BioPharma Credit PLC (LON:BPCR) offers investors access to a diverse portfolio of secured debt instruments for life science companies based on BPCR’s pool of investment opportunities. The ongoing specialisation and fragmentation of the drug discovery process is translating into an increased number of market players seeking additional funding backed by sales from approved products and/or royalty streams from out-licensed products. During its IPO in March 2017 and follow-on placings, the trust has so far raised gross proceeds of US$1,080m (of which US$339m is in seed assets) and already deployed US$690m in four large deals. It also has outstanding potential commitments of up to US$350m.
Investment strategy: Focus on life sciences debt
BPCR is aiming at long-term returns mostly in the form of sustainable income distributions, with a targeted dividend yield of 7% and a net total NAV return of 8-9% per year in the medium term. The trust intends to achieve this mostly through investments in debt assets of life sciences companies mainly in the US, Europe and Japan, such as senior secured loans, royalty debt instruments and priority royalty tranches. BPCR is focusing on borrowers with approved drugs or medical devices which offer predictable cash flows and significant downside protection.
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