We expect Royalty Pharma PLC RPRX to beat expectations when it reports third-quarter 2020 results on Nov 11. In the last reported quarter, the company delivered an earnings surprise of 19.67%.Shares of Royalty Pharma have underperformed the industry so far this year. The stock has declined 25.3% compared with the industry’s decrease of 3.6%.Factors to NoteRoyalty Pharma has neither an approved drug in its portfolio nor a pipeline. The company earns revenues from royalties from sales of marketed drugs of several companies. These include several key drugs — Vertex’s VRTX cystic fibrosis franchise, Biogen’s BIIB multiple sclerosis drug, Tysabri, J&J/AbbVie’s blockbuster cancer drug Imbruvica, Gilead’s HIV franchise, Merck’s Januvia and Janumet, Pfizer’s Xtandi, Novartis’ Promacta and others.Sales of some of these drugs like Imbruvica, Tysabri and Promacta showed strong growth during the third quarter while sales of others remained flat or declined. The impact on royalties remains to be seen when the company reports.Moreover, approval to Epizyme’s Tazverik in June and Roche’s Evrysdi in August is likely to have brought additional revenues. The company has agreements to earn royalties on sales of these drugs.Royalty Pharma has entered into multiple royalty acquisition agreement resulting in approximately $1.7 billion in announced transactions so far this year. Investors will likely focus on anticipated cashflow from these agreements as well as update on any new or potential royalty acquisition agreements.Why a Likely Positive Surprise?Our proven model predicts an earnings beat for Royalty Pharma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (60 cents per share) and the Zacks Consensus Estimate (59 cents per share) is +1.70%.Zacks Rank: Royalty Pharma currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Royalty Pharma PLC Price and Consensus Royalty Pharma PLC price-consensus-chart | Royalty Pharma PLC QuoteAnother Stock to ConsiderHere is a biotech stock that you may also want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.ADC Therapeutics SA ADCT has an Earnings ESP of +15.58% and a Zacks Rank #2.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Biogen Inc. (BIIB): Free Stock Analysis Report Royalty Pharma PLC (RPRX): Free Stock Analysis Report ADC Therapeutics SA (ADCT): Free Stock Analysis Report Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research