SEC Comment Letter 0000000000-23-008600 to Royalty Pharma plc (RPRX)
Royalty Pharma plc
Date: Aug. 8, 2023 · CIK: 0001802768 · Accession: 0000000000-23-008600
AI Filing Summary & Sentiment
File numbers found in text: 001-39329
Referenced dates: June 28, 2023
Letter
United States securities and exchange commission logo August 8, 2023 Terrance Coyne Chief Financial Officer Royalty Pharma plc 110 East 59th Street New York, NY 10022 Re:Royalty Pharma plc Form 10-K for the period ended December 31, 2022 Filed February 15, 2023 File No. 001-39329 Dear Terrance Coyne: We have reviewed your July 13, 2023 response to our comment letter and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our June 28, 2023 letter. Form 10-K for the period ended December 31, 2022 Non-GAAP Financial Results, page 68 1.We note your response to comment one of our letter dated June 28, 2023 includes language from your Credit Agreement regarding Consolidated EBITDA. We also note the disclosure on pages 68-69 of your Form 10-K regarding the definition of Adjusted EBITDA under your Credit Agreement. For each of the most recent two years and subsequent interim period, please provide us with a tabular breakdown of the calculation of your Adjusted EBITDA measure as it is defined in the credit agreement, separately quantifying each of the individual components identified in such definition. 2.Please address the following regarding your response to comment two of our letter dated June 28, 2023: •Your response to prior comment two acknowledges that the reconciliations from Net
FirstName LastNameTerrance Coyne Comapany NameRoyalty Pharma plc August 8, 2023 Page 2 FirstName LastName Terrance Coyne Royalty Pharma plc August 8, 2023 Page 2 cash from operating activities to Adjusted EBITDA and Adjusted Cash Receipts add back certain “charges or liabilities that required, or will require, cash settlement” which is prohibited by Item 10(e)(1)(ii)(A) of Regulation S-K. Please further explain to us how you determined that your current presentation depicting such adjustments is appropriate. As part of your response, tell us how you considered the response to Question 102.09 of the non-GAAP Compliance and Disclosure Interpretations which states that when a credit agreement contains a material covenant regarding a non-GAAP measure, "the company may be required to disclose the measure as calculated by the debt covenant as part of its MD&A." •Your response to prior comment two further states that your Adjusted Cash Flow measure provides meaningful information about your ability to successfully operate your business and generate cash flow. Please explain in detail how the adjustments made to calculate the Adjusted Cash Flow measure result in a measure that meets this stated purpose. As part of your response, specifically address the apparent inconsistencies in that certain cash outflows are excluded from the measure when the corresponding cash inflows are included in the measure, as noted in our prior comment. You may contact Sasha Parikh at 202-551-3627 or Kevin Vaughn at 202-551-3494 if you have questions regarding comments on the financial statements and related matters. Sincerely, Division of Corporation Finance Office of Life Sciences
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United States securities and exchange commission logo
August 8, 2023
Terrance Coyne
Chief Financial Officer
Royalty Pharma plc
110 East 59th Street
New York, NY 10022
Re:Royalty Pharma plc
Form 10-K for the period ended December 31, 2022
Filed February 15, 2023
File No. 001-39329
Dear Terrance Coyne:
We have reviewed your July 13, 2023 response to our comment letter and have the
following comments. In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional
comments. Unless we note otherwise, our references to prior comments are to comments in our
June 28, 2023 letter.
Form 10-K for the period ended December 31, 2022
Non-GAAP Financial Results, page 68
1.We note your response to comment one of our letter dated June 28, 2023 includes
language from your Credit Agreement regarding Consolidated EBITDA. We also note the
disclosure on pages 68-69 of your Form 10-K regarding the definition of Adjusted
EBITDA under your Credit Agreement. For each of the most recent two years and
subsequent interim period, please provide us with a tabular breakdown of the calculation
of your Adjusted EBITDA measure as it is defined in the credit agreement, separately
quantifying each of the individual components identified in such definition.
2.Please address the following regarding your response to comment two of our letter dated
June 28, 2023:
•Your response to prior comment two acknowledges that the reconciliations from Net
FirstName LastNameTerrance Coyne
Comapany NameRoyalty Pharma plc
August 8, 2023 Page 2
FirstName LastName
Terrance Coyne
Royalty Pharma plc
August 8, 2023
Page 2
cash from operating activities to Adjusted EBITDA and Adjusted Cash Receipts add
back certain “charges or liabilities that required, or will require, cash settlement”
which is prohibited by Item 10(e)(1)(ii)(A) of Regulation S-K. Please further explain
to us how you determined that your current presentation depicting such
adjustments is appropriate. As part of your response, tell us how you considered the
response to Question 102.09 of the non-GAAP Compliance and Disclosure
Interpretations which states that when a credit agreement contains a material
covenant regarding a non-GAAP measure, "the company may be required to disclose
the measure as calculated by the debt covenant as part of its MD&A."
•Your response to prior comment two further states that your Adjusted Cash Flow
measure provides meaningful information about your ability to successfully operate
your business and generate cash flow. Please explain in detail how the adjustments
made to calculate the Adjusted Cash Flow measure result in a measure that meets this
stated purpose. As part of your response, specifically address the apparent
inconsistencies in that certain cash outflows are excluded from the measure when the
corresponding cash inflows are included in the measure, as noted in our prior
comment.
You may contact Sasha Parikh at 202-551-3627 or Kevin Vaughn at 202-551-3494 if you
have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Life Sciences