What is Royalty Pharma Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Royalty Pharma's Probability of Financial Distress (%) is 0.03%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Royalty Pharma's Probability of Financial Distress (%)
For the Biotechnology subindustry, Royalty Pharma's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Royalty Pharma's Probability of Financial Distress (%) Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Royalty Pharma's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Royalty Pharma's Probability of Financial Distress (%) falls into.
Royalty Pharma Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -8.27 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.03% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Royalty Pharma (Royalty Pharma) Business Description
Traded in Other Exchanges
Address
110 East 59th Street, FL 33, New York, NY, USA, 10022
Royalty Pharma PLC is the largest buyer of biopharmaceutical royalties. The firm has a portfolio of royalties that entitles it to payments based on the sales of biopharma products. Royalty Pharma receives royalties on more than 35 commercial products, including AbbVie and Johnson & Johnson's Imbruvica (for chronic lymphocytic leukemia and other blood cancers), Biogen's Tysabri (for relapsing forms of multiple sclerosis), Vertex's cystic fibrosis franchise, and 10 development-stage product candidates.
Executives
| Rory B Riggs |
director |
65 RAILROAD AVE, RIDGEFIELD NJ 07657 |
| Avara Management Ltd |
10 percent owner |
C/O GISEV FAMILY OFFICE SA, CONTRADA DI SASSELLO 2, LUGANO V8 6900 |
| Terrance P. Coyne |
officer: EVP & CFO |
C/O ROYALTY PHARMA PLC, 110 EAST 59TH STREET, NEW YORK NY 10022 |
| Pablo G. Legorreta |
director, officer: CEO, Chairman of the Board |
110 E 59TH STREET, SUITE 3300, NEW YORK NY 10022 |
| George W. Lloyd |
officer: EVP, Investments & GC |
C/O ROYALTY PHARMA PLC, 110 EAST 59TH STREET, NEW YORK NY 10022 |
| Marshall Urist |
officer: EVP, Research & Investments |
C/O ROYALTY PHARMA PLC, 110 EAST 59TH STREET, NEW YORK NY 10022 |
| Mario Germano Giuliani |
director, 10 percent owner |
C/O GISEV FAMILY OFFICE SA, CONTRADA DI SASSELLO 2, LUGANO V8 6900 |
| James F. Reddoch |
officer: EVP, Research & Investments |
C/O ROYALTY PHARMA PLC, 110 EAST 59TH STREET, NEW YORK NY 10022 |
| Nogra Group Sicaf Sif Gg Strategic |
10 percent owner |
C/O NOGRA GROUP SICAF-SIF S.A., 18 AVENUE DE LA PORTE NEUVE, LUXEMBOURG N4 L-2227 |
| Nogra Group Sicaf - Sif S.a. |
10 percent owner |
18 AVENUE DE LA PORTE NEUVE, LUXEMBOURG N4 L-2227 |
| Catherine M. Engelbert |
director |
110 NORTH CARPENTER STREET, CHICAGO IL 60607 |
| Errol B Desouza |
director |
215 COLLEGE ROAD, PARAMUS NJ 07652 |
| Henry A Fernandez |
director |
MSCI INC., 88 PINE STREET, NEW YORK NY 10005 |
| Gregory Norden |
director |
16640 CHESTERFIELD GROVE DRIVE, SUITE 200, CHESTERFIELD MO 63005 |
| Ted W Love |
director |
C/O GLOBAL BLOOD THERAPEUTICS, INC., 400 EAST JAMIE COURT, SUITE 101, SOUTH SAN FRANCISCO CA 94080 |
Royalty Pharma (Royalty Pharma) Headlines
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
RPRX has been successfully added to your