Financial Royalty Assets

3 Months Ended

Mar. 31, 2024

Financial royalty assets consist of contractual rights to cash flows relating to royalties derived from the expected sales of patent-protected biopharmaceutical products that entitle us and our subsidiaries to receive a portion of income from the sale of such products by third parties.

The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current portion of financial royalty assets are as follows (in thousands):


		As of March 31, 2024
	Estimated Royalty Duration(1)	Gross Carrying Value		Cumulative Allowance for Changes in Expected Cash Flows (Note 6)		Net Carrying Value(4)

Cystic fibrosis franchise	2039-2041(2)	$	5,266,693	$	(393,000)	$	4,873,693
Evrysdi	2035-2036	1,803,179		(24,931)		1,778,248
Trelegy	2029-2030	1,171,848		—		1,171,848
Tysabri	(3)	1,460,897		(451,755)		1,009,142
Tremfya	2031-2032	927,609		(137,217)		790,392
Xtandi	2027-2028	878,728		(252,310)		626,418
Other	2024-2041	6,265,680		(2,252,494)		4,013,186
Total		$	17,774,634	$	(3,511,707)	$	14,262,927
Less: Cumulative allowance for credit losses (Note 6)						(137,038)
Total current and non-current financial royalty assets, net						$	14,125,889

(1)Durations shown represent our estimates as of the current reporting date of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors. There can be no assurances that our royalties will expire when expected.

(2)Royalty is perpetual; range shown assumes approval of the vanzacaftor/tezacaftor/deutivacaftor combination product and represents expected patent expiration and potential sales decline based on timing of potential generic entry.

(3)RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed.

(4)The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 6–Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets for additional information.

As of March 31, 2024, the balance of $14.1 billion above for total current and non-current financial royalty assets, net included $629.6 million in unapproved financial royalty assets held at cost primarily related to olpasiran, pelacarsen, KarXT and seltorexant.


		As of December 31, 2023
	Estimated Royalty Duration(1)	Gross Carrying Value		Cumulative Allowance for Changes in Expected Cash Flows (Note 6)		Net Carrying Value(4)

Cystic fibrosis franchise	2037(2)	$	5,288,833	$	(2,539)	$	5,286,294
Evrysdi	2035-2036	1,793,088		—		1,793,088
Trelegy	2029-2030	1,208,807		—		1,208,807
Tysabri	(3)	1,511,957		(434,568)		1,077,389
Tremfya	2031-2032	927,488		(120,733)		806,755
Xtandi	2027-2028	911,045		(268,701)		642,344
Other	2024-2041	6,251,020		(2,100,897)		4,150,123
Total		$	17,892,238	$	(2,927,438)	$	14,964,800
Less: Cumulative allowance for credit losses (Note 6)						(137,707)
Total current and non-current financial royalty assets, net						$	14,827,093

(1)Durations shown represent our estimates as of December 31, 2023 of when a royalty will substantially end, which may vary by geography and may depend on clinical trial results, regulatory approvals, contractual terms, commercial developments, estimates of regulatory exclusivity and patent expiration dates (which may include estimated patent term extensions) or other factors. There can be no assurances that our royalties will expire when expected.

(2)Royalty is perpetual; year shown represents Trikafta’s expected patent expiration and potential sales decline based on timing of potential generic entry.

(3)RPIFT acquired a perpetual royalty on net sales of Tysabri. We have applied an end date of 2031 for purposes of accreting income over the royalty term, which is periodically reviewed.