Royalty Pharma's Strategic Acquisition and Promising Imdelltra Sales Drive Buy Rating.

Morgan Stanley's Terence Flynn maintains a Buy rating on Royalty Pharma with a $55 price target. Flynn cites the company's strategic acquisition of a royalty interest in Amgen's Imdelltra as a key factor, driven by the treatment's strong sales performance and potential for significant revenue growth. Ongoing Phase 3 studies and the royalty's expected longevity through 2038-2041 further support Flynn's optimistic outlook.

Title: Morgan Stanley's Terence Flynn Maintains Buy Rating on Royalty Pharma

Morgan Stanley analyst Terence Flynn has maintained a Buy rating on Royalty Pharma with a $55 price target, citing the company's strategic acquisition of a royalty interest in Amgen's Imdelltra as a key factor [2]. The acquisition involves a substantial upfront payment of $885 million to BeOne Medicines, with an option to acquire additional royalty rights worth $65 million within twelve months [1]. Under this agreement, Royalty Pharma will receive roughly 7% of global net sales of Imdelltra, excluding the Chinese market.

Imdelltra, a lung cancer therapy approved in the U.S. in 2024 for small cell lung cancer patients whose disease progressed after platinum-based chemotherapy, has shown remarkable clinical results. A Phase 3 trial demonstrated a 40% reduction in risk of death and a median overall survival of 13.6 months compared to 8.3 months with chemotherapy [1]. Sales reached $215 million in the first half of 2025 and are forecasted to generate over $2.8 billion annually by 2035 [1].

This transaction significantly boosts Royalty Pharma’s oncology royalty portfolio and positions the company for long-term benefit, with royalty flows expected to continue until approximately 2038-2041 [1]. Flynn's optimistic outlook is supported by Imdelltra's strong sales performance and the potential for significant revenue growth. Ongoing Phase 3 studies for Imdelltra in combination with other treatments could further enhance its market position [2].

Royalty Pharma's recent acquisition of a royalty interest in Amgen's Imdelltra could further bolster its growth prospects. This move aligns with the company's strategic investments in the biopharmaceutical sector, potentially increasing future revenue streams and supporting long-term earnings forecasts. Analysts foresee revenue reaching around US$4 billion by August 2028, underlining potential growth driven by such acquisitions and diversified revenue streams [3].

Despite recent positive price movements, shares trading at US$36.32 exhibit a discount to the analyst consensus price target of US$43.27, suggesting potential upside. If realized, ongoing strategic investments and efficient cash reinvestment policies could extend Royalty Pharma's favorable market performance, further aligning its market value with the consensus expectations [3].

References:
[1] https://www.pharmiweb.com/pwtoday-story/royalty-pharma-secures-950-million-royalty-stake-in-amgen-s-imdelltra
[2] https://www.tipranks.com/news/ratings/strategic-acquisition-and-promising-revenue-growth-drive-buy-rating-for-royalty-pharma-ratings
[3] https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-rprx/royalty-pharma/news/royalty-pharma-rprx-acquires-us885-million-royalty-interest