The article argues that Royalty Pharma suits buy-and-hold income investors for three reasons: healthcare spending tends to stay resilient through economic cycles, the company's experts select which drugs to back, and its portfolio is diversified. Royalty Pharma pays drug companies cash up front in exchange for future royalties on approved and in-development drugs, and that cash funds its shareholder distributions. Its yield is around 1.5%, slightly above the pharmaceutical sector average of roughly 1.4%. The portfolio includes 35 approved products and 16 in development, with 16 generating more than $1 billion in annual revenue and an average remaining royalty duration of around 13 years. The article acknowledges that some of its drug investments will not work out as planned.
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