v3.25.4
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets
 12 Months Ended
Dec. 31, 2025
Credit Loss [Abstract]  
Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets
The cumulative allowance for changes in expected cash flows from financial royalty assets is presented net within the non-current portion of financial royalty assets on the consolidated balance sheets and includes the following:

•the movement in the cumulative allowance related to changes in forecasted royalty payments to be received based on royalty bearing products’ projected sales which are primarily derived from sell-side equity research analysts’ consensus sales forecasts,
•the write-off of cumulative allowance at the end of a royalty asset’s life which only impacts the consolidated balance sheets, and
•the movement in the cumulative allowance for current expected credit losses, primarily associated with new financial royalty assets with limited protective rights and changes in the underlying cash flow forecasts of financial royalty assets with limited protective rights.

The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the cumulative allowance for credit losses (in thousands):

Activity for the Year
Balance at December 31, 2022(1)
$(2,591,882)
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets(1,006,933)
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets468,562 
Write-off of cumulative allowance87,393 
Provision for credit losses, net(2)
(22,285)
Balance at December 31, 2023$(3,065,145)
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets(1,438,001)
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets805,955 
Write-off of cumulative allowance8,325 
Provision for credit losses, net(2)
(100,415)
Balance at December 31, 2024
$(3,789,281)
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets(687,269)
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets956,944 
Write-off of cumulative allowance95,962 
Provision for credit losses, net(2)
26,163 
Balance at December 31, 2025$(3,397,481)
(1)Includes $115.4 million related to cumulative allowance for credit losses.
(2)In 2023, the provision expense for credit losses was primarily related to the additions of Adstiladrin and Skytrofa to our portfolio. In 2024, the provision expense for credit losses was primarily related to the addition of Niktimvo to our portfolio. In 2025, the provision income for credit losses was primarily related to Niktimvo as a result of changes in sell-side equity research analysts’ consensus sales forecasts, partially offset by the addition of Imdelltra to our portfolio.