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Non-Consolidated Affiliates
6 Months Ended
Jun. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Non-Consolidated Affiliates Non-Consolidated Affiliates
We have equity investments in certain entities at a level that provide us with significant influence. We account for such investments as equity method investments or as equity securities for which we have elected the fair value option.

ApiJect

During the three months ended June 30, 2022, we acquired common stock and a revenue participation right from ApiJect. We elected the fair value option to account for our investments in ApiJect because it is more reflective of current values for our investments in ApiJect. We are also required to acquire additional common stock in ApiJect if certain milestones are achieved. The fair value of our equity investment was recorded within Equity securities and the fair value of the revenue participation right was recorded within Other assets on the condensed consolidated balance sheet as of June 30, 2022. No amounts were due from ApiJect as of June 30, 2022.

The Legacy SLP Interest

In connection with the Exchange Offer Transactions, we acquired a special limited partnership interest in the Legacy Investors Partnerships (the “Legacy SLP Interest”) from the Continuing Investors Partnerships for $303.7 million in exchange for issuing shares in our subsidiary. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy SLP Interest entitles us to the equivalent of performance distribution payments that would have been paid to the general partner of the Legacy Investors Partnerships and an income allocation on a similar basis. Our income allocation is equal to the general partner’s former contractual rights to the income of the Legacy Investors Partnerships, net of amortization of the basis difference. The Legacy SLP Interest is treated as an equity method investment as our Manager is also the Manager of the Legacy Investors Partnerships and has the ability to exercise significant influence. The Legacy Investors Partnerships no longer participate in investment opportunities from June 30, 2020 and, as such, the value of the Legacy SLP Interest is expected to decline over time. The Legacy Investors Partnerships also indirectly own a non-controlling interest in Old RPI.

The income allocation from the Legacy SLP Interest is based on an estimate as the Legacy Investors Partnerships are private partnerships that are expected to report on a lag subsequent to the date of this quarterly report. Management’s estimate of equity in earnings from the Legacy SLP Interest for the current period will be updated for historical results in the subsequent period. During the three and six months ended June 30, 2022, we recorded income allocations of $4.7 million and $9.3 million, respectively, within Equity in earnings of equity method investees. During the three and six months ended June 30, 2021, we recorded income allocations of $25.6 million and $30.8 million, respectively, within Equity in earnings of equity method investees. We received cash distributions from the Legacy SLP Interest of $6.8 million and $14.1 million in the three and six months ended June 30, 2022, respectively. We received cash distributions from the Legacy SLP Interest of $4.7 million and $8.6 million in the three and six months ended June 30, 2021, respectively.

The Avillion Entities

We account for our partnership interests in Avillion Financing I, LP and its related entities (“Avillion I”), BAv Financing II, LP and its related entities (“Avillion II,” together with Avillion I, the “Avillion Entities”) as equity method investments because RPIFT has the ability to exercise significant influence over the Avillion Entities. During the three and six months ended June 30, 2022, we recorded a loss allocation from the Avillion Entities of $4.0 million and $8.2 million, respectively, within Equity in earnings of equity method investees. During the three and six months ended June 30, 2021, we recorded a loss allocation from the Avillion Entities of $7.9 million and $15.0 million, respectively, within Equity in earnings of equity method investees.

On December 19, 2017, the FDA approved a supplemental New Drug Application for Pfizer’s Bosulif. Avillion I is eligible to receive fixed payments from Pfizer based on this approval under its co-development agreement with Pfizer. The only operations of Avillion I are the collection of cash and unwinding of the discount on the series of fixed annual payments due from Pfizer. We received distributions from Avillion I of $13.4 million during each of the six months ended June 30, 2022 and 2021, respectively.
In May 2018, RPIFT entered into an agreement, which was amended in July 2021 and was further amended in June 2022 to increase the funding amount by $27.5 million, which totaled $150.0 million over multiple years in Avillion II, which is a party to a co-development agreement with AstraZeneca, to fund a portion of the costs of Phase 2 and 3 clinical trials to advance PT027 through a global clinical development program for the treatment of asthma in exchange for royalties, a series of success-based milestones and other potential payments.Our maximum exposure to loss at any particular reporting date is limited to the current carrying value of the investment plus the unfunded commitments. As of June 30, 2022 and December 31, 2021, RPIFT had $35.7 million and $11.2 million, respectively, of unfunded commitments related to the Avillion Entities.