BioPharma Credit PLC USD · LSE:BPCP
BioPharma Credit PLC USD — BioPharma Credit — FY2023 Earnings Presentation
33 slides from BioPharma Credit PLC USD's earnings presentation, Mar 27, 2024
Slide 1: Debt Capital for the Life Sciences Industry
Debt Capital for the Life Sciences Industry COMPANY PRESENTATION – 27 March 2024 For additional information please email: ir@bpcruk.com or visit BioPharma Credit PLC’s website at www.bpcruk.com
Slide 2: Disclaimer
Disclaimer This presentation of information relating to BioPharma Credit PLC (“BPCR”) is confidential and is intended solely for the information and exclusive use of the person to whom it has been provided. It is not to be reproduced, or transmitted, in whole or in part, to third parties. This prese
Slide 3: Experienced Investment Team
Experienced Investment Team Pharmakon Advisors, LP Pedro Gonzalez de Cosio Martin Friedman Pablo Legorreta Co-Founder, Principal and CEO 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 ye
Slide 4: Financial Highlights as at December 2023
Financial Highlights as at 31 December 20231 Source: Pharmakon 1. Past performance is not an indication of future performance. 3
Slide 5: Recent Material Updates
Recent Material Updates 2 October 2023 – BPCR funded its share of Tranches E, F and G of the LumiraDx loan totaling $8,000,000. 9 December 20231 During such period BPCR entered into five amendments to the LumiraDx loan agreement, which included waivers for the minimum sales and minimum liquidity cov
Slide 6: Recent Material Updates
Recent Material Updates 5 January 2024 – BPCR funded its share of three additional fundings as part of the agreement with Roche to 1 March 2024 fund LumiraDx until the close of the acquisition to support ongoing ordinary course of operations, totaling $13,000,000. 29 January 2024 On 29 January 2024,
Slide 7: Recent Material Updates
Recent Material Updates 5 March 2024 – On 5 March 2024, BPCR entered into a First Amendment and Waiver with OptiNose which 15 March 2024 waived the no ‘going concern’ requirement with respect to the 2023 fiscal year and first quarter of 2024. On 8 March 2024, BPCR entered into a Second Amendment wit
Slide 8: Investment Opportunity – Summary
Investment Opportunity – Summary Investments in Approved Life Sciences Products – No Clinical Trial or Approval Risk Debt investments backed by life sciences products (drugs, devices and diagnostics) Collateral value assigned only to approved products in their approved indications and territorie
Slide 9: BPCR has generated consistent returns since IPO
BPCR has generated consistent returns since IPO1 BPCR annualized2 dividends per share in US$ $0.140 Interim Special $0.120 $0.100 Interim dividend has consistently $0.080 met the annualized $0.070 target $0.060 for almost seven years $0.040 $0.020 $0.000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 10: Realized Gross / Net IRR
Investment track record of mostly singles and doubles – Emphasis on consistency and reduced risk Unlevered Returns have been consistent over the years (34 Realized Transactions)1 Realized Gross IRR 70% Realized Gross IRR Realized Net IRR 60% 50% Realized Gross / Net IRR 30% (10) > 15.0% 40% 30% 20%
Slide 11: The right structure / LTV helps generate attractive returns on debt
The right structure / LTV helps generate attractive returns on debt irrespective of equity performance Life Sciences Debt Investments were less risky and are generally exposed to less volatility than an equity investment in the corresponding issuer ■ The chart below shows the gross and net multiple
Slide 12: New investments have allowed BPCR to broaden its diversification
New investments have allowed BPCR to broaden its diversification and deploy cash from capital raises and loan repayments Evolution of BPCR Portfolio since IPO1 (US$m) $1,800 Cash Seed Assets $1,600 Other Realized (repaid) Investments Outstanding Investments $1,400 $1,200 $1,000 $800 $600 $400 $200 $
Slide 13: As at December 2023, BPCR had ~$1.3bn invested across transactions
As at 31 December 2023, BPCR had ~$1.3bn invested across 12 transactions ($ millions) BPCR Original Projected IRR Total Outstanding Remaining Outstanding Balances + Cash Investment Share (%) Share ($) Loan Amt. to Maturity1 Invested Balance Tranches (As at December 31, 2023) Bristol Myers $97.6 High
Slide 14: BPCR's portfolio is primarily composed of senior secured loans to listed companies
BPCR’s portfolio is primarily composed of senior secured loans to listed companies Investment: 1 Investment Date: November 1, 2017 September 12, 2019 November 25, 2019 March 22, 2022 March 29, 2021 December 14, 2021 January 5, 2022 Structure: Royalty Stream Secured Loan Secured Loan Secured Loan Sec
Slide 15: The Gross Yield of the Portfolio has Benefited from Higher Reference Rates
The Gross Yield1 of the Portfolio has Benefited from Higher Reference Rates and an Increase in Floating Rate Investments Floating vs. Fixed2 10% 27% 59% Fixed 90% 73% Floating 41% YE 2021 YE 2022 YE 2023 Gross Yield1 14.0% 13.0% 12.0% 13.1% 13.2% 11.0% 11.7% 12.1% 10.0% 10.8% 9.0% 9.5% 8.0% 9.0% 9.0
Slide 16: Current Valuation of BPCR Portfolio
Current Valuation of BPCR Portfolio1 ■ The majority of BPCR’s investments are private loans that do not have an observable market value and are classified as “Level 3 Investments” or “unlisted investments”. The fair values of the “unlisted investments” are determined principally by reference to disc
Slide 17: $275m senior secured corporate loan
$275m senior secured corporate loan Reata: A global biopharmaceutical company that identifies, develops, and commercializes novel mechanisms of action for the treatment of severe life-threatening diseases that have few or no approved therapies Market Cap: $6.4bn as of August 25, 2023 Cash: $33
Slide 18: $450m senior secured corporate loan
$450m senior secured corporate loan BioCryst: A global biopharmaceutical company that discovers and commercializes novel, oral, small-molecule medicines Market Cap: $1.0bn as of March 26, 2024 Cash: $391m as of December 31, 2023 LTM Sales: $326m as of December 31, 2023 Main Product: Orlade
Slide 19: $100m senior secured corporate loan
$100m senior secured corporate loan Immunocore: A commercial stage biopharmaceutical company focused on developing a novel class of TCR bispecific immunotherapies designed to treat a broad range of diseases, including cancer, infectious and autoimmune diseases Market Cap: $3.1bn as of March 26,
Slide 20: $350m senior secured corporate loan
$350m senior secured corporate loan Insmed: Global biopharmaceutical company focused treating patients with serious and rare diseases Market Cap: $4.0bn as of March 26, 2024 Cash: $780m as of December 31, 2023 LTM Sales: $305m as of December 31, 2023 Main Product: Arikayce® (amikacin lipos
Slide 21: $650m senior secured loan to finance Collegium's acquisition of BDSI
$650m senior secured loan to finance Collegium’s acquisition of BDSI Collegium Pharmaceutical: biopharmaceutical company focused on developing and commercializing new medicines for responsible pain management. Market Cap: $1.3bn as of March 26, 2024 Cash: $311m as of December 31, 2023 LTM 4Q
Slide 22: $200m senior secured corporate loan
$200m senior secured corporate loan UroGen: Biopharmaceutical company focused on developing products to treat specialty cancers and urologic diseases. The Company’s products are being developed as chemoablation agents designed to remove tumors by non-surgical means. The Company is focused on treat
Slide 23: $300m senior secured corporate loan
$300m senior secured corporate loan1 Coherus BioSciences: Biopharmaceutical company building a leading immuno- oncology franchise funded with cash generated by its commercial biosimilars business Market Cap: $256m as of March 26, 2024 Cash: $118m as of December 31, 2023 LTM Sales: $257m as o
Slide 24: $125m senior secured corporate loan
$125m senior secured corporate loan Evolus: Biopharmaceutical company with a customer-centric approach focused on delivering breakthrough performance beauty products Market Cap: $852m as of March 26, 2024 Cash: $63m as of December 31, 2023 LTM Sales: $202m as of December 31, 2023 Main Prod
Slide 25: $350m senior secured corporate loan
$350m senior secured corporate loan LumiraDx: A next-generation point-of-care (POC) diagnostic company addressing the current limitations of legacy POC systems by bringing lab- comparable performance in minutes on a single instrument for a broad menu of tests with a low cost of ownership. Market
Slide 26: $100m senior secured corporate loan
$100m senior secured corporate loan Akebia Therapeutics is a biopharmaceutical company focused on the development and commercialization of therapeutic for patients with kidney disease. Market Cap: $419m as of March 26, 2024 Cash: $43m as of December 31, 2023 LTM Sales: $170m as of December 3
Slide 27: $130m senior secured corporate loan
$130m senior secured corporate loan OptiNose: Specialty pharmaceutical company focused on products for patients treated by ear, nose, and throat (ENT) and allergy specialists. Market Cap: $167m as of March 26, 2024 Cash: $74m as of December 31, 2023 LTM Sales: $71m as of December 31, 2023
Slide 28: Life Sciences is a $1 Trillion+ Vital Industry with Sales that are Uncorrelated
Life Sciences is a $1 Trillion+ Vital Industry with Sales that are Uncorrelated and Unaffected by Economic Cycles Global Historical Pharmaceutical Sales ($ in trillions) COVID-19 Global Financial $1.6 Crisis $1.5 $1.5 $1.3 $1.3 $1.2 $1.1 $1.1 $1.1 $1.1 $1.0 $1.0 $1.0 $0.9 $0.8 $0.8 $0.7 $0.6 $0.6 $0
Slide 29: Life Sciences is a $1 Trillion+ Vital Industry (cont'd)
Life Sciences is a $1 Trillion + Vital Industry with Sales that are Uncorrelated and Unaffected by Economic Cycles (cont’d) Annual Changes in Sales of Oncology Drugs vs Major Indices 100% $140 Oncology Sales $Bn 80% $120 NASDAQ (% change) 60% $100 40% $80 20% $60 0% $40 (20%) (40%) $20 (60%) $0 1990
Slide 30: Small and midsize companies are involved in a majority of newly approved drugs
Small and midsize companies (target borrowers) are involved in a majority of newly approved drugs Drug Approvals by Size of Drug Originator 2009 - 2020 Source: Bloomberg, Pharmakon 29
Slide 31: Choppy biotech equity markets created an attractive environment for debt investments
Choppy biotech equity markets historically created an attractive environment for debt investments in biotech XBI Biotech Index Price Performance1 60% 44% 35% 40% 25% 22% 16% 20% 0% (4%) (2%) (20%) (23%) (40%) (37%) (60%) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Convert Count and Proceeds $30 80
Slide 32: Pharmakon Advisors, LP
All four previous BioPharma Credit private funds have returned all capital to investors Pharmakon Advisors, LP Private Fund Historical Investment Performance (Private Funds) I II III IV Launch Date June 2009 March 2011 February 2013 December 2015 Founded in 2009; manager of the BioPharma Credit fu
Slide 33: Gross and Net Returns of Past Realized Investments
Gross and Net Returns of Past Realized Investments1 Investment Date Investment Name Fund Investment Amount Gross IRR1 Net IRR1 Gross MOIC1 Net MOIC1 Jun 2009 LEXIVA Private Fund I $25,901,597 22% 18% 1.37x 1.30x Sep 2009 Cymbalta Private Fund I $132,000,000 15% 11% 1.20x 1.16x Oct 2009 PDL Private F