Royalty Pharma plc (NASDAQ:RPRX), a pharmaceutical investment company, announced on Monday that it has finalized a payment of $905 million to Agios Pharmaceuticals as part of a royalty agreement following the U.S. Food and Drug Administration's (FDA) approval of a new cancer drug, Voranigo.
Voranigo, a first-in-class targeted therapy for patients with IDH1/2 mutant diffuse glioma, received FDA approval on August 6, 2024. The agreement with Agios, established in May 2024, grants Royalty Pharma a 15% royalty on annual U.S. net sales of Voranigo up to $1 billion and a 12% royalty on annual U.S. net sales exceeding $1 billion.
The company projects that Voranigo will reach peak annual sales exceeding $1 billion, potentially generating royalties surpassing $150 million annually. Royalty Pharma anticipates earning royalties from Voranigo through 2038.
The information provided in this article is based on a press release statement.
In other recent news, Royalty Pharma has expanded its stake in Evrysdi, a spinal muscular atrophy treatment, by acquiring additional shares from PTC (NASDAQ:PTC) Therapeutics (NASDAQ:PTCT) for $242 million. This boosts Royalty Pharma's stake in the Evrysdi royalty from 81% to 90.5%. The company will start receiving its increased share of royalties from the second quarter of 2024.
Goldman Sachs (NYSE:GS) has raised its price target for Royalty Pharma, reflecting the company's recent revenue and future projections. The revised earnings per share (EPS) estimates for the company now stand at $3.91 for 2024, $4.69 for 2025, and $5.29 for 2026.
TD Cowen reiterated a Buy rating for Royalty Pharma, highlighting the potential for the company in the context of aficamten's market prospects. Aficamten is a promising drug developed by Cytokinetics (NASDAQ:CYTK) for the treatment of obstructive hypertrophic cardiomyopathy.
Finally, Royalty Pharma reported a growth of 14% in Royalty Receipts, amounting to $717 million in the first quarter of 2024, and reaffirmed its full-year guidance for 2024 with Portfolio Receipts expected to be between $2.6 billion and $2.7 billion.
These are just a few of the recent developments for Royalty Pharma.
InvestingPro Insights
As Royalty Pharma plc (NASDAQ:RPRX) embarks on a new chapter with the FDA approval of Voranigo, it's worth noting the company's financial health and market performance. With a robust market capitalization of $16.19 billion and a P/E ratio of 15.34, Royalty Pharma stands out as a significant player in the pharmaceutical investment landscape. The company's commitment to rewarding shareholders is evident through a high shareholder yield and a consistent track record of raising its dividend for four consecutive years, signaling confidence in its financial stability and future prospects.
Despite a slight decrease in revenue growth over the last twelve months as of Q1 2024, Royalty Pharma maintains a strong gross profit margin of over 54%. This financial resilience is further supported by an impressive operating income margin of nearly 42%, showcasing the company's ability to manage its operations efficiently. Additionally, the company's stock is known for low price volatility, making it a potentially attractive option for investors seeking stability in their portfolios.
Investors can find further insights and additional InvestingPro Tips for Royalty Pharma on InvestingPro, with 9 tips currently listed that could help inform investment decisions. Among these, analysts have revised their earnings upwards for the upcoming period and predict the company will be profitable this year, adding to the optimistic outlook for Royalty Pharma in the wake of its latest FDA drug approval.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.