Royalty Pharma Ramps Up Dividend By 13%

Royalty Pharma announced a 13% hike in its quarterly dividend to $0.17 per share from $0.15.

Royalty Pharma (RPRX) said that the new quarterly dividend would be paid by Mar. 15 to shareholders of record as of Feb. 19. Its annual dividend of $0.68 per share now reflects a dividend yield of 1.3%.

Earlier on Dec. 7, Royalty Pharma announced that it will acquire a royalty interest in Orladeyo therapy and BCX9930 from BioCryst Pharmaceuticals. Royalty Pharma, along with Athyrium Capital Management, will provide about $325 million in funding for BioCryst to support the launch of Orladeyo therapy to treat hereditary angioedema disorder and the development of BCX9930, which is an oral Factor D inhibitor. (See RPRX stock analysis on TipRanks)

Meanwhile, on Nov. 9, UBS analyst Navin Jacob upgraded Royalty Pharma stock from Hold to Buy. Jacob said, “Creative transactions, such as the BHVN [Biohaven Pharmaceutical Holding Company Ltd.] financing and NPV [net present value] positive Cystic Fibrosis deal, increases the likelihood of low double digit IRR [internal rate of return] on new investments.”

The analyst added, “RPRX’s low cost of debt (~2%) & 0% tax rate creates an opportunity to invest in royalty streams and in biotech companies at more favorable terms than competitors.”

However, Jacob lowered the price target to $51 (0.53% downside potential) from $52. Shares have gained 16.1% since it was listed on the NASDAQ on June 16, 2020.

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