BPCP — Biopharma Credit News Story

0.000.00%

Last trade - 00:00

FinancialsConservativeMid CapSuper Stock

Market Cap
£724.38m
Enterprise Value
£720.16m
Revenue
$150.03m

All News

REG - BioPharma Credit PLC - Half-year Report

Biopharma CreditAnnouncement

24/09/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240924:nRSX3301Fa&default-theme=true

RNS Number : 3301F BioPharma Credit PLC 24 September 2024

24 September 2024

BIOPHARMA CREDIT PLC

(THE "COMPANY")

HALF YEAR REPORT FOR THE PERIOD ENDED 30 JUNE 2024

Net revenue per share of 6.15 cents in the six months substantially covers the
annual dividend target of 7 cents

LumiraDx investment resolved with anticipated 96 per cent. of invested capital
recovered

Share buybacks continue with $76 million purchased in the half year

2.04 cent special dividend declared post period end with dividends totalling
7.29 cents per share for the calendar year to date

BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investor,
is pleased to present the Half Yearly Report of the Company for the six-month
period ended 30 June 2024 (the "Period").

The full Half Yearly Report and Financial Statements can be accessed via the
Company's website at www.bpcruk.com (http://www.bpcruk.com) or by contacting
the Company Secretary by telephone on 44 (0) 333 300 1950.

INVESTMENT HIGHLIGHTS

· Net revenue per share of 6.15 cents, substantially covers the annual
dividend target in six months

· Share buybacks have continued in accordance with the revised terms
announced on 27 March 2024

o During the Period, the Company bought back 83,579,397 shares at a cost of
$76.1 million and post period end an additional 20,463,663 shares at a cost of
$18.8 million giving total shares bought back year to date of 104,043,060
shares at a cost of $94.9 million

· The Company is debt free having terminated its revolving credit
facility as of 11 April 2024

· The investment manager continued to work diligently in seeking an
optimal outcome for the investment in LumiraDx

o On 29 July, the Company announced the successful closing of the
acquisition of a majority of LumiraDx's assets by Roche Diagnostics Limited

o On 31 July the Company received $165.3 million and the Company expects to
receive a further $5.3 million within 90 days, equating to a 96 per cent.
recovery of invested proceeds

o In addition, the Company is expected to receive its share ownership of
LumiraDx's Colombian subsidiary which the Company will seek to sell

· During the Period, the Company announced two new transactions
totalling $300 million in fresh commitments:

o $100 million for the loan to Tarsus announced on 24 April 2024

o $200 million for the loan to Novocure announced on 2 May 2024

· The Company also received increased liquidity from the BMS purchased
payments investment and amortisation payments of the Collegium loan and
repayments from Akebia, Coherus and ImmunoGen

· At Period end, the Company had $258.4 million in cash to make new
investments

· Post Period end, the Company announced an investment of up to $130
million for the new loan to Collegium announced on 30 July 2024

· The Company's investment manager continues to develop a pipeline of
additional potential investments to further strengthen the portfolio using the
cash available

FINANCIAL HIGHLIGHTS

· The percentage of floating rate senior secured loans within the
portfolio remains extremely high at 96 per cent. which has benefited the
Company in the rising interest rate environment

o Investment returns increased 1.3 per cent. during the first six months of
2024 compared with the same period in 2023

· With an overall expectation of decreasing interest rates, the Company
benefits from the interest rate floors in its portfolio that set minimum
coupons

· The Company made three dividend payments over the Period totalling
8.5 cents per share¹

· On 19 September 2024, the Company declared an interim dividend of
3.79 cents per share, which was inclusive of a 2.04 cent special distribution.
Dividends for the calendar year to date will total 7.29 cents per share

SUMMARY

as at 30 June 2024

Share Price Ordinary shares in issue with voting rights (m)
$0.8400 1,219.1m
(31 December 2023: $0.8400) (31 December 2023: 1,302.7m)

Net Revenue per Share Shares in treasury (m)
$0.0615 154.8m
(31 December 2023: $0.0538) (31 December 2023: 71.2m)

NAV per Share Net assets
$1.0074 $1,228.1m
(31 December 2023: $1.0293) (31 December 2023: $1,340.9m)

Dividends declared Discount to NAV per share
8.5 cents per share¹ 16.6%
(31 December 2023: 10.2 cents per share) (31 December 2023: 18.4%)

¹The Company paid total dividends in the period of 8.46 cents of which 6.71
cents per share references net income for the two quarters ending 30 September
2023 and 31 December 2023 paid on 5 January 2024 and 15 March 2024
respectively and 1.75 cents per share that was paid on 30 April 2024
referencing the quarter ending 31 March 2024.

PORTFOLIO COMPOSITION

As at 30 June 2024 ($m) As at 31 December 2023 ($m) As at 30 June 2024 (%) As at 31 December 2023 (%)

Cash and cash equivalents 258.4 260.8 21.0% 19.4%

LumiraDx senior secured loan and warrants 168.0 136.0 13.7% 10.1%
Collegium senior secured loan 160.4 206.3 13.1% 15.4%
Insmed senior secured loan 156.0 151.0 12.7% 11.3%
BioCryst senior secured loan 129.5 125.5 10.5% 9.4%
OptiNose senior secured note, shares and warrants 74.3 71.5 6.0% 5.3%
BMS purchased payments 66.3 83.6 5.4% 6.2%
Evolus senior secured loan 62.5 62.5 5.1% 4.7%
UroGen senior secured loan 50.0 50.0 4.1% 3.7%
Novocure Luxembourg senior secured loan 50.0 - 4.1% -
Tarsus senior secured loan 37.5 - 3.1% -
Immunocore senior secured loan 25.0 25.0 2.0% 1.9%
Coherus senior secured loan - 125.0 0.0% 9.3%
ImmunoGen senior secured loan - 48.2 0.0% 3.6%
Akebia senior secured loan - 17.5 0.0% 1.3%
Other net liabilities (9.8) (22.0) -0.8% -1.6%
Total net assets 1,228.1 1,340.9 100% 100%

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

"We are pleased to see the Company's income rise a further 1.3 per cent.
during the first six months of 2024 compared with 2023 with net income per
share almost covering the annual dividend in a six-month period. During the
period three investments were repaid and two new commitments totalling $300
million were made to Tarsus and Novocure. As new approved products enter the
market during the remainder of 2024 we expect our investment pipeline to grow
further, and we continue to assess an attractive pipeline of potential new
investment opportunities with $258.4 million in cash at the Period end.

"The hard work during the Period on LumiraDx has resulted in 96 per cent. of
invested capital anticipated to be recovered and substantially resolves this
issue. While the Company's shares continue to trade at a discount to the net
asset value, we remain committed to our discount control policy and have
bought back 104,043,060 million shares at a cost of $94.9 million during the
Period / year to date.

"We remain focused on our mission of being the premier dedicated provider of
debt capital to the life sciences industry while generating attractive returns
and remain extremely confident of our ability to continue delivering high
income to our investors."

Results presentation

As announced on 16 August 2024, a management presentation for sell side
analysts will be held via a webcast call facility at 2pm BST today. To request
details or to register to attend please RSVP biopharmacredit@buchanan.uk.com
(mailto:biopharmacredit@buchanan.uk.com) .

Enquiries

Burson Buchanan

Mark Court / Jamie Hooper / Henry Wilson / Samuel Adams

+44 (0) 20 7466 5000

biopharmacredit@buchanan.uk.com (mailto:biopharmacredit@buchanan.uk.com)

Notes to Editors

BioPharma Credit PLC is London's only specialist debt investor in the life
sciences industry and joined the LSE in March 2017. The Company seeks to
provide long-term shareholder returns, principally in the form of sustainable
income distributions from exposure to the life sciences industry. The Company
seeks to achieve this objective primarily through investments in debt assets
secured by royalties or other cash flows derived from the sales of approved
life sciences products.

CHAIRMAN'S STATEMENT

DURING THE FIRST HALF OF 2023, THE COMPANY ANNOUNCED THREE NEW TRANSACTIONS
TOTALING $380 MILLION IN FRESH COMMITMENTS

INTRODUCTION

I am pleased to present the half yearly report for the Company, which covers
the period 1 January 2024 to 30 June 2024. The Company reported net revenue
per share of $0.0615 for the period, almost covering in just six months the
7.0 cent target annual dividend. As a reminder, the Company's policy is to pay
special dividends for any excess income over the 7.0 cent annual dividend.
Total dividends paid for calendar 2022 and 2023 were 13.1 and 10.2 cents,
respectively. The Company continues to offer investors exposure to an
attractive and diversified portfolio of secured loans. Consistent with
challenges seen across the market, the Company's shares have traded at a
discount to NAV throughout the period. The Company has purchased 104,043,060
shares during 2024, including 83,579,397 shares during the first six months of
the year. The Company terminated its JPMorgan revolving credit facility as of
11 April 2024 and currently has no debt.

INVESTMENTS

Over the first six months of 2024, the Company and its subsidiaries invested
$117.1 million, comprised of $29.6 million for LumiraDx, $37.5 million for
Tarsus and $50.0 million for Novocure.

The Company, including its financing subsidiary ended the period with total
net assets of $1,228.1 million, comprising $979.5 million of investments,
$258.4 million of cash (comprised of $37.5 million from the Company and $221.3
million from BPCR Limited Partnership) and $9.8 million of other net
liabilities. The Company and its subsidiaries saw $247.2 million increased
liquidity from BMS purchased payments and amortisation payments of the
Collegium loan, and repayments from Akebia, Coherus and ImmunoGen during the
first half of the year. The post balance sheet deployment of $135 million has
partially reduced of cash drag from these inflows.

During this period, Pharmakon Advisors, LP, the Company's investment manager
("Pharmakon" or the "Investment Manager") continued to work diligently in
seeking an optimal outcome for the investment in LumiraDx, which had gone into
administration on 29 December 2023. On 29 July, the Company announced the
successful closing of the acquisition of a majority of LumiraDx's assets by a
subsidiary of Roche Diagnostics Limited. On 31 July 2024, the Company received
$165.3 million from FTI Consulting LLP, LumiraDx's administrators. Assuming
Roche releases 100 per cent. of the holdback amount, and estimated total
expenses of $10.0 million, the Company is expected to receive an additional
payment of approximately $5.3 million within 90 days. With the addition of
cash interest received from LumiraDx to date, this equates to an approximate
96 per cent. recovery rate of our investment. Additionally, in due course the
Company is expected to receive its share holding of LumiraDx's Colombian
subsidiary which the Company will seek to sell.

SHAREHOLDER RETURNS

The Company reported net income on ordinary activities after finance costs and
before taxation for the first half of 2024 of $82.9 million, up from the $77
million reported during the first half of 2023. On 30 June 2024 and 31
December 2023, the Company's ordinary shares closed at $0.8400. Net Asset
Value ("NAV") per ordinary share decreased since 30 June 2023 by $0.0104 from
$1.0178 to $1.0074. The Company made three dividend payments over the period
totaling 8.46 cents per share, referencing net income for the quarters ending
30 September 2023, 31 December 2023 and 31 March 2024.1

(1) Past performance is not an indication of future performance

INVESTMENT VALUATIONS

The valuation of the Company's investments is performed by the Investment
Manager. The valuation principles of the Company's unlisted secured loans are
valued based on a discounted cash flow methodology. A fair value for each loan
is calculated by applying a discount rate to the cash flows expected to arise
from each loan. Investments with quoted prices in active markets are verified
with independent sources. Further details on the valuation methodology are
given in note 7 to the financial statements.

ESG

The Board has supported the Investment Manager's Environmental, Social and
Governance ("ESG") programme over the first six months of 2024, with progress
made in embedding ESG as an integral part of the investment process. The key
areas are described in more detail in the full report.

We are proud that a large portion of the Company's past and current
investments help to fund clinical trials and research that benefit patients
suffering from a wide variety of serious diseases, including various forms of
cancer and rare or orphan conditions. Through its investments, the Company
helps bring new life sciences products to market which help patients
globally.

OUTLOOK

The first half year of 2024 was strong, with the Company having announced two
new transactions that represent $300 million in new commitments. The Company
had $258.4 million in cash to make new investments at 30 June 2024. With 94
per cent. of its portfolio consisting of loans with floating interest rates,
the Company has benefited from the recent period of rising interest rates. As
the future outlook for interest rates remains uncertain, with an overall
expectation of decreasing interest rates, the Company benefits from the
interest rate floors in its portfolio that set minimum coupons.

The Investment Manager continues to develop a pipeline of additional potential
investments and, as a consequence, we are currently evaluating a number of
potential opportunities which will further diversify our portfolio. On behalf
of the Board I would like to recognize the perseverance and fortitude
demonstrated by the Investment Manager in addressing the difficulties created
by the LumiraDx loan. While the outcome was disappointing, the substantial
amount recovered through the management of the collateral helps validate the
Company's investment thesis on the value of unique, patent-protected
healthcare assets. I should also like to express our thanks to our Investment
Manager for their continued achievements on behalf of the Company in 2024 and
to our shareholders for their continued support.

Harry Hyman

Chairman

23 September 2024

INVESTMENT MANAGER'S REPORT

Pharmakon is pleased to present an update on the Company's portfolio and
investment outlook.

Pharmakon's engagement with potential counterparties during the first six
months of the year resulted in $300 million of new commitments(1) for the
Company. The Company's portfolio continues to perform well. The proportion of
floating rate loans in the portfolio and higher reference interest rates led
to investment returns increasing by 1.3 per cent. during the first six months
of 2024 compared to the same period in 2023. Three investments, Akebia,
ImmunoGen and Coherus were repaid in the first half of 2024.

(1) New investments figure represents overall commitments inclusive of any
unfunded commitments.

Below is an update on the Company and its subsidiaries portfolio.

Novocure

On 1 May 2024, the Company along with the Private Fund also managed by the
Investment Manager (the "Private Fund"), entered into a senior secured term
loan agreement for up to $400 million with a wholly‑owned subsidiary of
Novocure Limited (Nasdaq: NVCR) a proprietary platform technology that uses
electric fields that exert physical forces to kill cancer cells via a variety
of mechanisms ("Novocure").

Novocure drew down $100 million of the $400 million loan on 1 May 2024. The
Company's share was $50 million, which was funded at closing by the Company
and its subsidiaries, and will mature in May 2029. Of the remaining $300
million, $100 million is required to be drawn by 30 June 2025, subject to
customary conditions precedent, and $200 million is available to be drawn
after achieving certain sales-based milestones. The loan has a coupon of
3-month secured overnight financing rate ("SOFR"), plus 6.25 per cent.
(subject to a 3.25 per cent. floor). Novocure is a global oncology company
that has a proprietary platform technology called Tumor Treating Fields
("TTFields"), which are electric fields that exert physical forces to kill
cancer cells via a variety of mechanisms. Novocure's product, Optune Gio, is
approved for the treatment of adult patients with newly diagnosed
glioblastoma. Novocure also has ongoing or completed trials investigating
TTFields in brain metastases, gastric cancer, GBM, liver cancer, NSCLC, and
pancreatic cancer.

Investment Type Secured Loan
Initial investment date 1 May 2024
Total loan amount $400m
Company commitment $200m
Maturity May 2029

Tarsus

On 19 April 2024, the Company and the Private Fund entered into a senior
secured term loan agreement for up to $200 million with Tarsus
Pharmaceuticals, Inc. (Nasdaq: TARS). Tarsus is a biopharmaceutical company
focused on addressing several diseases with high unmet need across a range of
therapeutic categories, including eye care, dermatology, and infectious
disease prevention ("Tarsus").

Tarsus drew down $75 million at closing. The Company's share of the
transaction was $37.5 million, which was funded at closing by the Company and
its subsidiaries, and will be maturing in April 2029. Tranche B of $25 million
may be drawn by December 2024, and Tranche C of $50 million, and Tranche D of
$50 million, may be drawn after achieving certain sales-based milestones. The
loan has a coupon of 3-month SOFR, plus 6.75 per cent. (subject to a 3.75 per
cent. floor).

Tarsus currently markets XDEMVY® (lotilaner ophthalmic solution), a treatment
for Demodex blepharitis. XDEMVY® was approved in the US in July 2023. Tarsus
also has 3 additional clinical programs. Its clinical programs are TP-03 for
Meibomian Gland Disease, TP-04 for Rosacea, and TP-05 for the prevention of
Lyme disease, all of which are in Phase 2.

Investment Type Secured Loan
Initial investment date 19 April 2024
Total loan amount $200m
Company commitment $100m
Maturity April 2029

BioCryst

On 17 April 2023, the Company along with the Private Fund entered into a
senior secured term loan agreement for up to $450 million with BioCryst
Pharmaceuticals Inc. (Nasdaq: BCRX), a biopharmaceutical company that
discovers and commercializes novel, oral and small molecule medicines
("BioCryst").

BioCryst drew down $300 million at closing on 16 April 2023. The Company's
share of the transaction is $180 million, of which $120 million was funded at
closing by the Company and its subsidiaries. BioCryst has elected the option
to accrue 50 per cent. of their interest due from closing through 30 June 2024
as a payment in-kind as allowed in the loan agreement. The remaining three
tranches of up to $50 million each will be available through 30 September
2024.

The Company's share of the remaining three tranches is $20 million each. The
loan has a coupon of 3-month SOFR plus 7 per cent. (subject to a 1.75 per
cent. floor) and up to 50 per cent. of the interest during the first 18 months
may be paid-in-kind (PIK) at a rate of 3-month SOFR plus 7.25 per cent., with
an additional consideration of 1.75 per cent. of the total loan amount.

BioCryst's commercial product, Orladeyo, is indicated for prophylaxis to
prevent attacks of hereditary angioedema (HAE) in adults and pediatric
patients 12 years and older. BioCryst also has one pipeline product for
BCX10013, a factor D inhibitor being studied in atypical hemolytic uremic
syndrome (aHUS), IgA nephropathy (IgAN), and complement 3 glomerulopathy
(C3G).

Investment Type Secured Loan
Initial investment date 17 April 2023
Total loan amount $450m
Company commitment $180m
Maturity April 2028

Immunocore

On 8 November 2022, the Company along with the Private Fund entered into a
senior secured loan agreement for up to $100 million with Immunocore Limited
(Nasdaq: IMCR), a biopharmaceutical company focused on developing a novel
class of TCR bispecific immunotherapies designed to treat a broad range of
diseases, including cancer, infectious diseases and autoimmune diseases
("Immunocore").

The Company and its subsidiaries funded $25 million of the first tranche of
$50 million on 8 November 2022. The remaining $50 million commitment, of which
the Company's share was $25 million, lapsed so there are no additional funding
commitments. On 30 June 2024, Immunocore paid $625,000 to the Company in
additional consideration on the expiration of Tranche B.

Tranche A will mature in November 2028 and bears interest at 9.75 per cent.
per annum along with an additional consideration of 2.50 per cent. paid at
funding.

Immunocore currently markets Kimmtrak (tebentafusp-tebn) for the treatment of
people with HLA-A02+ metastatic uveal melanoma. Kimmtrak is approved in 38
countries and has been launched in 17 countries globally to date. Immunocore
is also developing teventafusp for the treatment of adjuvant uveal (ocular)
melanoma and 2L+ (second line of treatment if the first treatment fails) for
advanced cutaneous melanoma.

Investment Type Secured Loan
Initial investment date 8 November 2022
Total loan amount $100m
Company commitment $50m
Maturity November 2028

Insmed

On 19 October 2022, the Company and the Private Fund entered into a senior
secured loan agreement for $350 million with Insmed Incorporated (Nasdaq:
INSM), a biopharmaceutical company focused on treating patients with serious
and rare diseases ("Insmed").

The Company and its subsidiaries funded $140 million of the $350 million loan
on 19 October 2022. Insmed has elected the option to accrue 50 per cent. of
their interest due from closing through 30 June 2024 as a payment-in-kind as
allowed in the loan agreement.

The loan will mature in October 2027 and bears interest at a rate based upon
the 3-month SOFR, plus 7.75 per cent. per annum subject to a SOFR floor of
2.50 per cent. with a one-time additional consideration of 2 per cent. of the
total loan amount paid at funding.

Insmed currently markets Arikayce (amikacin liposome inhalation suspension), a
novel, inhaled, once-daily formulation of amikacin, for the treatment of
mycobacterium avium complex (MAC) lung disease in adult patients. Insmed is
also developing brensocatib, a small molecule, oral, reversible inhibitor of
dipeptidyl peptidase 1, for the treatment of patients with bronchiectasis.

Investment Type Secured Loan
Initial investment date 19 October 2022
Total loan amount $350m
Company commitment $140m
Maturity October 2027

Collegium 2022

On 14 February 2022, the Company along with the Private Fund provided
Collegium Pharmaceutical, Inc. (Nasdaq: COLL), a biopharmaceutical company
focused on developing and commercialising new medicines for responsible pain
management ("Collegium"), with a commitment to enter into a new senior secured
term loan agreement for $650 million.

On 22 March 2022, proceeds from the new loan were used to fund Collegium's
acquisition of BDSI as well as repay the outstanding debt of Collegium and
BDSI. At closing, the Company and its subsidiaries invested $325 million in a
single drawing. The four-year loan will have $100 million in amortisation
payments during the first year and the remaining $550 million balance will
amortize in equal quarterly installments. The loan will mature in March 2026
and bears interest at 3-month LIBOR plus 7.50 per cent. per annum subject to a
1.20 per cent. floor along with a one-time additional consideration of 2 per
cent. of the loan amount paid upon signing and a one time additional
consideration of 1 per cent. of the loan amount paid at funding. On 23 June
2023, the Company and the Private Fund entered into an amendment which
modified the loan interest rate to 3-month SOFR plus 7.50 per cent.

On 28 July 2024, the Company along with the Private Fund amended the Collegium
loan to, among other things, a) modify the amortization of the then
outstanding balance of $320.8 million, b) provide a second tranche of up to
$325 million to be drawn upon the closing of an acquisition (40 per cent. of
that to be invested by the Company), and c) modify the terms reducing the
coupon to 3-month SOFR plus 4.50 per cent. per annum subject to a SOFR floor
of 4.00 per cent. A one-time additional consideration of 1.25 per cent. of
Tranche A was paid at the signing of the amended loan agreement, and 2.25 per
cent. of Tranche B is payable at funding.

Collegium currently markets Xtampza ER, an abuse-deterrent, extended-release,
oral formulation of oxycodone, Nucynta (tapentadol), a centrally acting
synthetic analgesic, and Belbuca (buprenorphine buccal film), for chronic pain
management.

Investment Type Secured Loan
Initial investment date 22 March 2022
Total loan amount $650m
Company commitment $325m
Maturity March 2026

UroGen

On 7 March 2022, the Company and the Private Fund entered into a senior
secured loan agreement for up to $100 million with UroGen Pharma, Inc.
(Nasdaq: URGN), a biopharmaceutical company dedicated to creating novel
solutions that treat urothelial and specialty cancers ("UroGen").

UroGen drew down $75 million at closing and the remaining $25 million on 16
December 2022. The Company and its subsidiaries funded $50 million across the
two tranches. The loan will mature in March 2027 and bears interest at 3-month
LIBOR plus 8.25 per cent. per annum subject to a 1.25 per cent. floor along
with a one-time additional consideration of 1.75 per cent. of the total loan
amount paid at funding of the first tranche. On 29 June 2023, the Company and
the Private Fund entered into an amendment which modified the loan interest
rate to 3-month SOFR plus 8.25 per cent.

On 13 March 2024, the Company entered into an Amendment and Restatement of its
Loan Agreement with UroGen. The Amended and Restated Loan Agreement includes
an additional third and fourth tranche of senior secured loans of $25,000,000
and $75,000,000 respectively. In addition, the interest rate was reduced from
3-month SOFR plus 8.25 per cent. per annum to 3-month SOFR plus 7.25 per cent.
per annum, and the SOFR floor was increased from 1.25 per cent. to 2.50 per
cent. Under the Amended and Restated Loan Agreement, the third and fourth
tranches were allocated in full to the Private Fund in consideration of the
Company's then current Discount Control Mechanism which restricted the
Company's ability to make new investments. The maturity date can be extended
to March 2028 if the conditions for Tranche D are met.

UroGen markets JELMYTO (mitomycin), a prescription medicine used to treat
adults with a type of cancer of the lining of the upper urinary tract
including the kidney called low grade Upper Tract Urothelial Cancer (LG-UTUC).
UroGen is also developing UGN-102 (mitomycin) for the treatment of low-grade
intermediate risk non-muscle invasive bladder cancer.

Investment Type Secured Loan
Initial investment date 16 March 2022
Total loan amount $300m
Company commitment $50m
Maturity March 2027

Evolus

On 14 December 2021, the Company and the Private Fund entered into a senior
secured loan agreement for up to $125 million with Evolus, Inc. (Nasdaq:
EOLS), a biopharmaceutical company that develops, produces, and markets
clinical neurotoxins for aesthetic treatments ("Evolus").

The Company and its subsidiaries funded $37.5 million of the first tranche of
$75 million on 29 December 2021. The remaining $50 million was drawn down in
two installments of $12.5 million each on 13 May 2023 and on 14 December 2023.
The Company's share of the final tranche was $25 million. The loan will mature
in December 2027 and bears interest at 3-month LIBOR plus 8.50 per cent. per
annum subject to a 1 per cent. floor along with a one-time additional
consideration of 2.25 per cent. of the total loan amount paid at funding of
the

first tranche.

On 5 December 2022, the Evolus loan was amended to extend the draw down date
for Tranche B in exchange for a $500,000 amendment fee, of which 50 per cent.
was allocated to the Company.

On 9 May 2023, the Evolus loan was amended to: (i) allow Tranche B to be drawn
in two installments, (ii) switching the LIBOR component of the loan coupon to
SOFR, with an additional 0.17 per cent. adjustment, (iii) certain
modifications to the amortization schedule, and (iv) subject to specified
conditions, allow for up to a $15 million revolver facility to be secured by
accounts receivable and inventory.

On 31 May 2023 and 15 December 2023, the Company funded installments of
Tranche B of $12.5 million each. Evolus currently markets Jeuveau
(prabotulinumtoxinA-xvfs), the first and only neurotoxin dedicated exclusively
to aesthetics.

Investment Type Secured Loan
Initial investment date 14 December 2021
Total loan amount $125m
Company commitment $63m
Maturity December 2027

LumiraDx

On 23 March 2021, the Company and the Private Fund entered into a senior
secured loan agreement for $300 million with LumiraDx Investment Limited and
LumiraDx Group Limited (collectively "LumiraDx").

The Company and its subsidiaries funded $150 million of the $300 million loan
on 29 March 2021.

On 22 February 2023, the LumiraDx loan was amended to provide LumiraDx with
certain waivers in exchange for increasing the fee payable at maturity from 3
to 9 per cent. of the loan. The LumiraDx loan was amended fourteen times
during the year ended 31 December 2023.

On 29 December 2023, LumiraDx announced the appointment of joint
administrators for two of its subsidiaries and Roche announced that it would
acquire select parts of LumiraDx for a purchase price of $295 million. As part
of the acquisition, the Company agreed to provide up to $34.6 million in
funding for LumiraDx to fund the business until the closing of the
acquisition, Roche agreed to reimburse up to $27.5 million to the Company in
the period to completion of the acquisition. At the time, it was anticipated
that all of the sale proceeds of the acquisition would be used to repay
certain amounts outstanding under the Company's loan agreement, and that no
sale proceeds will be distributed to LumiraDx or its shareholders.

On 29 July 2024, the Company announced the successful closing of the
acquisition of a majority of LumiraDx's assets by Roche Diagnostics Limited.
On 31 July 2024, the Company received $165.3 million from FTI Consulting LLP,
LumiraDx's administrators. Assuming the administrators release 100 per cent.
of the holdback amount and estimated total expenses of $10 million, the
Company is expected to receive an additional payment of approximately $5.3
million within 90 days. With the addition of cash interest received from
LumiraDx to date, this equates to an approximate 96 per cent. recovery rate of
invested capital. Additionally, in due course the Company is expected to
receive its proceeds from its share ownership of LumiraDx's Colombian
subsidiary from the administrator, which the Company will seek to sell.

Investment Type Secured Loan
Initial investment date 23 March 2021
Total loan amount $350m
Company commitment $175m
Maturity March 2024

OptiNose

On 12 September 2019, the Company and the Private Fund entered into a senior
secured note purchase agreement for the issuance and sale of senior secured
notes in an aggregate original principal amount of up to $150 million by
OptiNose US, Inc. a wholly owned subsidiary of OptiNose Inc. (Nasdaq: OPTN), a
commercial stage specialty pharmaceutical company ("OptiNose").

OptiNose drew a total of $130 million in three tranches: $80 million on 12
September 2019, $30 million on 13 February 2020 and $20 million on 1 December
2020. There are no additional funding commitments.

The Company and its subsidiaries funded a total $72 million across all
tranches. The notes mature in September 2024 and bore interest at 10.75 per
cent. per annum along with a one- time additional consideration of 0.75 per
cent. of the aggregate original principal amount of senior secured notes which
the Company was committed to purchase under the facility and 445,696 warrants
exercisable into common stock of OptiNose at a strike price of $6.72. In prior
years, there were two amendments to the OptiNose note purchase agreement,
resulting in re-tiered sales covenants, permission for an equity issuance,
amended amortisation and make-whole provisions, and the issuance of new
three-year warrants, with the original warrants being canceled.

On 10 August 2022, the OptiNose note and purchase agreement were amended
resulting in re-tiered sales covenants in exchange for an amendment fee of
$780,000, payable upon repayment, of which the Company will be allocated
$429,000.

On 9 November 2022, OptiNose negotiated certain waivers in exchange for a
waiver fee, of which the Company earned $715,000 of the total $1.3 million
waiver fee.

On 21 November 2022, OptiNose entered into an Amended and Restated Note
Purchase Agreement (the "A&R NPA"). As part of the A&R NPA, Pharmakon
revised the sales covenants, amended the amortization and make-whole, and
modified the loan interest from a fixed rate of 10.75 per cent. to a floating
rate equal to 3-month SOFR plus 8.50 per cent., subject to a 2.50 per cent.
floor, in exchange for an amendment fee.

From 5 March 2024 through 9 May 2024, the Company entered into three
amendments with OptiNose. The amendments collectively waived the no 'going
concern' requirement with respect to its financial statements until the end of
the 2025 fiscal year, extended the make-whole period by 6 months and revised
the sales and minimum liquidity covenants . The waiver of the no 'going
concern' requirement until the end of the 2025 fiscal year and the revised
minimum liquidity covenant were contingent on a successful equity raise.
OptiNose announced on 9 May 2024 a successful $55 million registered direct
offering. In connection with these amendments, OptiNose also issued 4.7
million shares in the aggregate to the Company and Private Fund in
satisfaction of approximately $4.7 million of outstanding amendment and waiver
fees to the Company and the Private Fund.

On 15 March 2024, the FDA approved XHANCE (flucticasone propionate) nasal
spray for the treatment of chronic rhinosinusitis with and without nasal
polyps in patients 18 years of age or older. OptiNose's leading product,
XHANCE (flucticasone propionate), had already been approved by the FDA for the
treatment of chronic rhinosinusitis with nasal polyps in September 2017, and
without nasal polyps in March 2024.

Investment Type Secured Loan
Initial investment date 12 September 2019
Total loan amount $130m
Company commitment $72m
Maturity June 2027

Bristol-Myers Squibb Company

On 8 December 2017, the Company's wholly‑owned subsidiary entered into a
purchase, sale and assignment agreement with a wholly‑owned subsidiary of
Royalty Pharma Investments ("RPI"), an affiliate of the Investment Manager,
for the purchase of a 50 per cent. interest in a stream of payments (the
"Purchased Payments") acquired by RPI's subsidiary from Bristol‑Myers Squibb
(NYSE: BMY) through a purchase agreement dated 14 November 2017.

As a result of the arrangements, RPI's subsidiary and the Company's subsidiary
are each entitled to the benefit of 50 per cent. of the Purchased Payments
under identical economic terms. The Purchased Payments are linked to tiered
worldwide sales of Onglyza and Farxiga, diabetes agents between marketed by
AstraZeneca, and related products. The Company was expected to fund $140
million and $165 million during 2018 and 2019, determined by product sales
over that period, and will receive payments from 2020 through 2025. The
Purchased Payments are expected to generate attractive risk-adjusted returns
in the high single digits per annum.

The Company funded all of the Purchased Payments based on sales from 1 January
2018 to 31 December 2019 for a total of $162 million.

From 1 January 2020 to 30 June 2024, the Company received 42,398,427 of
interest income and 109,849,954 on principle, totaling 152,248,381.

REALIZED INVESTMENTS

REATA

On 5 May 2023, the Company and the Private Fund, entered into a senior secured
term loan agreement for up to $275 million with Reata Pharmaceuticals Inc.
("Reata") originally due to mature in May 2028. Tranche A of $75 million was
funded at closing. Tranche B of $50 million and Tranche C of $75 million were
originally due to be drawn after achieving certain performance-based
milestones, and Tranche D of $75 million was originally due to be available at
the Company's discretion after achieving certain sales-based milestones. The
loan had a coupon of 3-month secured overnight financing rate ("SOFR"), plus
7.50 per cent. (subject to a 2.50 per cent. floor). There was also a 2 per
cent. upfront fee upon each draw. The interest only period for the loan was
for 3 years but could have been extended to 4 years if trailing twelve month
sales were greater than $250 million. The Company's share of the transaction
was $137.5 million, of which $37.5 million was funded at closing. On 10 July
2023, the Company funded Tranche B of the Reata loan for $25 million. On 28
July 2023, Inc. ("Biogen") Biogen announced an agreement pursuant to which
Biogen will acquire Reata for an enterprise value of approximately $7.3
billion. The acquisition closed on 29 September 2023. As of the acquisition
closing date, the Company received prepayment of the principal of the loan and
in addition, $15.5 million in prepayment and make-whole fees.

AKEBIA

On 11 November 2019, the Company and the Private Fund entered into a senior
secured term loan agreement for up to $100 million with Akebia Therapeutics,
Inc. (Nasdaq: AKBA), a fully integrated biopharmaceutical company focused on
the development and commercialisation of therapeutics for people living with
kidney disease ("Akebia"). Akebia drew down $80 million at closing and an
additional $20 million on 10 December 2020. The Company and its subsidiaries
funded $50 million across both tranches. The loan was due to mature in
November 2024 and bore interest at LIBOR plus 7.5 per cent. per annum along
with a one-time additional consideration of 2 per cent. of the total loan
amount paid at funding. The Akebia loan began amortising in September 2022. On
15 July 2022, the Akebia loan was amended to provide Akebia with certain
waivers. As a result of this amendment, Akebia made a $25 million pre-payment,
of which $12.5 million went to the Company, as well as a 2 per cent.
prepayment fee. On 30 June 2023, the Company and the Private Fund entered into
an amendment which modified the loan interest rate to 3-month SOFR plus 7.50
per cent. On 31 October 2023, the Akebia loan was amended to extend the
maturity of the senior secured loan to 31 March 2025, delayed the payment of
additional principal until 31 October 2024 and if certain pre-specified events
occurred, required Akebia to make payments of principal commencing on the
original maturity date through the new extended maturity date and repay all
unpaid principal that would have been due or payable on or after 1 July 2024.
On 29 January 2024, Akebia prepaid its remaining $17,500,000 of the balance
that was due to amortise to the Company and the Company received $87,500 in
prepayment fees.

IMMUNOGEN

On 6 April 2023, the Company along with the Private Fund entered into a senior
secured loan agreement with ImmunoGen, Inc. ("ImmunoGen") for up to $125
million. ImmunoGen drew down $75 million at closing on 6 April 2023. The
Company and its subsidiaries funded $37.5 million. The loan would have matured
in April 2028 and bore interest at SOFR plus 8 per cent. (subject to a 2.75
per cent. floor), with an additional consideration of 2 per cent. of the total
loan amount. On 30 November 2023, AbbVie announced it had entered into a
agreement to acquire ImmunoGen, Inc. The ImmunoGen investment was marked up by
$10.7 million as of 31 December 2023 to account for the discounted value of
the expected prepayment and the make-whole fees. The ImmunoGen repayment was
accompanied by prepayment and make-whole fees totaling $13.1 million. On 12
February 2024, ImmunoGen repaid its remaining $37.5 million balance to the
Company and the Company received $13.2 million of accrued interest, additional
consideration, and prepayment and make-whole fees.

COHERUS

On 5 January 2022, the Company and the Private Fund entered into a senior
secured loan agreement for up to $300 million with Coherus BioSciences, Inc.
(Nasdaq: CHRS), a biopharmaceutical company building a leading immunooncology
franchise funded with cash generated by its commercial biosimilars business
("Coherus"). Coherus drew down $100 million at closing, another $100 million
on 31 March 2022, and an additional $50 million on 14 September 2022. The
remaining $50 million commitment, of which the Company's share was $25
million, lapsed so there were no additional funding commitments. The Company
and its subsidiaries funded $125 million across the first three tranches. The
loan was due to mature in January 2027 and bore interest at 3-month SOFR plus
8.25 per cent. per annum subject to a 1.00 per cent. floor along with a
one-time additional consideration of 2.00 per cent. of the total loan amount
paid at funding of the first tranche. On 6 February 2023, the Coherus loan was
amended to allow for a short-term waiver to the sales covenant, as well
switching the LIBOR component of the loan coupon to SOFR. On 19 January 2024,
Coherus announced that it had entered into a Purchase and Sales Agreement with
Sandoz Inc. (the "Purchase Agreement"). On 5 February 2024, Coherus announced
that it had entered into a Consent, Partial Release and Third Amendment to the
Coherus loan agreement, under which certain subsidiaries and assets of Coherus
were released in connection with the Purchase Agreement. Further, Coherus was
permitted to make a partial prepayment of the principal of the loans
outstanding under the Coherus loan agreement in the amount of $175 million of
the outstanding principal balance of $250 million, and the minimum net sales
covenant was adjusted. On 1 April 2024, Coherus prepaid $87.5 million of its
balance to the Company and the Company received $3.1 million of accrued
interest, additional consideration, and prepayment and make-whole fees. On 10
May 2024, Coherus repaid its remaining $37.5 million balance to the Company
and the Company received $2.3 million of accrued interest and prepayment and
make-whole fees.

MARKET ANALYSIS

The life sciences industry is expected to continue to have substantial capital
needs during the coming years as the number of products undergoing clinical
trials continues to grow. All else being equal, companies seeking to raise
capital are generally more receptive to straight debt financing alternatives
at times when equity markets are soft, increasing the number and size of
fixed-income investment opportunities for the Company, and will be more
inclined to issue equity or convertible bonds at times when equity markets are
strong. A good indicator of the life sciences equity market is the New York
Stock Exchange Biotechnology Index ("BTK Index"). While there was substantial
volatility during the period, the BTK Index decreased 2.4 per cent. during the
first six months of 2024, compared to a 1.1 per cent. decrease during the same
period in 2023*. Global equity issuance by life sciences companies during the
first six months of 2024 was $28 billion, a 29 per cent. increase from the $22
billion issued during the same period in 2023*. This dynamic contributed to
additional deal flow for the Company during the recent period from 4Q 2023
through 2Q 2024, as we deployed $179.6 million across two new investments and
additional funding tranches of an existing investment. We anticipate a
continued slowdown in equity issuance coupled with greater appetite for fixed
income as a source of capital during the remainder of 2024.

Acquisition financing is an important driver of capital needs in the life
sciences industry in general and a source of investment opportunities. An
active M&A market helps drive opportunities for investors such as the
Company, as acquiring companies need capital to fund acquisitions. Global life
sciences M&A volume during the first six months of 2024 was $54 billion, a
59 per cent. increase from the $34 billion witnessed during the same period in
2023.*

* Source: FactSet

USD SOFR

On 5 March 2021, the Financial Conduct Authority ("FCA"), the regulatory
supervisor of USD LIBOR's administrator ("IBA") announced in a public
statement the future cessation of the 3-month USD LIBOR tenor setting. As of
that date, 30 June 2023, all available tenors of USD LIBOR have either
permanently or indefinitely ceased to be provided by IBA. As of 30 June 2023,
the benchmark replacement rate is based on Secured Overnight Financing Rate
("SOFR"), and all LIBOR-based interest payments are now calculated with SOFR
beginning on the respective effective date. The Company has eleven loans with
coupons that reference 3-month USD SOFR and six have a 2.50 per cent. floor or
greater and four have a floor ranging from 1.00 per cent. to 2.00 per cent. As
of 30 June 2024, the 3-month SOFR rate was 5.33 per cent, significantly above
the floors in the eleven loans.

INVESTMENT OUTLOOK

We expect our investment pipeline to grow as new products and companies enter
the market during the remainder of 2024. Pharmakon's extensive network and
thorough approach will continue to identify strong investment opportunities.
We remain focused on our mission of creating the premier dedicated provider of
debt capital to the life sciences industry while generating attractive returns
and sustainable income to investors. Further, Pharmakon remains confident of
our ability to deliver its target dividend yield to its investors.

Pedro Gonzalez de Cosio

Co-founder and CEO, Pharmakon

23 September 2024

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that to the best of their knowledge:

• this set of condensed financial statements has been prepared in accordance
with UK adopted International Accounting Standard ("IAS") 34, 'Interim
Financial Reporting', and gives a true and fair view of the assets,
liabilities, financial position, and profit of the Company; and

• this Half-Yearly Report includes a fair review of the information required
by:

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place during the first six months
of the financial year and that have materially affected the financial position
or performance of the Company during that period; and any changes in the
related party transactions that could do so.

This Half-Yearly Report was approved by the Board of Directors on 23 September
2024 and the above responsibility statement was signed on its behalf by Harry
Hyman, Chairman.

On behalf of the Board

Harry Hyman

Chairman

23 September 2024

DIRECTORS, ADVISERS AND OTHER SERVICE PROVIDERS

DIRECTORS

Harry Hyman (Chairman)

Colin Bond

Duncan Budge

Stephanie Léouzon

Sapna Shah

Rolf Soderstrom

INVESTMENT MANAGER AND AIFM

Pharmakon Advisors, LP

110 East 59th Street #2800

New York, NY 10022

USA

ADMINISTRATOR

Link Alternative Fund Administrators Limited

Broadwalk House

Southerhay West

Exeter

EX1 1TS

COMPANY SECRETARY AND REGISTERED OFFICE

Link Company Matters Limited

Central Square

29 Wellington Street

Leeds

LS1 4DL

Tel: +44 (0) 333 300 1950

COMPANY WEBSITE

www.bpcruk.com

CUSTODIAN

Bank of New York Mellon

One Canada Square

London

E14 5AL

FINANCIAL AND STRATEGIC COMMUNICATIONS

Burson Buchanan Communications Limited

107 Cheapside

London

EC2V 6DN

INDEPENDENT AUDITOR

Ernst & Young, Chartered Accountants

Harcourt Centre

Harcourt Street

Dublin

DO2 YA40

Ireland

JOINT BROKERS

J.P. Morgan Cazenove

25 Bank Street

London

E14 5JP

Goldman Sachs International

Peterborough Court

133 Fleet Street

London

EC4A 2BB

LEGAL ADVISER

Herbert Smith Freehills LLP

Exchange House

Primrose Street

London

EC2A 2EG

REGISTRAR

Link Group

10(th) Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

BPCP — Biopharma Credit News Story

REG - BioPharma Credit PLC - Half-year Report

Recent news on Biopharma Credit

REG - BioPharma Credit PLC - Transaction in Own Shares

REG - BioPharma Credit PLC - Transaction in Own Shares

REG - BioPharma Credit PLC - Transaction in Own Shares

REG - BioPharma Credit PLC - Transaction in Own Shares

REG - BioPharma Credit PLC - Transaction in Own Shares