Currency in USD
Last close As at 26/05/2023
USD0.95
— 0.00 (0.00%)
Market capitalisation
USD1,258m
Research: Investment Companies
BioPharma Credit (BPCR) has entered into a new senior secured loan agreement for up to US$50m to be provided to UroGen Pharma, a Nasdaq-listed biotech company focused on the treatment of urothelial and speciality cancers. BPCR and BioPharma fund V will each invest US$37.5m in the first tranche and up to a further US$12.5m available to be drawn by end-2022. Following the transaction, BPCR is fully invested and would require additional external capital for new investments (by a further drawdown of its credit facility or a new share issue).
BioPharma Credit |
New transaction of up to US$50m |
Investment trusts |
16 March 2022 |
Analysts
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BioPharma Credit (BPCR) has entered into a new senior secured loan agreement for up to US$50m to be provided to UroGen Pharma, a Nasdaq-listed biotech company focused on the treatment of urothelial and speciality cancers. BPCR and BioPharma fund V will each invest US$37.5m in the first tranche and up to a further US$12.5m available to be drawn by end-2022. Following the transaction, BPCR is fully invested and would require additional external capital for new investments (by a further drawdown of its credit facility or a new share issue).
BPCR’s net cash as percentage of NAV |
Source: BioPharma Credit. Note: *Pro forma at end-January 2022 after accounting for the first UroGen tranche and financing of BDSI takeover by Collegium Pharmaceutical. Edison Investment Research calculation. |
Interest at Libor + 8.25% and 1.75% upfront fee
UroGen currently 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 reported net sales of US$32m in 9M21 and EvaluatePharma consensus indicates that sales are expected to reach US$311m by 2026. The loan, which matures in March 2027, bears interest at three-month Libor + 8.25%, subject to a Libor floor of 1.25% (vs the current rate of 0.7%). BPCR will receive a 1.75% upfront fee with reference to the total loan amount (ie c US$0.9m) on funding of the first tranche.
Deal activity triggering a credit facility drawdown
We consider the recent pick-up in BCPR’s activity as an indication of continued strong deal flow, supported by the recent softening valuations of listed biotech stocks. At end-January 2022 (last reported figure), BPCR had US$130m in cash (10% of the portfolio). Since then it has agreed to provide debt funding to Collegium to fund the acquisition of BDSI of US$172m (on a net basis after repayment of existing loans granted to both Collegium and BDSI) and the above-mentioned UroGen loan. To finance its recent activity, BPCR tapped its available credit line (recently expanded to US$200m from US$50m). The recently agreed loans (Evolus, Coherus and UroGen) have a total outstanding commitment of US$137.5m under tranches yet to be drawn. We believe that BPCR has sufficient capital to finance these commitments by drawing on its remaining credit facility. BPCR may decide to expand its facility and/or conduct a new equity issue to fund additional investments, but this should not affect its attractive dividend policy.
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Research: TMT
4imprint’s FY21 results show a good recovery in orders and revenues, with momentum building over H221. Revenues and profits were as flagged in January’s trading update and were in line with our recent Outlook note. Our FY22 and FY23 forecasts are broadly unchanged, with FY22 revenues set to outstrip those of FY19 as the US economy rebuilds. A note of caution remains on the speed of margin recovery, reflecting lingering supply chain issues and inflationary cost pressures, but this is built into the numbers. 4imprint is a high-quality business in a large and growing market, underpinned by marketing expertise and a strong balance sheet.
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