Biopharma Cred. Regulatory News (BPCR)

"This announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014."

14 FEBRUARY 2022 

BIOPHARMA CREDIT PLC

(THE "COMPANY")

US$325 MILLION INVESTMENT IN COLLEGIUM

BDSI PREPAYMENT  

BioPharma Credit PLC (LSE:BPCR), is pleased to announce that it, through its fully owned subsidiary, together with BioPharma Credit Investments V (Master) LP ("BioPharma-V" and jointly with the Company the "Lenders",) has provided Collegium Pharmaceutical, Inc. (Nasdaq: COLL) a commitment to enter into a new US$650 million senior secured term loan agreement. Proceeds from the new loan will be used to fund Collegium's proposed acquisition of BioDelivery Sciences International, Inc. (Nasdaq: BDSI), as well as to repay the outstanding debt of Collegium and BDSI (the "M&A Transaction").

Under the terms of the new loan agreement, upon the closing of the M&A Transaction, the Company will invest US$325 million in a single drawing and BioPharma-V will invest US$325 million in parallel, with the Company acting as collateral agent. The four-year loan will have US$100 million in amortization payments during the first year and the remaining US$550 million balance will amortize in equal quarterly installments. The loan will bear interest at 3-month LIBOR plus 7.50 per cent. per annum subject to a 1.20 per cent. floor along with a one-time additional consideration of 2.00 per cent. of the loan amount payable at signing and 1.00 per cent. of the loan amount payable at funding.

The Company intends to fund this investment from current cash on hand, US$ 102 million, proceeds from the BDSI and Collegium repayment as well as drawing on its credit facility with JPMorgan Chase bank. As part of this transaction and in anticipation of other potential investments, the Company intends to increase the committed amount under the facility from US$50 million to US$200 million using the facility's accordion feature.

Background

On 29 May 2019 the Company entered into a senior secured term loan agreement with BDSI and ultimately funded US$80 million in two tranches. During 2021 BDSI repaid US$20 million resulting in a current balance of US$60 million. Upon the closing of the M&A Transaction, BDSI will be required to repay the US$60 million balance together with accrued interest and a 2.0% prepayment fee. Also, in May 2019 the Company acquired 5.0 million shares of BDSI at US$5.00 each and sold 2.3 million shares during 2019 at an average price of US$6.60 per share. Upon closing of the M&A Transaction, the Company will receive cash consideration of US$5.60 per share or US$15 million in total.

On 7 February 2020 the Company and BioPharma-V entered into a US$200 million senior secured term loan agreement with Collegium and the Company initially invested US$165 million. To date, Collegium has repaid US$88 million through scheduled amortizations resulting in a current balance of US$112 million. Upon the closing of the M&A Transaction, Collegium will be required to repay the Lenders the remaining US$112 million balance, of which US$93 million is owed to the Company, together with accrued interest. There will not be a prepayment fee.

Collegium Pharmaceutical is a publicly traded, biopharmaceutical company focused on developing and commercializing new medicines for responsible pain management with a current market capitalization of ~US$608 million. Collegium currently markets Xtampza® ER, an abuse-deterrent, extended-release, oral formulation of oxycodone and Nucynta® (tapentadol), a centrally acting synthetic analgesic. Collegium reported 12-month trailing net sales as of the third quarter of 2021 of US$326 million comprised of US$129 million of Xtampza® ER and US$197 million of Nucynta®. During the same period Collegium reported US$161 million of EBITDA.

BDSI is a publicly traded biopharmaceutical company that currently markets 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, Symproic® (naldemedine) for the treatment of opioid-induced constipation (OIC), and ELYXYBTM(celecoxib oral solution) for the treatment of migraine with or without aura. Schedule III medicines are considered by the U.S. Drug Enforcement Agency (DEA) to have less potential for abuse than Schedule II medicines such as fentanyl, hydrocodone, morphine and oxycodone. BDSI reported 12-month trailing net sales as of the third quarter of 2021 of US$164 that included $146 million in net sales of BELBUCA® as of the third quarter of 2021. During the same period BDSI reported US$48 million of EBITDA.

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. Starting with a US$575 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 and BDSI, this is Pharmakon's fourth loan secured by these meaningfully differentiated products that treat moderate to severe pain."

-Ends-

Enquiries

BioPharma Credit plc

via Link Company Matters Limited

Company Secretary

+44 (0)1392 477 509

J.P. Morgan Cazenove

+44 (0)20 7742 4000

William Simmonds

Buchanan

+44 (0)20 7466 5000 / biopharmacredit@buchanan.uk.com

David Rydell

Mark Court

Jamie Hooper

Henry Wilson

Notes to Editors:

BioPharma Credit PLC is London's only listed specialist investor in debt from the life sciences industry and joined the LSE on 27 March 2017. The Company seeks to provide long-term shareholder returns, principally in the form of sustainable income distributions from exposure to the life sciences industry. The Company seeks to achieve this objective primarily through investments in debt assets secured by royalties or other cash flows derived from the sales of approved life sciences products.

LEI: 213800AV55PYXAS7SY24