BioPharma Credit (BPCR) Investor presentation summary

Market overview and opportunity

• Life sciences is a $1.6 trillion global industry, growing at a 7% CAGR over 20 years, with R&D spending reaching $250bn in 2021.

• Pharmaceutical sales are uncorrelated with economic cycles, providing stability for debt investments.

• Biotech equity markets have underperformed broader indices, making debt a more attractive option.

• FDA approval rates remain strong, ensuring a steady pipeline of lending opportunities.

• Choppy equity markets and high capital needs in life sciences create a favorable environment for debt capital providers.

Investment strategy and portfolio

• Focus on debt investments backed by approved life sciences products, with collateral value assigned to approved or late-stage assets.

• Portfolio currently holds ~$1.1bn across 14 transactions, primarily in senior secured loans to listed companies.

• Investments are diversified across therapeutics, devices, and diagnostics, with a preference for commercial-stage products.

• Major positions include Insmed, Novocure, Geron, Valneva, Tarsus, UroGen, and others, with projected gross IRRs ranging from high single digits to low double digits.

• Publicly traded securities holdings include Harrow, Cytokinetics, and Cogent convertible notes.

Performance and track record

• $10.8bn committed across 68 investments, with four private funds fully realized and a 10.3% unlevered weighted average annualized net IRR.

• Consistent annualized dividends per share since IPO, meeting or exceeding the $0.07 target for seven years.

• Realized net IRRs for BPCR investments have been stable, with most transactions delivering between 10-15%.

• Debt investments have provided downside protection and lower volatility compared to equity, even when equity values dropped significantly.

• All four previous private funds have returned all capital to investors, with net MOICs ranging from 1.21x to 1.27x.