Tigress Financial Partners Starts Royalty Pharma (RPRX) at Buy
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Tigress Financial Partners analyst Ivan Feinseth initiates coverage on Royalty Pharma (NASDAQ: RPRX) with a Buy rating and a price target of $50.00.
The analyst commented, "We are initiating research coverage on RPRX with a Buy rating and a 12-month target price of $50 as the company’s unique business model and history of success provide investors the opportunity to benefit from the growth of bio Pharma royalty streams. RPRX represents a unique opportunity to participate in a growing and diversified portfolio of pharmaceutical royalty streams in both the development-stage growth stage and mature stage biopharma royalties across a broad range of therapeutic areas. RPRX's successful track record and experienced management, along with its partnerships across leading biotech and pharmaceutical companies, universities, hospitals, and not-for-profits, creates a significant competitive advantage and unique access to significant and key pharmaceutical opportunities. RPRX’s core portfolio of over 45 products that includes over 20 drugs with greater than $1 billion annual sales rates creates a significant base to provide steady cash flow and dividend payments along with the ability to leverage its portfolio, cash flow, and access to the capital markets to further drive innovation, development, and an ongoing cadence of acquisitions. Healthcare remains one of the largest, most fragmented, most economically inefficient, and confusing industries for both consumers and service providers, creating tremendous opportunities for companies that can help provide capital, funding, and expertise to solve the ongoing healthcare crisis. Healthcare expenditures are projected to grow at 1.1 percentage points greater than GDP per year from 2020 to 2028. Healthcare’s biggest spending category continues to be prescription drugs, representing $600 billion per year in annual expenditures. Currently, 60% of all adults in the U.S. suffer from chronic disease, and 40% suffer from two or more chronic conditions. Chronic conditions, including arthritis, asthma, cancer, chronic obstructive pulmonary disease, diabetes, Lyme disease, and certain viral diseases such as Hepatitis C and Acquired Immunodeficiency Syndrome, currently make up over $3.5 trillion in annual healthcare expenditures. RPRX’s ability to buy royalty streams provides capital for the ongoing need for R&D and drug development. RPRX has a long runway of investment opportunities driving significant growth in revenue, cash flow, and dividend payments and increases. We believe further upside in the shares exists, and our 12-month target price of $50 represents a potential return of 30% from current levels and, along with RPRX’s current 1.78% dividend yield, creates a very attractive total return opportunity."
Shares of Royalty Pharma closed at $38.25 yesterday.
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