Royalty Pharma Reports 7.7% Revenue Growth in Q2 2025, Completes Management Internalization

Royalty Pharma plc reported its financial results for the second quarter and first half of 2025, revealing a total income of $578.7 million for the three months ending June 30, 2025, a 7.7% increase from $537.3 million in the same period of 2024. For the first six months of 2025, total income reached $1.15 billion, up 3.8% from $1.1 billion in the prior year. The increase in revenue was primarily driven by a rise in income from financial royalty assets, which amounted to $550.4 million for the second quarter, reflecting a 7.3% year-over-year increase, and $1.09 billion for the first half, a 3.4% increase.

The company experienced significant changes in its operating expenses, which totaled $368.9 million in the second quarter of 2025, a 37.8% increase compared to $267.6 million in the same quarter of 2024. This rise was largely attributed to a substantial increase in general and administrative expenses, which surged to $179.8 million from $54.7 million, primarily due to share-based compensation expenses following the company's internalization of management. The provision for changes in expected cash flows from financial royalty assets also saw a notable shift, moving from a provision expense of $212.4 million in Q2 2024 to a provision income of $203.9 million in Q2 2025.

Strategically, Royalty Pharma completed the internalization of its management on May 16, 2025, transitioning from an externally managed structure to an integrated company. This move involved acquiring the equity interests of RP Manager, which included a cash component and the issuance of 24.5 million RP Holdings Class E Interests. The internalization is expected to enhance operational efficiency and align the interests of management with those of shareholders. Additionally, the company has expanded its funding collaborations, including a significant $2 billion funding arrangement with Revolution Medicines and an ongoing partnership with Cytokinetics.

Operationally, Royalty Pharma's portfolio includes royalties on over 35 marketed therapies and 16 development-stage product candidates. The company reported a total of $727.5 million in Portfolio Receipts for the first half of 2025, a significant increase of 19.7% compared to the same period in 2024. The cystic fibrosis franchise, particularly the royalties from Vertex's Trikafta, contributed notably to this growth. The company also reported a cash balance of $631.9 million as of June 30, 2025, down from $929 million at the end of 2024, reflecting cash used for share repurchases and investments.

Looking ahead, Royalty Pharma anticipates continued growth driven by its strategic acquisitions and partnerships, alongside a focus on expanding its portfolio of biopharmaceutical royalties. The company remains committed to leveraging its financial strength to fund innovation in the biopharmaceutical sector while managing its operational costs effectively.