BioPharma Credit PLC
30 July 2024
BIOPHARMA
CREDIT PLC
(THE
"COMPANY")
NEW
INVESTMENT OF US$130.0 MILLION
The Company notes the filing of a
Form 8-K made on 29 July 2024 by Collegium Pharmaceutical, Inc.
("Collegium"), which announced (i) the entering into of a
definitive agreement pursuant to which Collegium will acquire all
of the outstanding shares of Ironshore Therapeutics Inc. for
US$525.0 million in cash at closing, with a potential US$25.0
million commercial milestone payment (the "Merger") and (ii) the
second amendment and restatement of its loan agreement entered into
with the Company, BioPharma Credit Investments V (Master) LP
("BioPharma-V"), and BPCR Limited Partnership (the "2nd
A&R Loan Agreement") to assist in financing the
Merger.
The 2nd A&R Loan
Agreement provides for a US$645.8 million senior secured term loan,
consisting of a US$320.8 million initial term loan ("Tranche A")
and a new tranche for a US$325.0 million delayed draw term loan
("Tranche B"). Under the 2nd A&R Loan Agreement,
Collegium used the proceeds of Tranche A to refinance in full all
outstanding indebtedness under Collegium's existing term loan with
the Company and BioPharma-V. Tranche B will be used by Collegium to
fund a portion of the consideration to be paid to complete the
Merger, pay fees and expenses in connection with the Merger and the
2nd A&R Loan Agreement and the remainder for general
corporate purposes. The Merger is expected to close in the third
quarter of 2024, subject to customary closing conditions, including
receipt of required regulatory approvals.
The Company was allocated 40 per
cent. of Tranche B, with BioPharma-V allocated 60 per cent. of
Tranche B, which will result in Collegium representing
approximately 21 per cent. of the Company's NAV if the Company had
funded its allocation in Tranche B in full as of today.
Pedro Gonzalez de Cosio, CEO of
Pharmakon Advisors, LP, the Company's investment manager commented:
"We are pleased to continue to build upon our successful
partnership with Collegium Pharmaceutical through this transaction.
This investment marks Pharmakon's third loan to Collegium and the
fifth involving these meaningfully differentiated therapies. Our
initial investment was a US$575.0 million loan to Depomed, Inc.
structured by Pharmakon in 2015 to fund the original acquisition of
Nucynta from Johnson & Johnson, followed by the initial loans
by the Lenders to Collegium (US$200.0 million) and BDSI (US$100.0
million), and the US$650.0 million loan to Collegium for the
purchase of BDSI."
Background
The Company previously announced on
14 February 2022 a commitment to enter into a US$650.0 million
senior secured loan to Collegium, with each of the Company and
BioPharma-V investing up to US$325.0 million (the "Prior Loan
Agreement"). The Company had previously funded to Collegium
US$325.0 million at closing, and since 2022 Collegium repaid
US$164.6 million to the Company resulting in a balance as of the
entering into of the 2nd A&R Loan Agreement of
US$160.4 million.
Under the terms of the
2nd A&R Loan Agreement, the five-year loan will bear
interest per the Prior Loan Agreement (3-month SOFR plus 7.50 per
cent. per annum plus a 0.26161 per cent. per annum adjustment
subject to a 1.00 per cent floor) until Q3 2024 and thereafter,
3-month SOFR + 4.50 per cent. per annum plus a 0.130805 per cent.
per annum adjustment subject to a 4.00 per cent. floor, with
quarterly amortization payments equal to 2.50 per cent of the
original funded term loans commencing in Q4 2024. A one-time
additional consideration of 1.25 per cent. of Tranche A was paid at
the signing of the 2nd A&R Loan Agreement, and 2.25
per cent. of Tranche B payable at funding. There will not be a
prepayment fee under the Prior Loan Agreement.
Collegium is a leading diversified
specialty pharmaceutical company committed to improving the lives
of people living with serious medical conditions. Collegium is
publicly traded with a current market capitalization of ~US$1,180
million. Collegium currently markets Xtampza ER, an
abuse-deterrent, extended-release, oral formulation of oxycodone,
Nucynta (tapentadol), a centrally acting synthetic analgesic,
Belbuca (buprenorphine buccal film), a Schedule III partial opioid
agonist for the management of pain severe enough to require daily,
around-the-clock, long-term opioid treatment, and Symproic
(naldemedine) for the treatment of opioid-induced constipation
(OIC). On 29 July 2024, Collegium reiterated 2024 guidance,
excluding the impact of the acquisition, of US$580 to US$595
million in Net Product Revenues and US$380 to US$395 million in
EBITDA.
Ironshore Therapeutics Inc. is a
privately held, pharmaceutical company whose mission is to
commercialize innovative, patient-focused treatment options to
improve the lives of patients and caregivers. Jornay PM
(methylphenidate HCl extended-release capsules) is a central
nervous system (CNS) stimulant indicated for the treatment of
attention deficit hyperactivity disorder (ADHD) in patients 6 years
and older. According to Collegium, Jornay PM is poised to become
Collegium's leading growth driver. Collegium expects net revenue
for Jornay PM to be in excess of $100 million in 2024. According to
Collegium, in the first half of 2024, Jornay PM prescriptions grew
32 per cent. year-over-year and for the full-year 2023, the product
generated approximately 490,000 prescriptions, a 58 per cent.
increase compared to 2022. Jornay PM is a highly differentiated
treatment for ADHD due to its evening dosing, smooth therapeutic
effect and dose-dependent duration.
Enquiries:
BioPharma Credit plc
via Link Company Matters
Limited
Company Secretary
+44 (0)1392 477 509