Wall Street Journal Creates A Pitch In Favor Of Royalty Pharma

Drug development, both a lucrative and a risky segment. Royalty Pharma plc RPRX offers a middle ground for its investors.
The Company was founded in 1996 and went public in June last year.
It helps fund expensive clinical trials for a promising new drug in a typical transaction.
In return, drug-making companies pay a predetermined portion of that drug’s revenue after commercialization.
The Company owns rights to drugs sold by Johnson & Johnson JNJ, AbbVie Inc ABBV, Pfizer Inc PFE, Gilead Sciences Inc GILD, and Vertex Pharmaceuticals Incorporated VRTX.
While the most significant drug companies typically narrow their focus by therapeutic category, Royalty can generate revenue from oncology, rare diseases, HIV, and diabetes.
That isn’t to say Royalty shares are immune from the challenges of the drug industry, writes Wall Street Journal.
Any changes to tax policy or drug-pricing regulations could impact Royalty Pharma shares.
The stock trades at about 15 times last year’s cash flow. So far this year, cash flow is up 25% from 1H of 2020.
Expectations of solid performance in the years ahead could be a reality.
Price Action: RPRX shares are up 1.75% at $38.92 during the market session on the last check Tuesday.