Royalty Pharma Earns Its Profits The Slow Way

Buying up royalty streams on marketed drugs isn’t the sexiest part of the pharmaceutical industry, but Royalty Pharma has made it one of the most profitable endeavors in the business. The firm owns rights to more than three dozen revenue streams worth about $8 billion, collected over a series of deals spread out over its 17-year history. And its dealmaking process has recently taken a more creative turn and shown more appetite for risk, including deals for royalties on late-stage pipeline products awaiting approval and even an attempted hostile takeover.

Many marketed drugs have a royalty tail that extends past their current owners, through the biotechs that funded their early-stage trials, all the way back to their inventors and the universities or hospitals where they worked. For Royalty Pharma, each owner represents a possible target for a deal