Royalty Pharma Raises 2026 Receipts Outlook as Q3 Grows 9%

Royalty Pharma plc (Nasdaq: RPRX) raised its full-year 2026 Portfolio Receipts forecast after third-quarter receipts grew 9%, reflecting continued gains across its biopharma royalty portfolio. The company now expects Portfolio Receipts of $3.50 billion to $3.55 billion, excluding transactions announced after November 4, up from its previous range of $3.40 billion to $3.50 billion.

The revised outlook assumes Royalty Receipts will grow about 10% to 11% year over year, compared with the prior expectation of 7% to 10%. Royalty Pharma attributed the change to strong portfolio performance. Milestones and other contractual receipts, which are more variable, are still expected to decline to about $65 million in 2026 from $128 million in 2025.

Receipts rise as portfolio growth offsets expiries

Third-quarter Portfolio Receipts reached $890 million, up 9% from a year earlier. Royalty Receipts, the company’s recurring cash inflows tied to product sales, also increased 9% to $883 million, while milestones and other contractual receipts were $7 million.

Non-GAAP Adjusted EBITDA was $840 million, equal to 94.4% of Portfolio Receipts, after $50 million of operating and professional costs. Portfolio Cash Flow, another non-GAAP measure representing cash available for new royalty investments, debt repayment or shareholder returns, totaled $673 million after $167 million of net interest paid.

For the first nine months of 2026, Royalty Receipts rose 12% to $2.54 billion. Growth in Tremfya, Voranigo, Evrysdi and Imdelltra supported the result, while Imbruvica was a headwind. Royalty expiries, primarily involving Promacta, Farxiga/Onglyza and Soliqua, reduced receipts by $105 million. Including $50 million of milestone and other contractual payments, year-to-date Portfolio Receipts increased 9% to $2.59 billion.

Royalty Pharma reported a 14.3% return on invested capital and a 20.2% return on invested equity for the 12 months ended in the third quarter. The company said these measures reflect cash generated relative to active invested capital and equity, respectively.

New royalties expand the approved-product portfolio

Royalty Pharma deployed $1.24 billion of capital during the first nine months of 2026. As of November 3, capital deployment for the year had reached $1.6 billion, with announced transaction value totaling $1.9 billion.

Recent investments included a royalty on Takeda’s Mimrylo, an approved treatment for polycythemia vera. Royalty Pharma agreed to pay $100 million in total, including $50 million upfront, for a 1% royalty on worldwide sales up to $1.5 billion and 0.75% above that level. It is also eligible for as much as $23 million in milestone payments. The company expects the transaction to generate an unlevered internal rate of return in the low double digits.

Royalty Pharma also paid $100 million upfront for a 3% royalty on worldwide sales of Arcutis Biotherapeutics’ Zoryve, a once-daily topical treatment for plaque psoriasis, seborrheic dermatitis and atopic dermatitis. Arcutis has provided 2026 Zoryve sales guidance of $525 million to $540 million and has set a peak-sales target of $2.3 billion to $3.0 billion for its current indications. Royalty Pharma said the transaction’s expected unlevered return falls within its target range for approved products.

The broader portfolio recorded several clinical and regulatory developments during 2026. These included U.S. Food and Drug Administration approvals for Revolution Medicines’ Rasonque in second-line metastatic pancreatic ductal adenocarcinoma and Teva’s Weltruza in schizophrenia, as well as positive Phase 3 results for Amgen’s Imdelltra in first-line small cell lung cancer and Pharvaris’ extended-release deucrictibant in hereditary angioedema prophylaxis.

Royalty Pharma identified more than $30 billion of potential, non-risk-adjusted peak sales across its late-stage development portfolio, corresponding to more than $1.7 billion in potential peak royalties. Those estimates depend on future clinical, regulatory and commercial outcomes and include company estimates, marketer guidance and third-party analyst projections.

Capital returns and full-year assumptions

Royalty Pharma returned $589 million to shareholders during the first nine months, comprising $406 million of dividends and distributions and $183 million of share repurchases. That represented about 28% of Portfolio Cash Flow.

At September 30, the company held $514 million in cash and cash equivalents and had $8.8 billion of investment-grade debt with a weighted average duration of approximately 12 years. Total leverage was 2.7 times Adjusted EBITDA and net leverage was 2.5 times. Royalty Pharma estimated its financial flexibility at about $4.8 billion and had a $1.8 billion revolving credit facility.

For 2026, operating and professional costs are expected to equal approximately 5.5% to 6.0% of Portfolio Receipts, narrowing from the previous 5.5% to 6.5% range. Expected interest paid remains $350 million to $360 million. The forecast assumes no additional debt issuance, incorporates the repayment of a $380 million term loan in July and excludes interest received.

The guidance assumes no major unforeseen adverse events and excludes contributions from transactions announced after November 4. Actual results remain subject to product sales, royalty expiries, milestone timing and the clinical, regulatory and commercial performance of portfolio therapies. The company may also revise its outlook if new royalty transactions have a material near-term financial impact.