BioPharma Credit (BPCR) announced its annual results for the year ended 31 December 2023. The company saw NAV growth of 1.5% over the period while maintaining its record of paying a dividend of at least 1.75 cents per share every quarter since that quarter ending 30 June 2018. Three dividends paid during the year totalled 7.25 cents per share, with a fourth dividend paid after the year end of 2.96 cents per share comprising a 1.75 cent ordinary dividend and a special dividend of 1.21 cents per share. Total dividends from 2023 results therefore equated to 10.21 cents per share. Shares fell 12% during the period, widening the discount which now sits at around 9%. Over the course of 2023, the company and its subsidiaries invested a total of $270.0m into new and existing investments with additional unfunded commitments of $85m that may be funded over the next six months. The company repurchased a total of 16,499,477 ordinary shares at an average price of $0.92 per share and a total cost of $15.3 million from 9 January 2023 to 11 July 2023.
Commenting on the market, CEO Pedro Gonzalez de Cosio noted:
“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 substantial volatility during the period, the BTK index increased 3 per cent. during 2023, compared to a 4 per cent. decrease during 2022. Global equity issuance by life sciences companies during 2023 was $45 billion, a 31 per cent. increase from the $34.4 billion issued during 2022. Similarly, convertible bond issuance by life sciences companies increased to $9.7 billion in 2023 from $7.3 billion in 2022. We anticipate 2024 equity and convertible bond issuance to remain comparable to 2023 levels which should continue to support appetite for non-dilutive debt during the remainder of 2024.
“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 2023 was $189 billion, a 108 per cent. increase from the $91 billion witnessed during 2022, driven mainly by the volatility in the equity markets. 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.”
Regarding the outlook, he continued:
“We expect our investment pipeline to grow as new products and companies enter the market in 2024 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.”
BPCR BioPharma Credit lags market during challenging year