London Stock Exchange welcomes BioPharma Credit PLC
BioPharma Credit PLC today opened the markets of the London Stock Exchange to mark the occasion of its Initial Public Offering and the admission of its ordinary shares to the Main Market on 30 March 2017. The Fund raised gross cash proceeds of US$761.9m from a mix of new institutional and existing Royalty Pharma Select and BioPharma III investors.
The Fund gives investors exposure to the fast-growing life sciences industry which as at the end of 2016 generated revenues of US$1.1 trillion globally and is expected to grow to US$1.5 trillion by 2021. This growth has been driven in part by breakthrough science, favourable demographic changes (a growing and aging population) and increased prosperity in emerging markets. The industry is experiencing a dramatic increase in the need for accessible and flexible credit driven by the persistent demand for new biopharmacetical products. There has also been a profound change in the R&D ecosystem which in the past was dominated by a small universe of well-funded global pharmaceutical companies and now is driven by more than 5,000 biotech companies, many of which require and can financially support efficient debt capital.
Pharmakon Advisors, the fund’s Investment Manager, is the leading provider of debt capital in this space, having invested US$1.3 billion since 2009. Pharmakon's affiliate, Royalty Pharma, has more than 20 years’ experience in the industry and is the leading purchaser of royalties on bio-pharmaceutical products with in excess of US$17 billion In AUMs. Royalty Pharma played a leading role in developing the royalty backed debt market, starting in 2003 to fund investments in pharma royalties. Leveraging their expertise and network of contacts, BioPharma Credit will be the only listed fund to specialise in debt financing for the global life sciences industry.
The Fund’s primary objective is to generate long-term shareholder returns, predominantly in the form of sustainable income distributions from debt assets secured by royalties. It is targeting an initial dividend yield of 7% and net return on NAV of 8-9% per annum once substantially invested.
J.P. Morgan Cazenove and Goldman Sachs acted as joint bookrunners and financial advisers.
Commenting on the result of the IPO, Jeremy Sillem, Chairman of BioPharma Credit plc, said:
"The strong support we have received from institutional investors, which has resulted in the issue exceeding our original target to raise US$300 million, demonstrates the attraction of the investment proposition BioPharma Credit offers the market. The Board would like to thank those involved in the process and looks forward to supporting the management team as they execute on the strategy."
Pablo Legorreta, CEO of Royalty Pharma and Co-Founder of Pharmakon, added:
"We are pleased with the success of the initial public offering and welcome our new shareholders. The continued growth and evolution of the global life sciences industry has fuelled the demand for flexible credit and debt expertise now and in the future. Building upon our track record, we believe we are best placed to capitalise on this opportunity and are excited to give a broader audience of investors access to the benefits of our strong network and in-depth knowledge of the sector as we begin life as a publicly listed company. We look forward to delivering on our investment strategy.”