Royalty Pharma PLC began its public engagement with a major push early Tuesday, as pharmaceutical royalty buyer shares opened well above the initial public bid limit.
The first trade at noontime Eastern time of $44.00 was 6.4 million shares, 57 percent higher compared to the $28 IPO price. After then, the stock has marginally contributed to sales, rising 58 percent in recent sessions.
The upsized IPO priced to the top of the expected range late Monday. Royalty Pharma unloaded 77.7 million shares to secure $2.2 billion, climbing from its original bid of 70 million shares, enough to become 2020's biggest IPO so far.
The oversubscribed initial bidding turned out bigger than anticipated in about $300 million, with Tuesday's shares of the company listed on the Nasdaq under the 'RPRX' symbol. The stock jumped almost 60 percent after the launch at $28 to wrap up the day at $44.50.
The IPO size - which this year is the highest in the US across all market sectors - represents the role of Royalty Pharma as the biggest name in the field of pharmaceutical royalty deals, a model that the group has transformed into a highly lucrative enterprise.
Investors' pandemic-triggered appetites for stocks of freshly-listed biopharmaceutical firms seem to know no boundaries this year. The biggest IPO for 2020 thus far is a pharma group that has no plans of creating or selling any vaccines directly.
As its name implies, Royalty Pharma helps other biopharmaceutical firms by providing them the financial wherewithal to use for vaccine research and development and in return gain a percentage of any future profits those drugs might earn. The company's most recent investment entitles it to a certain cut of the Idhifa sales that Bristol Myers Squibb owes its investment partner, Agios Pharmaceuticals.
Royalty Pharma's IPO marks the impressive shift of tycoon Pablo Legorreta's investment activity from an exclusively non-transparent private equity platform to a publicly-listed model on the Nasdaq.
A former banking investor, Legorreta helped create the vision of investing in the royalty business of pharmaceutical products. He founded the company in 1996 as a private equity structure that acquired revenue chunks of heavyweight vaccines such as Lyrica, Imbruvica, and Humira years before these drugs hit their highest revenues.
Royalty Pharma has shelled out around $18 billion purchasing royalty streams since its inception, which the group claims comprises about 50 percent of all such acquisitions in the intervening timeframe. Royalty Pharma has stakes in 45 blockbuster drugs, 22 of them mega-hits with sales reaching more than $1 billion a year.
