REG - BioPharma Credit PLC - Annual Financial Report
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RNS Number : 7808X BioPharma Credit PLC 24 March 2026
24 MARCH 2026
BIOPHARMA CREDIT PLC
("BPCR" or "the Company")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025
BioPharma Credit PLC (LSE: BPCR), the specialist life sciences debt investor,
is pleased to present its audited Final Results for the 12-month period ended
31 December 2025.
The full Annual Report and Financial Statements is available to view on 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 1932.
INVESTMENT HIGHLIGHTS
· Over the course of 2025, the Company and its subsidiaries invested
an aggregate of $301.3 million.
· The Company committed a total of $251.3 million to new investments
and $50 million to a new tranche of a current investment. Of the new
investments:
o $167.5 million was invested in senior secured loans (Evolus, Paratek,
Precigen and Valneva)
o $48.8 million was invested in senior unsecured convertible notes
(Alphatec, Celcuity, Cogent and CytoKinetics)
o $35 million was invested in senior unsecured notes (Harrow)
· Repayments increased to $616.6 million in 2025 (2024: $463.1
million), which increased the pace of capital turnover and provided additional
liquidity to support investment activity.
· The Company has additional unfunded commitments with Evolus, Geron,
Novocure, Precigen, Paratek, UroGen and Zenas totalling $316.7 million.
· Over the course of 2026 thus far, the Company has had several updates
to its current portfolio. The Company invested an additional $50 million in
UroGen, sold 18 million of 1.75 per cent. CytoKinetics, Inc. senior unsecured
convertible notes, committed to invest up to $125 million with Zenas BioPharma
and invested an additional $25 million in Paratek.
FINANCIAL HIGHLIGHTS
· During 2025, the Company generated an increased net income per share
of 11.40 cents (2024: 9.99 cents).
· The Company reported net income return from ordinary activities
after finance costs and before taxation for the year ended 2025 of $129.9
million.
· On 31 December 2025, the Company's Ordinary Shares closed at a share
price of 91.60 cents, above the closing price on 31 December 2024 of 88.4
cents. Net Asset Value ("NAV") per Ordinary Share increased during the same
timeframe by 2.29 cents from 99.63 cents to $1.02.
· The Company made three dividend payments over the calendar year,
which related to 2025, totalling 6.75 cents per share, referencing net income
for the three quarters ending 30 September 2025. It was therefore once again
able to maintain its record of paying a dividend of at least 1.75 cents per
share every quarter since 30 June 2018.
DISCOUNT CONTROL
· During 2025, the Discount Control Mechanism ('DCM') was triggered,
and the Company was required to use its capital to repurchase shares,
resulting in the purchase of 56,828,879 shares, which is 4.14 per cent. of the
total shares in issue of the Company, at an average share price of 86.9 cents
and a total cost of $50.3 million. Since IPO, the Company has bought back a
total of 240,470,178 shares, which is 16.34 per cent. of the total shares in
issue of the Company.
POST PERIOD END HIGHLIGHTS
· Following the end of the year, the Company declared a further
dividend in respect of the last quarter of 2025 of 3.20 cents per share made
up of an ordinary dividend of 1.75 cents together with a special dividend of
1.45 cents that was paid on 20 March 2026.
· Total dividends related to 2025 and 2024 results reached 9.95 cents
and 10.18 cents per share respectively. The 2025 and 2024 dividends were both
covered from profits.
· From 11 February 2026 through 18 February 2026, the Company sold 18
million of 1.75 per cent. CytoKinetics, Inc. senior unsecured convertible
notes due 2031 at an average price of $1.29. The sales generated a gain of
$5.2 million.
· On 26 February 2026, the Company and the private fund entered into
the second amended and restated senior term loan agreement with UroGen for
$250 million. The existing $125 million initial term loan was increased to
$200 million in a new Tranche A (with the additional $75 million being funded
at closing) and an additional Tranche B was added for up to $50 million that
expires 30 June 2027. The Company's share of the transaction was $125 million.
The loan will mature in February 2031 and will bear interest at a fixed rate
of 8.25 per cent. per annum. and a one-time additional consideration of 1.50
per cent. of each new tranche is payable upon funding of each respective
tranche, with the Company receiving $1.5 million in connection with the new
Tranche A at signing. In addition, an exit consideration of 1 per cent. is
also required upon any payment of principal, scheduled or otherwise.
· On 14 March 2026, the Company and the private fund entered into a
new senior secured loan agreement with Zenas BioPharma, Inc. The Company will
invest up to $125 million, and the private fund will invest up to an
additional $125 million in parallel, with the Company acting as collateral
agent. Under the Loan Agreement, the Company will invest up to $125 million
across five tranches, subject to customary conditions precedent and the
achievement of certain regulatory and commercial milestones (Tranche A of
$37.5 million, Tranche B of $37.5 million, Tranche C of $12.5 million, Tranche
D of $25 million and Tranche E of $25 million). The loan will mature in March
2031 and will bear interest at 3-month SOFR plus 5.75 per cent. per annum
subject to a 3.25 per cent. SOFR floor. A one-time additional consideration of
2 per cent. of Tranche A and $50 million of Tranche B, and 1 per cent. of any
amounts in excess of $50 million of the funding amount for Tranche B and each
of Tranche C, D and E, is payable by Zenas upon the funding of each respective
tranche.
· On 16 March 2026, Paratek announced the successful completion of
its combination with Radius Health, and the Company and the private fund
provided debt financing in support of this transaction. The Company and the
private fund each funded $50 million and the new investment replaced the
previous debt financing in which the Company and the private fund each had $25
million with Paratek, which was repaid in its entirety. Since Paratek is a
privately held company, further details about the new debt financing are not
publicly available, but the terms of the loan are generally comparable with
the Company's other investments.
SUMMARY
as at 31 December 2025
Share price Net assets
$0.9160 $1,150.9m
(31 December 2024: $0.8840) (31 December 2024: $1,181.7m)
NAV per share Net income per share
$1.0192 ¢11.40
(31 December 2024: $0.9963) (31 December 2024: ¢9.99))
Discount to NAV per share Ordinary Shares in Issue with Voting rights
10.1% 1,129.2m
(31 December 2024: 11.3%) (31 December 2024: 1,186.0m)
Dividend Yield Shares in Treasury
10.9% 244.7m
(31 December 2024: 11.5%) (31 December 2024: 187.9m)
PORTFOLIO COMPOSITION
As at 31 Dec 2025 Percentage as at As at 31 Dec 2024 Percentage as at
$m 31 Dec 2025 $m 31 Dec 2024
Cash and cash equivalents 422.3 36.7% 168.6 14.3%
Insmed 2024 senior secured loan 217.3 18.9% 215.9 18.3%
Novocure senior secured loan 98.3 8.5% 47.8 4.0%
Evolus 2025 senior secured loan 62.1 5.4% - -
UroGen 2024 senior secured loan 49.8 4.3% 49.6 4.2%
Geron senior secured loan 49.0 4.3% 48.8 4.1%
Precigen senior secured loan 48.9 4.2% - -
Tarsus senior secured loan 36.8 3.2% 36.7 3.1%
Harrow senior unsecured notes 36.5 3.2% - -
CytoKinetics senior unsecured convertible notes 35.9 3.1% - -
Alphatec senior secured loan 35.2 3.1% 34.7 2.9%
Valneva senior secured loan 29.4 2.6% - -
Paratek senior secured loan 24.8 2.2% - -
BMS purchased payments 10.1 0.9% 49.1 4.2%
LumiraDx Colombia equity 7.5 0.7% 7.5 0.6%
Cogent senior unsecured convertible notes 1.5 0.1% - -
Collegium 2024 senior secured loan - - 278.3 23.6%
BioCryst senior secured loan - - 127.5 10.8%
OptiNose senior secured note, shares and warrants - - 70.4 6.0%
Evolus senior secured loan - - 61.7 5.2%
Other net liabilities (14.5) (1.4%) (14.9) (1.3%)
Total net assets 1,150.9 100.0% 1,181.7 100.0%
Pedro Gonzalez de Cosio, CEO and co-founder of Pharmakon Advisors, LP, the
Investment Manager of BioPharma Credit PLC, said:
"We are pleased to report on another strong year, with net income per share
increasing notably from ¢9.99 in 2024 to ¢11.40 last year. Our existing
portfolio investments continue to perform well, and new investments, together
with multiple repayments, led to total income for the portfolio during 2025 of
$157.8 million."
"Despite the strong investment activity during the year, which has added
significantly to portfolio diversification, the Company's cash balance is
larger than usual at year end as a result of the Collegium repayment in
December. We anticipate our investment pipeline to grow as new products and
companies enter the market in 2026 and beyond."
"The life sciences industry will continue to require substantial capital
requirements as the number of products undergoing clinical trials continues to
grow. We are also encouraged by the number of M&A opportunities which are
starting to build, with capital required to fund acquisitions. We look forward
to updating shareholders further."
Results presentation
As announced previously, a management presentation for sell side analysts will
be held via a webcast facility at 14:00 GMT today. To request details or to
register to attend please RSVP biopharmacredit@buchanan.uk.com
(mailto:biopharmacredit@buchanan.uk.com)
Enquiries
Burson Buchanan
Henry Wilson / Helen Tarbet / Jamie Hooper / Nick Croysdill
+44 (0)20 7466 5000
biopharmacredit@buchanan.uk.com (mailto:biopharmacredit@buchanan.uk.com)
Notes to Editors:
BioPharma Credit PLC is London's only listed specialist investor in debt
from the life sciences industry and joined the LSE on 27 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.
LEI: 213800AV55PYXAS7SY24
Extracts from the full Annual Report:
CHAIRMAN'S STATEMENT
During 2025, the Company delivered a strong financial and investment
performance, investing $301.3 million in several investments. This performance
generated net income per share of 11.40 cents and supported dividends of 9.95
cents for the 2025 financial year. The Company also repurchased 4.14 per cent
of shares in issue. A large repayment from Collegium in December of 2025
increased the cash balance to $422.3m which the Investment Manager is actively
working to redeploy.
INTRODUCTION
2025 marks the eighth full year since the Company's Initial Public Offering
("IPO") on the London Stock Exchange in March 2017. I am pleased to be able to
report on another year of consistent returns and targets achieved. During
2025, the Company generated net income per share of 11.40 cents, compared to
9.99 cents in 2024, and paid 9.95 cents in dividends, 2.95 cents above the
target of 7 cents(1), compared to 3.18 cents above the 7 cent target in 2024.
Investors continue to benefit from the Company's exposure to a high-quality,
diversified portfolio.
INVESTMENTS
Over the course of 2025, the Company and its subsidiaries invested an
aggregate of $301.3 million. Of this amount, $50 million was used to fund an
additional tranche of a current investment and $251.3 million was deployed
toward new investments. Out of the new investments, $167.5 million was
invested in senior secured loans (Evolus, Paratek, Precigen and Valneva),
$48.8 million was invested in senior unsecured convertible notes (Alphatec,
Celcuity, Cogent and CytoKinetics) and $35 million was invested in senior
unsecured notes (Harrow). The Company saw principal repayments from BioCryst,
Collegium, Evolus and OptiNose totaling $553.9 million, a total of $25.1
million in accrued interest, prepayment and make-whole fees and sold $18.8
million face value of convertible notes in Alphatec, Celcuity and CytoKinetics
for a total gain of $7.4 million. Repayments increased to $616.6 million in
2025, up from $463.1 million in 2024, which, increased the pace of capital
turnover and provided additional liquidity to support new investment activity.
The Company has additional unfunded commitments with Evolus, Geron, Novocure,
Paratek, Precigen, UroGen and Zenas totaling $366.7 million as of 23 March
2026. Including assets and liabilities from its financing subsidiary, BPCR
Limited Partnership, the Company ended the year with total net assets of
$1,150.9 million, comprising $742.9 million of investments, $422.3 million of
cash less $14.4 million of other net liabilities.
During the first weeks of 2026, the Company has had several updates to its
current portfolio. The Company invested an additional $50 million in UroGen,
sold 19.3 million of 1.75 per cent. CytoKinetics, Inc. senior unsecured
convertible notes, committed to invest up to $125 million with Zenas BioPharma
and invested an additional $25 million in Paratek.
DCM AND SHARE BUYBACKS
The Board recognises that the share price during 2025 represented a
significant discount to the NAV and together with the manager assessed new
strategies to ameliorate that discount. Under the Discount Control Mechanism
("DCM"), the Company is required to use up to $50 million over the calendar
year to repurchase shares until such time that the discount to NAV over a
two-week period is less than 5 per cent. During 2025, the DCM was triggered,
and the Company was required to use its capital to repurchase shares,
resulting in the purchase of 56,828,879 shares, which is 4.14 per cent. of the
total shares in issue of the Company, at an average share price of 86.9 cents
and a total cost of $50.3 million. Please see the full Annual Report for a
full description of the current DCM, that will continue until otherwise
amended. Since IPO, the Company has bought back a total of 240,470,178 shares,
which is 16.34 per cent. of the total shares in issue of the Company.
SHAREHOLDER RETURNS(1)
The Company reported net income return from ordinary activities after finance
costs and before taxation for the year ended 2025 of $129.9 million. On 31
December 2025, the Company's Ordinary Shares in issue closed at a share price
of 91.60 cents, above the closing price on 31 December 2024 of 88.4 cents. Net
Asset Value ("NAV") per Ordinary Share in issue increased during the same
timeframe by 2.29 cents from 99.63 cents to 101.20 cents. The Company made
three dividend payments over the calendar year, which related to 2025,
totaling 6.75 cents per share, referencing net income for the three quarters
ending 30 September 2025. The Company was therefore able to maintain its
record of paying a dividend of at least 1.75 cents per share in every quarter
since 30 June 2018.
Following the end of the year, the Company declared a further dividend in
respect of the last quarter of 2025 of 3.20 cents per share made up of an
ordinary dividend of 1.75 cents together with a special dividend of 1.45 cents
that was paid on 20 March 2026. Total dividends related to 2025 and 2024
results reached 9.95 cents and 10.18 cents per share respectively. The 2025
and 2024 dividends were both covered from profits.
The Company's share price as of 20 March 2026 was 94.00 cents which represents
a 6 per cent. discount to NAV.
ESG
The Board has supported the Environmental, Social and Governance ("ESG")
programme of Pharmakon during 2025, with progress made in further
incorporating ESG as part of the investment process. In addition to managing
environmental and social risks, the Company's financing activities support
healthcare innovators, including companies such as Valneva, which are
developing vaccines aimed at addressing vaccine-preventable diseases and
contributing to improved public health outcomes. The key areas are described
in more detail in the full Annual Report.
GEOPOLITICAL STATEMENT
The effects of major geopolitical and social risks, including the invasion by
Russia of Ukraine and the war between Israel and Hamas, may have economic
consequences that extend beyond the short term. However, the Company does not
have any direct investments with Russia, Ukraine or Iran and has limited
manufacturing exposure in Israel.
The Board will continue to monitor the situation and will inform shareholders
of any material changes to this assessment.
PRICING AND REGULATORY OUTLOOK
A significant portion of the revenues from borrowers in the portfolio come
from sales which are reimbursed by various US government entities that are
highly regulated. While we currently do not expect major changes to how these
entities will continue to reimburse for the cost of these drugs, we cannot
predict whether the US administration will seek to make changes that may
affect the sales of these products.
There were no major regulatory changes in 2025 that, in the Investment
Manager's opinion, would impact the performance of the portfolio.
OUTLOOK
The Investment Manager highlights an expanding investment pipeline as new
products and companies enter the market from 2026 onward. The significant
increase in the cash balance to $422.3 million at 31 December 2025 came from
the Collegium repayment on 23 December 2025. The Investment Manager is
grateful for Collegium's partnership and is proud to have served as a trusted
financing source over the past six years. While this early repayment will
result in a higher-than-usual cash balance, the Investment Manager is
encouraged by the strength of the broader pipeline and looks forward to
further diversifying the portfolio. The Board also believes the Company's
portfolio of floating- and fixed-rate loans remains well positioned to deliver
attractive returns in a shifting interest rate environment.
Following the annual general meeting ("AGM") on 9 June 2025, the Company
announced that shareholders approved the continuation of the Company's
business as a closed-ended investment trust with 99 per cent. of shares voting
in favor. Under the existing articles of the Company, a Continuation
Resolution is required to be held at the first AGM following the fifth
anniversary of the Company's IPO and at every third AGM thereafter.
BOARD CHANGES
At this year's AGM, both Colin Bond and Duncan Budge, who have been on the
Board for nine years as recommended by the UK Corporate Governance Code, will
not seek re-election. The Board would like to thank Colin and Duncan for their
invaluable contribution during their tenure. Nigel Reynolds will replace Colin
as Chair of the Audit and Risk Committee and Sapna Shah will replace Duncan as
Senior Independent Director. To ensure continuity, I will remain in post as
Chairman until the end of 2026, then I will step down as a Director and be
replaced as Chairman by Rolf Soderstrom, current non-executive Director. In
the meantime, a process is underway to recruit one additional non-executive
Director.
On behalf of the Board, I should like to express our thanks to Pharmakon for
their continued efforts and achievements on behalf of the Company in 2025 and
to our shareholders for their continued support.
Harry Hyman
Chairman
23 March 2026
(1)Past performance is not indicative of future performance.
INVESTMENT MANAGER'S REPORT
Another year of strong investment returns
Pharmakon is pleased to present an update on the Company's portfolio and
investment outlook. The Company's existing portfolio investments continue to
perform well.
New investments, together with multiple repayments, led to total income and
return on ordinary activities after finance costs and taxation for the
portfolio during 2025 of $157.8 million and $129.9 million respectively.(1)
Pharmakon's engagement with current and potential counterparties throughout
the year resulted in $301.3 million of investments for the Company.(2) The
Company also received $553.9 million in principal repayments and $25.1 million
in accrued interest, prepayment and make-whole fees on the private loans
(including BioCryst, Collegium, Evolus and OptiNose) and sold $18.8 million of
convertible notes in Alphatec, Celcuity and CytoKinetics for a total gain of
$7.4 million.
See the full Annual Report for the investment track record of non-convertible
debt investments made by the Company and prior funds managed by the Investment
Manager.
(1) Past performance is not indicative of future results. Please refer to the
full Annual Report for additional information.
(2) Referenced figures and amounts for Reata are inclusive of the Biogen
settlement payment in 2025, net of any applicable transaction related expenses
and costs. Past performance is not indicative of future results.
CURRENT PORTFOLIO AS OF 31 DECEMBER 2025
Current Portfolio Diversification
Type Percentage(2) Fair Value (in $M)
Cash 36.5% 422.3
Insmed 2024 18.8% 217.3
Novocure 8.5% 98.3
Evolus 2025 5.4% 62.4
UroGen 2024 4.3% 49.8
Geron 4.2% 49.0
Precigen 4.2% 48.9
Tarsus 3.2% 36.8
Harrow 3.2% 36.5
CytoKinetics 3.1% 35.7
Alphatec 3.0% 35.2
Valneva 2.5% 29.4
Paratek 2.1% 24.8
BMS 0.9% 9.9
Cogent 0.1% 1.5
(1) Source: Factset
(2) Percentages of the Company's current portfolio and cash as at 31 December
2025, not including total liabilities.
Cogent
On 12 November 2025, the Company, along with the Private Fund also managed by
the Investment Manager (the "Private Fund"), purchased 1.3 million face value
each of 1.625 per cent. senior unsecured convertible notes due 2031 issued by
Cogent Biosciences, Inc. (Nasdaq: COGT) ("Cogent") at a price of $1.00 per
note for a total $1.3 million investment. The closing price at 31 December
2025 was $117.08.
Cogent is a clinical-stage biotechnology company focused on creating precision
therapies for genetically defined diseases, especially those driven by
specific genetic mutations. The market capitalization as of 16 March 2026 was
$5.79 billion.
Investment type: Senior Unsecured Convertible Notes
Purchase date: 12 November 2025
Total investment amount: $2.6m
Company commitment: $1.3m
Maturity: November 2031
Valneva
On 6 October 2025, the Company, along with the Private Fund, entered into a
senior secured term loan agreement with Valneva Austria GmbH, a subsidiary of
Valneva SE (PAR: VLA) ("Valneva"), a specialty vaccine company committed to
developing vaccines for the treatment of infectious diseases in high unmet
areas.
Valneva drew down $215 million on 17 October 2025. The Company's share of the
transaction was $30 million, which was funded by the Company through its
subsidiary. The loan bears interest at a fixed rate of 9 per cent. per annum
with a 2 per cent. paydown fee. and a 2 per cent. additional consideration for
Tranche A that was paid at closing.
Valneva currently markets three travel vaccines globally while continuing to
develop a pipeline of candidates, including a Lyme disease vaccine candidate
in advanced clinical development. Marketed products include Ixiaro, Dukoral,
and Ixchiq which are vaccines approved against Japanese encephalitis, cholera,
and chikungunya respectively. Valneva is headquartered in France with
operations in Austria, Sweden, the UK, France, Canada, and the U.S. The market
capitalization as of 16 March 2026 was $914 million.
Investment type: Secured Loan
Initial investment date: 6 October 2025
Total loan amount: $215m
Company commitment: $30m
Maturity: October 2030
CytoKinetics
On 17 September 2025, the Company and the Private Fund purchased 30 million
face value and 20 million face value, respectively, for a total of 50 million
of 1.75 per cent. senior unsecured convertible notes due 2031 issued by
CytoKinetics, Inc. at a price of $1.00 per note for a total $30 million
investment. The closing price at 31 December 2025 was $124.46. (Nasdaq: CYTK)
("CytoKinetics").
On 22 December 2025, the Company sold 1.3 million of 1.75 per cent.
CytoKinetics, Inc. senior unsecured convertible notes due 2031 at a price of
$130. The sale generated a gain of $413,000.
Cytokinetics is a U.S. based biopharmaceutical company focused on developing
medicines that improve how muscles work and specializes in drugs that directly
target muscle proteins to treat serious cardiac and neuromuscular diseases.
The market capitalization as of 16 March 2026 was $7.49 billion.
Investment type: Senior Unsecured Convertible Notes
Purchase date: 17 September 2025
Total investment amount: $50m
Company commitment: $30m
Maturity: October 2031
Harrow
On 12 September 2025, the Company purchased 35 million face value of 8.63 per
cent. senior unsecured notes due 2030 issued by Harrow, Inc. at a purchase
price of $1.00 per note for a total $35 million investment. The closing price
of the notes at 31 December 2025 was $105.10 (Nasdaq: HROW) ("Harrow").
Harrow is a leading provider of ophthalmic disease management solutions in the
U.S. marketing a portfolio of products used to treat conditions of both the
front and back of the eye. The market capitalization as of 16 March 2026 was
$1.30 billion.
Investment type: Senior Unsecured Notes
Purchase date: 12 September 2025
Total investment amount: $35m
Company commitment: $35m
Maturity: October 2031
Precigen
On 3 September 2025, the Company, along with the Private Fund, entered into a
senior secured term loan agreement with Precigen, Inc. (Nasdaq: PGEN)
("Precigen"), a dedicated discovery, clinical and commercial stage company
advancing the next generation of gene and cell therapies using precision
technology to target the most urgent and intractable diseases.
Precigen drew down $100 million at closing on 3 September 2025. The Company's
share of the draw down was $50 million, which was funded by the Company
through its subsidiary. The remaining tranche, of which the Company's share is
$12.5 million, will be available through 29 June 2027. The loan bears interest
at 3-month secured overnight financing rate ("SOFR"), (subject to a 3.75 per
cent. floor), plus 6.50 per cent. and a 2.50 per cent. additional
consideration for Tranche A that was paid at closing. The additional
consideration for the remaining tranche will be payable on the respective
funding date.
Precigen's first approved product is Papzimeos (formerly PRGN-2012), an
immunotherapy for the treatment of adults with Recurrent Respiratory
Papillomatosis (RRP). Papzimeos is the first and only FDA-approved therapy for
the treatment of adults with RRP. Papzimeos is a non-replicating adenoviral
vector-based immunotherapy designed to express a fusion antigen comprising
selected regions of human papillomavirus (HPV) types 6 and 11 proteins - the
root cause of RRP. The market capitalization as of 16 March 2026 was $1.24
billion.
Investment type: Secured Loan
Initial Investment date: 3 September 2025
Total loan amount: $125m
Company commitment: $62.5m
Maturity: September 2030
Paratek
On 21 May 2025, the Company, along with the Private Fund entered into a senior
secured term loan agreement with Paratek Pharmaceuticals, Inc. ("Paratek"),
alongside funds managed by Oaktree Capital Management, L.P. ("Oaktree") and Q
Aspen LLC (a wholly owned subsidiary of Qatar Investment Authority, "QIA").
The Company, through its subsidiary, and the Private Fund funded $50 million
out of a total $275 million senior secured loan facility. The Company's share
of the transaction was $25 million, which was funded by the Company through
its subsidiary. Oaktree and QIA funded the balance of the $200 million senior
secured loan facility. Since Paratek is a privately held company, further
details about the senior secured loan facility are not publicly available, but
the terms of the loan are generally comparable with the Company's other
investments.
Paratek is a privately held pharmaceutical company providing innovative
specialty therapies for community care providers and specialists. Paratek's
lead product, Nuzyra (omadacycline), is a once-daily oral and intravenous
antibiotic indicated for adults with community-acquired bacterial pneumonia
(CABP). On 21 May 2025, Paratek acquired OptiNose, Inc. ("OptiNose"), a
specialty pharmaceutical company focused on products for patients treated by
ear, nose, and throat (ENT) and allergy specialists. This acquisition added
Xhance, a propionate nasal spray approved for the treatment of chronic
rhinosinusitis with nasal polyps and without nasal polyps, to the portfolio.
Investment type: Secured Loan
Initial investment date: 21 May 2025
Total loan amount: $200m
Company Commitment: $25m
Maturity: -*
*Since Paratek is a privately held company, further details about the senior
secured loan facility are not publicly available, but the terms of the loan
are generally comparable with the Company's other investments.
Evolus 2025
On 5 May 2025, the Company and the Private Fund entered into an amended and
restated senior term loan agreement for up to $250 million with Evolus, Inc.
(Nasdaq: EOLS) ("Evolus"), a biopharmaceutical company that develops,
produces, and markets clinical neurotoxins for aesthetic treatments.
The new loan consisted of a $250 million initial term loan, of which the
Company's share is $62.5 million, to refinance in full the existing term loan
and two additional tranches of $20.85 million each, that are available to be
drawn by 31 December 2026 subject to customary conditions precedent set forth
in the amended and restated loan agreement. The Company's share of the new
term loan is $104.2 million. The loan bears interest at 3-month SOFR (subject
to a 3.50 per cent. floor), plus 5 per cent. with a 1 per cent. additional
consideration that was paid at closing, of which the Company received $625,000
and a 2 per cent. exit consideration payable at maturity.
Evolus currently markets Jeuveau©, the first and only neurotoxin dedicated
exclusively to aesthetics, and Evolysse™, a collection of unique injectable
hyaluronic acid (HA) gels. On 13 February 2025, Evolysse was approved by the
Food and Drug Administration ("FDA") and is the first HA filler to recognize
weight loss in the patient label as a factor in wrinkle formation. Evolus
launched Evolysse in April 2025. The market capitalization as of 16 March 2026
was $328 million.
Investment type: Secured Loan
Initial investment date: 5 May 2025
Total loan amount: $250m
Company commitment: $104.2m
Maturity: May 2030
Geron
On 1 November 2024, the Company and the Private Fund entered into a senior
secured term loan agreement for up to $250 million with Geron Corporation
(Nasdaq: GERN), a commercial stage biopharmaceutical company committed to
extending and enhancing the lives of people living with blood cancers
("Geron").
Geron drew down $125 million at closing on 1 November 2024. The Company's
share of the draw down was $50 million, which was funded by the Company,
through its subsidiary. The remaining two tranches, of which the Company's
share was $50 million, were due to expire on 31 December 2025. On 5 January
2026, the Company and Geron entered into an amendment to extend the
availability period for Tranche B and C to 30 September 2026 and extend the
make-whole period for Tranche A to 1 May 2027. The loan bears interest at
3-month SOFR (subject to a 3 per cent. floor), plus 5.75 per cent. and a 2.50
per cent. additional consideration for Tranche A that was paid at closing. The
additional consideration for the remaining tranches will be payable on their
respective funding dates.
Geron's telomerase inhibitor Rytelo (imetelstat) is approved in the United
States for the treatment of certain adult patients with lower-risk
myelodysplastic syndromes (LR- MDS) with transfusion dependent anemia and was
launched in the United States in June 2024. In March 2025, Geron received
marketing authorization for Rytelo from the European Commission as a
monotherapy for ESA ineligible and ESA relapsed/refractory non-del 5q patients
with transfusion-dependent anemia due to LR-MDS. Launch planning is underway
and Geron expects to commercialize Rytelo in select EU countries commencing in
2026.
Geron is also conducting a pivotal Phase 3 clinical trial of imetelstat in
JAK-inhibitor relapsed/refractory myelofibrosis (R/R MF), as well as studies
in other myeloid hematologic malignancies. Inhibiting telomerase activity,
which is increased in malignant stem and progenitor cells in the bone marrow,
aims to reduce proliferation and induce death of malignant cells. The market
capitalization as of 16 March 2026 was $1.06 billion.
Investment type: Secured Loan
Initial investment date: 1 November 2024
Total loan amount: $250m
Company commitment: $100m
Maturity: November 2029
Insmed 2024
On 31 October 2024, the Company and the Private Fund entered into an amended
and restated senior term loan agreement for up to $547 million with Insmed
Incorporated (Nasdaq: INSM), a biopharmaceutical company focused on treating
patients with serious and rare pulmonary diseases ("Insmed").
The new loan consisted of a $397 million initial term loan to refinance in
full the existing term loan and an additional $150 million tranche. The
Company, through its subsidiary, funded its share of the additional tranche
totaling $60 million at signing on 31 October 2024. The loan bears interest at
a fixed rate of 9.60 per cent. per annum with a 2 per cent. exit
consideration.
Insmed's commercial product, Arikayce, launched in October 2018 and is
indicated for refractory mycobacterium avium complex (MAC) lung disease. The
product is currently being commercialized in the US, Europe, and Japan. On 12
August 2025, the FDA approved Brinsupri (Brensocatib) as an oral treatment for
non-cystic fibrosis bronchiectasis in adults and children 12 years and older,
and on 17 October 2025, the EMA's CHMP adopted a positive opinion recommending
approval of Brinsupri in the EU, approval is expected by year-end 2025.
In June 2025, Insmed announced positive topline data from the Phase 2b study
of TPIP, a dry powder inhalation formulation of a Treprostinil prodrug, in
pulmonary arterial hypertension ("PAH"). Insmed anticipates initiating a Phase
3 study of TPIP in patients with PH-ILD in 4Q25 and in patients with PAH in
early 2026. The market capitalization as of 16 March 2026 was $31.17 billion.
Investment type: Secured Loan
Initial Investment Date: 31 October 2024
Total loan amount: $547m
Company commitment: $219m
Maturity: September 2029
Alphatec
On 29 October 2024, the Company and the Private Fund entered into a new
investment in the form of an assignment of $70 million of a $200 million
senior secured loan to Alphatec Holdings, Inc. (Nasdaq: ATEC) ("Alphatec").
The assignor, Braidwell Transaction Holdings LLC - Series I, retained the
remaining $130 million. Alphatec is a medical device company that designs,
develops, and markets spine fusion products and solutions for the treatment of
spinal disorders.
Alphatec drew down $50 million at closing on 29 October 2024. The Company and
the Private Fund received $70 million in total via assignment, of which the
Company's portion was $35 million, where $50 million consisted of the new
funds drawn and the remaining $20 million was from the existing funded loan.
The loan bears interest at 3-month SOFR (subject to a 3 per cent. floor) plus
5.75 per cent., with a SOFR adjustment of 0.11448 per cent. with a 1 per cent.
additional consideration that was paid at closing and an exit consideration of
3.25 per cent.
On 7 March 2025, the Company purchased 15 million of 0.75 per cent. senior
unsecured convertible notes due 2030 issued by Alphatec Holdings, Inc. at a
purchase price of $1.00 per note for a $15 million investment. On 9 September
2025 and 31 October 2025, the Company sold 8 million face value and 7 million
face value respectively, of 0.75 per cent. Alphatec Holdings, Inc. senior
unsecured convertible notes due 2030, at an average price of $134. The sales
generated a gain of $5 million.(1)
Alphatec offers intra-operative information and neuromonitoring technologies,
access systems, interbody implants, fixation systems, and various biologics
offerings. The market capitalization as of 16 March 2026 was $1.91 billion.
Investment type: Secured Loan (via Assignment)
Initial investment date: 29 October 2024
Total loan amount: $200m
Company commitment: $35m
Maturity: January 2028
Novocure
On 1 May 2024, the Company and 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). Novocure owns and commercialises 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, of
which $50 million was funded by the Company through its subsidiary. On 26
September 2025, Novocure drew down $100 million of Tranche B, of which $50
million was funded by the Company through its subsidiary. The remaining $200
million is available to be drawn after achieving certain sales-based
milestones. The loan bears interest at 3-month SOFR (subject to a 3.25 per
cent. floor) plus 6.25 per cent. A one-time additional consideration of 2.50
per cent. of Tranche A and Tranche B amounts were paid at signing, and a
one-time additional consideration of 2.50 per cent. of each remaining tranche
will be paid at funding.
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. Optune Lua was approved on
15 October 2024 and is indicated for concurrent use with PD-1/ PD-L1
inhibitors or docetaxel, for the treatment of adult patients with metastatic
non-small cell lung cancer who have progressed on or after a platinum-based
regimen.
Novocure also has ongoing or complete trials investigating TTFields in brain
metastases, gastric cancer, GBM, liver cancer, and pancreatic cancer. The
market capitalization as of 16 March 2026 was $1.41 billion.
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
(Nasdaq: TARS) ("Tarsus"), 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 drew down $75 million at closing on 19 April 2024, of which $37.5
million was funded by the Company through its subsidiary. The remaining
tranches totaling $75 million expired without being drawn. The loan bears
interest at 3-month SOFR (subject to a 3.75 per cent. floor) plus 6.75 per
cent. A one-time additional consideration of 2.5 per cent. of the funded
amount was paid.
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; TP-04 for ocular rosacea (Phase 2)
and TP-05 for the prevention of Lyme disease (Phase 2) and malaria
(preclinical). The market capitalization as of 16 March 2026 was $2.93
billion.
Investment type: Secured Loan
Initial investment date: 19 April 2024
Total loan amount: $200m
Company commitment: $100m
Maturity: April 2029
UroGen 2024
On 13 March 2024, the Company and the Private Fund entered into an amended and
restated loan agreement for up to $200 million with UroGen Inc. (Nasdaq: URGN)
("UroGen"), a biopharmaceutical company dedicated to creating novel solutions
that treat urothelial and specialty cancers.
The new loan consisted of a $100 million initial term loan to refinance in
full the existing term loan, of which the Company's portion was $50 million.
The additional tranches of up to $100 million were allocated in full to the
Private Fund. The loan bore interest at 3-month SOFR (subject to a 2.50 per
cent. floor) plus 7.25 per cent. per annum with a SOFR adjustment of 0.26161
per cent. A one-time additional consideration of 1.75 per cent. of the funded
amount was paid at funding, and a one-time additional consideration of 1.75
per cent. of each remaining tranche would have been paid at funding, if
certain milestones are met.
On 2 March 2026, the Company and the Private Fund entered into an amended and
restated senior term loan agreement with UroGen for $250 million. The existing
$125 million initial term loan was increased to $200 million in a new Tranche
A (with the additional $75 million being funded at closing) and an additional
Tranche B was added for up to $50 million that expires 30 June 2027. The
Company's share of the transaction was $150 million. The loan will mature in
March 2031 and will bear interest at a fixed rate of 8.25 per cent. per annum.
And a one-time additional consideration of 1.50 per cent. of each new tranche
is payable upon funding of each respective tranche, with the Company receiving
$1.5 million in connection with the new Tranche A at signing. In addition, an
exit fee of 1 per cent is also required upon any payment of principal.
UroGen's products are being developed as chemoablation agents designed to
remove tumors by non-surgical means. 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). On 15 October 2024, the FDA accepted UroGen's NDA
for UGN-102 for low-grade intermediate risk Non-Muscle Invasive Bladder Cancer
("NMIBC") and granted a PDUFA target action date of 13 June 2025. On 12 June
2025, the FDA approved ZUSDURI (UGN-102), the first and only FDA-approved
medication for adults with recurrent LG-IR-NMIBC. The market capitalization as
of 16 March 2026 was $912 million.
Investment type: Secured Loan
Initial investment date: 13 March 2024
Total loan amount: $200m
Company commitment: $50m
Maturity: March 2028
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
were each entitled to the benefit of 50 per cent. of the Purchased Payments
under identical economic terms. The Purchased Payments were linked to tiered
worldwide sales of Onglyza and Farxiga, diabetes agents marketed by
AstraZeneca, and related products. 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. The final payment of $10.2 million was received on 13 March
2026. Based on sales from 1 January 2020 to 31 December 2025, the Company
received $243 million consisting of $162 million of principal and $81 million
in interest.
Investment type: Purchased Payments
Initial investment date: 8 December 2017
Total loan amount: $324m
Company commitment: $162m
Maturity: March 2026
(1)Past performance is not an indication of future performance.
( )
REALISED INVESTMENTS
The following table details investments realized during the 31 December 2025
and 31 December 2024 periods.
Amount Funded Repayment Date Gross IRR(1) Net IRR(2) Prepayment and Make-whole Fees
Collegium 2024 senior secured loan 481.2 23/12/2025 12.1% 9.7% 7.9
CytoKinetics senior unsecured convertible notes 1.3 22/12/2025 187.9% 150.3% -
Alphatec senior unsecured convertible notes 15.0 03/11/2025 64.4% 51.5% -
Celcuity senior unsecured convertible notes 2.5 28/10/2025 1,077.2% 816.8% -
BioCryst senior secured loan 120.0 07/10/2025 15.3% 12.3% 4.4
OptiNose senior secured loan 71.5 21/05/2025 15.5% 12.4% 11.3
Evolus 2021 senior secured loan 62.5 05/05/2025 15.1% 12.0% -
Immunocore senior secured loan 25.0 08/11/2024 14.6% 11.7% 1.0
Insmed 2022 senior secured loan 140.0 31/10/2024 14.7% 11.8% -
Reata senior secured loan 62.5 05/09/2024 158.0% 126.4% 15.5
LumiraDx senior secured loan (Total) 176.0 -0.5% -0.7% -
LumiraDx 120.7 31/07/2024 0.4% 0.3% -
LumiraDx 20.1 31/07/2024 -21.9% -17.5% -
LumiraDx 35.2 31/07/2024 5.4% 4.3% -
Collegium 2022 senior secured loan 352.0 28/07/2024 14.3% 11.5% -
Coherus senior secured loan (Total) 125.0 16.7% 13.3% 5.4
Coherus 87.5 01/04/2024 16.6% 13.3% 3.1
Coherus 37.5 08/05/2024 16.8% 13.4% 2.3
UroGen 2022 senior secured loan 50.0 13/03/2024 14.5% 11.6% -
ImmunoGen senior secured loan 62.5 12/02/2024 60.2% 48.2% 13.2
Akebia senior secured loan (Total) 50.0 11.4% 9.1% 12.9
Akebia 10.0 15/07/2022 11.3% 9.0% 12.8
Akebia 40.0 29/01/2024 11.4% 9.1% 0.1
(1) Gross IRR is set forth in the Glossary, refer to the full Annual Report.
Past performance is not an indication of future performance.
(2) Net IRR is set forth in the Glossary, refer to the full Annual Report.
Past performance is not an indication of future performance.
Collegium 2024
On 28 July 2024, the Company and the Private Fund provided Collegium with a
commitment to enter into a new senior secured term loan agreement for $645.8
million. The new loan consisted of a $320.8 million initial term loan, of
which the Company's share was $160.4 million, to refinance in full the
existing term loan and a $325 million second tranche, of which the Company's
share was $130 million, that was drawn on 23 September 2024. Proceeds from the
new loan were used to assist Collegium in the successful closing of the
acquisition of Ironshore Therapeutics. On 23 December 2025, Collegium repaid
its remaining $261.4 million balance to the Company, and the Company received
$7.9 million of accrued interest and prepayment fees. The Company and its
subsidiaries earned a 12.1 per cent. gross internal rate of return(1) and 9.7
per cent. net internal rate of return(2) on its Collegium 2024 investment.
Alphatec
On 5 March 2025, the Company purchased 15 million of 0.75 per cent. senior
unsecured convertible notes due 2030 issued by Alphatec Holdings, Inc. at a
purchase price of $1.00 per note for a $15 million investment. On 9 September
2025 and 31 October 2025, the Company sold 8 million and 7 million face value
respectively, of 0.75 per cent. Alphatec Holdings, Inc. senior unsecured
convertible notes due 2030, at an average price of $134. The sales generated a
gain of $5 million and earned a 64.4 per cent. gross internal rate of
return(1) and 51.5 per cent. net internal rate of return.(2)
Celcuity
On 30 July 2025, the Company purchased 2.5 million of 2.75 per cent. senior
unsecured convertible notes due 2031 issued by Celcuity, Inc. at a purchase
price of $1.00 per note for a $2.5 million investment. On 27 October 2025, the
Company sold 2.5 million of 2.75 per cent. Celcuity, Inc. senior unsecured
convertible notes due 2031 at a price of $181. The sale generated a gain of $2
million and earned a 1,077.2 per cent. gross internal rate of return(1) and
816.8 per cent. net internal rate of return.(2)
BioCryst
On 17 April 2023, the Company and the Private Fund entered into a senior
secured term loan agreement for up to $450 million with BioCryst, who BioCryst
drew down $300 million at closing. On 17 April 2023, the Company funded $120
million through its subsidiary and BioCryst elected to PIK interest of $9.5
million. The commitment for the remaining three tranches of up to $50 million
each expired on 30 September 2024. The loan was due to mature in April 2028
and bore interest at 3-month SOFR plus 7 per cent. per annum subject to a 1.75
per cent. floor and up to 50 per cent. of the interest during the first 18
months were paid-in-kind (PIK) at a rate of 3-month SOFR plus 7.25 per cent.
The Company funded $120 million on 16 April 2023. On 18 April 2025, BioCryst
prepaid $30 million of its balance to the Company and the Company received
$1.1 million in accrued interest and prepayment fees. On 24 July 2025,
BioCryst prepaid $20 million of its balance to the Company and the Company
received $751,000 in accrued interest and prepayment fees. On 8 October 2025,
BioCryst repaid its remaining $79.5 million balance to the Company and the
Company received $2.6 million in accrued interest and prepayment fees. The
Company and its subsidiaries earned a 15.3 per cent. gross internal rate of
return(1) and 12.3 per cent. net internal rate of return(2) on its BioCryst
investment.
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, a commercial stage
specialty pharmaceutical company. OptiNose drew a total of $130 million out of
the $150 million committed, of which the Company, through its subsidiary,
funded $71.5 million. The notes were originally due to 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. After certain amendments, the loan would have matured in June 2027
and bore an interest rate of 3-month SOFR plus 8.50 per cent., subject to a
2.50 per cent. floor. On 21 May 2025, OptiNose entered into an agreement for
Paratek to acquire OptiNose. In connection with the closing of such
acquisition on 21 May 2025, the Company received a payment of $82.8 million,
comprised of $71.5 million in returned principal and $11.3 million of
make-whole and prepayment fees, and accrued interest. The Company also
received proceeds of $1.6 million in connection with the Company's outstanding
OptiNose shares. The Company and its subsidiaries earned a 15.5 per cent.
gross internal rate of return(1) and 12.4 per cent. net internal rate of
return(2) on its OptiNose investment.
Evolus 2021
On 14 December 2021, the Company and the Private Fund entered into a senior
secured loan agreement for up to $125 million with Evolus. The Company,
through its subsidiary, 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
loan would have matured in December 2027 and bore interest at 3-month SOFR
plus 8.50 per cent. with an additional 0.17 per cent. adjustment 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 May 2025, the Evolus loan was refinanced in full. The Company
and its subsidiaries earned a 15.1 per cent. gross internal rate of return(1)
and 12.0 per cent. net internal rate of return(2) on its Evolus 2021
investment.
LumiraDx
On 23 March 2021, the Company and the Private Fund entered into a senior
secured loan agreement with LumiraDx for $300 million. The loan would have
matured in March 2024 and bore interest at 3-month SOFR plus 8 per cent. with
the ability to PIK anything above 8 per cent., additional consideration of 2.5
per cent. of the total loan amount and 9 per cent. of the total loan amount
payable upon repayment. The Company's allocation of the transaction was $150
million. From 24 July 2023 to 9 November 2023, the Company, through its
subsidiary, and the Private Fund funded $53 million of additional tranches to
LumiraDx. On 29 December 2023, LumiraDx announced the appointment of joint
administrators for two of its subsidiaries, and Roche Diagnostics Limited
("Roche") announced that it would acquire LumiraDx group's point-of-care
diagnostics platform business and certain related assets for $295 million. On
29 July 2024, FTI Consulting LLP ("FTI"), as the UK administrator for
LumiraDx, made an initial payment to the Company and the Private Fund of
$330.6 million, of which $165.3 million was received by the Company. On 31
October 2024, FTI returned $9.2 million to the Company and $9.2 million to the
Private Fund which included the agreed holdback amount under the Roche Sales
and Purchase Agreement. On 30 June 2025, FTI returned $409,938 to the Company
and $409,938 to the Private Fund. With the addition of cash interest received
from LumiraDx as of the end of Q3 2024, this equated to an approximate 98 per
cent. recovery rate of invested capital by the Company and the Private Fund.
At the end of 2024, the Company and the Private Fund received LumiraDx's share
ownership of LumiraDx's Colombian subsidiary, which they are actively seeking
to sell. If the Company and the Private Fund were to receive the current fair
value of the Colombian subsidiary, this would equate to an approximate 102 per
cent. recovery rate.(3)
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
required to be drawn after achieving certain performance-based milestones, and
Tranche D of $75 million was available at the Company's discretion after
achieving certain sales-based milestones. The loan bore interest at 3-month
SOFR plus 7.5 per cent. (subject to a 2.5 per cent. floor). There was also a 2
per cent. additional consideration 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 a proposed
acquisition of 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 prepayments including $15.5 million in prepayment
and make-whole fees. In April 2024, the Company and the Private Fund filed a
lawsuit in New York courts against Biogen and Reata with respect to a dispute
about fees payable under the terms of the loan agreement. In April 2025, the
parties entered into a settlement agreement, representing the final resolution
of this dispute. The Company received an additional gross $8.5 million in
revenue from this settlement payment. The Company and its subsidiaries earned
a 158.0 per cent. gross internal rate of return(1) and 126.4 per cent. net
internal rate of return(2) on its Reata investment.
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.
("Coherus"), a biopharmaceutical company building a leading immunooncology
franchise funded with cash generated by its commercial biosimilars business.
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, through its
subsidiary, funded $125 million across the first three tranches. The loan
would have matured in January 2027 and bore interest at 3-month SOFR plus 8.25
per cent. per annum subject to a 1 per cent. floor along with a one-time
additional consideration of 2 per cent. of the total loan amount paid at
funding of the first tranche. On 1 April 2024, Coherus prepaid $87.5 million
of its balance to the Company and the Company received $31 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. The Company and its subsidiaries earned a 16.7 per cent.
gross internal rate of return(1) and 13.3 per cent. net internal rate of
return(2) on its Coherus investment.
ImmunoGen
On 6 April 2023, the Company and 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, through its subsidiary, 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. The Company and its
subsidiaries earned a 60.2 per cent. gross internal rate of return(1) and 48.2
per cent. net internal rate of return(2) on its ImmunoGen investment.
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. ("Akebia"), a fully integrated biopharmaceutical company focused on the
development and commercialisation of therapeutics for people living with
kidney disease. Akebia drew down $80 million at closing and an additional $20
million on 10 December 2020. The Company, through its subsidiary, funded $50
million across both tranches. The loan would have matured 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 29 January
2024, Akebia prepaid the remaining $17.5 million of the balance that was due
to amortise to the Company and the Company received $87,500 in prepayment
fees. The Company and its subsidiaries earned a 11.4 per cent. gross internal
rate of return(1) and 9.1 per cent. net internal rate of return(2) on its
Akebia investment.
Collegium 2022
On 14 February 2022, the Company and the Private Fund provided Collegium
("Collegium 2022"), a biopharmaceutical company focused on developing and
commercialising new medicines for responsible pain management, 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, through its subsidiary, invested
$325 million in a single drawing. The four-year loan would have had $100
million in amortisation payments during the first year and the remaining $550
million balance would have amortised in equal quarterly installments. The loan
would have matured in March 2026 and bore 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. with a SOFR adjustment of 0.26161 per cent. On 28 July 2024, the Company
and the Private Fund refinanced the Collegium 2022 loan in full, among other
things, to modify the amortisation of the then outstanding balance of $320.8
million, 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 modify the terms reducing the coupon to 3-month SOFR plus 4.50 per cent.
per annum subject to a SOFR floor of 4 per cent.
The Company and its subsidiaries earned a 14.3 per cent. gross internal rate
of return(1) and 11.5 per cent. net internal rate of return(2) on its
Collegium 2022 investment.
UroGen 2022
On 7 March 2022, the Company and the Private Fund entered into a senior
secured loan agreement for up to $100 million with UroGen ("UroGen 2022"), a
biopharmaceutical company dedicated to creating novel solutions that treat
urothelial and specialty cancers. UroGen drew down $75 million at closing and
the remaining $25 million on 16 December 2022. The Company, through its
subsidiary, funded $50 million across the two tranches. The loan would have
matured in March 2027 and bore interest at 3-month SOFR 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 and a one-time additional consideration of 1.75 per cent. of
each remaining tranche will be paid at funding as long as certain milestones
are met. 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. and an additional per annum rate of 0.26161 per cent. On 13 March 2024,
the UroGen loan was refinanced in full. The Company and its subsidiaries
earned a 14.5 per cent. gross internal rate of return(1) and 12.0 per cent.
net internal rate of return(2) on its UroGen 2022 investment.
Insmed 2022
On 19 October 2022, the Company and the Private Fund entered into a senior
secured loan agreement for $350 million with Insmed ("Insmed 2022"), a
biopharmaceutical company focused on treating patients with serious and rare
diseases. The Company, through its subsidiary, funded $140 million of the $350
million loan on 19 October 2022. Insmed had elected the option to accrue 50
per cent. of their interest due from closing through 30 September 2024 as a
PIK. The loan would have matured in October 2027 and bore 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. On 31 October 2024, the Insmed
loan was refinanced in full. The Company and its subsidiaries earned a 14.7
per cent. gross internal rate of return(1) and 11.8 per cent. net internal
rate of return(2) on its Insmed 2022 investment.
Immunocore
On 8 November 2022, the Company and the Private Fund entered into a senior
secured loan agreement for up to $100 million with Immunocore Limited
("Immunocore"), 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. The
Company, through its subsidiary, funded $25 million of the first tranche of
$50 million on 8 November 2022. The remaining $50 million Tranche B
commitment, of which the Company's share was $25 million, expired without
being drawn. On 30 June 2024, Immunocore paid $625,000 to the Company in
additional consideration on the expiration of Tranche B. Tranche A was due to
mature in November 2028 and bore interest at 9.75 per cent. per annum along
with an additional consideration of 2.50 per cent. paid at funding. On 8
November 2024, Immunocore repaid the remaining $25 million and the Company
received $1.1 million in accrued interest and prepayment fees. The Company and
its subsidiaries earned a 14.6 per cent. gross internal rate of return(1) and
11.7 per cent. net internal rate of return(2) on its Immunocore investment.
(1) Gross IRR is set forth in the Glossary available in the full Annual
Report. Past performance is not an indication of future performance.
(2) Net IRR is set forth in the Glossary available in the full Annual Report.
Past performance is not an indication of future performance.
(3) The market value of the LumiraDx Colombian subsidiary is subject to
change.
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 non-dilutive 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
some volatility in the first half of 2025, the BTK index increased 31 per
cent. during 2025 compared to 6 per cent. during 2024.(1) Global equity
issuance by life sciences companies during 2025 was $61.5 billion, a 6 per
cent. increase from the $58.3 billion issued during 2024.(1) Similarly, the
upturn in the life sciences equity markets was reflected in increased
convertible bond issuance by life sciences companies; issuances increased to
$7.7 billion in 2025 from $4.4 billion in 2024.(1) We anticipate 2026 equity
and convertible bond issuance to remain comparable to 2025 levels which should
continue to support appetite for non-dilutive debt during 2026. 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 2025 was $120.1 billion, a 9 per cent. decrease from the
$131.3 billion witnessed during 2024,(1) driven by the volatility in the
equity markets and uncertainty particularly in the first half of the year. We
are encouraged by the number of M&A opportunities that are starting to
build up, which should lead to a more active market in the near term.
PRICING AND REGULATORY OUTLOOK
A significant portion of the revenues from borrowers in the portfolio come
from sales which are reimbursed by various US government entities that are
highly regulated. While we currently do not expect major changes to how these
entities will continue to reimburse for the cost of these drugs, we cannot
predict whether the US administration will seek to make changes that may
affect the sales of these products. No regulatory changes in 2025 were
considered by Pharmakon to have a material effect on the portfolio's
performance.
USD SOFR
The Company has seven loans with coupons that reference 3-month USD SOFR and
one loan that references 1-month USD SOFR. Three loans have a 3.50 per cent.
SOFR floor or greater and five have a floor ranging from 2.25 per cent. to
3.25 per cent. As of 31 December 2025, the 1-month and 3-month SOFR was 3.69
per cent. and 3.66 per cent. respectively, above the floors in the eight
loans. As of the report date, two loans have triggered the SOFR floor.
INTERNATIONAL OUTLOOK
The invasion of Ukraine by Russia and the war between Israel and Hamas has led
to increased market volatility and widespread sanctions on Russian and Israeli
assets and individuals, contributing to the high inflation introduced by the
pandemic. While the portfolio has no direct exposure in Russia, Ukraine or
Iran and has limited manufacturing exposure in Israel. We remain vigilant in
monitoring this major event closely and will inform investors of any material
changes.
INVESTMENT OUTLOOK
We recognize that the company's cash balance is larger than the usual at year
end as a result of the Collegium repayment in December. We continue to expect
our investment pipeline to grow as new products and companies enter the market
in 2026 and beyond. 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.
Although the global economic outlook remains uncertain, Pharmakon remains
confident of its ability to deliver its target dividend yield to its
investors.
Pedro Gonzalez de Cosio
Co-founder and CEO, Pharmakon
23 March 2026
(1) Gross IRR is set forth in the Glossary available in the full Annual
Report. Past performance is not an indication of future performance.
(2) Net IRR is set forth in the Glossary available in the full Annual Report.
Past performance is not an indication of future performance.
(3) Source: Factset.
Further Information
The financial information does not constitute the Company's statutory accounts
for the year ended 31 December 2025 but is derived from those accounts.
Statutory accounts for the year ended 31 December 2025 will be delivered to
the Registrar of Companies in due course. The Auditor has reported on those
accounts; their report was (i) unqualified, (ii) did not include a reference
to any matters to which the Auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under Section
498 (2) or (3) of the Companies Act 2006.
National Storage Mechanism
A copy of the Annual Report in full unedited text will be submitted shortly to
the National Storage Mechanism ("NSM") and will be available for inspection at
the NSM, which is situated at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) in accordance with
DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
END
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