BioPharma Credit PLC USD · LSE:BPCP
BioPharma Credit PLC USD — BioPharma Credit — H1 2023 Earnings Presentation
32 slides from BioPharma Credit PLC USD's earnings presentation, Sep 27, 2023
Slide 1: Debt Capital for the Life Sciences Industry
Debt Capital for the Life Sciences Industry COMPANY PRESENTATION – September 27, 2023 For additional information please email: [email protected] or visit BioPharma Credit’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
Financial Highlights as at 30 June 2022 Source: Pharmakon 3
Slide 5: Recent Material Updates
Recent Material Updates 10 - 11 July 2023 BPCR repurchased 1,260,909 and 700,000 shares respectively. BPCR currently holds 71,252,875 of its ordinary shares in treasury and has 1,302,679,192 ordinary shares in issue (excluding treasury shares)1. 10 July 2023 BPCR funded its share of the Tranche B of
Slide 6: 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 7: 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 met the annualized $0.070 target $0.080 for almost five years $0.060 $0.040 $0.020 $0.000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 8: Realized Gross / Net IRR
Investment track record of mostly singles and doubles – Emphasis on consistency and reduced risk Unlevered Returns have been consistent over the years (32 Realized Transactions)1 Realized Gross IRR 45% Realized Gross IRR Realized Net IRR 40% 35% 28% (9) Realized Gross / Net IRR 30% > 15.0% 25% 20% 1
Slide 9: The right structure / LTV helps generate attractive returns on debt
The right structure / LTV helps generate attractive returns on debt irrespective of equity performance Life Sciences Debt Investments were less risky and are generally exposed to less volatility than an equity investment in the corresponding issuer ■ The chart below shows the gross and net multiple
Slide 10: New investments have allowed BPCR to broaden its diversification
New investments have allowed BPCR to broaden its diversification and deploy cash from capital raises and loan repayments Evolution of BPCR Portfolio since IPO1 (US$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 11: BPCR currently has ~$1.3bn invested across 13 transactions
BPCR currently has ~$1.3bn invested across 13 transactions ($ millions) BPCR Original Projected IRR Total Outstanding Remaining Investment Share (%) Share ($) Loan Amt. to Maturity1 Invested Balance Tranches Outstanding Balances + Cash Bristol Myers $97.6 High single % 100% $97.6 $97.6 $89.7 (As of
Slide 12: Portfolio primarily senior secured loans to listed companies
BPCR’s portfolio is primarily composed of senior secured loans to listed companies Source: Company Filings Note: Use of any company logos, trademarks and/or trade names not intended to and do not suggest, imply or indicate any kind of endorsement or otherwise. 11
Slide 13: 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% 27% Fixed 90% 73% 73% Floating YE 2022 Q1 23 2Q 23 3Q23 estimated Gross Yield1 Gross Yield1: 13.1% 13.0% 12.0% 11.0% 12.1% 11.7% 10.0% 10.8% 9.0% 9.5%
Slide 14: Current Valuation of BPCR Portfolio vs. Theoretical Value
Current Valuation of BPCR Portfolio1 vs. Theoretical Value Using Bond Market Rates2 ■ The majority of BPCR’s investments are private loans that do not have an observable market value and are classified as “Level 3 Investments”. The fair values of the unlisted investments are determined principally b
Slide 15: $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 16: $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: $1.4bn as of August 25, 2023 Cash: $416m as of June 30, 2023 LTM Sales: $283m as of June 30, 2023 Main Product: Orladeyo™ (be
Slide 17: $125m senior secured corporate loan
$125m senior secured corporate loan ImmunoGen: A commercial-stage biotechnology company focused on developing and commercializing the next generation of antibody-drug conjugates (ADCs) to improve outcomes for cancer patients Market Cap: $4.0bn as of August 25, 2023 Cash: $572m as of June 30, 2
Slide 18: $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: $2.8bn as of August 25,
Slide 19: $350m senior secured corporate loan
$350m senior secured corporate loan Insmed: Global biopharmaceutical company focused treating patients with serious and rare diseases Market Cap: $3.1bn as of August 25, 2023 Cash: $918m as of June 30, 2023 LTM Sales: $257m as of June 30, 2023 Main Product: Arikayce® (amikacin liposome inh
Slide 20: $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: $829m as of August 25, 2023 Cash: $326m as of June 30, 2023 LTM 2Q23 S
Slide 21: $100m senior secured corporate loan
$100m senior secured corporate loan UroGen: Biopharmaceutical company focused on developing products to treat specialty cancers and urologic diseases. UroGen’s products are being developed as chemoablation agents designed to remove tumors by non- surgical means. UroGen is focused on treating non-m
Slide 22: $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: $444m as of August 25, 2023 Cash: $145m as of June 30, 2023 LTM Sales: $210m as of Ju
Slide 23: $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: $516m as of August 25, 2023 Cash: $42m as of June 30, 2023 LTM Sales: $160m as of June 30, 2023 Main Product: Je
Slide 24: $331m senior secured corporate loan
$331m 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 25: $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: $214m as of August 25, 2023 Cash: $54m as of June 30, 2023 LTM Sales: $176m as of June 30, 2023
Slide 26: $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: $143m as of August 25, 2023 Cash: $71m as of June 30, 2023 LTM Sales: $75m as of June 30, 2023 Main pr
Slide 27: Life Sciences is a $1 Trillion+ Vital Industry with Uncorrelated Sales
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 $1.5 Global Financial $1.5 Crisis $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 $0.6 $0
Slide 28: Life Sciences Sales Uncorrelated and Unaffected by Economic Cycles (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 29: 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 28
Slide 30: Choppy biotech equity markets created an attractive environment for debt
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% (20%) (4%) (23%) (40%) (38%) (60%) 2015 2016 2017 2018 2019 2020 2021 2022 Convert Count and Proceeds $30 80 Total Amou
Slide 31: All four previous BioPharma Credit private funds have returned all capital
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 32: 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