Royalty Pharma shares soar 57% in market debut

(Reuters) - Shares of Royalty Pharma Plc RPRX.O jumped 57.1% in their stock market debut on Tuesday, as the IPO market gathers steam after the coronavirus crisis stalled potential listings.

Royalty Pharma’s shares opened at $44, valuing the company at $26.20 billion.

The company, which buys biopharmaceutical royalties and also helps fund new treatments, sold $2.18 billion in stock after its U.S. initial public offering was priced at the top end of the range, making it the second-largest pharmaceutical listing ever.

Royalty Pharma raised its initial target of selling 70 million shares by about 11% due to strong demand.

A slew of biotech and pharmaceutical companies are filing to go public now, as they are less immune to volatile market swings. The first-day pop highlights that appetite for new stock is undiminished by recent swings in the market.

Biotech shares are also popular among investors as they can be prime targets for takeovers that fetch big premiums.

Earlier this month, shares of Legend Biotech Corp LEGN.O jumped in their market debut after the IPO was priced above the targeted range.

“Royalty Pharma is the other side of the coin in the biotech space which is drawing substantial interest from IPO investors,” said Jeff Zell, senior research analyst at IPO Boutique

“They have a diversified portfolio of drugs from the most impressive Pharma companies in the world, which generates desired cash-flow.”

Royalty Pharma's listing eclipses record label Warner Music Group's WMG.O $1.93-billion IPO earlier this month as the largest U.S. listing so far this year, and is behind only Zoetis Inc ZTS.N as the largest pharma IPO of all time, according to data provider Dealogic.

Reporting by C Nivedita; Editing by Vinay Dwivedi