Royalty Pharma Eyes AI, China Growth While Navigating Biopharma Policy Shifts

Royalty Pharma Eyes AI, China Growth While Navigating Biopharma Policy Shifts Written by MarketBeat September 25, 2026 Add As Preferred Source Share Share Share This Article Link copied to clipboard. Close Image from MarketBeat Media, LLC. Key Points Royalty Pharma is expanding its strategic capabilities by using AI to accelerate diligence, improve forecasting and potentially support partners with clinical-trial design. It is also building a China team, initially targeting royalty streams from licensing deals involving Chinese drug developers. The company is preparing for policy uncertainty, including potential U.S. most-favored-nation drug-pricing rules and U.S.-China tensions, by modeling multiple pricing, market-access and commercialization scenarios. China-related investments are excluded from its $2 billion–$2.5 billion annual deployment outlook because the opportunity is expected to take time to mature. Management emphasized disciplined capital allocation, investment-grade leverage and portfolio diversification. Royalty Pharma reviewed 480 opportunities but completed only eight transactions last year, while expecting its three largest products’ share of revenue to decline from about 45% currently to roughly 30% by the end of the decade. Interested in Royalty Pharma? Here are five stocks we like better . How Royalty Pharma Prints Cash Without Biotech's Biggest Risks Royalty Pharma NASDAQ: RPRX executives said the company is monitoring a shifting biopharma policy environment, expanding its artificial-intelligence capabilities and building a presence in China, while maintaining a disciplined approach to capital deployment and leverage. Speaking during a fireside chat, Chief Financial Officer Terry Coyne said policy developments in Washington remain fluid ahead of the midterm elections. He cited most-favored-nation, or MFN, policies as an ongoing topic of attention but said the company does not have a firm view on how the policy landscape will ultimately develop. Get Royalty Pharma alerts: Sign Up 1 Trial, 2 Franchises: Zenas Stock Climbs on Landmark Data On potential effects outside the U.S., Coyne said the implications for drug pricing and commercialization in Europe are still “largely TBD.” However, he said Royalty Pharma incorporates a range of outcomes into its investment models, including whether products launch in certain markets, differences between U.S. and international pricing, and potential effects on U.S. prices. AI Focused on Diligence and Strategic Partnerships Coyne said Royalty Pharma views artificial intelligence primarily as a way to improve and accelerate due diligence rather than simply increase the number of transactions it completes. AI could help the company process information from pharmaceutical and biotechnology partners more quickly, improve forecasts and identify issues earlier in the evaluation process, he said. 4 Healthcare Stocks With Massive Gains—and More to Come The company hired an executive earlier in the year to lead its AI effort, according to Coyne. The hire previously led AI efforts at IQVIA. Over time, Royalty Pharma also sees potential to offer AI-related capabilities to partners, including support for clinical-trial design. “We don’t want to be viewed as purely financial partner,” Coyne said. “We want to be viewed as a strategic partner to help our partners grow.” He said these resources may be particularly useful for smaller biotechnology companies with fewer internal capabilities, while larger pharmaceutical companies generally have substantial expertise in running clinical trials. China Opportunity Expected to Take Time Greg Butz, executive vice president of partnering and investments, said Royalty Pharma is investing in a local team and educating companies in China about royalty financing. The company hired Ken Sun from Goldman Sachs to build its team in the region, with Sun based in Hong Kong. Butz said the company’s initial focus is on passive royalties held by Chinese companies following the rise in licensing deals between Chinese drug developers and Western pharmaceutical companies. Those royalties are tied to products expected to be developed and commercialized in Western markets. Royalty Pharma does not include contributions from China in its stated annual capital-deployment target of $2 billion to $2.5 billion, Butz said, reflecting the time needed for the market opportunity to mature. Coyne added that many products underlying these royalty streams have not yet reached the market, though some could become more actionable as late-stage clinical data emerge over the next several years. On U.S.-China policy risk, Coyne said the company generally purchases royalties connected to products controlled by Western companies, with royalty structures typically located outside China. He said the longer-term question is whether policy could slow Western pharmaceutical companies’ licensing activity involving Chinese assets. New Funding Structures and Capital Deploy