I think we're ready to start. Delighted to introduce the management from Royalty Pharma. Unusually, I've worked with both at two separate organizations during my career. Starting on the far left was my former counterpart at Citi, Chris Hite, who's now Vice Chairman of Royalty Pharma. The gentleman next to him, who I worked with when I was at another house I won't mention, is Marshall Urist, who is the Head of Research and Investments at Royalty Pharma. Great to have you both here. To the audience, if you have got any questions that you'd like to ask, just raise a hand, and if I'm not blinded by the light-
All good
I will try and take them. So just maybe to start off, look, I, you know, the obvious place to start is the share price, right? And it is below the IPO. It's obviously probably about half where it was at its highs. In terms of the evolution of the business, there has been no unexpected surprises. I know that you've had an awful lot of pre-IPO selling, which has acted as a weight on the stock. You're continuing to allocate capital and do reasonable investments. But there's an inherent challenge with the business model in terms of from the public markets, because there's never any earnings surprise, because it's already pre-announced. Pipeline news, there is some, but it's again somewhat limited, dependent on the state of the assets.
And there's no backstop to valuation as there is for a biotech company because there's no M&A bid. So the question is: how do you address this? How much do you attribute to the pre-IPO sell-down? Where are we? Is it all done? Is this a strong, you know, publicly traded company? Is this the right place for it? How should investors think about it? Because, look, I think, you know, you're allocating capital, you're doing the right things. We can talk about CF royalties and some of the other things, and IRA. We'll talk about all that. But just as a general overview, anything you could lend would be interesting, because there's a disconnect between the operating model and the value you're building, and the ability of the market to value it, and the bookends that may help inform investors.
Well, we knew this was gonna come.
Yeah.
This would be your first question.
Yeah.
We pre-
Yeah
W e predicted accurately.
Yeah.
Then we were debating who was gonna take it.
Yeah.
I guess I'll start.
Yeah.
We can, we can double team this. You know, first of all, thank you for having us.
Pleasure.
Good to see you. You know, the share price, I think... We went—Our IPO price was $28. Obviously, the stock ran from there and has come back to you, you know, around $30. So you're right in the standpoint of a lot of... Our CEO has talked about this. A lot of our pre-IPO shareholders were endowments and foundations and universities and things like that, that weren't, you know, necessarily able to hold a single stock. Pablo has talked extensively about that selling. I do think that we agree with you that we have, I think, executed quite well. I think we've deployed a lot of capital. We think the deals are quite attractive from a return perspective.
I think it's really just incumbent upon us to make sure people understand, you know, what Royalty Pharma is. We're an N of one. You know, we're not really— There's not a lot of public comps out there for Royalty Pharma. You know, when you're investing in the deals that we're investing in, you know, some of them are pre-commercial, some of them are commercial. And, you know, our returns are— One thing we're really proud of is our, the duration of our royalties is quite long. So we have duration that's in excess of 10 years. It's 12, 13 years across the portfolio. And when you're making long-term investments that have those types of duration with really attractive IRRs, you know, that takes a while to play out.
So to your point, maybe the lack of a catalyst where the stock's gonna double overnight, like a biotech company or whatnot, that's not who we are. And I think, you know, we're doing. We're out on the road, at conferences like this, making, you know, trying to make sure people understand the power of the model. The total addressable market is very, very large. The royalty market is growing quite nicely. We think royalties are now a part of the conversation at really large pharma and biotech companies as a part of the capital structure. So all the things are pointing in the right direction. We're super excited about the opportunities we're seeing. We're deploying capital at a really strong rate, and our returns are attractive.
We just need to get out and make sure people understand the story, and the. You know, it may be a, a story that's, you have to be patient from the standpoint of, the stock's not gonna double overnight, but if you believe in the management team and our ability to execute, you know, I think you'll be happy as a shareholder. I think that's really incumbent on the management team to continue to tell the story. I don't know, Marshall, anything.
Yeah, I'd add or emphasize a couple of things. I think, you know, it is a great question, and, you know, I think we're focused on the things that we can control, right? Which is, you know, like Chris said, continuing to execute, and I think we've been very clear about, you know, what our goals are. You know, have raised our capital deployment goals, been clear about the type of products that we're after, the type of returns that we're targeting, and I think we've been doing that and will continue to. But you know, to the point Chris said, that there isn't anything really like Royalty Pharma out there. So I think we acknowledge and, you know, welcome the market watching us, you know, continue to build the portfolio.
Continue to show the scale of what we can achieve, continue to build the portfolio to give people visibility on long-term growth through multiple cycles of, you know, things that, you know, like all companies in our industry, right? We will have things that lose patent, and we need to continue to, you know, continue to fill the top line and add things to it, and show how we're gonna do that. And, you know, I agree, the rest will take care of itself.
So I'm asking this question as a devil's advocate, not something that I necessarily believe. One mechanism that you have if you think your stock is materially undervalued is to significantly upsize your buyback, do an ASR, whatever. Now, obviously, it takes away from the central premise of your business and your ability to... But do you think there's any role for that? You must get that question from frustrated shareholders, and what's your answer?
We did announce a billion-dollar buyback earlier this year. We have been buying back stock in the marketplace. I think as of the quarter, we gave updated numbers on our quarterly call. Look, I think, you know, that's part of our capital allocation thought process. We pay a dividend, and we're returning capital to shareholders also through the buyback. We think the stock is attractive at these levels, which is why we've been buying it. And we're trying to balance the capital allocation against the investments that you know, that we are looking at right now.
I mean, when we went public, for folks that don't know the company, we went public in June of 2020, and we set out a investment target of roughly $7 billion over the next five years, from 2020 forward, of capital deployment and new investments. We announced transactions since going public of over $10 billion, and in less than three years, so we're way ahead of our capital deployment targets, which is why we raised our capital deployment targets last year at our analyst day, to $10 billion-$12 billion over the five years. So we have to balance, you know, making those investments against the dividend and the buyback.
But, you know, we wouldn't have announced that billion-dollar buyback and we wouldn't be buying shares in the market like we have been if we didn't see that as a good opportunity. And we will defend the stock, you know, and try to balance that in the whole scheme of the allocation policies.
I think, Andrew, you hit on sort of the key thing in your question, too, which is, you know, we've been clear all along that our very first priority in terms of use of capital is building the portfolio. I think, you know, we're weighing it against the attractiveness of the things that we see in our pipeline, 'cause ultimately that will create the most value for shareholders. I think it's there, it's an option. We've been doing it. You know, like we've talked about, you know, the pipeline is very full. We're very excited about the opportunities that we're seeing, so it's all part of the, all part of the balance.
So Chris addressed this issue of durability and the durability of the royalties, and so that obviously is a nice segue to the IRA on specific-
Good segue.
Assets.
Yeah.
Business.
Yeah. Right.
So, could you talk to what you perceive to be the levels of your exposure? Because obviously, Trelegy, which is a deal that you recently consummated, you know, be interesting, given what we know now, whether you would have paid what you have paid. I suspect the answer will be probably not, but you may still have gone ahead, but maybe a different price point. So, one question is just helping us to understand, and there are other assets I can identify, but why don't you talk to your internal calculations, what assets and the percentages that are exposed, and the impact once you take into account, you know, other variables as well, that we'll address. And then the second thing is how the IRA is impacting your capital allocation going forwards.
Given, as our first speaker this morning outlined, there is really quite considerable uncertainty about whether the IRA is, you know, gonna... actually, the drug pricing negotiations, is gonna stick or not. So anyway, over to you. But, whoever wants to take that one first.
Yeah, I can start. So on the first part of your question, you know, we've been in the fortunate position of having, I think, relatively limited Medicare exposure in the portfolio. And I think, you know, we highlighted on the last call sort of three products in the portfolio that we thought, you know, would be on the list for negotiation over the next couple of years, and that is Imbruvica, which was on the list. Xtandi, which, you know, turned out not to be on this year, but, you know, certainly possible for next year. And then Trelegy as well. And so I think when we tick through each of those, right, you know, we've talked about in terms of the impact to the portfolio, it's actually very modest, right, from an NPV perspective.
Because, you know, Imbruvica has been sort of well, been under very well-publicized, significant competitive pressure. And so, you know, I think when you look at consensus expectations, look at our own models, the contribution of that to our portfolio going forward, I think is, you know, it is, it is very modest. Xtandi, you know, has been a great investment for us, but will go generic, right, I think in 2027 or 2028. And then Trelegy, you know, I think and this brings up a little bit of some of your comments as well, which is uncertainty to how very heavily rebated categories are going to fare if, you know, in an IRA process relative to higher-priced oncology drugs, which have, you know, very limited or no rebates today. And how the... And I think, again, in terms of more of the uncertainty, how the-...
Out-of-pocket changes for less expensive drugs in the Part D redesign will impact, will impact the market as well. So I think there's lots and lots of crosscurrents, and I think net, we, you know, we are happy, very happy with how Trelegy has performed, happy to have that as, as part of the portfolio. But I think regardless of what happens with the IRA, I think we feel really good about where the, where the portfolio is today. You know, in some ways, you know, the other really interesting part of that question is how we've started to implement that into the process looking forward.
You know, one of the cool things about the model is, you know, because we don't have the sort of, you know, the, some of the traditional pharma issues of, you know, legacy, you know, therapeutic area focuses or whatever, you know, we can, we can really think about each investment on its own, right? In terms of, you know, and really pivot and start to incorporate IRA-driven scenarios into our modeling, which is what we are doing today. But you brought up a really important point, which is, you know, there is a lot of uncertainty about the extent, you know, the extent to which this will impact the, will impact the space. What, you know, if it does make it to... If it does make it all the way through, what the actual price discounts are, et cetera.
So, you know, we've taken a really, I think, you know, kind of scenario-driven model of saying, you know, "Look, what is the range of scenarios where we still think, you know, we can exceed our cost of capital for products that have heavy exposure?" 'Cause we don't wanna be in a position where we've taken one extreme view, let things go, or not done things and, you know, maybe there's a whole range of scenarios that would have made it attractive even with IRA. So we're trying to think through all of that. The last thing I just mentioned is, you know, and you, and, I think that the market has seen us do it, is, you know, we do pride ourselves on being very creative in the way that we structure things, right?
And so particularly when we're thinking about, you know, thinking about synthetic royalties or working directly with companies, you know, we have a lot of latitude in how we can structure things. So it is another thing that we're thinking about: How do we build structures which, you know, can which can kind of balance some of the risk/reward around the IRA in outyears? So I don't know, Chris, you know?
Yeah. Yeah. It's a good answer.
Done. So just before we pick up on some of those threads, let's just take Trelegy, which was a substantial investment for you.
Mm-hmm.
What do you expect GSK to do in terms of the rebates? Because obviously, that's gonna impact you in terms of the royalty flow. So do we expect, a bit like insulins, that, you know, the sponsor is gonna say, "Okay, you're getting the price 50% cheaper, you know, say goodbye to your rebates, we're not paying"? Or do we expect GSK to say... And I'm using GSK, but you could talk to the industry if it's easier and doesn't, you know, cause conflict. Is the industry fearful that it's gonna lead to retribution, either on that product or another product in their portfolio, that the PBM is gonna put up prior authorization, step edits, whatever, in order for them to get access? So how do you think this shakes out?
Because it does have an impact on what your ultimate royalties are gonna be.
Yeah. You know, it's a good question. I don't know that it has a clean answer today. I don't think anyone necessarily has a, you know, has a, has an answer to that. So, you know, again, and I do think you brought up an important point, which is I think it's hard to speak broadly, right? Because I think, you know, each product, its specific mix of sort of, of plans and positions and the, you know, to a certain extent, the company's portfolio are all gonna play into that. You know, we'll see how it plays out. You know, look, I think at base, you know, Trelegy is gonna remain an important, you know, an important product to GSK.
I think one good thing is we're, you know, in most ways, we're aligned with them in terms of trying to maximize, you know, trying to maximize the revenue opportunity, and so we'll have to watch and see how it plays out, but don't know that we have a crystal ball on how-
Yeah
A ll that's gonna come together.
So, I don't wanna leave Chris out the conversation.
Yeah.
Yeah, no, it's good.
So, so-
It's good
O kay, this is for Chris. You know, synthetic royalties, which has been a key part of your mandate.
Mm-hmm.
To me, I always struggle to buy into the idea that large pharma would embrace these.
Mm-hmm.
You know, in Europe, it seems for accounting reasons, it's problematic, as we've written and described, and seems to be confirmed, at least by my conversations with the C-suite. But so a lot of your deals have been with the SMID companies. Historically, I guess, the ones that I remember is Ibrance with Paratek, and then, there's an interesting one you did with AZ, on, PT027 or-
Right
W hatever brand name they gave it with.
Mm-hmm.
But have I missed any others? And is it wrong to assume that large pharma really isn't, you know, you know, as I would have anticipated there, this is really focused on SMID, or is something changing in U.S. large pharma, that you expect them to be more open for synthetic royalties going forward?
Yeah. So,
'Cause Roivant was a-
Yeah.
Roivant was almost an alternative structure for Pfizer compared to a synthetic royalty deal.
Yeah. So synthetic royalties, for people that aren't aware of what these are, are obviously the company's been around 27 or eight years, was founded on going and buying royalties that existed at hospitals, universities, foundations, and that's how the company was founded. And we still do that. We buy existing royalties that, you know, wherever they might be. Synthetic royalties come in a couple different flavors. We create a royalty that didn't exist by partnering with the company, and we just announced one last night with Ascendis for their long-acting growth hormone. And all we're doing is effectively set, you know, acquiring a revenue participation right in the product, and that's a synthetic royalty on a drug that's already been launched. So that's one way we do it.
You know, the drug's out there, and we just create it through the synthetic royalty process. The other way is partnering around research and development. Same thing, the drug's maybe not launched, but it's in development. You fund the R&D, and you get a royalty once again, through what we call a Revenue Participation Right in the drug. Now, we've done that recently, specifically around large pharma. We did one in November of last year with Merck, U.S. Merck, where we announced a $425 million deal, where Royalty Pharma will partner with Merck and fund up to $425 million of a clinical program for PDE10 inhibitor that's being studied in schizophrenia by Merck. It's in phase II-B right now. At close, we funded $50 million.
Merck will see the results of the phase II-B trial, meet with the FDA. Merck then needs to make the decision to advance into phase III clinical development without knowing whether we're going to participate. So right there, we know that we see the data, we see the interaction with the FDA. They're moving forward without knowing whether we're going to participate, and we have an option to come in and co-fund the phase III development program. That is, you know, something that we feel, one, we get to see the results of the phase II-B, how it stacks up, the interaction with the FDA, and whether Merck's committed without us. Then we can opt in a certain time period after they commence the phase III study. And in exchange, we get milestones and a royalty on that drug.
Now, why, why would Merck do this? Well, lots of reasons. One, they're risk sharing across one of their portfolio assets. And two, they're funding something where, if we opt in, you know, they're gonna get $425 million from us over their clinical program and help them defray the cost of that. Under U.S. GAAP, to your point, Andrew, that there's clear guidelines which permits a company, if structured properly, to receive what's called contra R&D accounting. So they effectively, at every quarter, bill us half of the clinical trial costs. We pay for it, and, you know, that effectively is a deduct from their R&D spend. It allows them to do more of other things in their R&D and preserve their guidance on their EPS bottom line. That's R&D synthetic royalty financing.
We have talked to, you might imagine, virtually every large pharmaceutical company before and really after that transaction around how can we do this with you? In Europe, under IFRS, the accounting is not predefined, that you have certain exceptions, you know, pathways to contra R&D, but we know for sure companies have achieved, under IFRS, that accounting treatment. And so we believe there is a pathway, and we know for sure there is one, if structured properly and working with their auditors very carefully. So we see that as an interesting opportunity because, you know, we're partnering with a large multinational. If structured properly, we wanna be very clearly aligned with pharma on what they perceive to be their very important assets. To us, that's the most important thing.
When the Merck deal was announced, we got a lot of calls from people that we've known a long time, and we've looked at a lot of things, but we wanna make sure we're funding the highest priority assets at these companies. So, you know, I don't know how big the R&D funding opportunity will be over time. We think it'll be part of our portfolio. We think the synthetic royalty on the sort of the mid-stage biotech, like an Ascendis, a $5 billion-$6 billion market cap company that's launching a drug, or we did this with Biohaven, we did it with Immunomedics, we did it with Cytokinetics, we've done it with BioCryst.
These sort of mid-stage biotech companies that, you know, they don't wanna dilute their shareholders 10% or 15% across all of their assets, we're a much better cost to capital option for them. And in the Ascendis call, I believe their CFO you know, specifically mentioned, you know, working with us was a cheaper form than selling equity. You know, lowered their overall cost of cost to capital by doing something with us, and we're still getting very attractive returns for our shareholders. So to us, the synthetic royalty opportunity is a lot of different things. It's just creating a new royalty when one didn't exist. You can do it in a lot of different ways.
But we think the bigger opportunity is that sort of mid-cap biotech sector space, where pre-commercial or even commercial companies really see the opportunity to work with us, and do something that's more cost-effective than diluting all their shareholders. It's a long answer, but-
It's a good one.
Required a lot of explanation.
Maybe we could talk about... And by the way, if there's any questions in the audience, please raise a hand, and I'll make sure that we take them. I'll just carry on until I see a hand. Lp(a), so you've managed to hedge yourself by acquiring royalties on both the Arrowhead as well as the Alnylam molecules. Yeah, this is Alnylam.
Yeah.
Um, actually-
Yeah.
Could you talk to, because it's obviously relevant for the multinational, namely Novartis and Amgen, of the work that you did in anticipating the ramp-up within this patient population, and how easy it's going to be to commercialize? Because at the moment, you know, very few people know what their Lp(a) levels are-
Yes.
how quickly that's going to change, how quickly you can capture other related family members. You know, what is going to be the baseline LDL level, which means who's vulnerable? Does it mean that patients are going to first get GLP-1s, and then you then get an Lp(a)? So there's lots of interesting questions, and I'm sure that you've thought through much of this when you made both of these investments. So I think it'd be helpful to understand both the royalty, but also more broadly for the other companies.
Yeah, of course, and so, you know, There's lots of parts, there's lots of parts to that question, and you're right, we did think about that a lot. You know, at base, you know, testing the technical hurdle to testing your Lp(a) is very low, right?
Mm-hmm.
Very easy to do. I know mine, multiple members of our team have, you know, subsequent to making those investments, gone out and done that. So, you know-
You've got to get people to test.
Right. It is very easy to do. So I think, you know, and that's why it was important to have two multinational companies behind these products because, you know, making the investment in, you know, a behavioral change, it takes, you know, infrastructure, takes investments, and you have two, you know, great cardiovascular companies who are going to be driving this. So I think, you know, that part we thought would be there. It is easy to do. The sort of lipid specialist world is already there, right? So, you know, it's something they see as part of the base package today. So I think all of that will come together.
There's no question it will take time, and so, you know, we built in our, you know, our expectations were that it was going to take some time for this market to come together, right? But I think once we have, you know, compelling outcomes data out there, that, you know, the pieces will be there to start to drive awareness and testing. And I think the interesting part about this is, you know, one, you only have to test once, right?
Mm-hmm.
So, which is not, you know, different than LDL and other things. And the second piece is, you know, the only way to treat your Lp(a) is with these agents, right? And so I think there's a. You know, we thought that was, you know, with good data in hand, was going to be a pretty compelling commercial message for patients who need this, right? And I do think that, you know, the initial population or the focus of the population is going to be people who are, you know, who are a little bit younger, who are higher risk, you know, and are going to be, you know, more motivated, I think, on the margin to, you know, to find out their Lp(a) and get treated as needed.
So, you know, but it's definitely going to take time. I think we've seen every cardiovascular launch in the history of the world is slow, right? You think back to Entresto, Leqvio.
Leqvio .
You know, the-
Please...
Yeah, we have an investment in, you know, in the hypertrophic cardiomyopathy space. You know, that product also is, you know, very much consistent with what we thought, but also taking time. So I think it has to be sort of a base expectation that, you know, cardiologists take time to get, you know, to get behind things. So that was our thinking.
You never passed on the Alnylam. Blackstone took the royalties on Leqvio . Was that just a function of the valuation to acquire them, or was it more a function of concern that Novartis was out there alone, building up Buy and Bill in the absence of outcome data?
That takes me back a little bit.
Okay.
You know, without commenting-
I'm sure you looked at it.
Yeah, without commenting specifically. So, yes, you know, any royalty transaction that is announced of any size, you know, you can presume that we had looked at it. And, you know, it's a good product. I think Novartis is obviously the right company and believes very, very strongly in that. You know, I probably don't want to get into why we passed. I'd also remind everyone, you know, that happened at an interesting time, too. We were at sort of like peak COVID when that transaction happened. So it was an interesting time, too, in our markets generally.
So there were a lot of moving pieces at the time, but, you know, look, we think, you know, Leqvio has a lot of potential and just needs some time. You know, people tend to judge cardiovascular launches too early, right? You know, and Entresto being a great example, and look at what it's done. So, you know-
The problem with that molecule, unlike Lp(a), is the demographics, because obviously they're heavily weighted to the elderly, which takes you into the IRA-
Right, right.
Territory, which fortunately for you.
There's less. Yeah, exactly. There's less, you know, people, when you look at the age range of the people who are in the Lp(a) trials, right, it skews younger for this reason. It's a, you know, an important risk factor for earlier cardiovascular disease.
Perhaps you could talk to the Ferring gene therapy deal. I'm going to mispronounce it, Adstiladrin.
Adstiladrin. Yep.
I'm still working on it.
The mouthful.
Yeah, exactly.
Yeah.
It's a lot, yeah.
Um-
The vowels there. Yeah.
Is it your understanding that this would be exempt?
F rom the IRA, because when I, you know, whether it's a sell product is, I mean, you tell me, because usually me that's a question because it - you did the deal, I think, after the IRA.
Yeah.
What's your understanding? Because I'm sure you've taken legal counsel.
Yeah. So our kind of base case on that was that yes, it is, that it, it is also a single, a single indication orphan drug as well. So,
Okay, so you're exempt on the-
On that, yeah, exactly.
Yeah. Okay.
So that was our base view-
Appear to be jailbreak attempts
Exactly.
Yeah.
Exactly.
All right, I've got it.
Yeah.
It would be remiss of me because I still get questions on the downside to your share price from the cystic fibrosis next generation compounds.
I thought we handled that on the quarterly call.
Yeah.
Yeah, but you'd be surprised. It never dies, no matter where you-
Never does
S eems to be. So for those of you who may not have been in the quarterly call, if you could just summarize your exposure, and you know, why the magnitude and the impact is limited, and I'll let people do their own math, even at 40, it was, you know, minimal downside, if any. So certainly at 29 or wherever the share price is today. But just to make sure everyone's on the same page, and because I do get questions on it, either of you, why don't you just give a sort of the, do you want to go, you want to go for it?
No, you go ahead.
So you're, I-
George has the slide.
Yeah, George has the slide. So I will, I will speak at a high level for not, not misquoting any numbers, but I would encourage everyone to, you know, our, our CFO, Terry Coyne, did an excellent job of walking through, you know, walking through various kind of CF, CF royalty scenarios with respect to what might happen with the new triple that Vertex is going to report, going to report data on. The, the net takeaway of it, as, as Andrew is alluding to, and we walked through, and the effort was to kind of bookend some scenarios for the marketplace on the last call.
You know, as we showed that even under, you know, pretty pessimistic scenarios, both in terms of, you know, how much of what is the current Trikafta market today transitions to this new triple, and in terms of what the ultimate royalty rate might be, which is the basis of our, you know, of our differing views from Vertex, that you come up with a very manageable, you know, a very manageable exposure of a couple hundred million dollars plus to Royalty Pharma.
And when you think about that in the context of our of the size of our top line today, as we continue to add and build the portfolio, you know, the size of our top line when this actually happens, which will be later in this decade, you know, it's very, very manageable within the context, within the context of our portfolio and what we're doing. But, you know, we've tried to lay it out for people. You know, I think the next step, we'll see what Vertex reports in terms of the data, which is going to be early next year. And then, you know, I think that will be the first step in kind of understanding this better looking forward.
Is there any-
You promised us no Vertex questions, Andrew.
Did I promise? I don't remember that. Just to wrap up, and I've tried to tick off at least all the questions that I receive or things that-
Yeah
O ccur to me. Is there anything you think I should highlight that I haven't touched upon in the last 35-40 minutes?
I mean, I'll go. I mean, and you can chime in. I think what, a couple things from a high level, you know, the total addressable market is extraordinarily large. I think everybody understands how much people spend on R&D in the sector across the governments, biotech and large cap pharma. And, you know, we play in that market. I think we put out numbers, it's like over $3 trillion over the next decade. It's extraordinary, right? And I think what people also lose sight of is the fragmentation in the sector is enormous. So basic research is occurring around us here, you know, in Cambridge, MIT, and Harvard, et cetera, Mass General.
These basic research gets spun out into biotechs, biotechs partner with pharma, and every step along the way, you're creating an existing royalty. And that's the company's foundation, how we were founded, we would buy those existing royalties. And that's, that we have a lot of data to show that that fragmentation is only accelerating. And so that core base of how the company was founded and what we do, like the Lp(a) royalties were, you know, we acquired those from Ionis and Arrowhead, not the, what will be the marketers when those drugs get approved. And so that's just an enormous opportunity, and you put on top of that, the synthetic royalty opportunity, which we announced the deal last night, as we said, with Ascendis, and about 10 days ago with Ferring. Both synthetic royalties didn't exist.
Companies wanted to partner with us, attractive cost of capital for them, attractive returns for us. We only see, you know, that, the growth of the royalty market around people thinking away from just selling their stock or doing a convertible bond to raise capital, they're thinking in addition to that, creating a synthetic royalty. So we can be a piece of the capital structure for a lot of the sector, which is capital deprived, as we know. What I would put all of that against is, we've generated, you know, returns, unlevered returns. You know, sometimes we talk to investors and, you know, when we say unlevered returns, I mean, when you put leverage on that, obviously, they're even more attractive.
Unlevered returns over a very long period of time from a management team perspective in the teens, you know, and you put leverage on that, and they only go higher. It's an extraordinary business model and an extraordinary opportunity, I think. And people, you know, it takes some time to sort of explain all of that because it's a lot of different moving pieces. We're super excited. We've never been, you know, Marshall and I have never been busier from the pipeline perspective, but that would really be sort of my summation of things that maybe we don't get asked enough about, but the opportunity is there for sure.
That seems like a very good place to stop. But thank you both for-
Yeah, thanks for having us, Andrew.
Thank you.
Thanks, everyone.
Appreciate it.
Thanks, bye.