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
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.
FirstName LastNameTerrance Coyne Sincerely,
Comapany NameRoyalty Pharma plc
Division of
Corporation Finance
August 8, 2023 Page 2 Office of Life
Sciences
FirstName LastName