BioPharma Credit PLC USD · LSE:BPCP
BioPharma Credit PLC USD — BioPharma Credit — Investor Presentation (September 2018)
25 slides from BioPharma Credit PLC USD's investor presentation, Sep 13, 2018
Slide 1: Debt Capital for the Life Sciences Industry
Debt Capital for the Life Sciences Industry COMPANY PRESENTATION – September 2018 For additional information please email: ir@bpcruk.com or visit BioPharma Credit’s website at www.bpcruk.com
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS PRESENTATION IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTI
Slide 3: Disclaimer
Disclaimer This presentation was prepared using the financial information available to the Company as at the date of this presentation. Except where otherwise indicated herein, the information provided in this presentation is based on matters as they exist as of the date of preparation and not as of
Slide 4: Experienced Management Team
Experienced Management Team Pharmakon Advisors Pedro Gonzalez de Cosio Martin Friedman Pablo Legorreta Co-Founder and Principal Principal Co-Founder and Principal Co-founded Pharmakon in 2009 Joined Pharmakon in 2011 Co-Founded Pharmakon in 2009 after 17 years in structured after 18 years in he
Slide 5: Summary of Key Terms
Summary of Key Terms Company BioPharma Credit PLC, a UK investment trust listed on Specialist Fund Segment in March 2017 (Ticker: BPCR LN) Placing Programme of C Shares and new Ordinary Shares to be implemented until 13 March 2019 Placing Conversion into Ordinary Shares at the earlier of (i) a
Slide 6: The First Eighteen Months
The First Eighteen Months Total Raised ~$1,080m gross IPO – $762m gross Placing of Ordinary Issue of C-Shares proceeds proceeds including Shares – $154m – $163m gross ($740m in cash) $339m of seed gross proceeds proceeds assets Current1 Cash Balance: ~ $172m March 2017 Q2-2017 Q3-2017 Q4-2017 Q1-201
Slide 7: The First Eighteen Months
The First Eighteen Months BioPharma Credit is close to being substantially invested (millions) BPCR Porfolio Composition $1,200 $23 ~ $239m or 70% of seed assets $1,000 $125 RPS (RPS + BP-III) have amortized since IPO $150 BioPharma III $800 Cash $194 Despite the $239m in $600 Tesaro amortizations p
Slide 8: Summary of Assets
Summary of Assets Seed Assets Post-IPO Investments ROYALTY PHARMA Pharmakon Advisors, LP a . . i " ( Investment: (RPS) (BioPharma Ill) WIESARO — 4 Bristol Myers Squibb | Lexico novocure 2 i iy f LA perma’ 0 PHARMACEUTICALS Investment Type: Secured Loan 46% Limited Secured Loan Priontty Royalty Secur
Slide 9: Trust Facts as at 31 July 2018
Trust Facts as at 31 July 2018 8
Slide 10: Investment Opportunity – Summary
Investment Opportunity – Summary The Life Sciences Debt Market is an Underserved, Large and Growing Opportunity Worldwide $1.1tn industry growing at 6% per annum Large capital needs, private companies spent $190bn in R&D during 2014 Industry dynamics create new debt investment opportunities
Slide 11: Life Sciences is a Large, Vital Industry with Strong, Consistent Growth
Life Sciences is a Large, Vital Industry with Strong, Consistent Growth WW Pharmaceutical Industry vs. Other Industries Global Pharmaceutical Sales: Historical & Projected ($, Trn) Est. WW US Sales $1.4trn $1.1trn $727bn $304bn $15bn $1.4 Mkt. Size WW Sales Mult. of 0.8x¹ 1.5x 3.6x 73x Forecast in L
Slide 12: Specialization & Fragmentation of Drug Discovery is Leading to More Lending Opportunities
Specialization & Fragmentation of Drug Discovery is Leading to More Lending Opportunities Worldwide Sales from Top 30 Products >5000 labs As new products are approved, more companies are generating rights and royalties from life sciences products, the ideal collateral for BioPharma Credit. Recent tr
Slide 13: Pharmakon Advisors has invested over $3.0 billion since 2009
Pharmakon Advisors has invested over $3.0 billion since 2009 Historical Investment Performance as of 12/31/17 (Private Funds) Founded in 2009; manager of the BioPharma funds Private Fund I II III IV $3.1bn committed in 31 transactions (incl. BPCR) Launch Date June 2009 March 2011 February 2013 D
Slide 14: The right structure / LTV helps generate attractive returns on debt irrespective of equity performance
The right structure / LTV helps generate attractive returns on debt irrespective of equity performance Life Sciences Debt Investments are less risky and are exposed to less volatility than the corresponding equity investments ■ The chart below shows the cash on cash returns of all past Pharmakon inv
Slide 15: Major Investments
BIOPHARMA CREDIT PLC Major Investments 14
Slide 16: $500m senior secured corporate loan to Tesaro
$500m senior secured corporate loan to Tesaro Key terms of Loan Description: TESARO, Inc. (TSRO) is an oncology-focused Size of facility: $500m to be funded in two tranches biopharmaceutical company focused on in-licensing and developing Tranche A: $300m at closing (BPCR $220m) oncology-relate
Slide 17: $316m senior secured corporate loan to help finance Sebela's acquisition of Braintree Laboratories
$316m senior secured corporate loan to help finance Sebela’s acquisition of Braintree Laboratories Sebela Corporate Overview Description of key products Description: Sebela Pharmaceuticals is a privately-held US Suprep – osmotic laxative indicated for cleansing of the colon focused specialty pha
Slide 18: $150m senior secured corporate loan to Novocure
$150m senior secured corporate loan to Novocure Novocure Corporate Overview Description of key products Description: Novocure is a commercial stage oncology company Optune System – a cancer treatment centered on a proprietary developing a profoundly different cancer treatment utilizing a therapy
Slide 19: $150m senior secured loan to Lexicon with potential $50m second tranche
$150m senior secured loan to Lexicon with potential $50m second tranche Lexicon Corporate Overview Description of key products Description: Lexicon Pharmaceuticals, Inc. (LXRX) is a XERMELO (telotristat ethyl) - an oral treatment that works with biopharmaceutical company focused on developing dr
Slide 20: Appendix
BIOPHARMA CREDIT PLC Appendix 19
Slide 21: Rigorous Screening and Evaluation of Opportunities
Rigorous Screening and Evaluation of Opportunities 2017 Pharmakon Opportunities Filters Screened 205 opportunities. Initial screen focused on: 1 Viable, marketed product 205 Opportunities Counterparty with financing need 2 58 opportunities met initial requirements. Performed initial 58 diligence
Slide 22: The Investment Process / Assessing Risks
The Investment Process / Assessing Risks Sizing a Loan Pharmakon’s Investment Process is Product Centric Upside Debt Service vs. Projected Cash Flows Case ■ The expected future cash flows from the underlying product(s) need to exceed the cost of servicing the loan ■ This should also be the case for
Slide 23: Risk Mitigants
Main risk factors are determined by the particular stage in a product’s life Top 500 Drugs Based on WW Sales Since 1986 – Average Annual WW Sales Since Year Of Launch $1,422 $1,438 Loss of IP Drug Regulatory $1,384 Exclusivity $1,342 $1,375 Approval $ millions Discovery $1,267 +3% +1% $1,258 post PT
Slide 24: M&A take-out value of oncology and specialty product companies illustrate the potential collateral value
M&A take-out value of oncology and specialty product companies illustrate the potential collateral value of these products Source: Bloomberg, company filings 23
Slide 25: Example of a Royalty Loan: $150m loan from BioPharma-IV to Halozyme Secured by Royalties
Example of a Royalty Loan: $150m loan from BioPharma-IV to Halozyme Secured by Royalties Background Transaction Structure Halozyme developed ENHANZE™ technology that allows for intra- venous (IV) infused drugs to be reformulated and delivered via more Initial Flows convenient Sub-Q injection $150m
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