Marshall Urist: I think in terms of the structure and the amounts involved, it’s important to remind everyone, this is a very novel deal structure. This has never been done before in this way. So I think we landed in a really great place in terms of the upfront and then the scale of our commitment to co-fund shoulder to shoulder with Merck, the Phase 3 program. So, I don’t know that I would read a lot into relative confidence about the product in terms of the structure. It’s more once this product goes to Phase 3, what’s the right deal structure and the right way to fund this program and to co-fund this program together. Second, I would also mention, in terms of this program, the trial is in a very large €“ the MK-8189, excuse me, is in a very large Phase 2b program.
So that is going to give us some really interesting and clear data. And we’re really going to know, I think, what this product is at that point. Finally, you asked about how differentiated can it be. I think in schizophrenia alone, we all know that there is still unmet need even with the number of drugs out there, patients cycle on and off therapy over time. And so, there is certainly need for options. But I wouldn’t lose sight of the fact that there obviously is a very broad potential development program beyond that, that could go much further. And that was certainly on our mind as we’re thinking about the potential profile of 8189. I don’t know, Chris, what would you add?
Christopher Hite: I guess the only thing I’d add on capital deployment is I think we feel really good about how we’re deploying capital. At the IPO, we said greater than $7 billion over 5 years. We upped that to $10 billion to $12 billion at the Analyst Day, and we’ve deployed around $8 billion since 2020. So we feel like we’re tracking really well and our opportunity set is only expanding. So we’re super excited about the opportunity to deploy capital.
Operator: Our next question comes from Greg Fraser with Truist.
Gregory Fraser: Curious if you’re seeing any changes in the competitive landscape for royalty transactions at the higher end of the spectrum in terms of deal size? And then, to the extent that you have to access to debt markets to help fund future deals, how should we think about the potential cost of debt?
Pablo Legorreta: Chris, you want to take the question on competition? And then maybe, Terry, the second question?
Christopher Hite: No, we haven’t really seen a whole big change in the competitive landscape. I think we are the largest player in the space. We are an investment grade rated company. We have tremendous access to capital in the capital markets and our own balance sheet and our free cash flow we generate. So, we’re quite comfortable in the environment of competing for the largest deals. And as I think we mentioned before, we welcome actually competition coming into the field in the sense of continuing to raise the awareness of synthetic royalties and R&D funding and just a different sort of way that biopharma can access capital, rather than just the equity or convertible bond market. So we’re really happy where we stand within the competitive landscape.
