Royalty Pharma $1.1 billion acquisition of its external manager and $3 billion share repurchase

Davis Polk is advising the board of directors of Royalty Pharma plc on the acquisition of its external manager, RP Management, LLC, for approximately 24.5 million shares of Royalty Pharma equity that will vest over five to nine years, approximately $100 million in cash and the assumption of $380 million of existing debt. The total transaction value is approximately $1.1 billion. The closing of the internalization transaction will be subject to shareholders’ approval of the issuance of the share consideration and other customary closing conditions, including required regulatory approvals.

Davis Polk is also advising the board of directors of Royalty Pharma on a $3 billion repurchase program. In 2025, Royalty Pharma intends to repurchase $2 billion of shares, subject to market conditions. The total amount of shares repurchased will depend on the discount to the intrinsic value at which the shares are trading.

Founded in 1996, Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry, collaborating with innovators from academic institutions, research hospitals and non-profits through small and mid-cap biotechnology companies to leading global pharmaceutical companies. Royalty Pharma has assembled a portfolio of royalties which entitles it to payments based directly on the top-line sales of many of the industry’s leading therapies.

The Davis Polk corporate team includes partners Richard D. Truesdell Jr., Harold Birnbaum and Simon Witty and associates F. Adam Abulawi and Evan McQuiston. Counsel Simon J Little is providing capital markets advice. Partner Leor Landa and counsel Benjamin Milder are providing investment management advice. Partner Michael Mollerus is providing tax advice. Partner Scott M. Herrig is providing finance advice. Members of the Davis Polk team are based in the New York and London offices.