Royalty Pharma Stock (RPRX) Soars After Landing Massive $950M Cancer Royalties Deal with Amgen

Royalty Pharma just scored a monster deal—and investors are rushing in.

The $950 million cancer royalties agreement with biotech giant Amgen sent RPRX shares climbing, proving once again that betting on other companies' innovations beats doing the actual R&D heavy lifting.

Big Pharma's deep pockets meet royalty financing's smart play—because why develop drugs when you can just own a slice of the success?

Amgen's pipeline gains a funding boost, while Royalty Pharma adds another cash-flowing asset to its portfolio. Everybody wins—except maybe the startups actually doing the hard work.

Another day, another mega-deal in the world of pharmaceutical royalties. Because in the end, it's all about the margins—not the molecules.

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Lung Cancer Treatment

Royalty Pharma, which is a leading investor in biopharmaceutical royalties, has bought the royalty interest in Amgen’s drug for small cell lung cancer from BeOne Medicines for up to $950 million. Amgen’s stock price was flat in pre-market trading.

The deal gives Royalty Pharma access to roughly 7% of global net sales of the therapy, Imdelltra, which won U.S. approval last year for patients with extensive-stage small cell lung cancer who have failed chemotherapy.

Royalty Pharma will pay $885 million upfront, while Chinese drug developer BeOne (ONC) will retain an option to sell an additional portion for up to $65 million within the next 12 months. BeOne, formerly known as BeiGene, will keep commercial rights to the therapy in China.

The royalties from the drug are expected to last until the period between 2038 and 2041.

Portfolio Strengthened

Royalty Pharma said the deal strengthened its portfolio of oncology-related royalties. In 2022, it bought royalty interests in Roche’s (RHHBY) lung cancer drug Gavreto for up to $340 million.

Pablo Legorreta, Royalty Pharma’s founder and Chief Executive Officer said: “Imdelltra is reshaping the treatment paradigm for patients with small cell lung cancer, a highly aggressive disease with few treatment options. Today’s transaction is consistent with our strategy of acquiring royalties on highly transformative products in life sciences.”

It will hope to give a boost to earnings, which have been fairly steady over the last few years – see below.

According to data from a late-stage trial in June, Amgen’s Imdelltra reduced the risk of death by 40% compared with chemotherapy for small cell lung cancer patients whose disease had worsened after an initial round.

Imdelltra sales reached $215 million in the first half of the year and are projected to exceed $2.8 billion by 2035.

Is RPRX a Good Stock to Buy Now?

On TipRanks, RPRX has a Strong Buy consensus based on 4 Buy and 1 Hold ratings. Its highest price target is $55. RPRX stock’s consensus price target is $43.60, implying a 20.04% upside.