Life sciences debt investor BioPharma Credit says the UK offers "limited" biotech investment opportunities

Courtney Goldsmith
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BioPharma Credit is the only London-listed debt fund to invest in life sciences (Source: Getty)

London's only listed life sciences debt investor has said there are a "very limited" number of UK companies it could invest in despite great science being developed in the sector.

The figures

In its first full-year results since its initial public offering (IPO) this time last year, BioPharma Credit today said total income for the period was $39.3m (£28.2m). The firm had a net asset value per share of $1.01.

BioPharma invested in four US companies during the period representing total commitments of $693.2m to $713.2m.

The firm declared a dividend of $0.02, in line with its targets, and it also today announced a $300m share placing, the net proceeds of which will be used to continue funding acquisitions.

Read more: City investors are poised to miss out on the UK’s biotech boom - here's why

Why it's interesting

Pedro Gonzalez de Cosio, the company's investment manager, told City AM BioPharma aims to pick out early-stage life sciences companies small enough to need its capital but with enough cash flow to provide support.

"Sadly there are a very limited number of companies in that situation in the UK," he said.

"You have early stage companies developing amazing science that one day will hopefully be real products, but there are very few products that already have cash flows that would be looking for financing."

De Cosio said UK life sciences firms tend to sell their companies early compared with US firms, which continue to develop and outlicense their products.

He added that BioPharma is selective about the companies it invests in, tending to distance itself from any risk.

"Sometimes we say no to things that look attractive but don’t give us a complete sense of comfort." De Cosio said, adding that BioPharma says no to about 90 per cent of the companies it talks with.

What BioPharma said

De Cosio said the firm had a "highly successful" first year.

Since the IPO, the company has made five investments, deploying $514m in corporate and royalty debt secured by cash flows derived from sales of approved life sciences products and a further $339.5m in future commitments subject to certain conditions.

BioPharma Credit remains uniquely positioned to generate uncorrelated long-term shareholder returns, predominantly in the form of sustainable income distributions from exposure to the life sciences industry.

Read more: London's only listed drugs development debt fund announces first dividend

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