Royalty Pharma plc Class A Ordinary Shares Bank of America Global Healthcare Conference

Thank you both. Thanks for having us.

Yeah. It is a great question. I think there is a lot of moving pieces on the policy front, and I would not point to any one thing in particular. Obviously, MFN continues to come up. But I think we are paying attention to the broad picture coming out of D.C. It kind of comes in waves, it seems, and do not have any strong views one way or another on how this all shakes out. But we are definitely paying close attention.

I would still say it's largely TBD. I don't think we have full clarity. There's going to be some important launches coming up over the next year or so that I think will help inform that a bit more. But as far as the deal models go, we absolutely are factoring this in. I don't think we know exactly how it's going to shake out, but when we think about pricing as an important lever, and obviously geography as an important lever of sales of the products, we try to take a scenario-based approach and look at a lot of different scenarios. Do they launch, do they not launch? Does the price, is the price a fraction of the U.S. price? What does that do to the U.S. price? And so we try to look at it in a lot of different ways.

I think for the most part, we're pretty aligned with the marketers. They obviously want to maximize the sales of these drugs, and so I think that there is strong alignment there. But, yeah, I don't think we have a crystal ball to know exactly how it all plays out, and I think the safest thing is to look at a lot of different scenarios and get comfortable that if it plays out to the downside, we're still okay with the investment that we made.

Yeah. I think it's a number of things. Enhancing the quality of the diligence that we can do can obviously lead to better forecasts, better investments, higher probabilities of success, although I think we're already pretty high on our ability to pick things that are going to do well. I think speed for the ability to process multiple deals at the same time. For example, when we're working directly with a pharma or biotech company, there's a lot of data that they can give us access to. The extent that we can use AI to help process that data can allow us to get through it more quickly, more rapidly, catch things earlier. I think that all of those things are things that can really enhance the process. I think longer term, we have made big investments in AI.

We hired somebody to run our AI effort earlier this year. He came from IQVIA, where he was running AI at IQVIA, so obviously huge data firm, and we're really happy to have him joining us to lead that effort. I think we see it initially being something that enhances the due diligence process internally. But longer term, we think that it can also be a tool that we provide to our partners as well. To help them with clinical trial design, for example, things like that. I think we're still probably in the earlier stages, but it's a big focus of ours.

Yeah. I think the way we see an opportunity to differentiate ourselves, we don't want to be viewed as purely financial partner. We want to be viewed as a strategic partner to help our partners grow. To the extent that we can bring resources to the table to help them make their products bigger, make their products launch better, help them design clinical trials that increase the probability of success, that accrues to them and accrues to us, and it makes us very different than just a capital provider, which anyone can do. I think that's part of the reason why you see such consistent repeat partners. We have a track record of repeat business with the same people, and I think that speaks to us bringing more to the table than just capital, but bringing a true partnership mentality.