Financial Royalty Assets

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Financial Royalty Assets

Financial Royalty AssetsFinancial royalty assets consist of contractual rights to cash flows relating to royalty payments 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 as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

		As of March 31, 2022
	Estimated Royalty Duration (1)	Gross Carrying Value		Cumulative Allowance for Changes in Expected Cash Flows (Note 6)		Net Carrying Value (5)
Cystic fibrosis franchise	2037 (2)	$	5,328,216	$	—	$	5,328,216
Tysabri	(3)	1,801,152		(30,613)		1,770,539
Imbruvica	2027-2032	1,439,186		(345,780)		1,093,406
Xtandi	2027-2028	1,081,587		(196,958)		884,629
Tremfya	2031-2032	869,596		—		869,596
Evrysdi	2030-2035 (4)	736,665		(20,797)		715,868
Other	2020-2039	4,661,059		(1,024,195)		3,636,864
Total		$	15,917,461	$	(1,618,343)	$	14,299,118
Less: Cumulative allowance for credit losses (Note 6)						(261,223)
Total financial royalty assets, net						$	14,037,895

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

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

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

(4)Key patents on Evrysdi in the United States expire in 2035, but our royalty will cease when aggregate royalties paid to us equal $1.3 billion.

(5)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 December 31, 2021
	Estimated Royalty Duration (1)	Gross Carrying Value		Cumulative Allowance for Changes in Expected Cash Flows (Note 6)		Net Carrying Value (5)
Cystic fibrosis franchise	2037 (2)	$	5,335,641	$	(48,636)	$	5,287,005
Tysabri	(3)	1,846,069		(16,617)		1,829,452
Imbruvica	2027-2032	1,438,730		(236,871)		1,201,859
Xtandi	2027-2028	1,100,065		(172,101)		927,964
Tremfya	2031-2032	881,671		—		881,671
Evrysdi	2030-2035 (4)	727,774		—		727,774
Other	2020-2039	4,697,591		(909,916)		3,787,675
Total		$	16,027,541	$	(1,384,141)	$	14,643,400
Less: Cumulative allowance for credit losses (Note 6)						(310,804)
Total financial royalty assets, net						$	14,332,596

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

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

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

(4)Key patents on Evrysdi in the United States expire in 2035, but our royalty will cease when aggregate royalties paid to us equal $1.3 billion.

(5)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.