|
Delaware
(State or Other Jurisdiction of Incorporation or Organization) |
| |
2834
(Primary Standard Industrial Classification Code Number) |
| |
86-3614695
(I.R.S. Employer Identification Number) |
|
|
Jeffrey A. Letalien, Esq.
Andrew R. Mariniello, Esq. Morgan, Lewis & Bockius LLP 1701 Market St. Philadelphia, Pennsylvania 19103 (215) 963-5000 |
| |
Richard C. Segal, Esq.
Eric Blanchard, Esq. Charlie S. Kim, Esq. Cooley LLP 55 Hudson Yards New York, New York 10001 (212) 479-6000 |
|
| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☒ | | | Smaller reporting company ☐ | |
| | | | Emerging Growth Company ☒ | |
| | ||||||||||||||
Title of Each Class of
Security to be Registered |
| | |
Proposed
Maximum Aggregate Offering Price(1)(2) |
| | |
Amount of
Registration Fee |
| ||||||
Class A common stock, par value $ per share
|
| | | | $ | 100,000,000 | | | | | | $ | 10,910.00 | | |
Total
|
| | | | | 100,000,000 | | | | | | | 10,910.00(3) | | |
| | |
Page
|
| |||
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| | | | 161 | | | |
| | | | 161 | | | |
| | | | F-1 | | |
| | |
Pro
Forma(1)(2) |
| |
Years Ended
December 31, |
| |
Three Months
Ended March 31, |
| |||||||||||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |
2021
|
| |
2020
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Combined Results of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty income
|
| | | $ | | | | | $ | 166,467 | | | | | $ | 130,792 | | | | | $ | 65,303 | | | | | $ | 32,871 | | | |
Note interest
|
| |
|
| | | | 50,397 | | | | | | 38,060 | | | | | | 15,245 | | | | | | 11,422 | | | |||
Paid-in-kind interest
|
| |
|
| | | | 11,953 | | | | | | 8,399 | | | | | | 212 | | | | | | 1,813 | | | |||
Other Income
|
| | | | | | | | | 10 | | | | | | 53 | | | | | | | | | | | | | | | |
Total investment income
|
| |
|
| | | | 228,827 | | | | | | 177,305 | | | | | | 80,760 | | | | | | 46,106 | | | |||
Expenses: | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |||
Management fees(3)
|
| |
|
| | | | 26,666 | | | | | | 20,538 | | | | | | 6,759 | | | | | | 6,632 | | | |||
Performance fees(4)
|
| |
|
| | | | 8,531 | | | | | | 4,267 | | | | | | 2,574 | | | | | | 1,061 | | | |||
Interest expense
|
| | | | | | | | | 7,294 | | | | | | 1,219 | | | | | | 2,915 | | | | | | 1,218 | | | |
Net investment income
|
| | | | | | | | | 183,550 | | | | | | 147,627 | | | | | | 68,047 | | | | | | 36,418 | | | |
Net realized and unrealized gain (loss) on investments:
|
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |||
Net realized gain (loss) on investments
|
| |
|
| | | | 11,102 | | | | | | (7,706) | | | | | | (1,284) | | | | | | 2,208 | | | |||
Net change in unrealized gain (loss) on investments
|
| | | | | | | | | 58,599 | | | | | | 32,631 | | | | | | 45,009 | | | | | | 3,587 | | | |
Net realized and unrealized gain (loss) on investments
|
| | | | | | | | | 69,701 | | | | | | 24,925 | | | | | | 43,725 | | | | | | 5,795 | | | |
Net increase in partners’ capital resulting from operations
|
| |
|
| | | | 253,252 | | | | | | 172,552 | | | | | | 111,772 | | | | | | 42,213 | | | |||
Less: Income attributable to non-controlling
interest |
| | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |
Net increase in partners’ capital resulting from operations attributable to controlling interest
|
| | |
$
|
|
| | | | $ | 253,252 | | | | | $ | 172,552 | | | | | $ | 111,772 | | | | | $ | 42,213 | | |
| | |
Years Ended
December 31, |
| |
As of/for The
Three Months Ended |
| ||||||||||||
| | |
2020
|
| |
2019
|
| |
March 31, 2021
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Combined Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 11,733 | | | | | $ | 10,145 | | | | | $ | 64,629 | | |
Investments, at fair value
|
| | | | 2,418,499 | | | | | | 1,511,328 | | | | | | 2,524,325 | | |
Interest receivable
|
| | | | 3,477 | | | | | | 2,982 | | | | | | 3,451 | | |
Total assets
|
| | | | 2,435,273 | | | | | | 1,525,506 | | | | | | 2,593,601 | | |
Revolving credit
|
| | | | 493,000 | | | | | | 82,642 | | | | | | 493,000 | | |
Partners’ capital
|
| | | | 1,931,953 | | | | | | 1,437,932 | | | | | | 2,090,945 | | |
Cash Flow Data: | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in): | | | | | | | | | | | | | | | | | | | |
Operating activities
|
| | | | (649,540) | | | | | | (174,248) | | | | | | 5,676 | | |
Financing activities
|
| | | | 651,128 | | | | | | 174,020 | | | | | | 47,220 | | |
| | |
Pro
Forma(1)(2) |
| |
Years Ended
December 31, |
| |
Three Months
Ended March 31, |
| |||||||||||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |
2021
|
| |
2020
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Other Financial Measures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash collections from royalty interests
|
| | | $ | | | | | | $ | 227,440 | | | | | $ | 171,500 | | | | | $ | 98,701 | | | | | $ | 26,179 | | |
Cash collections from notes
|
| | | | | | | | | | 55,803 | | | | | | 45,836 | | | | | | 19,785 | | | | | | 12,145 | | |
Proceeds from sales of Investments
|
| | | | | | | | | | 121,838 | | | | | | 35,616 | | | | | | 33,010 | | | | | | 49,391 | | |
Total Royalty Receipts
|
| | | $ | | | | | $ | 405,081 | | | | | $ | 252,952 | | | | | $ | 151,496 | | | | | $ | 87,715 | | | |
Payments for operating costs and professional services
|
| | | | | | | | | (34,485) | | | | | | (28,478) | | | | | | (10,416) | | | | | | (11,639) | | | |
Adjusted EBITDA (non-GAAP)(5)
|
| | | $ | | | | | $ | 370,596 | | | | | $ | 224,474 | | | | | $ | 141,080 | | | | | $ | 76,076 | | | |
Interest Paid
|
| | | | | | | | | (6,456) | | | | | | (1,073) | | | | | | (2,904) | | | | | | (763) | | | |
Adjusted Cash Flow (non-GAAP)(5)
|
| | | $ | | | | | $ | 364,140 | | | | | $ | 223,401 | | | | | $ | 138,176 | | | | | $ | 75,313 | | |
| | |
Additional Carry
Shares at IPO Price |
| |
Additional Carry
Shares at Maximum Carry Price |
|
At this offering (based on secondary offering and the Reorganization Buyback Transaction)
|
| | | | | | |
First Secondary Offering (assuming pro rata
participation) |
| | | | | | |
Second Secondary Offering (assuming pro rata participation)
|
| | | | | | |
Quarterly Period Deemed Sales
|
| | | | | | |
Total (assuming same Quarterly VWAP for each of the eight Quarterly Carry Periods)
|
| | | | | | |
| | |
As of March 31, 2021
|
| | | | |||||||||||||||||||||
| | |
(in thousands)
|
| | | | |||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma
for the Reorganization Transactions |
| |
Pro Forma
As Adjusted for Reorganization Transactions and This Offering |
| | | | |||||||||||||||
Cash and cash equivalents
|
| | | $ | 64,629 | | | | | | | | | | | | | | | | | |||||||
Existing revolving credit facility
|
| | | | 493,000 | | | | | | | | | | | | | | | | | |||||||
New Credit Facility
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Term Loan
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Senior Notes due 2029
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Partners' capital
|
| | | | 2,090,945 | | | | | | | | | | | | | | | | | | ||||||
Class A common stock, par value $ per
share, shares authorized; shares issued and outstanding, on an actual basis; shares authorized, shares issued and outstanding, on a pro forma basis; shares authorized; shares issued and outstanding, on a pro forma as adjusted basis |
| | | | | | | | | | | | | | | | | | | | | | ||||||
Class B common stock, par value $ per
share, shares authorized; shares issued and outstanding, on an actual basis; shares authorized, shares issued and outstanding, on a pro forma basis; shares authorized, shares issued and outstanding, on a pro forma as adjusted basis |
| | | | | | | | | | | | | | | | | | | | | | ||||||
Additional paid-in capital
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Retained earnings
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Non-controlling interest
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Total stockholders' equity
|
| | | | | | | | | | | | | | | | | | | | | | ||||||
Total Capitalization
|
| | | $ | 2,583,945 | | | | | | | | | | |
|
|
| | | | |
|
Assumed initial public offering price per share
|
| | | | | | | | | $ | | | |
|
Pro forma net tangible book value per share as of March 31, 2021
|
| | | $ | | | | | | | | | |
|
Increase in pro forma net tangible book value per share attributable to investors in this offering
|
| | | | | | | | | | | | |
|
Pro forma as adjusted net tangible book value per share after this
offering |
| | | | | | | | | | | | |
|
Dilution in pro forma as adjusted net tangible book value per share to investors in this offering
|
| | | | | | | | | $ | | | |
| | |
Shares of Class A
common stock Purchased |
| |
Total Consideration
|
| |
Average
Price per Share |
| |||||||||||||||||||||
| | |
Number
|
| |
Percentage
|
| |
Amount
|
| |
Percentage
|
| ||||||||||||||||||
| | |
(in thousands, except percentages)
|
| | ||||||||||||||||||||||||||
Existing stockholders
|
| | | | | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||
New investors
|
| | | | | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||
Total
|
| | | | | | | | | 100% | | | | | $ | | | | | | 100% | | | | | $ | | |
| | |
Three Months Ended March 31, 2021
|
| |||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma (unaudited)
|
| ||||||||||||||||||
| | |
HealthCare Royalty
Partners |
| |
Reorganization
Transactions |
| |
Offering
|
| |
HealthCare
Royalty, Inc. |
| ||||||||||||
| | |
($ thousands, except share-related amounts)
|
| |||||||||||||||||||||
Investment income | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty income
|
| | | $ | 65,303 | | | | | | | | | |
|
| | | | | | | |||
Note interest
|
| | | | 15,245 | | | | | | | | | | | | | | | | | | | | |
Paid-in-kind interest
|
| | | | 212 | | | | | | | | | | | | | | | | | | | | |
Total investment income
|
| | | | 80,760 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Management fees
|
| | | | 6,759 | | | | | | 4,603(a) | | | | | | | | | | | | 11,362 | | |
Interest expense
|
| | | | 2,916 | | | | | | —(c) | | | | | | | | | | | | | | |
Performance fees
|
| | | | 2,574 | | | | | | —(b) | | | | | | | | | | | | | | |
Professional fees
|
| | | | 348 | | | | | | | | | | | | | | | | | | | | |
Investment research and other expenses
|
| | | | 299 | | | | | | | | | | | | | | | | | | | | |
Organizational expenses
|
| | | | — | | | | | | | | | | | | | | | | | | | | |
Total expenses
|
| | | | 12,896 | | | | | | | | | | | | | | | | | | | | |
Management fees waived
|
| | | | (183) | | | | | | 183(a) | | | | | | | | | | | | — | | |
Net expenses
|
| | | | 12,713 | | | | | | | | | | | | | | | | | | | | |
Net investment income
|
| | | | 68,047 | | | | | | | | | | | | | | | | | | | | |
Net realized and unrealized gain (loss) on
investments |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments
|
| | | | (1,285) | | | | | | | | | | | | | | | | | | | | |
Net change in unrealized gain (loss) on investments
|
| | | | 45,010 | | | | | | | | | | | | | | | | | | | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 43,725 | | | | | | | | | | | | | | | | | | | | |
Net increase in partners’ capital resulting from operations
|
| | | | 111,772 | | | | | | | | | | | | | | | | | | | | |
Less: Income attributable to non-controlling interest
|
| | | | — | | | | | | | | | | | | | | | | | | | | |
Net increase in partners’ capital resulting
from operations attributable to controlling interest |
| | |
$
|
111,772
|
| | | | | | | | | | | | | | | | | | | |
Pro forma earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | $ | —(d) | | | | | $ | —(e) | | | | | | | | |
Diluted
|
| | | | | | | | | $ | —(d) | | | | | $ | —(e) | | | | | | | | |
Pro forma number of shares used in computing earnings per share:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Year Ended December 31, 2020
|
| ||||||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma (unaudited)
|
| | ||||||||||||||||||||
| | |
HealthCare Royalty
Partners |
| |
Reorganization
Transactions |
| |
Offering
|
| |
HealthCare
Royalty, Inc. |
| | ||||||||||||||
| | |
($ thousands, except share-related amounts)
|
| ||||||||||||||||||||||||
Investment income | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Royalty income
|
| | | $ | 166,467 | | | | | | | | | | | | | | | | | | | | | | ||
Note interest
|
| | | | 50,397 | | | | | | | | | | | | | | | | | |||||||
Paid-in-kind interest
|
| | | | 11,953 | | | | | | | | | | | | | | | | | |||||||
Other Income
|
| | | | 10 | | | | | | | | | | | | | | | | | | | | | | ||
Total investment income
|
| | | | 228,827 | | | | | | | | | | | | | | | | | |||||||
Expenses | | | | | | | | | | | | | | | | | | | | | | |||||||
Management fees
|
| | | | 26,666 | | | | | | 3,715(a) | | | | | | | | | | | | 30,381 | | | | ||
Performance fees
|
| | | | 8,531 | | | | | | —(b) | | | | | | | | | | | | | | | | ||
Interest expense
|
| | | | 7,294 | | | | | | —(c) | | | | | | | | | | | | | | | | ||
Investment research and other
expenses |
| | | | 1,767 | | | | | | | | | | | | | | | | | |||||||
Professional fees
|
| | | | 1,632 | | | | | | | | | | | | | | | | | |||||||
Organizational expenses
|
| | | | 119 | | | | | | | | | | | | | | | | | | | | | | ||
Total expenses
|
| | | | 46,010 | | | | | | | | | | | | | | | | | |||||||
Management fees waived
|
| | | | (733) | | | | | | 733(a) | | | | | | | | | | | | — | | | | ||
Net expenses
|
| | | | 45,277 | | | | | | | | | | | | | | | | | | | | | | ||
Net investment income
|
| | | | 183,550 | | | | | | | | | | | | | | | | | | | | | | ||
Net realized and unrealized gain (loss) on investments
|
| | | | | | | | | | | | | | | | | | | | | | | | | | ||
Net realized gain (loss) on investments
|
| | | | 11,102 | | | | | | | | | | | | | | | | | | | | | | | |
Net change in unrealized gain (loss) on investments
|
| | | | 58,599 | | | | | | | | | | | | | | | | | | | | | | ||
Net realized and unrealized gain (loss) on investments
|
| | | | 69,701 | | | | | | | | | | | | | | | | | | | | | | ||
Net increase in partners’ capital resulting
from operations |
| | | | 253,252 | | | | | | | | | | | | | | | | | | | | | | ||
Less: Income attributable to non-controlling
interest |
| | | | — | | | | | | | | | | | | | | | | | | | | | | ||
Net increase in partners’ capital
resulting from operations attributable to controlling interest |
| | |
$
|
253,252
|
| | | | | | | | | | | | | | | | | | | | | ||
Pro forma earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | $ | —(d) | | | | | $ | —(e) | | | | | | | | | | ||
Diluted
|
| | | | | | | | | $ | —(d) | | | | | $ | —(e) | | | | | | | | | | ||
Pro forma number of shares used in computing earnings per share:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | | | ||
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
As of March 31, 2021
|
| |||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma (unaudited)
|
| ||||||||||||||||||
| | |
HealthCare Royalty
Partners |
| |
Reorganization
Transactions |
| |
Offering
|
| |
HealthCare
Royalty, Inc. |
| ||||||||||||
| | |
($ thousands, except share-related amounts)
|
| |||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 64,629 | | | | | $ | —(h)(i) | | | | | $ | —(g) | | | | | $ | | | |
Investments, at fair value
|
| | | | 2,524,324 | | | | | | | | | | | | | | | | | | | | |
Interest receivable
|
| | | | 3,451 | | | | | | | | | | | | | | | | | | | | |
Deferred borrowing costs
|
| | | | 1,051 | | | | | | | | | | | | | | | | | | | | |
Prepaid assets
|
| | | | 128 | | | | | | | | | | | | | | | | | | | | |
Receivable from affiliate
|
| | | | 18 | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 2,593,601 | | | | | $ | | | | | $ | | | | | $ | | | |||
Liabilities and Partners’ Capital/Shareholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Revolving credit
|
| | | $ | 493,000 | | | | | $ | | | | | $ | | | | | $ | | | |||
Debt Obligations
|
| | | | | | | | | | —(h) | | | | | | | | | | | | | | |
Performance Fee payable to Manager
|
| | | | 6,871 | | | | | | | | | | | | | | | | | | | | |
Accrued expenses
|
| | | | 1,391 | | | | | | | | | | | | | | | | | | | | |
Due to Manager
|
| | | | 1,373 | | | | | | | | | | | | | | | | | | | | |
Management fees payable
|
| | | | 21 | | | | | | | | | | | | | | | | | | | | |
Interest payable
|
| | | | — | | | | | | —(h) | | | | | | | | | | | | | | |
Total liabilities
|
| | | | 502,656 | | | | | | | | | | | | | | | | | | | | |
Partners’ Capital/Shareholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Class A common stock, par value
$ per share, shares authorized; no shares issued and outstanding, on an actual basis; shares authorized, no shares issued and outstanding, on a pro forma basis; million shares authorized; shares issued and outstanding, on a pro forma as adjusted basis |
| | | | | | | | | | —(f) | | | | | | —(g) | | | | | | | | |
Class B common stock, par value $ per share, shares authorized; no shares issued and outstanding, on an actual basis; shares authorized; no shares issued and outstanding, on a pro forma basis; shares authorized; shares issued and outstanding, on a pro forma as adjusted basis
|
| | | | | | | | | | —(f)(i) | | | | | | —(g) | | | | | | | | |
Partners’ capital
|
| | | | 2,090,945 | | | | |
|
(f)
|
| | | | | | | | | | | | | |
Additional paid-in capital
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Retained earnings
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-controlling interest
|
| | | | | | | | | | —(f) | | | | | | | | | | | | | | |
Total partners’ capital/shareholders’ equity
|
| | |
|
2,090,945
|
| | | | | | | | | | | | | | | | | | | |
Total liabilities and partners’ capital/shareholders’ equity
|
| | | $ | 2,593,601 | | | | | $ | | | | | $ | | | | | $ | | | |
| | |
Three Months Ended March 31,
|
| |||||||||
($ in thousands)
|
| |
2021
|
| |
2020
|
| ||||||
Cash flow data (GAAP) | | | | | | | | | | | | | |
Net cash provided by (used in): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | 5,676 | | | | | $ | (204,687) | | |
Net cash provided by (used in) operating activities
|
| | | $ | 5,676 | | | | | $ | (204,687) | | |
Adjustments: | | | | | | | | | | | | | |
Interest paid
|
| | | | 2,904 | | | | | | 763 | | |
Acquisitions of investments
|
| | | | 132,500 | | | | | | 280,000 | | |
Adjusted EBITDA (non-GAAP)
|
| | | $ | 141,080 | | | | | $ | 76,076 | | |
Net cash provided by (used in) operating activities
|
| | | $ | 5,676 | | | | | $ | (204,687) | | |
Adjustments: | | | | | | | | | | | | | |
Acquisitions of investments
|
| | | | 132,500 | | | | | | 280,000 | | |
Adjusted Cash Flow (non-GAAP)
|
| | | $ | 138,176 | | | | | $ | 75,313 | | |
| | |
Years Ended December 31,
|
| |||||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| ||||||
Cash flow data (GAAP) | | | | | | | | | | | | | |
Net cash provided by (used in): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | (649,540) | | | | | $ | (174,248) | | |
Net cash used in operating activities
|
| | | $ | (649,540) | | | | | $ | (174,248) | | |
Adjustments: | | | | | | | | | | | | | |
Interest paid
|
| | | | 6,456 | | | | | | 1,073 | | |
Acquisitions of investments
|
| | | | 1,013,680 | | | | | | 397,649 | | |
Adjusted EBITDA (non-GAAP)
|
| | | $ | 370,596 | | | | | $ | 224,474 | | |
Net cash used in operating activities
|
| | | $ | (649,540) | | | | | $ | (174,248) | | |
Adjustments: | | | | | | | | | | | | | |
Acquisitions of investments
|
| | | | 1,013,680 | | | | | | 397,649 | | |
Adjusted Cash Flow (non-GAAP)
|
| | | $ | 364,140 | | | | | $ | 223,401 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
($ in thousands)
|
| |
2021
|
| |
2020
|
| ||||||
Royalty Receipts | | | | | | | | | | | | | |
Cash collections from royalty interests
|
| | | $ | 98,701 | | | | | $ | 26,179 | | |
Cash collections from notes
|
| | | | 19,785 | | | | | | 12,145 | | |
Proceeds from sales of investments
|
| | | | 33,010 | | | | | | 49,391 | | |
Royalty Receipts
|
| | | $ | 151,496 | | | | | $ | 87,715 | | |
| | |
Years Ended December 31,
|
| |||||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| ||||||
Royalty Receipts | | | | | | | | | | | | | |
Cash collections from royalty interests
|
| | | $ | 227,440 | | | | | $ | 171,500 | | |
Cash collections from notes
|
| | | | 55,803 | | | | | | 45,836 | | |
Proceeds from sales of investments
|
| | | | 121,838 | | | | | | 35,616 | | |
Royalty Receipts
|
| | | $ | 405,081 | | | | | $ | 252,952 | | |
($ in thousands)
|
| | | | | | | |
Royalty Receipts for
Three Months Ended March 31, |
| |||||||||
Top Ten Products
|
| |
Marketer
|
| |
Therapeutic Area
|
| |
2021
|
| |
2020
|
| ||||||
Vimpat
|
| |
UCB
|
| |
Neurology
|
| | | $ | 47,597 | | | | | $ | — | | |
Relistor
|
| |
Bausch
|
| |
Gastroenterology
|
| | | | 33,783 | | | | | | 2,621 | | |
Shingrix
|
| |
GSK
|
| |
Vaccines and anti-infectives
|
| | | | 16,247 | | | | | | — | | |
Zolgensma
|
| |
Novartis
|
| |
Rare genetic disorder
|
| | | | 9,469 | | | | | | — | | |
Trelegy Ellipta
|
| |
GSK
|
| |
Pulmonary
|
| | | | 7,969 | | | | | | 50,916 | | |
Gocovri/Namzaric
|
| |
Adamas/AbbVie
|
| |
Neurology
|
| | | | 3,657 | | | | | | 2,044 | | |
Udenyca
|
| |
Coherus
|
| |
Oncology
|
| | | | 3,272 | | | | | | 3,291 | | |
Fampyra
|
| |
Biogen
|
| |
Neurology
|
| | | | 2,990 | | | | | | 2,715 | | |
AndexXa
|
| |
Alexion
|
| |
Hematology
|
| | | | 2,946 | | | | | | 3,619 | | |
Benlysta
|
| |
GSK
|
| |
Immunology
|
| | | | 2,866 | | | | | | 2,157 | | |
Top Ten Products
|
| | | | | | | | | $ | 130,796 | | | | | $ | 67,363 | | |
All Product Royalty Receipts
|
| | | | | | | | | $ | 151,496 | | | | | $ | 87,715 | | |
($ in thousands)
|
| | | | | | | |
Royalty Receipts for
Year Ended |
| |||||||||
Total Top Ten Products
|
| |
Marketer
|
| |
Therapeutic Area
|
| |
2020
|
| |
2019
|
| ||||||
Vimpat
|
| |
UCB
|
| |
Neurology
|
| | | $ | 86,852 | | | | | $ | — | | |
AndexXa
|
| |
Alexion
|
| |
Hematology
|
| | | | 83,998 | | | | | | 11,149 | | |
Trelegy Ellipta
|
| |
GSK
|
| |
Pulmonary
|
| | | | 56,390 | | | | | | 4,171 | | |
Shingrix
|
| |
GSK
|
| |
Vaccines and anti-infectives
|
| | | | 30,298 | | | | | | 35,624 | | |
Udenyca
|
| |
Coherus
|
| |
Oncology
|
| | | | 13,203 | | | | | | 14,391 | | |
Goofice
|
| |
EA Pharma
|
| |
Gastroenterology
|
| | | | 11,905 | | | | | | 3,716 | | |
Gocovri/Namzaric
|
| |
Adamas/AbbVie
|
| |
Neurology
|
| | | | 11,738 | | | | | | 6,450 | | |
Fampyra
|
| |
Biogen
|
| |
Neurology
|
| | | | 11,211 | | | | | | 10,021 | | |
Cetrotide
|
| |
Merck Serono
|
| |
Endocrine
|
| | | | 11,158 | | | | | | 11,140 | | |
Relistor
|
| |
Bausch
|
| |
Gastroenterology
|
| | | | 10,472 | | | | | | 9,974 | | |
Top Ten Products
|
| | | | | | | | | $ | 327,225 | | | | | $ | 106,636 | | |
All Product Royalty Receipts
|
| | | | | | | | | $ | 405,081 | | | | | $ | 252,952 | | |
($ in thousands)
|
| | | | |
Contribution to total investment income for the
three months ended March 31, |
| |||||||||
Royalty Asset
|
| |
Royalty payor
|
| |
2021
|
| |
2020
|
| ||||||
Vimpat
|
| | UCB | | | | | 18% | | | | | | NA | | |
Shingrix
|
| | GSK | | | | | 17% | | | | | | 20% | | |
Trelegy Ellipta
|
| |
Theravance Biopharma
|
| | | | 10% | | | | | | 6% | | |
| | | | | |
Contribution to total investment income for the
years ended December 31, |
| |||||||||
Royalty Asset
|
| |
Royalty payor
|
| |
2020
|
| |
2019
|
| ||||||
Shingrix
|
| | GSK | | | | | 17% | | | | | | 21% | | |
Vimpat
|
| | UCB | | | | | 14% | | | |
N/A
|
| |||
Lyrica
|
| | Pfizer | | | | | 1% | | | | | | 13% | | |
| | |
Combined Statements for Operations for Three
Months ended March 31 |
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
2021
|
| |
2020
|
| |
Change
|
| |||||||||||||||
Investment income | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty income
|
| | | $ | 65,303 | | | | | $ | 32,871 | | | | | $ | 32,432 | | | | | | 98.7% | | |
Note interest
|
| | | | 15,245 | | | | | | 11,422 | | | | | | 3,823 | | | | | | 33.5% | | |
Paid-in-kind interest
|
| | | | 212 | | | | | | 1,813 | | | | | | (1,601) | | | | | | -88.3% | | |
Total investment income
|
| | | | 80,760 | | | | | | 46,106 | | | | | | 34,654 | | | | | | 75.2% | | |
Expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Management fees
|
| | | | 6,759 | | | | | | 6,632 | | | | | | 127 | | | | | | 1.9% | | |
Interest expense
|
| | | | 2,915 | | | | | | 1,217 | | | | | | 1,698 | | | | | | 139.5% | | |
Performance fees
|
| | | | 2,575 | | | | | | 1,061 | | | | | | 1,514 | | | | | | 142.7% | | |
Professional fees
|
| | | | 348 | | | | | | 340 | | | | | | 8 | | | | | | 2.4% | | |
Investment research and other expenses
|
| | | | 299 | | | | | | 560 | | | | | | (261) | | | | | | -46.6% | | |
Organizational expenses
|
| | | | — | | | | | | 61 | | | | | | (61) | | | | | | -100.0% | | |
Total expenses
|
| | | | 12,896 | | | | | | 9,871 | | | | | | 3,025 | | | | | | 30.6% | | |
Management fees waived
|
| | | | (183) | | | | | | (183) | | | | | | — | | | | | | -0.0% | | |
Net expenses
|
| | | | 12,713 | | | | | | 9,688 | | | | | | 3,025 | | | | | | 31.2% | | |
Net investment income
|
| | | | 68,047 | | | | | | 36,418 | | | | | | 31,629 | | | | | | 86.8% | | |
Net realized and unrealized gain (loss) on investments
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments
|
| | | | (1,285) | | | | | | 2,208 | | | | | | (3,493) | | | | | | -158.2% | | |
Net change in unrealized gain (loss) on investments
|
| | | | 45,010 | | | | | | 3,587 | | | | | | 41,423 | | | | | | 1154.8% | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 43,725 | | | | | | 5,795 | | | | | | 37,930 | | | | | | 654.5% | | |
Net increase in partners’ capital resulting from operations
|
| | | $ | 111,772 | | | | | $ | 42,213 | | | | | $ | 69,559 | | | | | | 164.8% | | |
| | |
Combined Statements for Operations for Years
ended December 31 |
| | | | | | | | | | |||||||||
($ in thousands, except
percentages) |
| |
2020
|
| |
2019
|
| |
Change
|
| ||||||||||||
Investment income | | | | | | | | | | | | | | | | | | | | | | |
Royalty income
|
| | | $ | 166,467 | | | | | $ | 130,792 | | | | | $ | 35,675 | | | |
27.3%
|
|
Note interest
|
| | | | 50,397 | | | | | | 38,060 | | | | | | 12,337 | | | |
32.4%
|
|
Paid-in-kind interest
|
| | | | 11,953 | | | | | | 8,399 | | | | | | 3,554 | | | |
42.3%
|
|
Other Income
|
| | | | 10 | | | | | | 53 | | | | | | (43) | | | |
(81.1)%
|
|
Total investment income
|
| | | | 228,827 | | | | | | 177,305 | | | | | | 51,522 | | | |
29.1%
|
|
Expenses | | | | | | | | | | | | | | | | | | | | | | |
Management fees
|
| | | | 26,666 | | | | | | 20,538 | | | | | | 6,128 | | | |
29.8%
|
|
Performance fees
|
| | | | 8,531 | | | | | | 4,267 | | | | | | 4,264 | | | |
99.9%
|
|
Interest expense
|
| | | | 7,294 | | | | | | 1,219 | | | | | | 6,075 | | | |
498.4%
|
|
Investment research and other expenses
|
| | | | 1,767 | | | | | | 2,146 | | | | | | (379) | | | |
(17.7)%
|
|
Professional fees
|
| | | | 1,632 | | | | | | 1,308 | | | | | | 324 | | | |
24.8%
|
|
Organizational expenses
|
| | | | 119 | | | | | | 692 | | | | | | (573) | | | |
(82.8)%
|
|
Total expenses
|
| | | | 46,010 | | | | | | 30,170 | | | | | | 15,840 | | | |
52.5%
|
|
Management fees waived
|
| | | | (733) | | | | | | (492) | | | | | | (241) | | | |
49.0%
|
|
Net expenses
|
| | | | 45,277 | | | | | | 29,678 | | | | | | 15,599 | | | |
52.6%
|
|
Net investment income
|
| | | | 183,550 | | | | | | 147,627 | | | | | | 35,923 | | | |
24.3%
|
|
Net realized and unrealized
gain (loss) on investments |
| | | | | | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments
|
| | | | 11,102 | | | | | | (7,706) | | | | | | 18,808 | | | |
NM
|
|
Net change in unrealized gain (loss) on investments
|
| | | | 58,599 | | | | | | 32,631 | | | | | | 25,968 | | | |
79.6%
|
|
Net realized and unrealized gain (loss) on investments
|
| | | | 69,701 | | | | | | 24,925 | | | | | | 44,776 | | | |
179.6%
|
|
Net increase in partners’ capital resulting from operations
|
| | | $ | 253,252 | | | | | $ | 172,552 | | | | | $ | 80,700 | | | |
46.8%
|
|
| | |
Three months ended March 31
|
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
2021
|
| |
2020
|
| |
Change
|
| |||||||||||||||
Royalty Receipts
|
| | | $ | 151,496 | | | | | $ | 87,715 | | | | | $ | 63,781 | | | | | | 72.7% | | |
Total Royalty Receipts
|
| | | $ | 151,496 | | | | | $ | 87,715 | | | | | $ | 63,781 | | | | | | 72.7% | | |
Payments for operating costs and professional services
|
| | | | (10,416) | | | | | | (11,639) | | | | | | 1,223 | | | | | | -10.5% | | |
Adjusted EBITDA (non-GAAP)
|
| | | $ | 141,080 | | | | | $ | 76,076 | | | | | $ | 65,004 | | | | | | 85.4% | | |
Interest Paid
|
| | | | (2,904) | | | | | | (763) | | | | | | (2,141) | | | | | | 280.5% | | |
Adjusted Cash Flow (non-GAAP)
|
| | | $ | 138,176 | | | | | $ | 75,313 | | | | | $ | 62,863 | | | | | | 83.5% | | |
| | |
Years ended December 31
|
| | | | | | | | | | |||||||||
($ in thousands, except percentages)
|
| |
2020
|
| |
2019
|
| |
Change
|
| ||||||||||||
Royalty Receipts
|
| | | $ | 405,081 | | | | | $ | 252,952 | | | | | $ | 152,129 | | | |
60.1%
|
|
Total Royalty Receipts
|
| | | $ | 405,081 | | | | | $ | 252,952 | | | | | $ | 152,129 | | | |
60.1%
|
|
Payments for operating costs and professional services
|
| | | | (34,485) | | | | | | (28,478) | | | | | | (6,007) | | | |
21.1%
|
|
Adjusted EBITDA (non-GAAP)
|
| | | $ | 370,596 | | | | | $ | 224,474 | | | | | $ | 146,122 | | | |
65.1%
|
|
Interest Paid
|
| | | | (6,456) | | | | | | (1,073) | | | | | | (5,383) | | | |
501.7%
|
|
Adjusted Cash Flow (non-GAAP)
|
| | | $ | 364,140 | | | | | $ | 223,401 | | | | | $ | 140,739 | | | |
63.0%
|
|
| | |
Three Months Ended March
|
| |
Years Ended December 31,
|
| ||||||||||||||||||
($ in thousands)
|
| |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
Cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating activities
|
| | | $ | 5,676 | | | | | $ | (204,688) | | | | | $ | (649,540) | | | | | $ | (174,248) | | |
Financing activities
|
| | | | 47,220 | | | | | | 204,511 | | | | | | 651,128 | | | | | | 174,020 | | |
| | |
Payments due by period
|
| | | |||||||||||||||||||||||||
(in thousands)
|
| |
Total
|
| |
Less than
1 year |
| |
1-3 years
|
| |
3-5 years
|
| |
More than
5 years |
| |||||||||||||||
Long-term debt | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Existing credit facility scheduled principal payments(1)
|
| | | $ | 493,000 | | | | | $ | — | | | | | $ | 493,000 | | | | | $ | — | | | | | $ | — | | |
Scheduled interest payments(2)
|
| | | | 13,772 | | | | | | 10,444 | | | | | | 3,328 | | | | | | — | | | | | | — | | |
Total | | | | $ | 506,772 | | | | | $ | 10,444 | | | | | $ | 496,328 | | | | | $ | — | | | | | $ | — | | |
|
Applicable Percentage
|
| |
Trailing Royalty Receipt Amount
|
|
|
7.5%
|
| | Less than $750 million | |
|
7.0%
|
| | More than or equal to $750 million but less than $1 billion | |
|
6.5%
|
| | More than or equal to $1 billion | |
Name
|
| |
Age
|
| |
Position
|
| |||
Clarke B. Futch
|
| | | | 54 | | | | Chairman and Chief Executive Officer | |
Christopher A. White
|
| | | | 56 | | | | President and Chief Financial Officer | |
Timothy R.M. Bryant
|
| | | | 57 | | | | General Counsel | |
Thomas K. Conner
|
| | | | 60 | | | | Chief Accounting Officer and Treasurer | |
Carlos M. Almodóvar
|
| | | | 42 | | | | Chief Business Officer | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(1) |
| |
Bonus
($) |
| |
All Other
Compensation ($)(2) |
| |
Total
($) |
| | |||||||||||||||||
Clarke B. Futch
|
| | | | 2020 | | | | | | | | ||||||||||||||||||||||
Chairman and Chief Executive
Officer |
| | | | | | | | | $ | 1,250,000 | | | | | $ | 4,584,492 | | | | | | — | | | | | $ | 5,834,492 | | | | ||
Christopher A. White
|
| | | | 2020 | | | | | | | | ||||||||||||||||||||||
President and Chief Financial Officer
|
| | | | | | | | | $ | 500,000 | | | | | $ | 910,247 | | | | | | — | | | | | $ | 1,410,247 | | | | ||
Thomas K. Conner
|
| | | | 2020 | | | | | | | | ||||||||||||||||||||||
Chief Accounting Officer and Treasurer
|
| | | | | | | | | $ | 400,000 | | | | | $ | 419,907 | | | | | | — | | | | | $ | 819,907 | | | | | |
| | |
Class A Common Stock
Beneficially Owned(1) |
| |
Class B Common Stock
Beneficially Owned(1) |
| |
Combined Voting Power
|
| ||||||||||||||||||||||||
Name of Beneficial Owner
|
| |
Before this
Offering |
| |
Number of
Shares Offered |
| |
After this
Offering |
| |
Before this
Offering |
| |
After this
Offering |
| |
Before this
Offering |
| |
After this
Offering |
| ||||||||||||
|
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Percent
|
| |
Percent
|
| |||||
5% Equity Holders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Directors and Named Executive Officers
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Clarke B. Futch
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Chris A. White
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Timothy R.M. Bryant
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Thomas K. Conner
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carlos M. Almodóvar
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
All executive officers and directors as a group (ten persons)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Selling Stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Class A Common Stock
Beneficially Owned(1) |
| |
Class B Common Stock
Beneficially Owned(1) |
| |
Combined Voting Power
|
| ||||||||||||||||||||||||
Name of Beneficial Owner
|
| |
Before this
Offering |
| |
Number of
Shares Offered |
| |
After this
Offering |
| |
Before this
Offering |
| |
After this
Offering |
| |
Before this
Offering |
| |
After this
Offering |
| ||||||||||||
|
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Number
|
| |
Percent
|
| |
Percent
|
| |
Percent
|
| |||||
5% Equity Holders
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Directors and Named Executive Officers
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Clarke B. Futch
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Chris A. White
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Timothy R.M. Bryant
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Thomas K. Conner
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carlos M. Almodóvar
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
All executive officers and directors as a group (ten persons)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling Stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Underwriters
|
| |
Number of Shares
|
| |||
Goldman Sachs & Co. LLC
|
| | | | | | |
Citigroup Global Markets Inc.
|
| | | | | | |
Credit Suisse Securities (USA) LLC
|
| | | | | | |
Jefferies LLC
|
| | | | | | |
Cowen and Company, LLC
|
| | | | | | |
SVB Leerink LLC
|
| | | | | | |
Truist Securities, Inc.
|
| | | | | | |
BMO Capital Markets Corp.
|
| | | | | | |
Stifel, Nicolaus & Company, Incorporated
|
| | | | | | |
Raymond James and Associates, Inc.
|
| | | | | | |
Total
|
| | | | | |
| | |
No Exercise
|
| |
Full Exercise
|
| ||||||
Per Share
|
| | | $ | | | | | $ | | | ||
Total
|
| | | $ | | | | | $ | | | |
| | |
Page(s)
|
| |||
Combined Financial Statements | | | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-9 | | | |
| | | | F-10 | | | |
| | | | F-11 | | | |
| | | | F-12 | | | |
| | | | F-30 | | | |
Combined Financial Statements | | | | | | | |
| | | | F-31 | | | |
| | | | F-32 | | | |
| | | | F-38 | | | |
| | | | F-39 | | | |
| | | | F-40 | | | |
| | | | F-41 | | |
(in U.S. Dollars)
|
| |
As of
March 31, 2021 |
| |
As of
December 31, 2020 |
| ||||||
Assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 64,629,198 | | | | | $ | 11,732,921 | | |
Investments, at fair value (cost of $2,261,484,065 and $2,223,489,375 at March 31, 2021 and December 31, 2020, respectively)
|
| | | | 2,524,324,949 | | | | | | 2,418,498,879 | | |
Interest receivable
|
| | | | 3,450,813 | | | | | | 3,476,577 | | |
Deferred borrowing costs
|
| | | | 1,050,895 | | | | | | 1,297,817 | | |
Prepaid assets
|
| | | | 127,828 | | | | | | 249,238 | | |
Receivable from affiliate (Note 5)
|
| | | | 17,625 | | | | | | 17,625 | | |
Total assets
|
| | | $ | 2,593,601,308 | | | | | $ | 2,435,273,057 | | |
Liabilities and Partners’ Capital | | | | | | | | | | | | | |
Liabilities
|
| | | | | | | | | | | | |
Revolving credit
|
| | | $ | 493,000,000 | | | | | $ | 493,000,000 | | |
Performance Fee payable to Manager (Note 6)
|
| | | | 6,870,862 | | | | | | 6,494,702 | | |
Accrued expenses (Note 5)
|
| | | | 1,391,287 | | | | | | 1,220,216 | | |
Due to Manager (Note 5)
|
| | | | 1,372,676 | | | | | | 1,411,083 | | |
Management fees payable (Note 6)
|
| | | | 21,250 | | | | | | 891,534 | | |
Interest payable
|
| | | | — | | | | | | 302,626 | | |
Total liabilities
|
| | | | 502,656,075 | | | | | | 503,320,161 | | |
Commitments and contingencies (Note 8) | | | | | | | | | | | | | |
Partners’ capital
|
| | | | 2,090,945,233 | | | | | | 1,931,952,896 | | |
Total liabilities and partners’ capital
|
| | | $ | 2,593,601,308 | | | | | $ | 2,435,273,057 | | |
| | |
As of March 31, 2021
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Direct Investments(1) | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Acorda Therapeutics, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 14,966,239 | | | | | $ | 15,730,569 | | | | | | 0.75% | | |
Adamas Pharma, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 11%, December 31, 2026
|
| | | $ | 117,087,060 | | | | | | 115,832,352 | | | | | | 120,658,769 | | | | | | 5.77 | | |
Aerial BioPharma, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 100,000,954 | | | | | | 126,721,914 | | | | | | 6.06 | | |
Agenus, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 188,032,861 | | | | | | 279,785,407 | | | | | | 13.37 | | |
Akebia Therapeutics, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 45,118,405 | | | | | | 45,000,000 | | | | | | 2.15 | | |
Aptevo Therapeutics Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 35,000,000 | | | | | | 35,000,000 | | | | | | 1.67 | | |
Chiasma, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 65,040,536 | | | | | | 72,309,244 | | | | | | 3.46 | | |
Coherus Biosciences
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Senior Convertible Note, 8.2%, March 31, 2022
|
| | | $ | 75,000,000 | | | | | | 75,000,000 | | | | | | 80,470,276 | | | | | | 3.85 | | |
Senior Secured Term Loan, Variable, January 7, 2025
|
| | | $ | 75,000,000 | | | | | | 74,329,327 | | | | | | 75,929,591 | | | | | | 3.63 | | |
Total Coherus Biosciences
|
| | | | | | | | | | 149,329,327 | | | | | | 156,399,867 | | | | | | 7.48 | | |
Infinity Pharmaceuticals, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 30,020,063 | | | | | | 32,861,824 | | | | | | 1.57 | | |
Karyopharm Therapeutics, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 75,050,725 | | | | | | 85,850,774 | | | | | | 4.11 | | |
Krystexxa
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 76,885,461 | | | | | | 81,386,710 | | | | | | 3.89 | | |
La Jolla Pharma, LLC(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 119,389,799 | | | | | | 115,955,321 | | | | | | 5.55 | | |
Lexiva/Telzir
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | — | | | | | | 208,004 | | | | | | 0.01 | | |
| | |
As of March 31, 2021
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Lyrica
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 86,445 | | | | | | 86,445 | | | | | | — | | |
Miotox, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 35,373,481 | | | | | | 35,373,481 | | | | | | 1.69 | | |
Myozyme
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 2,216,476 | | | | | | 9,203,440 | | | | | | 0.44 | | |
Nektar Therapeutics
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 146,532,245 | | | | | | 160,074,996 | | | | | | 7.66 | | |
Orenitram
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 19,353,813 | | | | | | 20,187,647 | | | | | | 0.97 | | |
Paratek Royalty Corporation
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Secured Promissory Note, 12%, May 1, 2029
|
| | | $ | 32,500,000 | | | | | | 31,910,205 | | | | | | 32,591,100 | | | | | | 1.56 | | |
Portola Pharmaceuticals, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 125,634,813 | | | | | | 150,767,722 | | | | | | 7.21 | | |
RedHill Biopharma Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 9.95%, February 23, 2026
|
| | | $ | 80,000,000 | | | | | | 80,041,148 | | | | | | 86,700,003 | | | | | | 4.15 | | |
ReGenXBio Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 190,533,523 | | | | | | 188,944,996 | | | | | | 9.04 | | |
Rutgers
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 8,759,202 | | | | | | 13,435,595 | | | | | | 0.64 | | |
Suneva Medical, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 10.9% Cash, 10.9% PIK, December 31, 2021
|
| | | $ | 10,734,496 | | | | | | 11,388,424 | | | | | | 10,734,496 | | | | | | 0.51 | | |
Series AA Preferred Stock(2)
|
| | | | 9,200,000 | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.35 | | |
Total Suneva Medical, Inc.
|
| | | | | | | | | | 30,745,421 | | | | | | 18,094,496 | | | | | | 0.86 | | |
Triple Royalty Sub II LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 9.5%, June 5, 2035
|
| | | $ | 204,652,493 | | | | | | 207,143,815 | | | | | | 207,143,815 | | | | | | 9.90 | | |
Vimpat
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interest
|
| | | | | | | | | | 220,796,025 | | | | | | 252,405,264 | | | | | | 12.07 | | |
Total United States
|
| | | | | | | | | | 2,113,793,334 | | | | | | 2,342,877,403 | | | | | | 112.03 | | |
|
| | |
As of March 31, 2021
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Japan | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Albireo
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 58,116,956 | | | | | | 92,894,995 | | | | | | 4.45 | | |
Inavir
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 30,894,075 | | | | | | 31,778,501 | | | | | | 1.52 | | |
Total Japan
|
| | | | | | | | | | 89,011,031 | | | | | | 124,673,496 | | | | | | 5.97 | | |
Germany | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cetrotide
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 30,307,382 | | | | | | 30,376,494 | | | | | | 1.46 | | |
Total Germany
|
| | | | | | | | | | 30,307,382 | | | | | | 30,376,494 | | | | | | 1.46 | | |
Switzerland | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Benlysta
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 26,397,556 | | | | | | 26,397,556 | | | | | | 1.27 | | |
Cardiorentis
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Warrants(2)
|
| | | | 1,272 | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Switzerland
|
| | | | | | | | | | 28,372,318 | | | | | | 26,397,556 | | | | | | 1.27 | | |
Total Investments
|
| | | | | | | | | $ | 2,261,484,065 | | | | | $ | 2,524,324,949 | | | | | | 120.73% | | |
Investment classification by type | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 1,644,507,035 | | | | | $ | 1,902,736,899 | | | | | | 91.01% | | |
Notes
|
| | | | | | | | | | 595,645,271 | | | | | | 614,228,050 | | | | | | 29.37 | | |
Preferred Stock
|
| | | | | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.35 | | |
Warrants
|
| | | | | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Investments
|
| | | | | | | | | $ | 2,261,484,065 | | | | | $ | 2,524,324,949 | | | | | | 120.73% | | |
|
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Direct Investments(1) | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Acorda Therapeutics, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 17,403,950 | | | | | $ | 17,403,950 | | | | | | 0.90% | | |
Adamas Pharma, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 11% Cash, 11% PIK, December 31, 2026
|
| | | $ | 117,512,573 | | | | | | 117,640,664 | | | | | | 123,087,021 | | | | | | 6.37 | | |
Aerial BioPharma, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 100,000,954 | | | | | | 122,818,396 | | | | | | 6.36 | | |
Agenus, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 190,307,425 | | | | | | 284,703,837 | | | | | | 14.73 | | |
Chiasma, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 65,040,536 | | | | | | 69,958,836 | | | | | | 3.62 | | |
Coherus Biosciences
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Senior Convertible Note, 8.2%, March 31, 2022
|
| | | $ | 75,000,000 | | | | | | 75,000,000 | | | | | | 80,168,084 | | | | | | 4.15 | | |
Senior Secured Term Loan, Variable, January 7, 2025
|
| | | $ | 75,000,000 | | | | | | 74,282,454 | | | | | | 75,792,270 | | | | | | 3.92 | | |
Total Coherus Biosciences
|
| | | | | | | | | | 149,282,454 | | | | | | 155,960,354 | | | | | | 8.07 | | |
Infinity Pharmaceuticals, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 30,020,063 | | | | | | 31,949,826 | | | | | | 1.65 | | |
Karyopharm Therapeutics, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 75,050,725 | | | | | | 85,382,711 | | | | | | 4.42 | | |
Krystexxa
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 24,714,772 | | | | | | 26,001,396 | | | | | | 1.35 | | |
La Jolla Pharma, LLC(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 119,959,065 | | | | | | 78,065,123 | | | | | | 4.04 | | |
Lexiva/Telzir
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | — | | | | | | 264,576 | | | | | | 0.01 | | |
Lyrica
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 268,203 | | | | | | 268,203 | | | | | | 0.01 | | |
Miotox, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 37,496,004 | | | | | | 37,496,004 | | | | | | 1.94 | | |
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Myozyme
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 3,274,176 | | | | | | 3,274,176 | | | | | | 0.17 | | |
Nektar Therapeutics
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 150,249,361 | | | | | | 150,000,000 | | | | | | 7.76 | | |
Orenitram
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 20,912,661 | | | | | | 21,836,936 | | | | | | 1.13 | | |
Paratek Royalty Corporation
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Secured Promissory Note, 12%, May 1, 2029
|
| | | $ | 32,500,000 | | | | | | 31,903,893 | | | | | | 32,616,037 | | | | | | 1.69 | | |
Portola Pharmaceuticals, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 125,850,165 | | | | | | 149,957,234 | | | | | | 7.76 | | |
Progenics Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 9.5%, June 30, 2025
|
| | | $ | 32,552,521 | | | | | | 31,953,317 | | | | | | 32,752,358 | | | | | | 1.70 | | |
RedHill Biopharma Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 9.95%,
February 23, 2026 |
| | | $ | 80,000,000 | | | | | | 80,041,148 | | | | | | 85,757,671 | | | | | | 4.44 | | |
ReGenXBio Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 196,129,549 | | | | | | 195,999,999 | | | | | | 10.15 | | |
Rutgers
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 9,092,801 | | | | | | 11,848,229 | | | | | | 0.61 | | |
Suneva Medical, Inc.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 10.9% Cash, 10.9% PIK, December 31, 2021
|
| | | $ | 10,522,639 | | | | | | 11,176,567 | | | | | | 10,522,639 | | | | | | 0.54 | | |
Series AA Preferred Stock(2)
|
| | | | 9,200,000 | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.38 | | |
Total Suneva Medical, Inc.
|
| | | | | | | | | | 30,533,564 | | | | | | 17,882,639 | | | | | | 0.92 | | |
Triple Royalty Sub II LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 9.5% Cash, 9.5% PIK, June 5, 2035
|
| | | $ | 209,285,872 | | | | | | 209,312,531 | | | | | | 210,301,909 | | | | | | 10.89 | | |
Vimpat
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interest
|
| | | | | | | | | | 253,465,293 | | | | | | 287,960,628 | | | | | | 14.91 | | |
Total Direct Investments (United States)
|
| | | | | | | | | | 2,069,903,274 | | | | | | 2,233,548,049 | | | | | | 115.60 | | |
Interest in affiliated investment fund(1)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
HealthCare Royalty Partners II, L.P.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
LP Interest
|
| | | | | | | | | | 1,250,459 | | | | | | 1,710,360 | | | | | | 0.09 | | |
|
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Total United States
|
| | | | | | | | | | 2,071,153,733 | | | | | | 2,235,258,409 | | | | | | 115.69 | | |
Japan | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Albireo
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 58,116,956 | | | | | | 92,294,222 | | | | | | 4.78 | | |
Inavir
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 31,212,457 | | | | | | 31,478,730 | | | | | | 1.63 | | |
Total Japan
|
| | | | | | | | | | 89,329,413 | | | | | | 123,772,952 | | | | | | 6.41 | | |
Germany | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cetrotide
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 30,307,382 | | | | | | 29,869,751 | | | | | | 1.55 | | |
Eligard
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 2,276,956 | | | | | | 2,002,045 | | | | | | 0.10 | | |
Total Germany
|
| | | | | | | | | | 32,584,338 | | | | | | 31,871,796 | | | | | | 1.65 | | |
Switzerland | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Benlysta
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | | 28,447,129 | | | | | | 27,595,722 | | | | | | 1.42 | | |
Cardiorentis
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Warrants(2)
|
| | | | 1,272 | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Switzerland
|
| | | | | | | | | | 30,421,891 | | | | | | 27,595,722 | | | | | | 1.42 | | |
Total Investments
|
| | | | | | | | | $ | 2,223,489,375 | | | | | $ | 2,418,498,879 | | | | | | 125.17% | | |
Investment classification by type | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 1,569,596,583 | | | | | $ | 1,758,430,530 | | | | | | 91.00% | | |
Notes
|
| | | | | | | | | | 631,310,574 | | | | | | 650,997,989 | | | | | | 33.70 | | |
Preferred Stock
|
| | | | | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.38 | | |
LP Interest
|
| | | | | | | | | | 1,250,459 | | | | | | 1,710,360 | | | | | | 0.09 | | |
Warrants
|
| | | | | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Investments
|
| | | | | | | | | $ | 2,223,489,375 | | | | | $ | 2,418,498,879 | | | | | | 125.17% | | |
|
| | |
For the Three Months Ended
|
| |||||||||
(in U.S. Dollars)
|
| |
March 31, 2021
|
| |
March 31, 2020
|
| ||||||
Investment income | | | | | | | | | | | | | |
Royalty income
|
| | | $ | 65,302,838 | | | | | $ | 32,871,083 | | |
Note interest
|
| | | | 15,245,432 | | | | | | 11,422,188 | | |
Paid-in-kind interest
|
| | | | 211,857 | | | | | | 1,812,795 | | |
Total investment income
|
| | | | 80,760,127 | | | | | | 46,106,066 | | |
Expenses | | | | | | | | | | | | | |
Management fees (Note 6)
|
| | | | 6,759,266 | | | | | | 6,632,338 | | |
Interest expense
|
| | | | 2,915,421 | | | | | | 1,217,887 | | |
Performance fees (Note 6)
|
| | | | 2,573,565 | | | | | | 1,060,620 | | |
Professional fees
|
| | | | 348,266 | | | | | | 340,194 | | |
Investment research and other expenses
|
| | | | 299,303 | | | | | | 559,625 | | |
Organizational expenses
|
| | | | 152 | | | | | | 60,976 | | |
Total expenses
|
| | | | 12,895,973 | | | | | | 9,871,640 | | |
Management fees waived
|
| | | | (182,609) | | | | | | (183,266) | | |
Net expenses
|
| | | | 12,713,364 | | | | | | 9,688,374 | | |
Net investment income
|
| | | | 68,046,763 | | | | | | 36,417,692 | | |
Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | |
Net realized gain (loss) on investments
|
| | | | (1,284,466) | | | | | | 2,208,361 | | |
Net change in unrealized gain (loss) on investments
|
| | | | 45,009,762 | | | | | | 3,586,508 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 43,725,296 | | | | | | 5,794,869 | | |
Net increase in partners’ capital resulting from operations
|
| | | $ | 111,772,059 | | | | | $ | 42,212,561 | | |
(in U.S. Dollars)
|
| |
General
Partners |
| |
Limited
Partners |
| |
Total
|
| |||||||||
Partners’ capital at January 1, 2021
|
| | | $ | 85,037,996 | | | | | $ | 1,846,914,900 | | | | | $ | 1,931,952,896 | | |
Capital contributions
|
| | | | 1,354,142 | | | | | | 138,992,959 | | | | | | 140,347,101 | | |
Distributions
|
| | | | (764,514) | | | | | | (92,362,309) | | | | | | (93,126,823) | | |
Net investment income
|
| | | | 594,614 | | | | | | 67,452,149 | | | | | | 68,046,763 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 325,908 | | | | | | 43,399,388 | | | | | | 43,725,296 | | |
Carried interest
|
| | | | 14,160,136 | | | | | | (14,160,136) | | | | | | — | | |
Partners’ capital at March 31, 2021
|
| | | $ | 100,708,282 | | | | | $ | 1,990,236,951 | | | | | $ | 2,090,945,233 | | |
| | |
General
Partners |
| |
Limited
Partners |
| |
Total
|
| |||||||||
Partners’ capital at January 1, 2020
|
| | | $ | 47,834,522 | | | | | $ | 1,390,096,991 | | | | | $ | 1,437,931,513 | | |
Capital contributions
|
| | | | 624,000 | | | | | | 119,450,865 | | | | | | 120,074,865 | | |
Distributions
|
| | | | (252,545) | | | | | | (79,806,639) | | | | | | (80,059,184) | | |
Syndication costs
|
| | | | (3) | | | | | | (295) | | | | | | (298) | | |
Net investment income
|
| | | | 293,469 | | | | | | 36,124,223 | | | | | | 36,417,692 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 42,667 | | | | | | 5,752,202 | | | | | | 5,794,869 | | |
Carried interest
|
| | | | 4,956,983 | | | | | | (4,956,983) | | | | | | — | | |
Partners’ capital at March 31, 2020
|
| | | $ | 53,499,093 | | | | | $ | 1,466,660,364 | | | | | $ | 1,520,159,457 | | |
| | |
For the Three Months Ended
|
| |||||||||
(in U.S. dollars)
|
| |
March 31, 2021
|
| |
March 31, 2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Cash collections from royalty interests
|
| | | $ | 98,701,163 | | | | | $ | 26,179,409 | | |
Cash collections from notes
|
| | | | 19,785,392 | | | | | | 12,144,994 | | |
Proceeds from sale of investments
|
| | | | 33,009,581 | | | | | | 49,390,625 | | |
Payments for operating costs and professional services
|
| | | | (10,416,051) | | | | | | (11,639,402) | | |
Interest paid
|
| | | | (2,904,086) | | | | | | (763,160) | | |
Acquisitions of investments
|
| | | | (132,500,000) | | | | | | (280,000,000) | | |
Net cash provided by / (used in) operating activities
|
| | | | 5,675,999 | | | | | | (204,687,534) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Distributions
|
| | | | (93,126,823) | | | | | | (80,059,184) | | |
Capital contributions
|
| | | | 140,347,101 | | | | | | 120,149,900 | | |
Syndication costs
|
| | | | — | | | | | | (298) | | |
Borrowings on Revolving Credit
|
| | | | — | | | | | | 164,420,863 | | |
Net cash provided by financing activities
|
| | | | 47,220,278 | | | | | | 204,511,281 | | |
Net change in cash and cash equivalents
|
| | | | 52,896,277 | | | | | | (176,253) | | |
Cash and cash equivalents, beginning of period
|
| | | | 11,732,921 | | | | | | 10,145,258 | | |
Cash and cash equivalents, end of period
|
| | | $ | 64,629,198 | | | | | $ | 9,969,005 | | |
|
Master Funds
|
| |
Organization Date
|
| |
Commencement of Operations
|
|
|
HealthCare Royalty Partners III, L.P.
|
| |
July 17, 2013
|
| |
July 17, 2013
|
|
|
HealthCare Royalty Partners IV, L.P.
|
| |
November 28, 2018
|
| |
January 3, 2019
|
|
|
HCRP Overflow Fund, L.P.
|
| |
February 2, 2010
|
| |
February 4, 2010
|
|
|
HCR Stafford Fund, L.P.
|
| |
June 28, 2016
|
| |
June 28, 2016
|
|
|
HCR Molag Fund, L.P.
|
| |
August 8, 2017
|
| |
August 8, 2017
|
|
|
HCR H.O.P. Fund, L.P.
|
| |
September 28, 2016
|
| |
September 28, 2016
|
|
|
HCR Potomac Fund, L.P.
|
| |
December 16, 2019
|
| |
February 26, 2020
|
|
|
HCR Canary Fund, L.P.
|
| |
July 31, 2020
|
| |
August 6, 2020
|
|
|
PPCF Harris Feeder, L.P.
|
| |
August 5, 2020
|
| |
August 5, 2020
|
|
|
Feeder Funds
|
| |
Organization Date
|
| |
Commencement of Operations
|
|
|
HealthCare Royalty Partners III-A, L.P.
|
| |
September 28, 2016
|
| |
September 28, 2016
|
|
|
HealthCare Royalty Partners IV-A, L.P.
|
| |
November 28, 2018
|
| |
January 3, 2019
|
|
|
Feeder Fund
|
| |
Affiliated Master Fund
|
| |
Feeder Fund
ownership of capital commitments in Master Fund as of March 31, 2021 |
| |
Unfunded
capital commitments as of March 31, 2021 |
| ||||||
|
HealthCare Royalty Partners III-A, L.P.
|
| |
HealthCare Royalty Partners III, L.P.
|
| | | | 11.8% | | | | | | 5,617,034 | | |
|
HealthCare Royalty Partners IV-A, L.P.
|
| |
HealthCare Royalty Partners IV, L.P.
|
| | | | 20.3% | | | | | | 209,081,026 | | |
|
General Partner
|
| |
Fund
|
|
|
HealthCare Royalty GP III, LLC
|
| |
HealthCare Royalty Partners III, L.P.
|
|
|
HealthCare Royalty GP III, LLC
|
| |
HealthCare Royalty Partners III-A, L.P.
|
|
|
HealthCare Royalty GP IV, LLC
|
| |
HealthCare Royalty Partners IV, L.P.
|
|
|
HealthCare Royalty GP IV, LLC
|
| |
HealthCare Royalty Partners IV-A, L.P.
|
|
|
HCRP Overflow GP, LLC
|
| |
HCRP Overflow Fund, L.P.
|
|
|
HCR Stafford Fund GP, LLC
|
| |
HCR Stafford Fund, L.P.
|
|
|
HCR Molag Fund GP, LLC
|
| |
HCR Molag Fund, L.P.
|
|
|
HCR H.O.P. Fund GP, LLC
|
| |
HCR H.O.P. Fund, L.P.
|
|
|
HCR Potomac Fund, GP LLC
|
| |
HCR Potomac Fund, L.P.
|
|
|
HCR Canary Fund, GP LLC
|
| |
HCR Canary Fund, L.P.
|
|
|
HCR Harris Feeder GP, LLC
|
| |
PPCF Harris Feeder, L.P.
|
|
| | |
Assets at Fair Value as of March 31, 2021
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Royalty Interests
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,902,736,899 | | | | | $ | 1,902,736,899 | | |
Notes
|
| | | | — | | | | | | — | | | | | | 614,228,050 | | | | | | 614,228,050 | | |
Preferred Stock
|
| | | | — | | | | | | — | | | | | | 7,360,000 | | | | | | 7,360,000 | | |
Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 2,524,324,949 | | | | | $ | 2,524,324,949 | | |
| | |
Assets at Fair Value as of December 31, 2020
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Royalty Interests
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,758,430,530 | | | | | $ | 1,758,430,530 | | |
Notes
|
| | | | — | | | | | | — | | | | | | 650,997,989 | | | | | | 650,997,989 | | |
Preferred Stock
|
| | | | — | | | | | | — | | | | | | 7,360,000 | | | | | | 7,360,000 | | |
LP Interest
|
| | | | — | | | | | | — | | | | | | 1,710,360 | | | | | | 1,710,360 | | |
Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 2,418,498,879 | | | | | $ | 2,418,498,879 | | |
Fair Value Measurements Using Level 3 Inputs for the three months ended March 31, 2021
|
| ||||||||||||||||||||||||||||||
| | |
Royalty
Interests |
| |
Notes
|
| |
Preferred
Stock |
| |
LP Interest
|
| |
Total
|
| |||||||||||||||
Balance at January 1, 2021
|
| | | $ | 1,758,430,530 | | | | | $ | 650,997,989 | | | | | $ | 7,360,000 | | | | | $ | 1,710,360 | | | | | $ | 2,418,498,879 | | |
Purchases of investments
|
| | | | 132,500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 132,500,000 | | |
Paid-in-kind interest
|
| | | | — | | | | | | 211,857 | | | | | | — | | | | | | — | | | | | | 211,857 | | |
Amortization of note discount
|
| | | | — | | | | | | 59,060 | | | | | | — | | | | | | — | | | | | | 59,060 | | |
Capitalized investment expenses
|
| | | | 311,013 | | | | | | — | | | | | | — | | | | | | — | | | | | | 311,013 | | |
Investment cost paydowns
|
| | | | (56,219,935) | | | | | | (3,424,231) | | | | | | — | | | | | | (1,149,027) | | | | | | (60,793,193) | | |
Unrealized royalty income
|
| | | | 22,821,616 | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,821,618 | | |
Proceeds from sale of investments
|
| | | | — | | | | | | (33,009,581) | | | | | | — | | | | | | — | | | | | | (33,009,581) | | |
Net change in unrealized gain (loss) on investments
|
| | | | 46,635,199 | | | | | | (1,064,104) | | | | | | — | | | | | | (561,333) | | | | | | 45,009,762 | | |
Net realized gain (loss) on investments
|
| | | | (1,741,526) | | | | | | 457,060 | | | | | | — | | | | | | — | | | | | | (1,284,466) | | |
Balance at March 31, 2021
|
| | | $ | 1,902,736,899 | | | | | $ | 614,228,050 | | | | | $ | 7,360,000 | | | | | $ | — | | | | | $ | 2,524,324,949 | | |
Change in unrealized gain (loss) related to investments still held at March 31, 2021
|
| | | $ | 62,627,872 | | | | | $ | (864,267) | | | | | $ | — | | | | | $ | — | | | | | $ | 61,763,605 | | |
Fair Value Measurements Using Level 3 Inputs for the three months ended March 31, 2020
|
| ||||||||||||||||||||||||||||||
| | |
Royalty
Interests |
| |
Notes
|
| |
LP Interest
|
| |
Preferred
Stock |
| |
Total
|
| |||||||||||||||
Balance at January 1, 2020
|
| | | $ | 1,024,392,971 | | | | | $ | 485,260,043 | | | | | $ | 1,674,819 | | | | | $ | — | | | | | $ | 1,511,327,833 | | |
Purchases of investments
|
| | | | — | | | | | | 280,000,000 | | | | | | — | | | | | | — | | | | | | 280,000,000 | | |
Paid-in-kind interest
|
| | | | — | | | | | | 1,812,795 | | | | | | — | | | | | | — | | | | | | 1,812,795 | | |
Amortization of note discount
|
| | | | — | | | | | | 104,635 | | | | | | — | | | | | | — | | | | | | 104,635 | | |
Capitalized investment expenses
|
| | | | — | | | | | | 2,299 | | | | | | — | | | | | | — | | | | | | 2,299 | | |
Investment cost paydowns
|
| | | | (16,003,701) | | | | | | (1,682,703) | | | | | | — | | | | | | — | | | | | | (17,686,404) | | |
Unrealized royalty income
|
| | | | 22,695,377 | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,695,377 | | |
Proceeds from sale of investments
|
| | | | — | | | | | | (49,363,516) | | | | | | (27,109) | | | | | | — | | | | | | (49,390,625) | | |
Net change in unrealized gain (loss) on investments
|
| | | | 1,430,775 | | | | | | 2,131,269 | | | | | | 24,464 | | | | | | — | | | | | | 3,586,508 | | |
Net realized gain (loss) on investments
|
| | | | — | | | | | | 2,181,666 | | | | | | 26,695 | | | | | | — | | | | | | 2,208,361 | | |
Balance at March 31, 2020
|
| | | $ | 1,032,515,422 | | | | | $ | 720,446,488 | | | | | $ | 1,698,869 | | | | | $ | — | | | | | $ | 1,754,660,779 | | |
Change in unrealized gain (loss) related to investments still held at March 31, 2020
|
| | | $ | 18,401,989 | | | | | $ | 1,212,579 | | | | | $ | 24,464 | | | | | $ | — | | | | | $ | 19,639,032 | | |
| | |
Qualitative Information about Level 3 Fair Value Measurements as of March 31, 2021
|
| ||||||||||||
| | |
Fair Value at
March 31, 2021 |
| |
Valuation Techniques
|
| |
Unobservable Inputs
|
| |
Range (weighted average)
|
| |||
Royalty Interests(1)
|
| | | $ | 1,822,736,899 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 -14 years Discount rates: 6% – 15% (12%) |
|
Notes(2)
|
| | | $ | 603,493,554 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 -9 years Discount rates: 10% – 14% (11%) |
|
Preferred Stock(3)
|
| | | $ | — | | | |
N/A
|
| |
N/A
|
| |
N/A
|
|
| | |
Qualitative Information about Level 3 Fair Value Measurements as of December 31, 2020
|
| ||||||||||||
| | |
Fair Value at
December 31, 2020 |
| |
Valuation Techniques
|
| |
Unobservable Inputs
|
| |
Range (weighted average)
|
| |||
Royalty Interests(1)
|
| | | $ | 1,412,430,531 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 -14 years Discount rates: 6% — 15% (11%) |
|
Notes(2) | | | | $ | 640,475,350 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 -9 years Discount rates: 10% — 14% (11%) |
|
LP Interest
|
| | | $ | 1,710,360 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
N/A
|
|
Preferred Stock(3)
|
| | | $ | — | | | |
N/A
|
| |
N/A
|
| |
N/A
|
|
| | |
For the Three Months Ended
|
| |||||||||
| | |
March 31, 2021
|
| |
March 31, 2020
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net increase in partners’ capital resulting from operations
|
| | | $ | 111,772,059 | | | | | $ | 42,212,561 | | |
Adjustments to reconcile net increase in partners’ capital resulting
from operations to net cash provided by / (used in) operating activities |
| | | | | | | | | | | | |
Acquisitions of investments
|
| | | | (132,500,000) | | | | | | (280,000,000) | | |
Paid-in-kind interest
|
| | | | (211,857) | | | | | | (1,812,795) | | |
Amortization of original issue discount
|
| | | | (59,060) | | | | | | (104,635) | | |
Capitalized investment expenses
|
| | | | (311,013) | | | | | | (2,299) | | |
Proceeds from sale of investments
|
| | | | 33,009,581 | | | | | | 49,390,625 | | |
Investment cost paydowns
|
| | | | 60,793,193 | | | | | | 17,686,404 | | |
Net realized gain (loss) on investments
|
| | | | 1,284,466 | | | | | | (2,208,361) | | |
Unrealized royalty income
|
| | | | (22,821,618) | | | | | | (22,695,377) | | |
Net change in unrealized gain (loss) on investments
|
| | | | (45,009,762) | | | | | | (3,586,508) | | |
Changes in assets and liabilities:
|
| | | | | | | | | | | | |
Increase / (decrease) in Performance Fee payable to Manager
|
| | | | 376,160 | | | | | | (2,292,412) | | |
(Increase) / decrease in deferred borrowing costs
|
| | | | 246,922 | | | | | | (256,032) | | |
Increase in prepaid assets
|
| | | | 121,410 | | | | | | — | | |
(Increase) / decrease in interest receivable
|
| | | | 25,764 | | | | | | (822,140) | | |
Increase in receivable from affiliate
|
| | | | — | | | | | | (1,556,126) | | |
Increase / (decrease) in accrued expenses and other liabilities
|
| | | | 171,071 | | | | | | (404,124) | | |
Decrease in management fees payable
|
| | | | (870,284) | | | | | | — | | |
Increase / (decrease) in interest payable
|
| | | | (302,626) | | | | | | 325,320 | | |
Increase / (decrease) in due to Manager
|
| | | | (38,407) | | | | | | 1,438,365 | | |
Net cash provided by / (used in) operating activities
|
| | | | 5,675,999 | | | | | | (204,687,534) | | |
| | |
Capital Commitments and Contributions as of March 31, 2021
|
| |||||||||||||||||||||
| | |
Capital
Commitments |
| |
Cumulative Capital
Contributions |
| |
Unfunded Capital
Commitments |
| |
% Funded
|
| ||||||||||||
Limited Partners
|
| | | | 4,345,769,834 | | | | | | 2,995,205,937 | | | | | | 1,385,897,502 | | | | | | 69% | | |
General Partners
|
| | | | 31,587,741 | | | | | | 18,231,692 | | | | | | 13,738,566 | | | | | | 58% | | |
Total
|
| | | | 4,377,357,575 | | | | | | 3,013,437,629 | | | | | | 1,399,636,069 | | | | | | 69% | | |
| | |
Capital Commitments and Contributions as of December 31, 2020
|
| |||||||||||||||||||||
| | |
Capital
Commitments |
| |
Cumulative Capital
Contributions |
| |
Unfunded Capital
Commitments |
| |
% Funded
|
| ||||||||||||
Limited Partners
|
| | | | 4,338,664,646 | | | | | | 2,856,212,980 | | | | | | 1,496,991,155 | | | | | | 66% | | |
General Partners
|
| | | | 31,393,599 | | | | | | 16,877,550 | | | | | | 14,688,526 | | | | | | 54% | | |
Total
|
| | | | 4,370,058,245 | | | | | | 2,873,090,529 | | | | | | 1,511,679,681 | | | | | | 66% | | |
Three Months Ended March 31, 2021
|
| |
Limited
Partners |
| |||
Ratios to average limited partners’ capital | | | | | | | |
Expenses before carried interest and performance fee allocation
|
| | | | 2.12% | | |
Carried interest and performance fee allocation
|
| | | | 0.88% | | |
Expenses after carried interest and performance fee allocation
|
| | | | 3.00% | | |
Net investment income
|
| | | | 14.57% | | |
Internal rate of return | | | | | | | |
Inception to March 31, 2021
|
| | | | 12.94% | | |
Inception to December 31, 2020
|
| | | | 12.30% | | |
Three Months Ended March 31, 2020
|
| |
Limited
Partners |
| |||
Ratios to average limited partners’ capital | | | | | | | |
Expenses before carried interest and performance fee allocation
|
| | | | 2.40% | | |
Carried interest and performance fee allocation
|
| | | | 0.42% | | |
Expenses after carried interest and performance fee allocation
|
| | | | 2.82% | | |
Net investment income
|
| | | | 10.28% | | |
Internal rate of return | | | | | | | |
Inception to March 31, 2020
|
| | | | 11.38% | | |
Inception to December 31, 2019
|
| | | | 11.41% | | |
(in U.S. Dollars)
|
| |
As of
December 31, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 11,732,921 | | | | | $ | 10,145,258 | | |
Investments, at fair value (cost of $2,223,489,375 and $1,415,618,651 at December 31, 2020 and 2019, respectively)
|
| | | | 2,418,498,879 | | | | | | 1,511,327,833 | | |
Interest receivable
|
| | | | 3,476,577 | | | | | | 2,982,405 | | |
Deferred borrowing costs
|
| | | | 1,297,817 | | | | | | 1,050,347 | | |
Prepaid assets
|
| | | | 249,238 | | | | | | — | | |
Receivable from affiliate (Note 5)
|
| | | | 17,625 | | | | | | — | | |
Total assets
|
| | | $ | 2,435,273,057 | | | | | $ | 1,525,505,843 | | |
Liabilities and Partners’ Capital | | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | | |
Revolving credit
|
| | | $ | 493,000,000 | | | | | $ | 82,641,781 | | |
Performance Fee payable to Manager (Note 6)
|
| | | | 6,494,702 | | | | | | 3,353,032 | | |
Due to Manager (Note 5)
|
| | | | 1,411,083 | | | | | | 843,251 | | |
Accrued expenses (Note 5)
|
| | | | 1,220,216 | | | | | | 589,643 | | |
Management fees payable (Note 6)
|
| | | | 891,534 | | | | | | — | | |
Interest payable
|
| | | | 302,626 | | | | | | 146,623 | | |
Total liabilities
|
| | | | 503,320,161 | | | | | | 87,574,330 | | |
Commitments and contingencies (Note 8) | | | | | | | | | | | | | |
Partners’ capital
|
| | | | 1,931,952,896 | | | | | | 1,437,931,513 | | |
Total liabilities and partners’ capital
|
| | | $ | 2,435,273,057 | | | | | $ | 1,525,505,843 | | |
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Direct Investments(1) | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Acorda Therapeutics, Inc.
Royalty Interests |
| | | | | | | | | $ | 17,403,950 | | | | | $ | 17,403,950 | | | | | | 0.90% | | |
Adamas Pharma, LLC
Note, 11% Cash, 11% PIK, December 31, 2026 |
| | | $ | 117,512,573 | | | | | | 117,640,664 | | | | | | 123,087,021 | | | | | | 6.37 | | |
Aerial BioPharma, LLC
Royalty Interests |
| | | | | | | | | | 100,000,954 | | | | | | 122,818,396 | | | | | | 6.36 | | |
Agenus, Inc.
Royalty Interests |
| | | | | | | | | | 190,307,425 | | | | | | 284,703,837 | | | | | | 14.73 | | |
Chiasma, Inc.
Royalty Interests |
| | | | | | | | | | 65,040,536 | | | | | | 69,958,836 | | | | | | 3.62 | | |
Coherus Biosciences
Senior Convertible Note, 8.2%, March 31, 2022 |
| | | $ | 75,000,000 | | | | | | 75,000,000 | | | | | | 80,168,084 | | | | | | 4.15 | | |
Senior Secured Term Loan, Variable,
January 7, 2025 |
| | | $ | 75,000,000 | | | | | | 74,282,454 | | | | | | 75,792,270 | | | | | | 3.92 | | |
Total Coherus Biosciences
|
| | | | | | | | | | 149,282,454 | | | | | | 155,960,354 | | | | | | 8.07 | | |
Infinity Pharmaceuticals, Inc.
Royalty Interests |
| | | | | | | | | | 30,020,063 | | | | | | 31,949,826 | | | | | | 1.65 | | |
Karyopharm Therapeutics, Inc.
Royalty Interests |
| | | | | | | | | | 75,050,725 | | | | | | 85,382,711 | | | | | | 4.42 | | |
Krystexxa
Royalty Interests |
| | | | | | | | | | 24,714,772 | | | | | | 26,001,396 | | | | | | 1.35 | | |
La Jolla Pharma, LLC(2)
Royalty Interests |
| | | | | | | | | | 119,959,065 | | | | | | 78,065,123 | | | | | | 4.04 | | |
Lexiva/Telzir
Royalty Interests |
| | | | | | | | | | — | | | | | | 264,576 | | | | | | 0.01 | | |
Lyrica
Royalty Interests |
| | | | | | | | | | 268,203 | | | | | | 268,203 | | | | | | 0.01 | | |
Miotox, LLC
Royalty Interests |
| | | | | | | | | | 37,496,004 | | | | | | 37,496,004 | | | | | | 1.94 | | |
Myozyme
Royalty Interests |
| | | | | | | | | | 3,274,176 | | | | | | 3,274,176 | | | | | | 0.17 | | |
Nektar Therapeutics
Royalty Interests |
| | | | | | | | | | 150,249,361 | | | | | | 150,000,000 | | | | | | 7.76 | | |
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Orenitram
Royalty Interests |
| | | | | | | | | | 20,912,661 | | | | | | 21,836,936 | | | | | | 1.13 | | |
Paratek Royalty Corporation
Secured Promissory Note, 12%, May 1, 2029 |
| | | $ | 32,500,000 | | | | | | 31,903,893 | | | | | | 32,616,037 | | | | | | 1.69 | | |
Portola Pharmaceuticals, Inc.
Royalty Interests |
| | | | | | | | | | 125,850,165 | | | | | | 149,957,234 | | | | | | 7.76 | | |
Progenics Pharmaceuticals
Note, 9.5%, June 30, 2025 |
| | | $ | 32,552,521 | | | | | | 31,953,317 | | | | | | 32,752,358 | | | | | | 1.70 | | |
RedHill Biopharma Inc.
Note, 9.95%, February 23, 2026 |
| | | $ | 80,000,000 | | | | | | 80,041,148 | | | | | | 85,757,671 | | | | | | 4.44 | | |
ReGenXBio Inc.
Royalty Interests |
| | | | | | | | | | 196,129,549 | | | | | | 195,999,999 | | | | | | 10.15 | | |
Rutgers
Royalty Interests |
| | | | | | | | | | 9,092,801 | | | | | | 11,848,229 | | | | | | 0.61 | | |
Suneva Medical, Inc.
Note, 10.9% Cash, 10.9% PIK, December 31, 2021 |
| | | $ | 10,522,639 | | | | | | 11,176,567 | | | | | | 10,522,639 | | | | | | 0.54 | | |
Series AA Preferred Stock(2)
|
| | | | 9,200,000 | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.38 | | |
Total Suneva Medical, Inc.
|
| | | | | | | | | | 30,533,564 | | | | | | 17,882,639 | | | | | | 0.92 | | |
Triple Royalty Sub II LLC
Note, 9.5% Cash, 9.5% PIK, June 5, 2035 |
| | | $ | 209,285,872 | | | | | | 209,312,531 | | | | | | 210,301,909 | | | | | | 10.89 | | |
Vimpat
Royalty Interest |
| | | | | | | | | | 253,465,293 | | | | | | 287,960,628 | | | | | | 14.91 | | |
Total Direct Investments (United States)
|
| | | | | | | | | | 2,069,903,274 | | | | | | 2,233,548,049 | | | | | | 115.60 | | |
Interest in affiliated investment fund(1)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
HealthCare Royalty Partners II, L.P.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
LP Interest
|
| | | | | | | | | | 1,250,459 | | | | | | 1,710,360 | | | | | | 0.09 | | |
Total United States
|
| | | | | | | | | | 2,071,153,733 | | | | | | 2,235,258,409 | | | | | | 115.69 | | |
Japan | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Albireo
Royalty Interests |
| | | | | | | | | | 58,116,956 | | | | | | 92,294,222 | | | | | | 4.78 | | |
Inavir
Royalty Interests |
| | | | | | | | | | 31,212,457 | | | | | | 31,478,730 | | | | | | 1.63 | | |
Total Japan
|
| | | | | | | | | | 89,329,413 | | | | | | 123,772,952 | | | | | | 6.41 | | |
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Germany | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cetrotide
Royalty Interests |
| | | | | | | | | | 30,307,382 | | | | | | 29,869,751 | | | | | | 1.55 | | |
Eligard
Royalty Interests |
| | | | | | | | | | 2,276,956 | | | | | | 2,002,045 | | | | | | 0.10 | | |
Total Germany
|
| | | | | | | | | | 32,584,338 | | | | | | 31,871,796 | | | | | | 1.65 | | |
Switzerland | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Benlysta
Royalty Interests |
| | | | | | | | | | 28,447,129 | | | | | | 27,595,722 | | | | | | 1.42 | | |
Cardiorentis
Warrants(2) |
| | | | 1,272 | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Switzerland
|
| | | | | | | | | | 30,421,891 | | | | | | 27,595,722 | | | | | | 1.42 | | |
Total Investments
|
| | | | | | | | | $ | 2,223,489,375 | | | | | $ | 2,418,498,879 | | | | | | 125.17% | | |
Investment classification by type | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 1,569,596,583 | | | | | $ | 1,758,430,530 | | | | | | 91.00% | | |
Notes
|
| | | | | | | | | | 631,310,574 | | | | | | 650,997,989 | | | | | | 33.70 | | |
Preferred Stock
|
| | | | | | | | | | 19,356,997 | | | | | | 7,360,000 | | | | | | 0.38 | | |
LP Interest
|
| | | | | | | | | | 1,250,459 | | | | | | 1,710,360 | | | | | | 0.09 | | |
Warrants
|
| | | | | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Investments
|
| | | | | | | | | $ | 2,223,489,375 | | | | | $ | 2,418,498,879 | | | | | | 125.17% | | |
|
| | |
As of December 31, 2019
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Direct Investments(1) | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Acorda Therapeutics, Inc.
Royalty Interests |
| | | | | | | | | $ | 26,961,666 | | | | | $ | 25,397,548 | | | | | | 1.77% | | |
Adamas Pharma, LLC
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Note, 11% Cash, 11% PIK, December 31, 2026
|
| | | $ | 116,356,294 | | | | | | 116,484,385 | | | | | | 125,229,979 | | | | | | 8.71 | | |
Aerial BioPharma, LLC
Royalty Interests |
| | | | | | | | | | 100,000,954 | | | | | | 108,001,459 | | | | | | 7.51 | | |
Agenus, Inc.
Royalty Interests |
| | | | | | | | | | 190,307,425 | | | | | | 284,373,376 | | | | | | 19.77 | | |
Cervarix
Royalty Interests |
| | | | | | | | | | 1,319,799 | | | | | | 161,661 | | | | | | 0.01 | | |
Coherus Biosciences
Senior Convertible Note, 8.2%, March 31, 2022 |
| | | $ | 75,000,000 | | | | | | 75,000,000 | | | | | | 79,025,604 | | | | | | 5.50 | | |
Senior Secured Term Loan, Variable, January 7, 2025
|
| | | $ | 75,000,000 | | | | | | 74,094,954 | | | | | | 75,275,292 | | | | | | 5.23 | | |
Total Coherus Biosciences
|
| | | | | | | | | | 149,094,954 | | | | | | 154,300,896 | | | | | | 10.73 | | |
Infinity Pharmaceuticals, Inc.
Royalty Interests |
| | | | | | | | | | 30,014,963 | | | | | | 32,352,574 | | | | | | 2.25 | | |
Karyopharm Therapeutics, Inc.
Royalty Interests |
| | | | | | | | | | 75,050,725 | | | | | | 77,498,299 | | | | | | 5.39 | | |
Krystexxa
Royalty Interests |
| | | | | | | | | | 27,058,326 | | | | | | 28,555,079 | | | | | | 1.99 | | |
La Jolla Pharma, LLC(2)
Royalty Interests |
| | | | | | | | | | 122,740,774 | | | | | | 72,779,552 | | | | | | 5.06 | | |
Lyrica
Royalty Interests |
| | | | | | | | | | 8,090,552 | | | | | | 8,090,552 | | | | | | 0.56 | | |
Miotox, LLC
Royalty Interests |
| | | | | | | | | | 33,856,062 | | | | | | 41,928,133 | | | | | | 2.92 | | |
Myozyme
Royalty Interests |
| | | | | | | | | | 8,976,792 | | | | | | 7,164,592 | | | | | | 0.50 | | |
Orenitram
Royalty Interests |
| | | | | | | | | | 24,842,475 | | | | | | 24,842,475 | | | | | | 1.73 | | |
| | |
As of December 31, 2019
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Paratek Royalty Corporation
Secured Promissory Note, 12%, May 1, 2029 |
| | | $ | 32,500,000 | | | | | | 31,845,274 | | | | | | 32,709,013 | | | | | | 2.27 | | |
Portola Pharmaceuticals, Inc.
Royalty Interests |
| | | | | | | | | | 125,850,165 | | | | | | 142,240,842 | | | | | | 9.89 | | |
Senior Secured Loan, 9.75%, February 28, 2025
|
| | | $ | 62,500,000 | | | | | | 61,570,056 | | | | | | 62,865,317 | | | | | | 4.37 | | |
Total Portola Pharmaceuticals, Inc.
|
| | | | | | | | | | 187,420,221 | | | | | | 205,106,159 | | | | | | 14.26 | | |
Progenics Pharmaceuticals
Note, 9.5%, June 30, 2025 |
| | | $ | 39,519,705 | | | | | | 38,461,264 | | | | | | 39,755,207 | | | | | | 2.76 | | |
Rutgers
Royalty Interests |
| | | | | | | | | | 9,889,633 | | | | | | 11,601,982 | | | | | | 0.81 | | |
Suneva Medical, Inc.
Note, 10.9% Cash, 10.9% PIK, May 31, 2021 |
| | | $ | 23,610,214 | | | | | | 24,264,142 | | | | | | 24,136,470 | | | | | | 1.68 | | |
Series 1-C Preferred Stock(2)
|
| | | | 5,000,000 | | | | | | 4,758,631 | | | | | | — | | | | | | — | | |
Total Suneva Medical, Inc.
|
| | | | | | | | | | 29,022,773 | | | | | | 24,136,470 | | | | | | 1.68 | | |
Triple Royalty Sub, LLC
Note, 9% Cash, 9% PIK, April 15, 2033 |
| | | $ | 47,069,503 | | | | | | 47,612,349 | | | | | | 46,263,161 | | | | | | 3.22 | | |
Total Direct Investments (United States)
|
| | | | | | | | | | 1,259,051,366 | | | | | | 1,350,248,167 | | | | | | 93.90 | | |
Interest in affiliated investment fund(1)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
HealthCare Royalty Partners II, L.P.
LP Interest |
| | | | | | | | | | 1,149,441 | | | | | | 1,674,819 | | | | | | 0.12 | | |
Total United States
|
| | | | | | | | | | 1,260,200,807 | | | | | | 1,351,922,986 | | | | | | 94.02 | | |
Japan | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Albireo
Royalty Interests |
| | | | | | | | | | 45,182,486 | | | | | | 53,122,150 | | | | | | 3.69 | | |
Inavir
Royalty Interests |
| | | | | | | | | | 32,172,073 | | | | | | 32,941,166 | | | | | | 2.29 | | |
Total Japan
|
| | | | | | | | | | 77,354,559 | | | | | | 86,063,316 | | | | | | 5.98 | | |
|
| | |
As of December 31, 2019
|
| |||||||||||||||||||||
(in U.S. Dollars)
|
| |
Shares/
Principal Amount |
| |
Current
Cost |
| |
Fair
Value |
| |
Fair Value
as a % of Partners’ Capital |
| ||||||||||||
Germany | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cetrotide
Royalty Interests |
| | | | | | | | | | 39,026,447 | | | | | | 37,831,085 | | | | | | 2.63 | | |
Eligard
Royalty Interests |
| | | | | | | | | | 5,099,670 | | | | | | 3,548,040 | | | | | | 0.25 | | |
Total Germany
|
| | | | | | | | | | 44,126,117 | | | | | | 41,379,125 | | | | | | 2.88 | | |
Switzerland | | | | | | | | | | | | | | | | | | | | | | | | | |
Pharmaceuticals
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Benlysta
Royalty Interests |
| | | | | | | | | | 31,962,406 | | | | | | 31,962,406 | | | | | | 2.22 | | |
Cardiorentis
Warrants(2) |
| | | | 1,272 | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Switzerland
|
| | | | | | | | | | 33,937,168 | | | | | | 31,962,406 | | | | | | 2.22 | | |
Total Investments
|
| | | | | | | | | $ | 1,415,618,651 | | | | | $ | 1,511,327,833 | | | | | | 105.10% | | |
Investment classification by type | | | | | | | | | | | | | | | | | | | | | | | | | |
Royalty Interests
|
| | | | | | | | | $ | 938,403,393 | | | | | $ | 1,024,392,971 | | | | | | 71.24% | | |
Notes
|
| | | | | | | | | | 469,332,424 | | | | | | 485,260,043 | | | | | | 33.74 | | |
LP Interest
|
| | | | | | | | | | 1,149,441 | | | | | | 1,674,819 | | | | | | 0.12 | | |
Preferred Stock
|
| | | | | | | | | | 4,758,631 | | | | | | — | | | | | | — | | |
Warrants
|
| | | | | | | | | | 1,974,762 | | | | | | — | | | | | | — | | |
Total Investments
|
| | | | | | | | | $ | 1,415,618,651 | | | | | $ | 1,511,327,833 | | | | | | 105.10% | | |
|
| | |
For the Years Ended
|
| |||||||||
(in U.S. Dollars)
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Investment income | | | | | | | | | | | | | |
Royalty income
|
| | | $ | 166,467,435 | | | | | $ | 130,792,412 | | |
Note interest
|
| | | | 50,397,184 | | | | | | 38,060,174 | | |
Paid-in-kind interest
|
| | | | 11,952,943 | | | | | | 8,399,147 | | |
Other Income
|
| | | | 9,727 | | | | | | 53,128 | | |
Total investment income
|
| | | | 228,827,289 | | | | | | 177,304,861 | | |
Expenses | | | | | | | | | | | | | |
Management fees (Note 6)
|
| | | | 26,666,102 | | | | | | 20,537,612 | | |
Performance fees (Note 6)
|
| | | | 8,530,752 | | | | | | 4,267,404 | | |
Interest expense
|
| | | | 7,294,277 | | | | | | 1,219,183 | | |
Investment research and other expenses
|
| | | | 1,767,354 | | | | | | 2,145,690 | | |
Professional fees
|
| | | | 1,631,933 | | | | | | 1,308,113 | | |
Organizational expenses
|
| | | | 119,459 | | | | | | 692,454 | | |
Total expenses
|
| | | | 46,009,877 | | | | | | 30,170,456 | | |
Management fees waived
|
| | | | (732,915) | | | | | | (492,414) | | |
Net expenses
|
| | | | 45,276,962 | | | | | | 29,678,042 | | |
Net investment income
|
| | | | 183,550,327 | | | | | | 147,626,819 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | | | | | | | | | |
Net realized gain (loss) on investments
|
| | | | 11,102,470 | | | | | | (7,705,851) | | |
Net change in unrealized gain (loss) on investments
|
| | | | 58,599,027 | | | | | | 32,631,338 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 69,701,497 | | | | | | 24,925,487 | | |
Net increase in partners’ capital resulting from operations
|
| | | $ | 253,251,824 | | | | | $ | 172,552,306 | | |
(in U.S. Dollars)
|
| |
General
Partners |
| |
Limited
Partners |
| |
Total
|
| |||||||||
Partners’ capital at January 1, 2020
|
| | | $ | 47,834,522 | | | | | $ | 1,390,096,991 | | | | | $ | 1,437,931,513 | | |
Capital contributions
|
| | | | 3,730,932 | | | | | | 555,891,167 | | | | | | 559,622,099 | | |
Distributions
|
| | | | (1,909,113) | | | | | | (316,943,129) | | | | | | (318,852,242) | | |
Syndication costs
|
| | | | (3) | | | | | | (295) | | | | | | (298) | | |
Net investment income
|
| | | | 1,654,819 | | | | | | 181,895,508 | | | | | | 183,550,327 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 658,792 | | | | | | 69,042,705 | | | | | | 69,701,497 | | |
Carried interest
|
| | | | 33,068,047 | | | | | | (33,068,047) | | | | | | — | | |
Partners’ capital at December 31, 2020
|
| | | $ | 85,037,996 | | | | | $ | 1,846,914,900 | | | | | $ | 1,931,952,896 | | |
| | |
General
Partners |
| |
Limited
Partners |
| |
Total
|
| |||||||||
Partners’ capital at January 1, 2019
|
| | | $ | 29,213,705 | | | | | $ | 1,142,287,554 | | | | | $ | 1,171,501,259 | | |
Capital contributions
|
| | | | 3,456,136 | | | | | | 385,055,779 | | | | | | 388,511,915 | | |
Return of capital contributions(1)
|
| | | | (425,000) | | | | | | (55,585,046) | | | | | | (56,010,046) | | |
Distributions
|
| | | | (1,282,781) | | | | | | (236,811,685) | | | | | | (238,094,466) | | |
Syndication costs
|
| | | | (5,295) | | | | | | (524,160) | | | | | | (529,455) | | |
Net investment income
|
| | | | 1,030,048 | | | | | | 146,596,771 | | | | | | 147,626,819 | | |
Net realized and unrealized gain (loss) on investments
|
| | | | 138,811 | | | | | | 24,786,676 | | | | | | 24,925,487 | | |
Carried interest
|
| | | | 15,708,898 | | | | | | (15,708,898) | | | | | | — | | |
Partners’ capital at December 31, 2019
|
| | | $ | 47,834,522 | | | | | $ | 1,390,096,991 | | | | | $ | 1,437,931,513 | | |
| | |
For the Years Ended
|
| |||||||||
(in U.S. dollars)
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Cash collections from royalty interests
|
| | | $ | 227,439,825 | | | | | $ | 171,499,762 | | |
Cash collections from notes
|
| | | | 55,803,111 | | | | | | 45,836,039 | | |
Proceeds from sale of investments
|
| | | | 121,837,989 | | | | | | 35,615,865 | | |
Payments for operating costs and professional
services |
| | | | (34,485,229) | | | | | | (28,477,863) | | |
Interest paid
|
| | | | (6,455,966) | | | | | | (1,072,560) | | |
Acquisitions of investments
|
| | | | (1,013,679,845) | | | | | | (397,649,441) | | |
Net cash used in operating activities
|
| | | | (649,540,115) | | | | | | (174,248,198) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Distributions
|
| | | | (318,852,242) | | | | | | (238,094,466) | | |
Capital contributions
|
| | | | 559,622,099 | | | | | | 386,012,379 | | |
Return of capital contributions
|
| | | | — | | | | | | (56,010,046) | | |
Syndication costs
|
| | | | (298) | | | | | | (529,455) | | |
Payments on Revolving Credit
|
| | | | (26,424,917) | | | | | | — | | |
Borrowings on Revolving Credit
|
| | | | 436,783,136 | | | | | | 82,641,781 | | |
Net cash provided by financing activities
|
| | | | 651,127,778 | | | | | | 174,020,193 | | |
Net change in cash and cash equivalents
|
| | | | 1,587,663 | | | | | | (228,005) | | |
Cash and cash equivalents, beginning of year
|
| | | | 10,145,258 | | | | | | 10,373,263 | | |
Cash and cash equivalents, end of year
|
| | | $ | 11,732,921 | | | | | $ | 10,145,258 | | |
|
Master Funds
|
| |
Organization Date
|
| |
Commencement of Operations
|
|
|
HealthCare Royalty Partners III, L.P.
|
| |
July 17, 2013
|
| |
July 17, 2013
|
|
|
HealthCare Royalty Partners IV, L.P.
|
| |
November 28, 2018
|
| |
January 3, 2019
|
|
|
HCRP Overflow Fund, L.P.
|
| |
February 2, 2010
|
| |
February 4, 2010
|
|
|
HCR Stafford Fund, L.P.
|
| |
June 28, 2016
|
| |
June 28, 2016
|
|
|
HCR Molag Fund, L.P.
|
| |
August 8, 2017
|
| |
August 8, 2017
|
|
|
HCR H.O.P. Fund, L.P.
|
| |
September 28, 2016
|
| |
September 28, 2016
|
|
|
HCR Potomac Fund, L.P.
|
| |
December 16, 2019
|
| |
February 26, 2020
|
|
|
HCR Canary Fund, L.P.
|
| |
July 31, 2020
|
| |
August 6, 2020
|
|
|
PPCF Harris Feeder, L.P.
|
| |
August 5, 2020
|
| |
August 5, 2020
|
|
|
Feeder Funds
|
| |
Organization Date
|
| |
Commencement of Operations
|
|
|
HealthCare Royalty Partners III-A, L.P.
|
| |
September 28, 2016
|
| |
September 28, 2016
|
|
|
HealthCare Royalty Partners IV-A, L.P.
|
| |
November 28, 2018
|
| |
January 3, 2019
|
|
|
Feeder Fund
|
| |
Affiliated Master Fund
|
| |
Feeder Fund ownership of
capital commitments in Master Fund |
| |
Unfunded capital
commitments |
|
|
HealthCare Royalty Partners III-A, L.P.
|
| |
HealthCare Royalty Partners III, L.P.
|
| |
11.8%
|
| |
5,617,034
|
|
|
HealthCare Royalty Partners IV-A, L.P.
|
| |
HealthCare Royalty Partners IV, L.P.
|
| |
20.3%
|
| |
245,149,770
|
|
|
General Partner
|
| |
Fund
|
|
|
HealthCare Royalty GP III, LLC
|
| |
HealthCare Royalty Partners III, L.P.
|
|
|
HealthCare Royalty GP III, LLC
|
| |
HealthCare Royalty Partners III-A, L.P.
|
|
|
HealthCare Royalty GP IV, LLC
|
| |
HealthCare Royalty Partners IV, L.P.
|
|
|
HealthCare Royalty GP IV, LLC
|
| |
HealthCare Royalty Partners IV-A, L.P.
|
|
|
HCRP Overflow GP, LLC
|
| |
HCRP Overflow Fund, L.P.
|
|
|
HCR Stafford Fund GP, LLC
|
| |
HCR Stafford Fund, L.P.
|
|
|
HCR Molag Fund GP, LLC
|
| |
HCR Molag Fund, L.P.
|
|
|
HCR H.O.P. Fund GP, LLC
|
| |
HCR H.O.P. Fund, L.P.
|
|
|
HCR Potomac Fund, GP LLC
|
| |
HCR Potomac Fund, L.P.
|
|
|
HCR Canary Fund, GP LLC
|
| |
HCR Canary Fund, L.P.
|
|
|
HCR Harris Feeder GP, LLC
|
| |
PPCF Harris Feeder, L.P.
|
|
| | |
Assets at Fair Value as of December 31, 2020
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Royalty Interests
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,758,430,530 | | | | | $ | 1,758,430,530 | | |
Notes
|
| | | | — | | | | | | — | | | | | | 650,997,989 | | | | | | 650,997,989 | | |
Preferred Stock
|
| | | | — | | | | | | — | | | | | | 7,360,000 | | | | | | 7,360,000 | | |
LP Interest
|
| | | | — | | | | | | — | | | | | | 1,710,360 | | | | | | 1,710,360 | | |
Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 2,418,498,879 | | | | | $ | 2,418,498,879 | | |
| | |
Assets at Fair Value as of December 31, 2019
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Royalty Interests
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,024,392,971 | | | | | $ | 1,024,392,971 | | |
Notes
|
| | | | — | | | | | | — | | | | | | 485,260,043 | | | | | | 485,260,043 | | |
LP Interest
|
| | | | — | | | | | | — | | | | | | 1,674,819 | | | | | | 1,674,819 | | |
Preferred Stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 1,511,327,833 | | | | | $ | 1,511,327,833 | | |
Fair Value Measurements Using Level 3 Inputs for the year ended December 31, 2020
|
| ||||||||||||||||||||||||||||||
| | |
Royalty
Interests |
| |
Notes
|
| |
Preferred
Stock |
| |
LP Interest
|
| |
Total
|
| |||||||||||||||
Balance at January 1, 2020
|
| | | $ | 1,024,392,971 | | | | | $ | 485,260,043 | | | | | $ | — | | | | | $ | 1,674,819 | | | | | $ | 1,511,327,833 | | |
Purchases of investments
|
| | | | 733,679,845 | | | | | | 280,000,000 | | | | | | — | | | | | | — | | | | | | 1,013,679,845 | | |
Transfer In
|
| | | | — | | | | | | — | | | | | | 14,598,366 | | | | | | — | | | | | | 14,598,366 | | |
Transfer Out
|
| | | | — | | | | | | (14,598,366) | | | | | | | | | | | | — | | | | | | (14,598,366) | | |
Paid-in-kind interest
|
| | | | — | | | | | | 11,952,943 | | | | | | — | | | | | | — | | | | | | 11,952,943 | | |
Amortization of note discount
|
| | | | — | | | | | | 1,178,244 | | | | | | — | | | | | | — | | | | | | 1,178,244 | | |
Capitalized investment expenses
|
| | | | 477,470 | | | | | | 77,668 | | | | | | — | | | | | | — | | | | | | 555,138 | | |
Investment cost paydowns
|
| | | | (101,691,325) | | | | | | (6,967,183) | | | | | | — | | | | | | (101,433) | | | | | | (108,759,941) | | |
Unrealized royalty income
|
| | | | 40,701,309 | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,701,309 | | |
Proceeds from sale of investments
|
| | | | — | | | | | | (121,837,989) | | | | | | — | | | | | | — | | | | | | (121,837,989) | | |
Net change in unrealized gain (loss) on investments
|
| | | | 62,012,898 | | | | | | 3,788,539 | | | | | | (7,238,366) | | | | | | 35,956 | | | | | | 58,599,027 | | |
Net realized gain (loss) on investments
|
| | | | (1,142,638) | | | | | | 12,144,090 | | | | | | — | | | | | | 101,018 | | | | | | 11,102,470 | | |
Balance at December 31, 2020
|
| | | $ | 1,758,430,530 | | | | | $ | 650,997,989 | | | | | $ | 7,360,000 | | | | | $ | 1,710,360 | | | | | $ | 2,418,498,879 | | |
Change in unrealized gain (loss) related to investments still held at December 31, 2020
|
| | | $ | 60,946,302 | | | | | $ | 4,165,113 | | | | | $ | (7,238,366) | | | | | $ | 35,956 | | | | | $ | 57,909,005 | | |
Fair Value Measurements Using Level 3 Inputs for the year ended December 31, 2019
|
| ||||||||||||||||||||||||||||||
| | |
Royalty
Interests |
| |
Notes
|
| |
LP Interest
|
| |
Preferred
Stock |
| |
Total
|
| |||||||||||||||
Balance at January 1, 2019
|
| | | $ | 819,197,552 | | | | | $ | 344,595,521 | | | | | $ | — | | | | | $ | 1,184,536 | | | | | $ | 1,164,977,609 | | |
Purchases of investments
|
| | | | 226,500,000 | | | | | | 170,000,000 | | | | | | 1,149,441 | | | | | | — | | | | | | 397,649,441 | | |
Paid-in-kind interest
|
| | | | — | | | | | | 8,399,147 | | | | | | — | | | | | | — | | | | | | 8,399,147 | | |
Amortization of note discount
|
| | | | — | | | | | | 368,945 | | | | | | — | | | | | | — | | | | | | 368,945 | | |
Capitalized investment expenses
|
| | | | 232,860 | | | | | | 76,795 | | | | | | — | | | | | | — | | | | | | 309,655 | | |
Investment cost paydowns
|
| | | | (71,155,853) | | | | | | (6,272,983) | | | | | | — | | | | | | — | | | | | | (77,428,836) | | |
Unrealized royalty income
|
| | | | 30,448,500 | | | | | | — | | | | | | — | | | | | | — | | | | | | 30,448,500 | | |
Proceeds from sale of investments
|
| | | | — | | | | | | (35,615,865) | | | | | | — | | | | | | — | | | | | | (35,615,865) | | |
Original issue discount on new purchases
|
| | | | — | | | | | | (2,706,250) | | | | | | — | | | | | | — | | | | | | (2,706,250) | | |
Net change in unrealized gain (loss) on
investments |
| | | | 26,723,022 | | | | | | 6,567,474 | | | | | | 525,378 | | | | | | (1,184,536) | | | | | | 32,631,338 | | |
Net realized gain (loss) on
investments |
| | | | (7,553,110) | | | | | | (152,741) | | | | | | — | | | | | | — | | | | | | (7,705,851) | | |
Balance at December 31, 2019
|
| | | $ | 1,024,392,971 | | | | | $ | 485,260,043 | | | | | $ | 1,674,819 | | | | | $ | — | | | | | $ | 1,511,327,833 | | |
Change in unrealized gain (loss) related to investments still held at December 31, 2019
|
| | | $ | 19,814,664 | | | | | $ | 6,567,474 | | | | | $ | 525,378 | | | | | $ | — | | | | | $ | 26,907,516 | | |
| | |
Qualitative Information about Level 3 Fair Value Measurements as of December 31, 2020
|
| ||||||||||||
|
Fair Value at
December 31, 2020 |
| |
Valuation Techniques
|
| |
Unobservable Inputs
|
| |
Range (weighted average)
|
| |||||
Royalty Interests(1)
|
| | | $ | 1,412,430,531 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 – 4 years Discount rates: 6% – 15% (11)% |
|
Notes(2) | | | | $ | 640,475,350 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
1 – 9 years Discount rates: 10% – 14% (11)% |
|
LP Interest
|
| | | $ | 1,710,360 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
N/A
|
|
Preferred Stock(3)
|
| | | $ | — | | | |
N/A
|
| |
N/A
|
| |
N/A
|
|
| | |
Qualitative Information about Level 3 Fair Value Measurements as of December 31, 2019
|
| ||||||||||||
|
Fair Value at
December 31, 2019 |
| |
Valuation Techniques
|
| |
Unobservable Inputs
|
| |
Range (weighted average)
|
| |||||
Royalty Interests
|
| | | $ | 1,024,392,971 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
2 – 13 years Discount rates: 6% – 15% (12)% |
|
Notes
|
| | | $ | 485,260,043 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
Timing of projected cash flows:
2 -11 years Discount rates: 9% – 13% (11)% |
|
LP Interest
|
| | | $ | 1,674,819 | | | |
Discounted cash flows
|
| |
Projected cash flows and
discount rate |
| |
N/A
|
|
| | |
For the Years Ended
|
| |||||||||
|
December 31, 2020
|
| |
December 31, 2019
|
| ||||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net increase in partners’ capital resulting from
operations |
| | | $ | 253,251,824 | | | | | | 172,552,306 | | |
Adjustments to reconcile net increase in partners’ capital resulting from operations to net cash used in operating activities
|
| | | | | | | | | | | | |
Purchases of investments
|
| | | | (1,013,679,845) | | | | | | (397,649,441) | | |
Paid-in-kind interest
|
| | | | (11,952,943) | | | | | | (8,399,147) | | |
Amortization of original issue discount
|
| | | | (1,178,244) | | | | | | (368,945) | | |
Capitalized investment expenses
|
| | | | (555,138) | | | | | | (309,655) | | |
Proceeds from sale of investments
|
| | | | 121,837,989 | | | | | | 35,615,865 | | |
Investment cost paydowns
|
| | | | 108,759,941 | | | | | | 77,428,836 | | |
Original issue discount on new purchases
|
| | | | — | | | | | | 2,706,250 | | |
Net realized gain (loss) on investments
|
| | | | (11,102,470) | | | | | | 7,705,851 | | |
Unrealized royalty income
|
| | | | (40,701,309) | | | | | | (30,448,500) | | |
Net change in unrealized gain (loss) on investments
|
| | | | (58,599,027) | | | | | | (32,631,338) | | |
Changes in assets and liabilities:
|
| | | | | | | | | | | | |
Increase in interest receivable
|
| | | | (494,172) | | | | | | (887,551) | | |
Increase in prepaid assets
|
| | | | (249,238) | | | | | | — | | |
Increase in deferred borrowing costs
|
| | | | (247,470) | | | | | | (1,050,347) | | |
Increase in receivable from affiliate
|
| | | | (17,625) | | | | | | — | | |
Increase in Performance Fee payable to Manager
|
| | | | 3,141,670 | | | | | | 1,745,532 | | |
Increase / (decrease) in management fees
payable |
| | | | 891,534 | | | | | | (500,000) | | |
Increase in accrued expenses and other liabilities
|
| | | | 630,573 | | | | | | 130,200 | | |
Increase / (decrease) in due to Manager
|
| | | | 567,832 | | | | | | (34,737) | | |
Increase in interest payable
|
| | | | 156,003 | | | | | | 146,623 | | |
Net cash used in operating activities
|
| | | | (649,540,115) | | | | | | (174,248,198) | | |
|
Capital Commitments and Contributions as of December 31, 2020
|
| ||||||||||||||||||||||||
| | | |
Capital
Commitments |
| |
Cumulative Capital
Contributions |
| |
Unfunded Capital
Commitments |
| |
% Funded
|
| ||||||||||||
|
Limited Partners
|
| | | | 4,338,664,646 | | | | | | 2,856,212,980 | | | | | | 1,496,991,155 | | | | | | 66% | | |
|
General Partners
|
| | | | 31,393,599 | | | | | | 16,877,550 | | | | | | 14,688,526 | | | | | | 54% | | |
|
Total
|
| | | | 4,370,058,245 | | | | | | 2,873,090,529 | | | | | | 1,511,679,681 | | | | | | 66% | | |
|
Capital Commitments and Contributions as of December 31, 2019
|
| ||||||||||||||||||||||||
| | | |
Capital
Commitments |
| |
Cumulative Capital
Contributions |
| |
Unfunded Capital
Commitments |
| |
% Funded
|
| ||||||||||||
|
Limited Partners
|
| | | | 3,918,853,859 | | | | | | 2,309,350,727 | | | | | | 1,588,432,529 | | | | | | 59% | | |
|
General Partners
|
| | | | 28,157,802 | | | | | | 13,146,617 | | | | | | 14,823,962 | | | | | | 47% | | |
|
Total
|
| | | | 3,947,011,661 | | | | | | 2,322,497,344 | | | | | | 1,603,256,491 | | | | | | 59% | | |
Year Ended December 31, 2020
|
| |
Limited
Partners |
| |||
Ratios to average limited partners’ capital | | | | | | | |
Expenses before carried interest and performance fee allocation
|
| | | | 2.38% | | |
Carried interest and performance fee allocation
|
| | | | 2.70% | | |
Expenses after carried interest and performance fee allocation
|
| | | | 5.08% | | |
Net investment income
|
| | | | 11.80% | | |
Internal rate of return | | | | | | | |
Inception to December 31, 2020
|
| | | | 12.30% | | |
Year Ended December 31, 2019
|
| |
Limited
Partners |
| |||
Ratios to average limited partners’ capital | | | | | | | |
Expenses before carried interest and performance fee allocation
|
| | | | 1.92% | | |
Carried interest and performance fee allocation
|
| | | | 1.51% | | |
Expenses after carried interest and performance fee allocation
|
| | | | 3.43% | | |
Net investment income
|
| | | | 11.09% | | |
Internal rate of return | | | | | | | |
Inception to December 31, 2019
|
| | | | 11.41% | | |
Inception to December 31, 2018
|
| | | | 10.87% | | |
| | |
Amount to Be Paid
|
| |||
SEC registration fee
|
| | | $ | * | | |
FINRA filing fee
|
| | | | * | | |
Exchange listing fee
|
| | | | * | | |
Blue sky fees and expenses
|
| | | | * | | |
Printing and engraving expenses
|
| | | | * | | |
Legal fees and expenses
|
| | | | * | | |
Accounting fees and expenses
|
| | | | * | | |
Transfer agent and registrar fees
|
| | | | * | | |
Miscellaneous fees and expenses
|
| | | | * | | |
Total
|
| | | $ | * | | |
| 1.1* | | | Form of Underwriting Agreement | |
| 3.1# | | | | |
| 3.2# | | | | |
| 4.1* | | | Form of Class A Common Stock Certificate | |
| 5.1# | | | Form of Opinion of Morgan, Lewis & Bockius LLP as to the validity of the shares of Class A common stock | |
| 10.1# | | | | |
| 10.2# | | | | |
| 10.3†# | | | | |
| 10.4†*# | | | Form of Equity Performance Award Agreement | |
| 10.5# | | | | |
| 10.6# | | | | |
| 10.7# | | | | |
| 10.8**# | | | | |
| 10.9**# | | | | |
| 10.10**# | | | Royalty Interest Acquisition Agreement, dated as of April 22, 2016, between Aviragen Therapeutics, Inc., Biota Scientific Management Pty. Ltd. and Biota Holdings Pty Ltd. and Healthcare Royalty Partners III, L.P. | |
| 10.11# | | | | |
| 21.1* | | | List of subsidiaries | |
| 23.1 | | | | |
| 23.2 | | | | |
| 23.3# | | | | |
| 24.1# | | | Power of Attorney (included on the signature page to the original filing of this registration statement) | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Clarke B. Futch
Clarke B. Futch
|
| |
Chairman, Chief Executive Officer, and Director
(Principal Executive Officer) |
| | July 16, 2021 | |
|
/s/ Christopher A. White
Christopher A. White
|
| |
President, Chief Financial Officer, and Director
(Principal Financial Officer) |
| | July 16, 2021 | |
|
/s/ Thomas K. Conner
Thomas K. Conner
|
| |
Chief Accounting Officer and Treasurer
(Principal Accounting Officer) |
| | July 16, 2021 | |
|
|
| | Director | | | July 16, 2021 | |
|
|
| | Director | | | July 16, 2021 | |
|
|
| | Director | | | July 16, 2021 | |
|
|
| | Director | | | July 16, 2021 | |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Healthcare Royalty, Inc. of our report dated May 5, 2021 relating to the combined financial statements of HealthCare Royalty Partners III, L.P., HealthCare Royalty Partners IV, L.P., HCRP Overflow Fund, L.P., HCR Stafford Fund, L.P., HCR Molag Fund, L.P., HCR H.O.P. Fund, L.P., HCR Potomac Fund, L.P., HCR Canary Fund, L.P., PPCF Harris Feeder, L.P., HealthCare Royalty Partners III-A, L.P., and HealthCare Royalty Partners IV-A, L.P., which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
July 16, 2021
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