambi, Symdeko/Symkevi and Trikafta/Kaftrio.

Current wording

(1)The cystic fibrosis franchise includes the following approved products: Kalydeco, Orkambi, Symdeko/Symkevi, Trikafta/Kaftrio and Alyftrek, which was approved by the FDA in December 2024.

Previous wording

(2)Other products primarily include Royalty Receipts on the following products: Cimzia, Crysvita, Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Letairis, Lexiscan, Mircera, Nesina, Prevymis, Soliqua and distributions from the Legacy SLP Interest, which are presented as Distributions from equity method investeeson the statements of cash flows.

Current wording

(2)Other products primarily include Royalty Receipts on the following products: Cimzia, Crysvita, Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Nesina, Nurtec ODT, Orladeyo, Rytelo, Soliqua, Voranigo and distributions from the Legacy SLP Interest, which are presented as Distributions from equity method investeesin the condensed consolidated statements of cash flows.

Previous wording

•Cystic fibrosis franchise – Royalty Receipts from the cystic fibrosis franchise, including Kalydeco, Orkambi, Symdeko/Symkevi and Trikafta/Kaftrio, which are marketed by Vertex for patients with certain mutations causing cystic fibrosis, increased by $57.0 million in the first nine months of 2024 as compared to the first nine months of 2023. The increase was primarily driven by the continued U.S. performance of Trikafta and the strong uptake of Kaftrio outside of the United States, including its uptake in younger age groups.

Current wording

•Cystic fibrosis franchise – Royalty Receipts from the cystic fibrosis franchise, including Kalydeco, Orkambi, Symdeko/Symkevi and Trikafta/Kaftrio, which is marketed by Vertex for patients with certain mutations causing cystic fibrosis, increased by $31.3 million in the first quarter of 2025 as compared to the first quarter of 2024. The increase was primarily due to strong Trikafta/Kaftrio performance and demand globally, including in younger age groups, and higher net realized pricing in the United States.

Previous wording

•Trelegy – Royalty Receipts from Trelegy, which is marketed by GSK for the maintenance treatment of chronic obstructive pulmonary disease and asthma, increased by $66.5 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily driven by strong patient demand, single inhaler triple therapy class growth and increased market share.

Current wording

•Trelegy – Royalty Receipts from Trelegy, which is marketed by GSK for the maintenance treatment of chronic obstructive pulmonary disease and asthma, increased by $14.7 million in the first quarter of 2025 as compared to the first quarter of 2024, primarily driven by strong volume growth across all regions reflecting patient demand, single inhaler triple therapy class growth and increased market share.

Previous wording

•Tysabri – Royalty Receipts from Tysabri, which is marketed by Biogen for the treatment of multiple sclerosis, decreased by $10.6 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily due to pricing pressure and competition.

Current wording

•Tysabri – Royalty Receipts from Tysabri, which is marketed by Biogen for the treatment of multiple sclerosis, decreased by $8.0 million in the first quarter of 2025 as compared to the first quarter of 2024, primarily due to increased competition.

Previous wording

•Evrysdi – Royalty Receipts from Evrysdi, which is marketed by Roche for the treatment of spinal muscular atrophy, increased by $71.5 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily attributable to royalty receipts on the incremental royalties we acquired in the fourth quarter of 2023 and the second quarter of 2024. The increase is further driven by gains in patient share across all regions.

Current wording

•Evrysdi – Royalty Receipts from Evrysdi, which is marketed by Roche for the treatment of spinal muscular atrophy, increased by $7.7 million in the first quarter of 2025 as compared to the first quarter of 2024, attributable to the incremental royalties we acquired in the second quarter of 2024. The increase was further driven by its strong global position in patient share and total patients.

Previous wording

•Xtandi – Royalty Receipts from Xtandi, which is marketed by Pfizer and Astellas for the treatment of prostate cancer, increased by $14.7 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily driven by growth in all regions.

Current wording

•Xtandi – Royalty Receipts from Xtandi, which is marketed by Pfizer and Astellas for the treatment of prostate cancer, increased by $11.5 million in the first quarter of 2025 as compared to the first quarter of 2024, driven primarily by strong demand due to uptake of the non-metastatic castration-sensitive prostate cancer (nmCSPC) indication following approval in the fourth quarter of 2023 and increased affordability in the United States.

Previous wording

•Imbruvica – Royalty Receipts from Imbruvica, which is marketed by AbbVie and Johnson & Johnson for the treatment of blood cancers and chronic graft versus host disease, decreased by $14.4 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily due to competitive pressures.

Current wording

•Imbruvica – Royalty Receipts from Imbruvica, which is marketed by AbbVie and Johnson & Johnson for the treatment of blood cancers and chronic graft versus host disease, decreased by $4.2 million in the first quarter of 2025 as compared to the first quarter of 2024, reflecting competitive pressures.

Previous wording

•Promacta – Royalty Receipts from Promacta, which is marketed by Novartis for the treatment of chronic immune thrombocytopenia purpura (ITP) and aplastic anemia, decreased by $2.5 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily due to higher revenue deductions, partially offset by an increased use of Promacta in chronic ITP and severe aplastic anemia in the United States.

Current wording

•Promacta – Royalty Receipts from Promacta, which is marketed by Novartis for the treatment of chronic immune thrombocytopenia purpura (ITP) and aplastic anemia, increased by $1.6 million in the first quarter of 2025 as compared to the first quarter of 2024, experiencing growth despite discontinued promotion in most markets.

Previous wording

•Tremfya– Royalty Receipts from Tremfya, which is marketed by Johnson & Johnson for the treatment of plaque psoriasis and active psoriatic arthritis, increased by $19.2 million in the first nine months of 2024 as compared to the first nine months of 2023, due to market growth, market share gains and favorable patient mix.

Current wording

•Tremfya– Royalty Receipts from Tremfya, which is marketed by Johnson & Johnson for the treatment of plaque psoriasis and active psoriatic arthritis, was relatively flat in the first quarter of 2025 as compared to the first quarter of 2024 due to market growth and share gains, partially offset by unfavorable patient mix and inventory dynamics.

Previous wording

•Cabometyx/Cometriq – Royalty Receipts from Cabometyx/Cometriq, which is marketed by Exelixis, Ipsen and Takeda, increased by $4.9 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily driven by continued demand growth in the United States and globally by broad uptake in combination with Opdivo in first-line renal cell carcinoma across clinical risk groups and practice settings.

Current wording

•Cabometyx/Cometriq – Royalty Receipts from Cabometyx/Cometriq, which is marketed by Exelixis, Ipsen and Takeda, for the treatment of advanced renal cell carcinoma as well as hepatocellular carcinoma in patients previously treated with sorafenib, increased by $2.8 million in the first quarter of 2025 as compared to the first quarter of 2024, primarily driven by continued demand growth from uptake in combination with Opdivo in first-line renal cell carcinoma and an increase in average net selling price.

Previous wording

•Spinraza – Royalty Receipts from Spinraza, which is marketed by Biogen for the treatment of spinal muscular atrophy, increased by $2.6 million in the first nine months of 2024 as compared to the first nine months of 2023, primarily due to relatively consistent U.S. sales, while performance outside the United States was impacted by the timing of shipments, competition and pricing pressure. We acquired the Spinraza royalty in the first quarter of 2023 and began receiving royalties in the second quarter of 2023.

Current wording

•Spinraza – Royalty Receipts from Spinraza, which is marketed by Biogen for the treatment of spinal muscular atrophy, increased by $6.3 million in the first quarter of 2025 as compared to the first quarter of 2024. Royalties in the prior year period were impacted by the $1.5 billion cap.