Royalty Pharma’s $1.3 Billion Senior Notes Offering

Davis Polk advised Royalty Pharma plc on the transaction.

Royalty Pharma executed its offering of $1.3 billion aggregate principal amount of senior notes. The offering consisted of $600 million aggregate principal amount of 2.150% senior notes due 2031 (the “Social Bonds”) and $700 million aggregate principal amount of 3.350% senior notes due 2051 (the “2051 Notes” and, together with the Social Bonds, the “Notes”). The Notes will be guaranteed on a senior unsecured basis by Royalty Pharma Holdings Ltd.

Royalty Pharma intends to use an amount equal to the net proceeds from the Social Bonds to finance or refinance, in whole or part, one or more new or existing “Eligible Investments”. Eligible Investments are expected to support the achievement of United Nations Sustainable Development Goals (“SDG”) 3 (Good Health and Well-Being) and SDG 9.5 (Enhance Scientific Research, Encourage Innovation). Eligible Investments will include investments made beginning on the issue date of the Social Bonds, or in the 24 months prior to the issue date, that are in alignment with the four core components of the Social Bond Principles, 2021, administered by the International Capital Markets Association. Royalty Pharma intends to use the net proceeds from the 2051 Notes for general corporate purposes.

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 not-for-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. Royalty Pharma funds innovation in the biopharmaceutical industry both directly and indirectly – directly when it partners with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties and indirectly when it acquires existing royalties from the original innovators. Royalty Pharma’s current portfolio includes royalties on more than 45 commercial products, including AbbVie and J&J’s Imbruvica, Astellas and Pfizer’s Xtandi, Biogen’s Tysabri, J&J’s Tremfya, Gilead’s Trodelvy, Merck’s Januvia, Novartis’ Promacta and Vertex’s Kalydeco, Orkambi, Symdeko and Trikafta and nine development-stage product candidates.

The Davis Polk corporate team included partner Richard D. Truesdell Jr. (Picture), counsel Jeffrey S. Ramsay and associate Steven Glendon. Partners Simon Witty and Dan Hirschovits, European counsel John Taylor and associates James Harmer and Vivek Thanki provided English law advice. Partner Jonathan Cooklin and counsel Alon Gurfinkel provided U.S. and English tax advice.

Involved fees earner: Jonathan Cooklin – Davis Polk & Wardwell; Steven Glendon – Davis Polk & Wardwell; Alon Gurfinkel – Davis Polk & Wardwell; James Harmer – Davis Polk & Wardwell; Dan Hirschovits – Davis Polk & Wardwell; Jeffrey Ramsay – Davis Polk & Wardwell; John Taylor – Davis Polk & Wardwell; Vivek Thanki – Davis Polk & Wardwell; Richard Truesdell Jr. – Davis Polk & Wardwell; Simon Witty – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Royalty Pharma;

Author: Martina Bellini