Biopharma Credit Share Discussion Threads

[speedsgh] 09/11/2020 08:21

ADDITIONAL INVESTMENT IN EPIZYME -

BioPharma Credit PLC (the "Company"), 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 an amended and restated loan agreement with Epizyme, Inc ("Epizyme") dated 3 November 2020. As part of this amendment, the Company will invest an additional US$75 million in the Epizyme loan.

Under the original terms of the loan agreement, executed in November 2019, Epizyme borrowed US$70 million in three tranches and the Company previously invested US$35 million with BioPharma-V investing the US$35 million balance. The original US$70 million loan will mature in November 2024 and bears interest at LIBOR plus 7.75 per cent. per annum along with a one-time additional consideration of 2.00 per cent. of the total loan amount. In addition, the facility was expandable by up to US$300 million, subject to mutual agreement between the Lenders and Epizyme after approval of tazemetostat for the treatment of follicular lymphoma. On 23 January 2020, TAZVERIK® was granted accelerated approval from the U.S. Food and Drug Administration (FDA) for the treatment of patients with epithelioid sarcoma and on 18 June 2020 TAZVERIK received accelerated approval from the FDA for the treatment of patients with relapsed/refractory follicular lymphoma.

The amendment increases the aggregate principal amount of the loan to Epizyme to US$220 million through a US$150 million fourth tranche ("Tranche D"), which the parties expect to be drawn in full on 18 November 2020. The Company will invest US$75 million of the US$150 million Tranche D and BioPharma-V will invest the US$75 million balance. Tranche D will have the same fees and coupon as the earlier tranches, will be secured by the same collateral as the earlier tranches, and will mature in November 2026 after eight equal amortization payments beginning in February 2025. As part of the amendment, the amortization terms of the initial US$70 million advanced in the first three tranches were changed from eight equal quarterly payments starting in February 2023 to four equal quarterly payments starting in February 2024. Following the expected Tranche D closing, the facility will remain expandable by up to an additional US$150 million, subject to mutual agreement between the Lenders and Epizyme.

"We are delighted to expand our partnership with Epizyme", said Pedro Gonzalez de Cosio, CEO of Pharmakon Advisors, LP. "TAZVERIK is now approved to meet the well-defined unmet patient needs in two very different indications (a solid tumor and a hematologic malignancy), demonstrating its broad therapeutic potential."

Further to the 4 November 2019 announcement of the original loan agreement, Royalty Pharma continues to hold approximately 9.1% of the issued share capital of Epizyme and Pablo Legorreta, a principal of Pharmakon and Royalty Pharma, continues to be a member of Epizyme's board of directors.

[williamcooper104] 21/10/2020 19:04

Thanks for posting Looks pleasingly boring

[speedsgh] 21/10/2020 18:39

Net Asset Value(s) and Monthly Factsheet -

As at the 30 September 2020 the unaudited net asset value per Ordinary Share, including current period revenue, was 101.00 cents. The Company's factsheet will be located on the Company's website,

[speedsgh] 02/10/2020 15:37

Director buys...

On 30/9 Rolf Soderstrom (Director) bought 50,000 shares at £0.787344 = £39,367


On 30/9 Linda Davey (PCA to Rolf Soderstrom, Director of BioPharma Credit PLC) bought 50,000 shares at £0.787344 = £39,367

[speedsgh] 28/9/2020 16:06

STATEMENT REGARDING SAREPTA THERAPEUTICS -

BioPharma Credit PLC (the "Company"), is pleased to announce that, together with Sarepta Therapeutics, Inc ("Sarepta"), and BioPharma Credit Investments V (Master) LP ("BioPharma-V") it has entered into a first amendment to the loan agreement dated 13 December 2019.

Under the original terms of the loan agreement, the Company agreed to invest up to US$350 million (US$175 million in the first tranche ("Tranche A") and up to an additional US$175 million by 31 December 2020 ("Tranche B")) and BioPharma-V agreed to invest up to US$150 million in parallel with the Company acting as collateral agent. The loan had an original maturity date of December 2023 and paid interest at 8.50 per cent. per annum along with a one-time additional consideration of 1.75 per cent. of the total loan amount payable upon funding and an additional 2.00 per cent. payable upon the repayment of the loan.

The amendment increases the aggregate principal amount of Tranche B from US$250 million to US$300 million. The Company's investment in Tranche B will remain unchanged at US$175 million while BioPharma-V will increase its investment by US$50 million. The Company's US$350 million aggregate investment in Sarepta will represent 25% of the Company's portfolio. Sarepta has agreed to draw Tranche B in full, on or prior to 2 November 2020, as long as the conditions to funding the Tranche B are satisfied or waived. In addition, the Amendment extends the maturity date for the Tranche B Loan to 31 December 2024 and increases the funding fee payable to each Lender providing a portion of the Tranche B Loan on the date the Tranche B Loan is funded by 1.20 per cent. to 2.95 per cent.

[speedsgh] 16/9/2020 14:22

Half-year Report -

Pedro Gonzalez de Cosio, CEO and co-founder of Pharmakon Advisors L. P., the Investment Manager of BioPharma Credit PLC, said:

"During the first six months of 2020, Covid-19 has brought exceptional challenges to the global economy resulting in volatile conditions for many sectors and a significant reduction in global dividends. However, as a result of the Company's uncorrelated revenue stream, dividend payments have continued uninterrupted towards the ongoing annual target of 7 cents per share, just above a 7% dividend yield to our investors on the 30 June share price. It is the Company's objective to continue to offer a highly attractive long-term source of income uncorrelated to other markets.

"The Company's investment activity in deploying specialised debt investments such as senior secured loans backed by important life science products has continued as normal with one significant new investment in Collegium Pharmaceuticals during the period and additional follow-on commitments in addition to some attractive pre-payments post-period end.

"The environment continues to be attractive for the Company's investment strategy given the considerable and growing capital needs of the sector. This will be potentially enhanced by an anticipated increase in sector M&A activity and a slowdown in equity issuance that has tended historically to lead to a greater appetite for fixed income as a source of capital for the life sciences industry."

[rambutan2] 29/5/2020 04:02

More good news. The hefty Invesco overhang is gone:



I found this relevantly interesting:

[rambutan2] 26/5/2020 21:11

As predicted, and a good thing imho:

NEW CREDIT FACILITY

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investor, is pleased to announce that it has entered into a US$200 million credit facility (the "Credit Facility") with JPMorgan Chase Bank.

The Credit Facility comprises a three-year US$200 million Revolving Credit Facility ("RCF"). The Company will pay a commitment fee on undrawn amounts of 200 basis points and a LIBOR margin of 400 basis points on drawn amounts. All borrowings under the Credit Facility are subject to compliance with certain covenants and the Company has provided charges over its subsidiaries' assets, including a charge over its subsidiaries' cash account and a floating charge over all of its subsidiaries' assets.

As disclosed in the Company's latest Investor Update, as at 31 March 2020 the Company had a net cash position of US$64.3 million, or 5 per cent. of the Company's net asset value. Should the Revolving Credit Facility be fully drawn, aggregate borrowings would represent approximately 13 per cent. of the Company's net asset value.

According to its Articles of Association, the Company may incur indebtedness of up to a maximum of 50 per cent. of its net asset value, calculated at the time of drawdown, for investment and for working capital purposes. Pharmakon Advisors, LP, the Company's Investment Manager, has agreed not to incur aggregate borrowings greater than 25 per cent. of the Company's net asset value, calculated at the time of drawdown, without prior Board approval. This facility provides for aggregate borrowings of less than 15 per cent.

Pedro Gonzalez de Cosio, CEO of Pharmakon Advisors, LP, said "We are proud to partner with JPMorgan in the Company's inaugural credit facility. This new capital, together with expected cash flows from the portfolio, will provide greater flexibility in relation to new lending opportunities and provide complete coverage for downstream funding obligations."

[jonwig] 10/3/2020 08:18

Annual report:



"The balance of outstanding commitments at the end of 2019 is expected to be funded over the course of 2020." and "Follow-on commitments totalled $319 million as at 31 December 2019, of which most is expected to be funded during the second half of 2020."

Then, "While the Company can raise equity and debt, it will also be important to monitor the potential early prepayment of loans in the portfolio in order to ensure the maximum amount of funds are deployed at all times."

[rambutan2] 16/2/2020 20:02

Confirms that now more than fully invested:

[jonwig] 12/2/2020 13:51

WilliamC - NAV at 102c is higher than the share price. They won't try new equity until they can reverse that. I think ram was suggesting debt.

[williamcooper104] 12/2/2020 13:05

Hope it raises equity - should be able to do at around NAV - bigger = diversified = better - my concern has always been the borrower concentration risk Have been happy to hold a little position

[jonwig] 12/2/2020 09:52

By coincidence, a related company is planning IPO (BPCR is mentioned):



A Canadian healthcare investment group has chosen London to float its flagship fund, reinforcing the UK market’s status as a hub for alternative income investments.

DRI Capital of Toronto operates funds that buy long-term royalty rights for pharmaceutical products from the inventors, research institutions and companies involved with their development. The group said today it was seeking to raise $350m by listing DRI Healthcare, a closed-ended investment company, on the London Stock Exchange’s premium segment.

Behzad Khosrowshahi, chief executive of DRI Capital, said familiarity made London the best fit for the float. The LSE already hosts royalty collection vehicles including BioPharma Credit, a sector peer, and music rights manager Hipgnosis Songs Fund, all of which promise investors returns uncorrelated with conventional asset classes.

“There’s an understanding of the business model,” Mr Khosrowshahi said. “It’s a totally vibrant sector in the LSE. An investor base exists in and around the UK who are frequent investors in the space, so that definitely gives us a bit of a running start.”

DRI typically buys rights to established pharmaceuticals that pay out royalties for a decade or more, which Mr Khosrowshahi said was better suited to public markets than private capital. “Private equity funds tend to have shorter and shorter lives now, and putting a ten to 12 year long asset into a vehicle with a five to seven year long life just didn’t make sense for us,” he said.

The company plans to use the float proceeds to buy assets from three of its existing funds for an aggregate cost of $458.8m. Annual royalties from this seed portfolio are expected to shrink from over $60m a year in 2020 to around $20m by 2027 so future value growth will depend on the acquisition pipeline. DRI’s independent board handles investment decisions while the listed vehicle will be chaired by Paul Mussenden, who was general counsel and head of strategic affairs at UK pharmaceuticals group BTG from 2000 until its takeover in 2019 by Boston Scientific.

More than a quarter of DRI Healthcare’s initial gross asset value post float will be tied to income from Spinraza, a spinal muscular atrophy injection sold by Biogen. It is among the most expensive drugs in the world, with a US list price of $125,000 per dose, and could face competition later this year after US regulators fast-tracked for approval a rival oral treatment developed by Roche and PTC Therapeutics.

Mr Khosrowshahi said DRI’s asset valuation models were reflecting competitive threats as well as factoring in long-term drug price deflation in all developed markets. “The nice thing about the pharmaceutical industry is that it typically takes between eight and 12 years for a drug to be developed and come to market. That process is very transparent,” he said.

DRI was also prepared for any outcome in the 2020 US presidential election, he said. “We’re kind of indifferent to the methodology but we are modelling for US drug prices to be controlled in some fashion, regardless of whether Bernie Sanders makes it [to the White House] or not.”

[rambutan2] 11/2/2020 20:56

Just looked on their site, and there's an investor presentation from yesterday. If you add up the investments/commitments made since last sept, it comes to well above the cash held. So either they have to issue equity, and I'm not sure the mkt wants it at the moment, or they'll have to take on some debt facility. Assuming they can get decent terms, it should pep up the performance a bit.

[jonwig] 11/2/2020 20:09

Could do, I hadn't really thought about it until now, but:

The Company may incur indebtedness of up to a maximum of
50 per cent. of its net asset value (‘‘Net Asset Value’’ or ‘‘NAV217;’),
calculated at the time of drawdown, for investment and for working
capital purposes.
Although not forming part of the investment policy of the Company,
under the investment management agreement between the
Company and Pharmakon Advisors LP (the ‘‘Investment
Manager’’;) dated 1 March 2017 (the ‘‘Investment Management
Agreement’R17;), the Investment Manager will not incur aggregate
borrowings greater than 25 per cent. of the Net Asset Value,
calculated as at the time of drawdown, without prior Board
approval.

[Prospectus pdf p16.]

[jonwig] 11/9/2019 05:52

More on the problem loan, etc. -

[jonwig] 05/8/2019 06:35

Lexicon loan problem:

[jonwig] 04/6/2019 06:19

Edison research coverage:

[jonwig] 04/12/2018 07:10

TESARO:

Pharmakon Advisors, the Investment Manager of BioPharma Credit PLC (the "Company") notes the announcement released yesterday by GlaxoSmithKline plc ("GSK") regarding the definitive agreement pursuant to which GSK will acquire TESARO Inc ("TESARO"). The Company's largest investment is a two-tranche $322 million loan to TESARO, which includes a prepayment fee structure of a premium of 3 per cent., 2 per cent., or 1 per cent. if the loan is prepaid before the second, third, or fourth anniversaries of the relevant closing date respectively plus, if the prepayment is made before the second anniversary, a make whole amount equal to the interest payable between the prepayment date and the second anniversary of the relevant closing date. Pharmakon will continue to monitor the situation and update shareholders as appropriate.

[jonwig] 09/11/2018 07:03

DT Questor:

We make one of our rare forays into premium territory this week. Normally this column seeks to live up to its name by focusing on trusts that trade at a discount, but occasionally we think it is justifiable to pay a small premium.

As recently as a month ago shares in the trust we have in mind, BioPharma Credit, were trading at 6.8pc above its net asset value per share. But the recent sell-off in the stock market has caused the premium to shrink to a more palatable 3pc.

The most obvious attraction of the fund, which lends money to life sciences companies at relatively high interest rates, is its 6.7pc yield, but it offers further benefits.

“We expect returns to have a very low correlation with other investments, along with relatively low volatility,” said Alan Brierley, an investment trust analyst at Canaccord Genuity, the broker. He said the portfolio’s defensive qualities “could have significant value in more challenging [market] conditions”.

Part of the fund’s resilience stems from the fact that the cash flows used to pay interest on the loans it makes derive from sales of drugs and other medical products that have been commercially approved and made available to patients – “investments with long-dated intellectual property protection”, Brierley said. But the experience and skill of the management team at Pharmakon Advisors are also important.

“The managers are highly experienced and can demonstrate an impressive track record; the unlevered weighted average annualised net return is 10pc and there have been no defaults [on loans in any of their funds],” Brierley added.

The trust, whose shares trade in dollars, targets an annual total return of 8pc-9pc, including the target yield of 7pc at the flotation price. Such a high income at a time of historically low interest rates is striking and the reason for it owes much to the specialised niche in which the trust operates.

The fund is able to charge rates of 9pc-12pc on its loans. Normally such high rates would ring alarm bells because they would be a sign of elevated risk. But the fast-growing life sciences firms that borrow from the trust are prepared to pay them because it is ultimately cheaper for their shareholders than issuing new shares, which would dilute existing holdings.

In fact the loans are very safe indeed, as the absence of defaults shows. The trust is one of the 17 in Canaccord’s model portfolio. Also reassuring are the personal stakes of Pablo Legorreta, a principal at Pharmakon Advisors, who owns 76.7m shares, and several board members.

Questor says: buy

[jonwig] 09/3/2018 06:22

C share fundraising: