Biopharma Credit Share Discussion Threads

[davebowler] 25/11/2024 14:04

Investec-
BioPharma Credit (BPCR) – We hosted a group lunch for manager Pedro Gonzalez last week as he was in London for a healthcare conference. BPCR has been a steady performer in the listed debt sector, a sector which has not covered itself in glory in recent years. According to our daily datasheets, over the last 5 years, BPCR has been the best performer in the sector, with NAV (£) total returns of +59.8% . BPCR targets and has paid a 7c annual dividend (covered) but in recent years when rates have been higher and/or it has generated material prepayment fees, BPCR has paid out extra special dividends as shown below. We think the management team are of the highest quality and whilst trading on the current double digit discount, have bought back over 100m shares back this year. The current yield is 10.2% (inc the 2024 announced special), we think this listed debt vehicle deserves attention.

[davebowler] 21/11/2024 10:25

BioPharma Credit (BPCR), a high-yielding, dollar-based fund, has seen a $25m (£19.7m) loan repaid, topping up its coffers following a string of investments in the past two weeks.

Pharmakon Advisors, manager of the £810m biotechnology loan portfolio, has reported the repayment of a $50m senior secured loan by Immunocore, an Oxfordshire-based T-cell receptor therapy group. BPCR’s share made up 2.6% of the portfolio at 30 September.

The repayment includes a $1.5m prepayment fee, of which BioPharma receives $750,000.

Deutsche Numis analyst Ash Nandi calculated BPCR also received accrued interest of $264,000.

She said the repayment would result in a ‘small uplift’ of 0.1% to the September net asset value (NAV) and leave the cash balance at about $165m, or 14.2% of the portfolio.

The cash pile takes into account the recent flurry of loans the fund has made, carrying on the pick-up in lending that started this year after a 10-month hiatus.

On 31 October, BPCR funded $35m of a $200m loan to Alphatec, a Nasdaq-listed medical device company.

Alphatec’s ‘organic innovation machine’ focused on developing newer approaches to spinal surgery to make it safer and deliver reproducible outcomes.

Pedro Gonzalez de Cosio, chief executive of Pharmakon Advisors, said Alphatec aims to be ‘the standard bearer’ in spinal surgery and care and reported net sales of $435m in the first nine months of this year.

The loan, which matures in January 2028, charges interest at a three-month secured overnight financing rate (SOFR) – the benchmark for dollar-denominated loans – plus 5.75% a year, subject to a 3% SOFR floor.

The fund received a 1% fee on its $35m investment at the signing of the loan and will receive a repayment premium of 3% of the principal amount should it be repaid within 12 months of the signing of the loan, reducing to 2% between 13 months and two years, and 1% after two years.

Gonzalez de Cosio said Alphatec’s ‘mission to improve spine care is fuelling exceptional growth’.

‘We are excited to partner with the team in support of that important mission as the company continues to expand profitability and inflects to positive cashflow,’ he said.

Just a day after the Alphatec investment, BPCR announced an additional investment in Insmed, a Nasdaq-listed drug developer for rare and serious diseases.

BPCR put up $140m of a $350m loan to Insmed in 2022 and is now investing another $60m in a new $150m tranche. This takes its total exposure to the $12bn company to $223.5m.

In funding the new tranche, BPCR also made amendments to the loan, including extending the maturity to September 2029 and reducing the interest rate from a three-month SOFR plus 7.75% a year to a fixed rate of 9.6% and adding a 2% exit fee.

Last week BPCR topped off these deals with a new investment in Geron Corporation, which develops blood cancer treatments. The biotech company has had a drug approved in the US and is conducting phase three trials on a new drug.

BPCR will loan up to $100m across three tranches, the first $50m of which was drawn on 1 November. The second tranche of $30m will be available from 31 December 2025 and the final $20m can be drawn on the achievement of certain revenue milestones.

The loan will mature in November 2029 and bear interest at a three-month SOFR plus 5.75%, subject to a 3% SOFR floor.

Gonzalez de Cosio said Geron was ‘driving commercial success in the US’ with its drugs and he looked forward to ‘supporting the company and management team as they plan for a potential launch in the EU and continue to develop the asset in additional hematologic malignancies’.

Numis analyst Nandi said the fund has ‘deployed significant capital’ this year and has also been active in buying back shares after amending its discount control mechanism in March to improve its ‘flexibility to allocating capital and prevent cash drag’. She said the current 11% discount was ‘an attractive entry point’ for new investors.

‘It has delivered a historic yield of 8% for ordinary dividends, increasing to 11% including special dividends. We believe it has the potential to continue to deliver an attractive yield to investors given the high yield of portfolio, currently 11.5%, post the latest investments.’

Launched at $1 each in 2017, shares in London-listed BPCR have fallen to 87 cents, below their 97.2 cents of NAV at 30 September.

[speedsgh] 15/11/2024 13:20

BioPharma Credit: More cash in and cash out for busy 11%-yielder -

[davebowler] 08/11/2024 10:26

Panmure-
Nearly $200m of new investments recently despite capital constraints with >$100m spent on buybacks YTD
Analyst: Shonil Chande

Mkt Cap £795m | Share price $0.87 | Prem/(disc) -10.9% | Div yield 14.1%

Event
BioPharma Credit has recently announced three investments, committing $35m to Alphatec, adding $60m to its existing loan with Insmed, and pledged up to $100m to Geron Corporation.

The $100m Geron loan is based on 3M SOFR + 5.75% (with a 3% SOFR floor) and also includes an additional consideration of 2.5% of each tranche paid at funding.

BCPR has increased its loan to Insmed, with a new coupon rate fixed at 9.6%. It also includes an exit fee of 2% on any principal payment (scheduled or otherwise) and a one-time additional consideration of 2% of the second tranche paid upon funding. Insmed's sales have grown from $188m in 2021 to an expected $360m this year, improving its financial position.

With respect to Alphatec, this is a new investment with BPCR providing $35m. The loan matures in January 2028 and earns interest of 3M SOFR plus 5.75% p/a subject to a 3.00% SOFR floor. The loan includes a number of prepayment fees:

3% of principal for repayments within the first 12 months
2% of principal for repayments between months 13-24
1% of principal for repayments after 24 months but before maturity
Exit Fee: 3.25% of any repayment or prepayment
Panmure Liberum view

BPCR has announced new investments totalling $195m since 31 October 2024. A key focus at the moment is increasing diversification while preserving capital for future investments. This is the reason why BPCR's allocation in the recent investments, such as Alphatec, is lower than the private fund. For relatively smaller investments like Alphatec, BPCR will maintain a c.50/50 split with the private fund, but for larger deals, the allocation is likely to be adjusted to c.60/40 to manage BPCR's capital constraints. BPCR has spent more than $100m on buybacks YTD. BPCR’s shares have delivered a share price total return of 16% YTD and a total distribution yield of more than 20% based on the dividend yield and buybacks YTD. We think it offers very good value at the current price. These are high-returning loans that are well structured.

[speedsgh] 07/11/2024 13:22

NEW INVESTMENT OF UP TO US $250 MILLION -

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investment trust, is pleased to announce that it, through its fully owned subsidiary, together with BioPharma Credit Investments V (Master) LP ("BioPharma-V" and jointly with the Company, the "Lenders") has entered into a definitive senior secured loan agreement with Geron Corporation ("Geron") (the "Loan Agreement"). The Company will invest up to US$100 million and BioPharma-V will invest up to an additional US$150 million in parallel, with the Company acting as collateral agent.

Based in the US, Geron is a commercial-stage biopharmaceutical company with a current market capitalization of ~US2.5 billion committed to extending and enhancing the lives of people living with blood cancers. Geron's telomerase inhibitor RYTELO™ (imetelstat) is approved in the United States for the treatment of certain adult patients with lower-risk myelodysplastic syndromes (LR-MDS) with transfusion dependent anemia. Geron is also conducting a pivotal Phase 3 clinical trial of imetelstat in JAK-inhibitor relapsed/refractory myelofibrosis (R/R MF), as well as studies in other myeloid hematologic malignancies. Rytelo was launched in the United States on June 27, 2024. Net product revenue for the quarter ending September 30, 2024 was US$28.2 million.

Under the terms of the transaction, the Company will invest up to US$100 million across three tranches:

· Tranche A of US$50 million was drawn on 1 November 2024;

· Tranche B of US$30 million is available to be drawn by 31 December 2025, subject to customary conditions precedent set forth in the Loan Agreement; and

· Tranche C of up to US$20 million will be available upon achievement of certain revenue milestones and customary conditions precedent set forth in the Loan Agreement until 31 December 2025.

The loan will mature in November 2029 and will bear interest at 3-month SOFR plus 5.75 per cent. per annum subject to a 3.00 per cent. SOFR floor, along with an additional consideration of 2.50 per cent. The additional consideration with respect to Tranche A was paid at the funding of Tranche A and will be due and payable with respect to Tranche B and Tranche C at the funding of those tranches.

[speedsgh] 01/11/2024 09:53

UPDATE ON INVESTMENT -

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investment trust, is pleased to announce an additional investment in Insmed Incorporated ("Insmed"). The Company announced on 20 October 2022 a US$350 million senior secured loan to Insmed, with the Company investing US$140 million and BioPharma Credit Investments V (Master) LP ("BioPharma-V") investing US$210 million. The Company is investing US$60 million in a new US$150 million tranche, with BioPharma-V investing US$90 million. Together with the accrual and capitalization of the partial paid-in-kind interest, the Company's total exposure to Insmed will be approximately US$223.5 million.

Based in the US, Insmed is a publicly traded biopharmaceutical company with a current market capitalization of ~US$12 billion (Ticker: INSM - NASDAQ). Insmed, a commercial stage global biopharmaceutical company striving to deliver first- and best-in-class therapies to transform the lives of patients facing serious diseases, reported trailing nine-month net sales of US$259 million during the period ending 30 September 2024 and USD$1.468 billion in cash and marketable securities as of 30 September 2024. Insmed is advancing a diverse portfolio of approved and mid- to late-stage investigational medicines as well as cutting-edge drug discovery focused on serving patient communities where the need is greatest. Insmed's most advanced programs are in pulmonary and inflammatory conditions.

In addition to the new tranche, certain amendments were made to the Insmed loan, including extending the maturity to September 2029, resetting the make-whole period to three years from the amendment date, reducing the interest rate from 3-month SOFR plus 7.75 per cent. per annum to a fixed rate of 9.60 per cent. per annum, and adding a 2.00 per cent. exit fee payable upon any payment of principal, scheduled or otherwise. A one-time additional consideration of 2.00 per cent. of the second tranche was paid on the funding of the second tranche.

[speedsgh] 31/10/2024 10:06

NEW INVESTMENT OF US$35 MILLION -

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investment trust, is pleased to announce a new investment in the form of an assignment of a US$35 million tranche in a US$200 million senior secured loan to Alphatec Holdings, Inc. ("ATEC"). BioPharma Credit Investments V (Master) LP ("BioPharma-V") was assigned an additional US$35 million tranche. The assignor, Braidwell Transaction Holdings LLC - Series I, will retain the remaining US$130 million.

Based in the US, ATEC is a publicly traded medical device company with a current market capitalization of ~US$745 million (Ticker: ATEC - NASDAQ). ATEC's Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with its expanding Alpha InformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC's vision is to be the Standard Bearer in Spine. ATEC reported net sales of US$435 million for the first nine months of 2024.

The loan matures in January 2028 and bears interest at 3-month SOFR plus 5.75 per cent. per annum subject to a 3.00 per cent. SOFR floor. The Company also received a 1% fee on its US$35 million investment at the signing of the assignment agreement. The loan includes (i) a repayment premium of 3.00 per cent. of the principal amount of any such repayment during the first 12 months after the signing date, 2.00 per cent. of the principal amount of any such repayment during months 13 through 24 after the signing date, and 1.00 per cent. of the principal amount of any such repayment thereafter but prior to the maturity date, as well as (ii) an exit fee of 3.25 per cent. of the principal amount of any repayment or prepayment on such date of repayment or prepayment.

[williamcooper104] 06/8/2024 14:24

That's the problem here Performance is excellent but the loan concentrations are extreme So all it takes is for one really bad loan to blow things up

[davebowler] 29/7/2024 09:32

Panmure-
Roche completes acquisition of LumiraDx assets
Analyst: Joachim Klement

Mkt Cap £839m | Share price 75.8p | Prem/(disc) -16.6% | Div yield 8.3%

Event

Roche announced that it had completed the acquisition of the LumiraDx assets after receiving all regulatory clearances.

In connection with the closing of the transaction, the amount due to the administrators of LumiraDx is $351.1m and includes $15m holdback from the purchase price, which is expected to be released in accordance within the next 90 days. The company expects to receive 50% of the amounts due to the administrators, less certain expenses, most of which will be returned to the senior secured lenders within the next 10 days and the balance within the next 90 days. Assuming Roche releases the full holdback amount and estimated total expenses of $10m, the company expects to receive approximately $170.6m, which is $3m more than the June 2024 valuation of the position. Altogether, the company expects to recover approximately 96% of its original $206m investment in LumiraDx.

Pharmakon notes that the transaction did not involve the sale of LumiraDx’s 81% interest in a Colombian distributor of third party diagnostic products with $13.7m in sales in 2023. The ownership of this asset is expected to be transferred to the senior secured lenders in due course and any proceeds from the sale of these assets would be in addition to the amounts described above.

Panmure Liberum view

This puts a positive end to the long story of the LumiraDx investment. We think the outcome is very good for BioPharma Credit investors with minimal losses on the investment that may shrink some more if the Colombian distribution assets can be sold at a reasonable price.

The completion of the windup of LumiraDx should do two things:

· It removes uncertainty over the NAV and the assets of BioPharma Credit thus boosting the share price.

It should refocus investor attention to the excellent investment track record of Pharmakon Advisors. The chart below, taken from the annual Report 2023 shows that BPCR has managed not only to average Net IRRS of more than 10% in its portfolios but that apart from LumiraDx, the net IRR of every single investment since IPO has been close to or above 10%. The Reata loan repaid in 2023 even had a net IRRR of 106.1%.
The discount to NAV of 16.6% is clearly too wide and investors should pick up the fund while they can, in our view.

[davebowler] 22/7/2024 08:49

Specialist DebtBioPharma Credit CMA clears sale of LumiraDx to RocheAnalyst: Joachim KlementMkt Cap £850m | Share price $0.90 | Prem/(disc) -10.1% | Div yield 11.3%EventOn 19 July 2024, the CMA cleared the proposed acquisition of LumiraDx by Roche. With the CMA's clearance of the acquisition, LumiraDx has started to work with Roche toward finalising the acquisition closing. BPCR is awaiting further confirmation as to the status of the transaction, but Pharmakon Advisors LP cannot comment further beyond what has been made public by the CMA and the two companies involved in the transaction.Panmure Liberum viewWith the clearance by the CMA, BPCR investors will soon be able to draw a line under a rather unhappy episode in an overall successful fund. In particular this news means that BPCR will not have to guarantee more bridge funding beyond the amount provided until end of August, which reduced the potential cash drain ion BPCR.

[panshanger1] 19/7/2024 15:02

Decent volume and a bit of traction today

[speedsgh] 01/7/2024 07:35

UPDATE ON INVESTMENT -

BioPharma Credit PLC (LSE: BPCR) (the "Company") makes reference to its announcements on (i) 2 January 2024 (the "Previous Announcement") regarding LumiraDx Limited ("LumiraDx"), the appointment of the joint administrators of two LumiraDx subsidiaries (the "Administrators"), and the entering into by the Administrators of a sale and purchase agreement (the "SPA") with Roche Diagnostics Limited ("Roche") providing for Roche's acquisition of certain LumiraDx group companies (the "Point of Care Diagnostics Companies") and certain related assets (the "Transaction"); and (ii) 28 May 2024 regarding the update on the UK CMA (Competition and Markets Authority) website regarding the Transaction.

LumiraDx has informed the Company that the "Long-Stop Date" under the SPA to complete the Transaction has been extended to 31 August 2024 (the "Extension"). In connection with the Extension, the Senior Secured Lenders (as referenced in the Previous Announcement) have agreed to provide up to an additional US$20 million in funding, comprised of up to US$10 million as needed for each of July and August 2024, for the LumiraDx group until the completion of the Transaction to support the ongoing operations of LumiraDx's Point of Care Diagnostics Companies (the "Additional Funding", and together with the Extension, the "Amendments"). Under the terms of the Amendments, Roche has further agreed to reimburse the Senior Secured Lenders for up to 70% of the Additional Funding, with a cap of US$7 million for each of July and August 2024. The Company has committed up to US$10 million in connection with the Additional Funding.

The Transaction continues to undergo the process to receive antitrust and regulatory reviews. At this time, Pharmakon Advisors, LP cannot comment beyond what has been made public by the CMA and the companies involved in the transaction.

Pharmakon Advisors, LP is continuing to actively monitor the situation and will provide any updates in due course.

[speedsgh] 20/6/2024 18:56

Dividend Declaration -

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investor, is pleased to declare an interim dividend in respect of the financial period ending 30 June 2024 of $0.0175 per ordinary share, payable on 31 July 2024 to ordinary shareholders on the register as at 5 July 2024. The ex-dividend date will be 4 July 2024. The Company has chosen to designate the entire amount of this interim dividend as an interest distribution. Shareholders in receipt of such a dividend will be treated for UK tax purposes as though they have received a payment of interest. This will result in a reduction in the corporation tax payable by the Company.

The Company is currently paying and continues to target a 7-cent annual dividend per ordinary share...

[panshanger1] 23/5/2024 08:50

Not much stock available atm

[speedsgh] 10/5/2024 15:15

STATEMENT RE COHERUS BIOSCIENCES, INC. -

Pharmakon Advisors, LP, the investment manager of the Company, notes the announcement released 9 May 2024 by Coherus Biosciences, Inc. ("Coherus") regarding entering into a combined term loan and product royalty financing agreement with Barings (the "New Financing"). The New Financing allowed Coherus to fully pay off its remaining USD$75 million senior secured term loan, of which the Company had an investment of USD$37.5 million.

The Company had previously announced on 10 January 2022 an investment in a senior secured loan to Coherus of up to USD$150 million in up to three tranches. The Company had previously funded US$125 million, of which USD$87.5 million was repaid as referenced in the Company's announcement on 6 February 2024. The remaining USD$37.5 million was repaid to the Company in connection with the New Financing. In connection with this final repayment, the Company received US$39.8 million in total, including USD$2.3 million of accrued interest, and prepayment and make-whole fees.

[davebowler] 03/5/2024 08:52

Liberum-
BioPharma Credit has entered into a new senior-secured loan agreement of up to $400m with Novocure Luxembourg S.a.r.l. (a wholly-owned subsidiary of Novocure Limited, a listed global oncology company with a market cap of $1.38bn). BioPharma Credit Investments V will invest up to an additional $200m in parallel. The loan will mature in May 2029 and has the following interest profile: 3-month SOFR plus 6.25% p/a, subject to a 3.25% SOFR floor, and an additional 2.50% consideration.

Under the terms of the transaction, BPCR will invest up to US$200m across four tranches:

Tranche A of $50m was drawn on 1 May 2024;
Tranche B of $50m is required to be drawn by 30 June 2025, subject to customary conditions precedent;
Tranche C of up to $50m will be available upon achievement of certain milestones and revenue thresholds until 31 December 2025;
Tranche D of up to $50m will be available upon achievement of certain milestones and revenue thresholds until 31 March 2026.
Liberum view

This is the third investment in Novocure by BPCR and entities managed by its manager (Pharmakon Advisors). This follows the Tarsus investment announced on 24 April and is another indication that BPCR is now able to strike a balance in capital allocation between portfolio investments and repurchases. This is attractive and is reflected in a YTD share price TR returns of 10.4% and a c.6ppts narrowing in the discount.

[speedsgh] 02/5/2024 13:13

New senior secured loan agreement with Novocure of up to USD400m (USD50m already drawn) with minimum interest rate of 9.5% plus additional considerations of 2.5% upon each funding...

NEW INVESTMENT OF UP TO US$400 MILLION -

[gsbmba99] 02/5/2024 13:02

According to the most recent factsheet, the yield of 13.7% is using "dividends paid/declared for twelve month period 31 March 2024" which they say is $0.1196. I can get this amount if I add the dividends paid between 26 May 2023 and 30 April 2024 (inclusive) which is five dividends as opposed to four "quarterly" dividends. On the plus side, Q323 and Q423 gross yields on the invested assets (ie excluding cash) were both above 13%. Hopefully this tranlates to very high single digit US cents in dividends.

[smidge21] 30/4/2024 14:55

These historic yields are of little value. Based on the latest price and historic distributions, they are also not obtainable

[brucie5] 30/4/2024 14:48

speedgh, that 14% looks somewhat misleading according to AAIC, which gives 7.99%. But delighted to be wrong!

[speedsgh] 30/4/2024 14:40

BioPharma Credit ends 10-month hiatus with $100m loan to Tarsus -

... ‘The shares are on a historic yield of 14%, including special dividends, and trading on a 10% discount which we believe offers value given the strong income generation from the portfolio,’ said Deutsche Numis analyst Ewan Lovett-Turner.

[davebowler] 24/4/2024 10:13

Liberum-
Major new investment
Analyst: Shonil Chande

Mkt Cap £865m | Share price $0.88 | Prem/(disc) -10.4% | Div yield 8.0%

Event

BioPharma Credit has agreed a new senior-secured loan investment of up $100m with Tarsus Pharmaceuticals (a listed US biopharma entity market cap of $1.2bn). BioPharma Credit Investments V will invest up to an additional $100m in parallel. The loan will mature in April 2029 and has the following interest profile: 3-month SOFR plus 6.75% p/a, subject to a 3.75% SOFR floor.

Under the terms of the transaction, the Company will invest up to US$100 million across four tranches:

Tranche A of $37.5m was drawn on 19 April 2024;
Tranche B of $12.5m will be available to be drawn at the election of Tarsus until 31 December 2024;
Tranche C of $25m will be available upon achievement of certain revenue thresholds until 30 June 2025;
Tranche D of $25m will be available upon achievement of certain revenue thresholds until 31 December 2025.
Liberum view

This is BPCR’s largest new investment since May 2023 and potentially one of its largest in recent years. At c.5.348% 90-day SOFRA, the loan will pay interest at 12.1% (minimum of 10.5%, taking account of the SOFR floor). YTD, BPCR’s shares have returned 9.9% on a TR basis and the discount has narrowed by 6ppts. We identified BPCR as one of our top picks for this year in our model portfolio note.

BPCR’s revised discount control mechanism, effective since late March 2024, provides greater capacity to take advantage of deployment opportunities such as Tarsus, while still maintaining significant support to the shares via repurchases (strong impact based on our tracked indicators). In BPCR’s case, returns from portfolio opportunities are higher than from buybacks. We calculate an ROI from buybacks of c.10% YTD, with a c.+0.5% impact on NAV per share YTD.

[brucie5] 24/4/2024 07:44

I'm very happy to hold this share: it sits in the back row holding its value while chucking out good dividends.

[speedsgh] 24/4/2024 07:37

Like the look of this. Up to USD100m (USD37.5m already drawn) with minimum interest rate of 10.5% to what seems a quality business...

NEW INVESTMENT OF UP TO US$100 MILLION -