Royalty Pharma plc announced on January 29, 2025, the closing of a transaction to monetize the remaining fixed payments on the MorphoSys Development Funding Bonds for $511 million in upfront cash. This strategic move generated total cash proceeds of $530 million on the initial $300 million investment made in September 2022.
The company achieved an attractive return by monetizing these future fixed payments at a low discount rate of 5.35%. This transaction provides Royalty Pharma with enhanced financial flexibility to pursue its disciplined capital allocation strategy.
The proceeds from this sale will be redeployed into higher-returning investment opportunities, including repurchasing its shares and acquiring attractive new royalties. This aligns with Royalty Pharma's updated capital allocation framework, which balances royalty investments with shareholder returns.
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