Royalty Pharma’s market value increases by more than 50% as it begins trading on Tuesday

Written by: Wajeeh Khan
June 16, 2020
  • Royalty Pharma’s market value increases by more than 50% as it begins trading on Tuesday.
  • The company sold over 77 million shares at £22.25 per piece to raise £1.73 billion in its IPO.
  • Royalty's £1.73 billion listing marks the 2nd largest IPO in the pharmaceutical sector in history.

Royalty Pharma’s initial public offering (IPO) in the United States priced at the peak of the expected range and raised £1.73 billion on Monday. Royalty’s listing now marks the 2nd largest IPO in the pharmaceutical sector in history. Learn more about the basics of an IPO.

The listing marks the latest in a streak of U.S. IPOs after months of inactivity due to the Coronavirus pandemic that has so far infected more than 2.1 million people in the United States and caused over 118,000 deaths. The revival of the U.S. IPO market in recent weeks suggests that investors are still interested in new stocks despite the unprecedented market volatility in 2020 due to COVID-19.

Royalty Pharma sold over 77 million shares at £22.25 per piece

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Before Royalty Pharma, Warner Music Group held the title of the largest U.S. listing this year. Warner Music went public in the first week of June with a £1.53 billion IPO. Raising £1.73 billion, Royalty’s listing on Monday topped Warner Music’s and came second only to Zoetis Inc. in the pharmaceutical industry.

The New York-based life sciences company revealed a target price of £19.87 to £22.25 per share for its IPO last week. On Monday, Royalty sold more than 77 million shares at a per-piece price of £22.25.

The American company had originally targeted selling 70 million shares in its IPO. Owing to the robust demand, however, it decided in favour of expanding the share sale by 11%. The initial public offering valued Royalty Pharma at £13.25 billion on Monday.

Tip: looking for an app to invest wisely? Trade safely by signing-up with our preferred choice, eToro: visit & create account

Royalty Pharma records a 15% increase in revenue to £398 million

Founded in 1996 by billionaire Pablo Legorreta, Royalty Pharma invests in biopharmaceutical royalties and offers financing for new treatments. From January to March of 2020, Royalty recorded a 15% year over year increase in its revenue to £398 million. At £287.22 million, however, its operating income came in 16% lower in the first 3 months of 2020.

A few of the prominent investors of Royalty Pharma include General Atlantic, Adage Capital Management, and Nogra Group. The NY company began trading on Tuesday under the stock ticker RPRX on the Nasdaq stock exchange. Shares of the company were reported at £35.76 per piece on Tuesday that increased its market value by more than 50% to £21.30 billion.

Prominent names like Goldman Sachs, Morgan Stanley, Bank of America Securities, Citigroup, and J.P. Morgan served as lead underwriters on Royalty’s IPO.