Half-yearly Report

14 September 2022

BIOPHARMA CREDIT PLC

(THE "COMPANY")

HALF-YEARLY REPORT FOR THE PERIOD ENDED 30 JUNE 2022

Resilient NAV with Successful Execution on Several Attractive Investments

BioPharma Credit PLC (LSE: BPCR), a specialist life sciences debt investment trust, is pleased to present the Half-Yearly Report of the Company for the period ended 30 June 2022.

The full Half-Yearly Report and Financials Statements can be accessed via the Company's website at www.bpcruk.com or by contacting the Company Secretary by telephone on 01392 477500.

INVESTMENT HIGHLIGHTS

· The Company's portfolio continued to perform well throughout the period with investment income increasing by 26 per cent, compared with the same period in 2021

· During the first half of 2022, the Company announced three new investments, totalling $526 million in fresh commitments, a greater than threefold increase from the $150 million committed during the comparative prior period:

o  $325 million for the new Collegium loan, announced on 14 February 2022

o  $100 million for the Coherus loan, announced on 10 January 2022

o  $38 million for the UroGen loan, announced on 8 March 2022

o  These investments have additional unfunded commitments totalling $88 million that may be funded over the next twelve months

· Net Asset Value ("NAV") per Ordinary Share remained resilient, increasing to $1.0072 from $0.9926 (31 December 2021)

· The Company and its subsidiaries saw a $181 million increase in cash flows in the first six months of 2022

POST PERIOD END HIGHLIGHTS

· July 2022 - Akebia loan amendment resulting in a $25 million pre-payment of which the Company's share is $12.5 million generating a 2 per cent. prepayment fee

· August 2022 - Ipsen closed on its acquisition of Epizyme, triggering a $110 million prepayment plus $9 million in prepayment and make whole fees realizing a gross IRR of 15.2 per cent

· August 2022 - Pfizer announced an agreement to purchase Global Blood Therapeutics which, upon closing, would trigger a $132.5 million prepayment to the Company plus fees the final sum of which remain dependent on the timing of the closing

· September 2022 - Sarepta Therapeutics announced a proposed offering of $1.0 billion of Convertible Senior Notes Due 2027 which, upon closing, would trigger a $350.0 million prepayment to the Company plus approximately $16 million in paydown, prepayment and make-whole fees.

CORPORATE HIGHLIGHTS

· The Company issued two dividend payments over the period as planned, together totalling $0.035 per share and remains confident of delivering its $0.07 target annual distribution

· On 21 March 2022, the Company through its subsidiary, BPCR Limited Partnerships, drew down $138 million on its existing credit facility with a remaining $162 million available under the accordion feature

· The Company announced on 1 July 2022 that it has the authority to repurchase up to 205,952,416 ordinary shares under its share buy-back programme. The Company repurchased 1,496,317 shares between 5 July 2022 and 8 July 2022 at an average price of $0.9392 and a total cost of $1.4 million

· The Board has supported the Investment Manager's Environmental, Social and Governance ("ESG") programme over the first six months of 2022, with progress made in embedding ESG as an integral part of the investment process

PORTFOLIO COMPOSITION

Pedro Gonzalez de Cosio, CEO and co-founder of Pharmakon Advisors L. P., the Investment Manager of BioPharma Credit PLC, said:

"We are pleased to report another robust set of financial results. Markets are experiencing significant volatility and macro-economic uncertainty and, despite this, the Company's portfolio has continued to perform well and was able to deliver on its strong pipeline of opportunities, with investment income increasing by 26 per cent. compared with the prior period. Meanwhile the Company's NAV remains resilient in contrast to the volatility in equity markets. The Company enjoyed a strong start to 2022, securing three transactions on high quality products that represent $526 million in commitments to be funded this year, a greater than threefold increase from the same period in 2021. This is especially notable when global equity issuance by life science companies decreased by 85 per cent during the same time period, a clear demonstration of the strength of our business model and the often counter-cyclical nature of our origination activity.

"We are also pleased to have made significant progress with our ESG programme over the last six months, and ESG is becoming an increasingly integral part of the Company's investment process. Having successfully navigated through COVID-19, we are mindful of the macroeconomic outlook driven by geopolitical and social risk, however, our significant origination network continues to produce a number of compelling pipeline opportunities, and we expect our investment pipeline to grow and further diversify as new products and companies enter the market. We remain focused on our mission to create the premier dedicated provider of debt capital to the life sciences industry while generating attractive returns and sustainable income for investors."

Results presentation

A management presentation for analysts will be delivered today, 14 September 2022, via a conference call facility at 2:00pm BST. To request dial-in details please RSVP [email protected].

Enquiries

BioPharma Credit plc

via Link Company Matters Limited

Company Secretary

+44 (0)1392 477 509

Buchanan

+44 (0)20 7466 5000 / [email protected]

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

CHAIRMAN'S STATEMENT

DURING THE FIRST HALF OF 2022, THE COMPANY ANNOUNCED THREE NEW INVESTMENT TOTALING $526 MILLION IN FRESH COMMITMENTS

INTRODUCTION

I am pleased to present the Half-Yearly Report for the Company, which covers the period 1 January 2022 to 30 June 2022. In an environment where markets encountered significant volatility and strong economic headwinds, the Company's portfolio continued to perform well throughout the period and was able to grow through the execution on a strong pipeline of opportunities, with investment income increasing by 26 per cent. compared to the same period of 2021.

INVESTMENTS

Over the first six months of 2022, the Company and its subsidiaries invested $463 million, comprised of $325 million for the new Collegium loan, $100 million for the Coherus loan and $38 million for the UroGen loan. These investments have additional unfunded commitments totaling $63 million that may be funded over the next twelve months. The portfolio diversification increased during 2021 and this continued into 2022, with eleven total investments as of 30 June 2022.

The Company, including assets and liabilities from its financing subsidiary, BPCR Limited Partnership, ended the year with total net assets of $1,384 million, comprising $1,478 million of investments, $62 million of cash less $138 million from its debt facility and $18 million of other net liabilities.

The Company and its subsidiaries saw a $181 million increase in cash flow in the first six months of 2022 due to the early repayment of the 2020 Collegium loan, the early repayment of the BDSI loan and the cash consideration received related to the tender offer on the remaining BDSI shares and the scheduled amortization payments from the BMS purchased payments.

In subsequent events, Akebia made a $12.5 million pre-payment on 15 July 2022, reducing the outstanding balance to $37.5 million and generating a 2 per cent. prepayment fee, and Ipsen closed on its acquisition of Epizyme, triggering a $110 million prepayment on 12 August 2022 plus $9 million in prepayment and make whole fees realizing a gross IRR of 15.2 per cent. Furthermore, on 8 August 2022, Pfizer announced an agreement to purchase GBT which, upon closing, would trigger a $132.5 million prepayment to the company plus fees which will be dependent on the timing of the closing.

DEBT FACILITY

On 10 September 2021, the Company renegotitated and amended the JPMorgan Chase Bank revolving credit facility that was originated with JPMorgan Chase Bank in 2020. On 21 March 2022, the Company through its subsidiary, BPCR Limited Partnerships, drew down $138 million on its credit facility with a remaining $162 million available under the accordion feature.

SHAREHOLDER RETURNS

The Company and its subsidiaries combined cash balance decreased by $112 million during the first six months of 2022 from $174 million at 31 December 2021 to $62 million at 30 June 2022. On 30 June 2022, the Company's Ordinary Shares closed at $0.9400, below the closing price on 31 December 2021 of $0.9680. Net Asset Value ("NAV") per Ordinary Share increased over the same timeframe from $0.9926 to $1.0072.

The Company made two dividend payments over the period totaling $0.0350 per share, referencing net income for the quarters ending 31 December 2021 and 31 March 2022. The Company is currently paying and continues to target a 7 cent annual dividend per share.

The average discount to NAV over the 3 month period ending 30 June 2022 was 2.4 per cent. The Company announced on 1 July 2022 that it has the authority to repurchase up to 205,952,416 ordinary shares under its share buy-back programme. The Company repurchased 1,496,317 shares between 5 July 2022 and 8 July 2022 at an average price of $0.9392 and a total cost of $1,415,865.

ESG

The Board has supported the Investment Manager's Environmental, Social and Governance ("ESG") programme over the first six months of 2022, with progress made in embedding ESG as an integral part of the investment process. The key areas are described in more detail in the full Half-Yearly Report available online.

OUTLOOK

The COVID-19 pandemic is continuing to affect the movement of people and cause disruption to business operations. Pharmakon and the Company's third-party service providers have hybrid and well established virtual working arrangements that have not impacted operations. Our investment manager believes that, while the COVID-19 pandemic has temporarily affected the sales of some of the Company's borrowers, it has not had a material impact on the credit quality of the Company's loans. The effects of other geopolitical and social risks, including the invasion by Russia of Ukraine, may have economic consequences that extend beyond the short term. The Company does not have any direct investments with Russia. We will continue to monitor the situation and will inform shareholders of any material changes to this assessment.

The Company started 2022 strongly, having announced three transactions that represent $526 million in commitments to be funded this year, a greater than three fold increase from the $150,000,000 committed during the same period of 2021. In comparison, global equity issuance by life science companies decreased by 85 per cent. during the same time periods. The Investment Manager continues to develop a pipeline of additional potential investments and, as a consequence, we expect to be evaluating a number of potential alternatives to fund future growth and further diversify our portfolio. On behalf of the Board, I should like to express our thanks to Pharmakon, the Company's Investment Manager, for their continued achievements on behalf of the Company in 2022 and to our shareholders for their continued support.

Harry Hyman

Chairman

13 September 2022

INVESTMENT MANAGER'S REPORT

Pharmakon is pleased to present an update on the Company's portfolio and investment outlook. The Company's existing portfolio investments continue to perform well.

Pharmakon's engagement with potential counterparties during the period resulted in $463 million of new investments for the Company out of the total $925 million executed. During the period, the Company announced the repayment of the BDSI loan, and the sale of its remaining BDSI shares, and the repayment of the Collegium 2020 loan as a part of Collegium's acquisition of BDSI. The Company and its subsidiaries earned an 11.9 per cent. internal rate of return on both its Collegium 2020 and BDSI loans. The Company earned an 11.6 per cent. internal rate of return on the BDSI equity investment.

Collegium 2022

On 14 February 2022, the Company along with BioPharma Credit Investments V, a private fund also investing in life sciences debt managed by Pharmakon Advisors ("BioPharma-V"), provided Collegium Pharmaceutical, Inc. (Nasdaq: COLL), a biopharmaceutical company focused on developing and commercialising new medicines for responsible pain management ("Collegium"), with a commitment to enter into a new senior secured term loan agreement for $650 million. On 22 March 2022, proceeds from the new loan were used to fund Collegium's acquisition of BDSI as well as repay the outstanding debt of Collegium and BDSI.

At closing, the Company and its subsidiaries invested $325 million in a single drawing. The four-year loan will have $100 million in amortisation payments during the first year and the remaining $550 million balance will amortize in equal quarterly installments. The loan will mature in March 2026 and bears 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 paid upon signing and a one-time additional consideration of 1.00 per cent. of the loan amount paid at funding.

Collegium currently markets Xtampza ER, an abuse-deterrent, extended-release, oral formulation of oxycodone and Nucynta (tapentadol), a centrally acting synthetic analgesic.

UroGen

On 7 March 2022, the Company and BioPharma-V entered into a definitive senior secured loan agreement for up to $100 million with Urogen Inc (Nasdaq: URGN), a biopharmaceutical company dedicated to creating novel solutions that treat urothelial and specialty cancers ("Urogen").

The Company and its subsidiaries funded $37.5 million of the first tranche of $75 million on 16 March 2022. The remaining $25 million may be drawn by 31 December 2022. The Company's share of the final tranche is $12.5 million.

The loan will mature in March 2027 and bears interest at 3-month LIBOR plus 8.25 per cent. per annum subject to a 1.25 per cent. floor along with a one-time additional consideration of 1.75 per cent. of the total loan amount payable upon funding of the first tranche.

UroGen 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).

Coherus

On 5 January 2022, the Company and BioPharma-V entered into a definitive senior secured loan agreement for up to $300 million with Coherus BioSciences, Inc. (Nasdaq: CHRS), a biopharmaceutical company building a leading immuno-oncology franchise funded with cash generated by its commercial biosimilars business ("Coherus").

Coherus drew down $100 million at closing and an additional $100 million on 31 March 2022. The remaining $100 million may be drawn by 17 March 2023 subject to regulatory approval of two additional pharmaceutical products.

The Company and its subsidiaries funded $100 million across the first two tranches. The loan will mature in January 2027 and bears interest at 3-month LIBOR plus 8.25 per cent. per annum subject to a 1.00 per cent. floor along with a one-time additional consideration of 2.00 per cent. of the total loan amount payable upon funding of the first tranche.

Coherus markets UDENYCA® (pegfilgrastim-cbqv), a biosimilar of Neulasta in the United States, and expects to launch the FDA-approved Humira biosimilar YUSIMRY (adalimumab-aqvh) in the United States in 2023.

Evolus

On 14 December 2021, the Company and BioPharma-V entered into a definitive senior secured loan agreement for up to $125 million with Evolus Inc (Nasdaq: EOLS), a biopharmaceutical company that develops, produces, and markets clinical neurotoxins for aesthetic treatments ("Evolus").

The Company and its subsidiaries funded $37.5 million of the first tranche of 

$75 million on 29 December 2021. The remaining $50 million may be drawn by 31 December 2022. The Company's share of the final tranche is $25 million.

The loan will mature in December 2027 and bears interest at 3-month LIBOR plus 8.50 per cent. per annum subject to a 1.00 per cent. floor along with a one-time additional consideration of 2.25 per cent. of the total loan amount payable upon funding of the first tranche.

Evolus currently markets Jeuveau (prabotulinumtoxinA-xvfs), the first and only neurotoxin dedicated exclusively to aesthetics.

LumiraDx

On 23 March 2021, the Company and BioPharma-V entered into a definitive senior secured loan agreement for $300 million with LumiraDx Investment Limited and LumiraDx Group Limited (collectively "LumiraDx").

The Company and its subsidiaries funded $150 million of the $300 million loan on 29 March 2021.

The loan will mature in March 2024 and bears interest at 8.00 per cent. per annum along with an additional consideration of 2.50 per cent. of the loan amount paid upon funding and an additional 1.50 per cent. of the loan payable at maturity. On 28 September 2021, LumiraDx became public via a SPAC transaction with CA Healthcare Acquisition Corp. and began trading on NASDAQ under the ticker LMDX. The Company and BioPharma-V both received 742,924 warrants exercisable into common stock of LumiraDx under the terms of the transaction.

On 25 July 2022, LumiraDx raised $100 million in a follow-on offering at a price of $1.75. As part of the financing, Pharmakon re-tiered its sales covenants, received a facility fee, and was issued new five-year warrants at the offering price of $1.75, with the original warrants being canceled.

LumiraDx is a UK based, next-generation Point of Care, or POC, diagnostic company addressing the current limitations of legacy POC systems by bringing performance comparable to a central lab to the POC in minutes, on a single instrument for a broad menu of tests with a low cost of ownership. To date, LumiraDx has developed and launched twelve diagnostic tests for use with its platform, three of which have been approved in the United States under an Emergency Use Authorization and in the EU under a CE mark: a SARS-CoV-2 ("COVID-19") antigen test, a COVID-19 antibody test, and a COVID-19 Surveillance test. The nine other tests are currently approved only in the EU under a CE mark.

LumiraDx has also used its technology to develop two rapid COVID-19 reagent testing kits for use on open molecular systems, LumiraDx SARS-CoV-2 RNA STAR and SARS-CoV-2 RNA STAR Complete, both of which obtained Emergency Use Authorization by the FDA.

GBT

On 17 December 2019, the Company and BioPharma-V entered into a definitive senior secured term loan agreement for up to $150 million with Global Blood Therapeutics (Nasdaq: GBT), a biopharmaceutical company focused on innovative treatments that provide hope to underserved patient communities ("GBT").

GBT drew down $75 million at closing and an additional $75 million on 20 November 2020. On 14 December 2021 the loan agreement was amended and restated. The amendment increased the aggregate principal amount of the loan to $250 million through a $100 million third tranche, which was drawn on 22 December 2021.

The Company and its subsidiaries funded $133 million across all three tranches. The loan will mature in December 2027 and bears interest at three-month LIBOR plus 7.00 per cent. per annum subject to a 2.00 per cent. floor along with a one-time additional consideration of 1.50 per cent. of the total loan amount paid upon funding and an additional 2.00 per cent. payable upon the repayment of the loan. The third tranche also incurred additional consideration of 1.50 per cent. at the time of funding. As a part of the amendment in 2021, the Company and its subsidiaries received a one-time fee equal to 1.25 per cent. of the first two tranches and the three-year make-whole period was reset to December 2021. On 8 August 2022, Pfizer announced a definitive agreement pursuant to which Pfizer will acquire GBT. Upon closing, GBT will be required to repay its $250 million senior secured loan, of which the Company holds a $132.5 million balance. Assuming the prepayment occurs on 1 October 2022, the Company would be expected to receive approximately $38 million in paydown, prepayment and make-whole fees.

GBT manufactures and sells Oxbryta (voxelotor) for the treatment of sickle cell disease in adults and pediatric patients 4 years of age and older.

Sarepta

On 13 December 2019, the Company and BioPharma-V entered into a definitive senior secured term loan agreement for up to $500 million with Sarepta Therapeutics (Nasdaq: SRPT), a fully integrated biopharmaceutical company focused on precision genetic medicine ("Sarepta").

On 24 September 2020 the Sarepta loan agreement was amended, and the loan amount was increased to $550 million. Sarepta drew down the first $250 million tranche at closing and an additional $300 million on 2 November 2020.

The Company and its subsidiaries funded $175 million of each tranche for a total investment of $350 million. The first tranche will mature in December 2023 and the second tranche in December 2024. The loan bears interest at 8.5 per cent. per annum along with a one-time additional consideration of 1.75 per cent. of the first tranche and 2.95 per cent. of the second tranche paid upon funding and an additional 2 per cent. payable upon the repayment of the loan.

Sarepta currently markets Exondys 51 (eteplirsen), Vyondys 53 (golodirsen) and Amondys 45 (casimersen) in the US for the treatment of Duchenne muscular dystrophy (DMD).

Akebia

On 11 November 2019, the Company and BioPharma-V entered into a definitive senior secured term loan agreement for up to $100 million with Akebia (Nasdaq: AKBA), a fully integrated biopharmaceutical company focused on the development and commercialisation of therapeutics for people living with kidney disease ("Akebia").

Akebia drew down $80 million at closing and an additional $20 million on 10 December 2020.

The Company and its subsidiaries funded $50 million across both tranches.

The loan will mature in November 2024 and bears interest at LIBOR plus 7.5 per cent. per annum along with a one-time additional consideration of 2 per cent. of the total loan amount paid upon funding.

On 20 July 2022, the Akebia loan agreement was amended and as a result, Akebia made a $25 million pre-payment, of which $12.5 million went to the Company, as well as a 2 per cent. prepayment fee. The Company's outstanding balance as of 30 June 2022 is $37.5 million. The amendment provided Akebia certain waivers including 1) Allowing Akebia to make certain payments under its Second Amended and Restated Vifor License Agreement with Vifor (International) Ltd., 2) waive the requirement that the Company's Quarterly Reports on Form 10-Q for the fiscal quarters ending 30 June 2022 and 30 September 2022 not be subject to any qualification as to going concern, and (3) waive certain payments payable under the Loan Agreement, other than prepayment fees.

Akebia currently markets Auryxia® (ferric citrate) which is approved in the US for hyperphosphatemia (elevated phosphorus levels in blood serum) in adult patients with chronic kidney disease (CKD) on dialysis and iron deficiency anaemia in adult patients with CKD not on dialysis.

Epizyme

On 4 November 2019, the Company and BioPharma-V entered into a definitive senior secured term loan agreement for up to $70 million with Epizyme (Nasdaq: EPZM), a late-stage biopharmaceutical company developing novel epigenetic therapies for cancer.

On 3 November 2020 the Epizyme loan agreement was amended, and the loan amount was increased to $220 million. Epizyme drew down $25 million at closing and an additional $195 million during 2020.

The Company and its subsidiaries funded a total of $110 million of the Epizyme loan. The loan was originally due to mature in November 2024 and bore interest at LIBOR plus 7.75 per cent. per annum along with a one-time additional consideration of 2 per cent. of the total loan amount paid upon funding.

Epizyme's lead product, TAZVERIK (tazemetostat), is a first-in- class, oral inhibitor that received FDA approval for epithelioid sarcoma on 23 January 2020 and follicular lymphoma on 18 June 2020.

On 27 June 2022, Ipsen announced a definitive agreement pursuant to which Ipsen will acquire Epizyme. On 12 August 2022, Epizyme repaid its $220 million senior secured loan. The Company received its $110 million of principal and $9 million in prepayment and makewhole fees.

Optinose

On 12 September 2019, the Company and BioPharma-V entered into a definitive senior secured note purchase agreement for the issuance and sale of senior secured notes in an aggregate original principal amount of up to US$150 million by OptiNose US, a wholly-owned subsidiary of OptiNose (Nasdaq: OPTN), a commercial-stage specialty pharmaceutical company.

Optinose drew a total of US$130 million in three tranches: $80 million on 12 September 2019, $30 million on 13 February 2020 and $20 million on 1 December 2020. There are no additional funding commitments.

The Company and its subsidiaries funded a total $72 million across all tranches. The notes mature in September 2024 and bear interest at 10.75 per cent. per annum along with a one-time additional consideration of 0.75 per cent. of the aggregate original principal amount of senior secured notes which the Company was committed to purchase under the facility and 445,696 warrants exercisable into common stock of OptiNose at a strike price of $6.72.

On 2 March 2021, the sales covenants in the notes were reduced by 16 per cent. for 2021 and 3 per cent. thereafter to allow for slower growth due to the temporary impact of COVID 19 from reduced patient visits. The revised covenant for 2021 of $80 million still represents growth of 65 per cent. from 2020.

On 18 November 2021, OptiNose raised $46M in a follow-on offering at a price of $1.60. As part of the financing, Pharmakon re-tiered its sales covenants, amended the amortisation and make-whole provisions, and were issued new three-year warrants at the offering price of $1.60, with the original warrants being canceled.

OptiNose's leading product, XHANCE (fluticasone propionate), is a nasal spray approved by the U.S. Food and Drug Administration (FDA) in September 2017 for the treatment of nasal polyps in patients 18 years or older. XHANCE utilises a novel and proprietary exhalation delivery system to deliver the drug high and deep into the sinuses, targeting areas traditional intranasal sprays are not able to reach.

Bristol-Myers Squibb, Inc.

On 8 December 2017, the Company's wholly-owned subsidiary entered into a purchase, sale and assignment agreement with a wholly-owned subsidiary of Royalty Pharma Investments ("RPI"), an affiliate of the Investment Manager, for the purchase of a 50 per cent. Interest in a stream of payments (the "Purchased Payments") acquired by RPI's subsidiary from Bristol-Myers Squibb (NYSE: BMY) through a purchase agreement dated 14 November 2017.

As a result of the arrangements, RPI's subsidiary and the Company's subsidiary are each entitled to the benefit of 50 per cent. of the Purchased Payments under identical economic terms. The Purchased Payments are linked to tiered worldwide sales of Onglyza and Farxiga, diabetes agents marketed by AstraZeneca, and related products. The Company was expected to fund $140 million to $165 million during 2018 and 2019, determined by product sales over that period, and will receive payments from 2020 through 2025. The Purchased Payments are expected to generate attractive risk-adjusted returns in the high single digits per annum. The Company funded all of the Purchased Payments based on sales from 1 January 2018 to 31 December 2019 for a total of $162 million.

REALIZED INVESTMENTS

Collegium 2020

On 7 February 2020, the Company and BioPharma-V entered into a definitive senior secured term loan agreement for $200 million with Collegium Pharmaceutical, Inc. (Nasdaq: COLL), a biopharmaceutical company focused on developing and commercialising new medicines for responsible pain management ("Collegium 2020").

The Company and its subsidiaries funded $165 million of the $200 million loan on 13 February 2020.

The secured loan began amortising immediately and was due to fully mature in February 2024. The loan bore interest at three-month LIBOR plus 7.50 per cent. per annum subject to a 2.00 per cent. LIBOR floor with a one-time additional consideration of 2.50 per cent. of the loan amount paid upon funding. The loan was repaid in its entirety on 22 March 2022. The Company and its subsidiaries earned a 11.9 per cent. internal rate of return on its Collegium 2020 investment.

Biodelivery Sciences

On 23 May 2019, the Company entered into a senior secured loan agreement for up to $80 million with BioDelivery Sciences International (Nasdaq: BDSI), a commercial-stage specialty pharmaceutical company ("BDSI"). In addition, the Company acquired 5,000,000 BDSI shares at $5.00 each for a total cost of $25 million in a public offering that took place on 11 April 2019.

The first tranche of the loan for $60 million was funded on 28 May 2019 and the second $20 million tranche was funded on 22 May 2020. The loan was due to mature in May 2025 and bore interest at LIBOR plus 7.50 per cent., along with 2.00 per cent. additional consideration paid at closing. On 23 September 2021, BDSI made an early prepayment of $20 million, and made its final payment for the remainder of the loan on 22 March 2022. The Company earned a 11.9 per cent. internal rate of return on the BDSI loan. The Company sold 46 per cent of its BDSI shares during 2019 at an average price of $6.50 and received $5.60 per remaining shares on the date of the M&A Transaction. The Company earned a 11.6 per cent. internal rate of return on the BDSI equity investment.

MARKET ANALYSIS

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 straight 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 decreased 16 per cent. during the first six months of 2022, compared to a 3 per cent. increase during the same period in 2021. Global equity issuance by life sciences companies during the first six months of 2022 was $11 billion, an 85 per cent. decrease from the $73 billion issued during the same period in 2021. This dynamic contributed to additional deal flow for the Company during the recent period from 4Q 2021 through 2Q 2022, as we deployed $463 million across four new investments. We anticipate a continued slowdown in equity issuance coupled with greater appetite for fixed income as a source of capital during the remainder of 2022.

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 the first six months of 2022 was $26 billion, a 72 per cent. decrease from the $93 billion witnessed during the same period in 2021, driven mainly by the impact of global inflation post Covid-19. We anticipate M&A opportunities to eventually ramp up once the economy stabilizes.

USD LIBOR On 5 March 2021, the Financial Conduct Authority ("FCA"), the regulatory supervisor of USD LIBOR's administrator ("IBA") announced in a public statement the future cessation of the 3-month USD LIBOR tenor setting. As of 30 June 2023, all available Tenor of USD LIBOR must have either permanently or indefinitely ceased to be provided by IBA or have been announced by or on behalf of the FCA pursuant to public statement or publication of information to be no longer representative, a replacement benchmark will be used in the absence of USD LIBOR. If the benchmark replacement is daily simple Secured Overnight Financing Rate ("SOFR"), all interest payments will be calculated with SOFR beginning on the effective date on a quarterly basis. The Company has seven loans with coupons that reference 3-month USD LIBOR and three have a 2.00 per cent. floor and four have a floor ranging from 1.00 per cent. to 1.25 per cent. As of 30 June 2022, the 3-month LIBOR rate was 2.29 per cent, slightly above the floors in the seven loans. The Investment Manager will continue to monitor the news on the replacement benchmark and will take steps to update its interest payments as of the effective date.

COVID-19 The easing of Covid-19 restrictions during the beginning of 2022 following the deployment of vaccination campaigns has resulted in the adoption of hybrid schedules for both the Company's operations and its service providers, which has not affected any technical or operational functions during the pandemic. Covid-19 continues to cause major disruptions across the globe however we have confidence in the performance of our loans and there has not been a material impact on the credit quality of the Company's investments. We will continue to monitor the pandemic and will inform investors of any material changes to this assessment.

INVESTMENT OUTLOOK We expect our investment pipeline to grow as new products and companies enter the market during the remainder of 2022 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. Furthermore, Pharmakon remains confident of our ability to deliver its target dividend yield to its investors.

Pedro Gonzalez de Cosio

Co-founder and CEO, Pharmakon

13 September 2022

CASE STUDY - COHERUS

DEDICATED TO IMPROVING THE AVAILABILITY OF HIGH-VALUE, HIGH-QUALITY THERAPEUTICS. COHERUS' PIPELINE SPANS MULTIPLE THERAPEUTIC AREAS INCLUDING ONCOLOGY, IMMUNOLOGY, AND OPHTHALMOLOGY.

The Company's first FDA-approved and commercial product, UDENYCA® (pegfilgrastim-cbqv), is a biosimilar to Amgen's product Neulasta which supports white blood cell growth in cancer patients and had peak US commercial sales of .-$4bn. In December 2021, the company received FDA approval for its second product, YUSIMRYTM (adalimumab- aqvh), a biosimilar to Abbvie's auto-immune product Humira which had US sales of .-$17bn in 2021. Coherus anticipates launching YUSIMRY in July 2023. Most recently, in August 2022, the company received FDA approval for its third product, CIMERLITM (ranibizumab-eqrn), a biosimilar to Roche/Genentech's product Lucentis for macular degeneration and other ophthalmic indications that is anticipated to launch later this year. In 2021, the company expanded into novel immuno-oncology therapeutics with its collaboration agreement with Junshi Biosciences. Its lead product, toripalimab, is a PD-1 antibody that is currently on file with the FDA for nasopharyngeal carcinoma. Toripalimab is being studied across multiple tumor types including cancers of the lung, esophagus, bladder, stomach, breast, liver, and skin. Coherus' strategy is to invest cash flows from their commercial biosimilar business to build an immuno-oncology franchise that will be synergistic with their proven commercial capabilities.

CASE STUDY - BIOSIMILARS

DEVELOPING COMPLEX BIOSIMILARS REQUIRES A HIGHLY-TRAINED TEAM AND STATE-OF-THE-ART PROCESSES.

In order to meet the challenges of biosimilar development, the Company developed a scientific platform that incorporates cutting-edge analytics, clinical and regulatory expertise, and process and manufacturing quality. Coherus believes its platform has been essential in its success in developing and commercializing biosimilars, and that key aspects of the platform will translate to its immuno-oncology program.

The FDA approval process for biosimilars is rigorous and requires a team of individuals with a diverse set of competencies to optimize outcomes. For a biosimilar to be approved by the FDA, the product needs to be highly similar to the reference product regarding purity, molecular structure, bioactivity, safety, and efficacy.

Strong interactions with the agency are required throughout the drug approval process to ensure success. To date, the Company has efficiently designed and conducted clinical studies in line with the latest regulatory guidance meeting all FDA requirements as seen with the approval of UDENYCA®, YUSIMRYTM and CIMERLITM.

In addition to the clinical and regulatory expertise, Coherus prides itself on its commercial operations that can meet market demand while also balancing reimbursement and patient access.

Expansion into Immuno-oncology

IMMUNO-ONCOLOGY HAS REVOLUTIONIZED CANCER TREATMENT.

The successful development of immuno-oncology medicines, such as anti-PD-1 monoclonal antibodies, has significantly improved the prognosis for many patients with cancer.

Focused on broadening its business, in February 2021, Coherus entered into a collaboration agreement with Junshi Biosciences for the development and commercialization of toripalimab in the United States and Canada. This collaboration provides Coherus with a late-stage anti-PD-1 antibody, as well as options on other novel immuno-oncology molecules.

Toripalimab, approved in China for the second-line treatment of melanoma, urothelial cancer and nasopharyngeal carcinoma, has been evaluated in more than 2,500 patients across 29 completed or ongoing clinical trials in various tumor types including cancers of the lung, nasopharynx, esophagus, bladder, stomach, breast, liver, and skin.

In addition to the US rights to toripalimab, Coherus has also acquired options and first negotiation rights to four of Junshi's novel oncology molecules, including an option to an antibody targeting TIGIT, a clinically validated immune inhibitory checkpoint, and an option to a next-generation engineered IL-2 cytokine. The Company may develop toripalimab in combination with one or more of these compounds, or potentially with other cancer drugs. The Company opted to exercise its option for the TIGIT targeted antibody in January 2022.

Coherus believes that toripalimab, if approved in the United States and Canada, will be synergistic with its core competencies in oncology commercialization.

What is a biosimilar?

A biosimilar product is a biologic product that is approved based on demonstrating that it is highly similar to an FDA‐ approved biologic product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products.

How are biosimilars different from generic medicines?

While identical generic versions of small molecules can be chemically synthesized, it is not possible to create identical versions of reference biologic medicines, due to the fact that they are derived from living organisms. As a result, the processes used to develop generic medicines is not applicable to the development of biosimilars.

Biosimilars are different from generics due to their molecular size and structure, and the complexity and cost of their development. Biosimilars are significantly more costly and complex to manufacture than a traditional tablet generic medicine. Biosimilar development may take five to nine years and cost more than $100 million. A generic, however, costs $1-2 million and takes approximately two years to develop. (Source: Pfizer - https://www.pfizer.com/sites/default/files/investors/financial_reports/annual_reports/2018/our-innovation/progressing-our-science/biosimilars-vs-generics/index.html)

CASE STUDY - COHERUS

UROGEN IS A BIOTECH COMPANY DEDICATED TO DEVELOPING AND COMMERCIALIZING INNOVATIVE SOLUTIONS TO TREAT UROTHELIAL AND SPECIALTY CANCERS.

The Company's approved breakthrough therapy and innovative clinical pipeline aims to maximize the potential benefit of local delivery. Its novel RTGelTM technology provides a transformative, nonsurgical treatment for challenging urothelial and bladder cancers.

JELMYTO® (mitomycin) for pyelocalyceal solution, is the first and only FDA-approved nonsurgical therapeutic of its kind. JELMYTO uses Urogen's RTGelTM reverse-thermal hydrogel technology to increase the effectiveness of mitomycin, a well-known chemotherapeutic agent. Now, UroGen is building upon its novel delivery technology by exploring ways to harness the immune system to fight solid tumors in urothelial and bladder cancers.

RTGELTM REVERSE-THERMAL HYDROGEL TECHNOLOGY IS TRANSFORMING MEDICINE DELIVERY IN UROLOGY.

RTGel, unlike most forms of matter, is liquid at lower temperatures and converts into gel form when warmed to body temperature. This technology promotes ease of delivery and retention of drug in body cavities, including the bladder and upper urinary tract, forming a transient reservoir of drug that disintegrates over time while preventing rapid excretion. The gel leverages the physiologic flow of urine to provide a natural exit from the body.

THERAPEUTIC POSSIBILITIES

The RTGel platform has the potential to advance the treatment of urological conditions by:

· Increasing dwell time and exposure of active drugs, potentially improving the therapeutic effects of existing products

· Potentially increasing the viability of organ-sparing techniques and providing alternatives to radical surgery

PHARMAKON ADVISORS' ESG POLICY

Pharmakon Advisors' ESG Policy can be found set out in the full Half-Yearly report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

INTERIM MANAGEMENT REPORT

The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal factors that could impact the remaining six months of the financial year are set out in the Chairman's Statement and the Investment Manager's report above.

The Directors and the Investment Manager have considered the adverse impact of potential changes in law, regulation and taxation and the matter of foreign exchange risk.

The Directors have considered the principal risks facing the Company and there have not been any material changes to the principal risks and uncertainties and approach to mitigating these risks since the publication of the Annual Report and Financial Statements for the year ended 31 December 2021, and expect that, for the remainder of the year ending 31 December 2022, these will continue to be as set out on pages 24 to 30 of that report.

Risks faced by the Company include, but are not limited to:

· Failure to achieve target returns;

· The success of the Company depends on the ability and expertise of the Investment Manager;

· The Company may from time to time commit to make future investments that exceed the Company's current liquidity;

· The Investment Manager's ability to source and advise appropriately on investments;

· There can be no assurance that the Board will be able to find a replacement investment manager if the Investment Manager resigns;

· Concentration in the Company's portfolio may affect the Company's ability to achieve its investment objective;

· Life sciences products are subject to intense competition and various other risks;

· Investments in debt obligations are subject to credit and interest rate risks;

· Risk that a counterparty is unable to honour its obligation to the Company;

· Sales of life sciences products are subject to regulatory actions that could harm the Company's ability to make distributions to investors;

· Net asset values published will be estimates only and may differ materially from actual results;

· Changes in taxation legislation or practice may adversely affect the Company and the tax treatment for shareholders investing in the Company;

· COVID-19 may affect the Company's ability to continue operations; and

· Changes to accounting regulation may require the Company to make a change in accounting policy that could have a material impact on its reported results including its net asset value, net income and distributable reserves.

GOING CONCERN

The financial statements continue to be prepared on a going concern basis. The Directors have reviewed areas of potential financial risk and cash flow forecasts.

No material uncertainties have been detected which would influence the Company's ability to continue as a going concern 12 months from the date of this report. Accordingly, the Board of Directors continue to adopt the going concern basis in preparing the financial statements. The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal factors that could impact the remaining six months of the financial year are set out in the Chairman's statement and the Investment Manager's report above.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that to the best of their knowledge:

· this set of condensed financial statements has been prepared in accordance with UK adopted International Accounting Standard ("IAS") 34, 'Interim Financial Reporting', and gives a true and fair view of the assets, liabilities, financial position and profit of the Company; and

· the full Half-Yearly Report includes a fair review of the information required by:

a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions that could do so.

The full Half-Yearly Report was approved by the Board of Directors on 13 September 2022 and the above responsibility statement was signed on its behalf by Harry Hyman, Chairman.

On behalf of the Board

Harry Hyman

Chairman

13 September 2022

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 30 June 2022

(In $000s except per share amounts)

The total column of this statement is the Company's Condensed Statement of Comprehensive Income prepared in accordance with UK-adopted International Accounting Standards. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC").

All items in the Condensed Statement of Comprehensive Income derive from continuing operations.

There is no other comprehensive income, and therefore the return on ordinary activities after finance costs and taxation is also the total comprehensive income.

The notes below form part of these financial statements.

CONDENSED STATEMENT OF CHANGES IN EQUITY

For the period ended 30 June 2022

(In $000s)

* The special distributable reserve and revenue reserves can be distributed in the form of a dividend.

** The negative capital reserve at 30 June 2021 is due to unrealised depreciation on BPCR LP - see note 7. The capital reserve can be used to repurchase treasury shares. It cannot be used for distributions.

The notes below form part of these financial statements.

CONDENSED STATEMENT OF FINANCIAL POSITION

As of 30 June 2022

(In $000s except per share amounts)

The financial statements of BioPharma Credit PLC registered number 10443190 were approved and authorised for issue by the Board of Directors on 13 September 2022 and signed on its behalf by:

Harry Hyman

Chairman

13 September 2022

The notes below form part of these financial statements.

CONDENSED CASH FLOW STATEMENT

For the period ended 30 June 2022

(In $000s except per share amounts)

* BPCR Limited Partnership investments not included.

The notes below form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

For the period ended 30 June 2022

1. GENERAL INFORMATION

BioPharma Credit PLC is a closed-ended investment company incorporated and domiciled in England and Wales on 24 October 2016 with registered number 10443190. The registered office of the Company is 51 New North Road, Exeter, EX4 4EP. On 6 February 2017 the Company changed its name from PRECIS (2772) PLC.

The Company carries on the business as an investment trust company within the meaning of Sections 1158/1159 of the Corporation Tax Act 2010.

The Company's Investment Manager is Pharmakon Advisors L.P. ("Pharmakon"). Pharmakon is a limited partnership established under the laws of the State of Delaware. It is registered as an investment adviser with the Securities and Exchange Commission ("SEC") under the United States Investment Advisers Act of 1940, as amended.

Pharmakon is authorised as an Alternative Investment Fund Manager ("AIFM") under the Alternative Investment Fund Managers Directive ("AIFMD"). Pharmakon has, with the consent of the Directors, delegated certain administrative duties to Link Alternative Fund Administrators Limited ("Link").

2. ACCOUNTING POLICIES

A) Basis of preparation

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Company transitioned to UK-adopted International Accounting Standards in its financial statements on 1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in the framework. The Company's condensed half-year financial statements covers the period from 1 January 2022 to 30 June 2022 and have been prepared in conformity with UK adopted International Accounting Standard 34 'Interim Financial Reporting'. They do not include all financial information required for full annual financial statements and have been prepared using the accounting policies adopted in the audited financial statements for the year ended 31 December 2021. The Company's annual financial statements were prepared in accordance with UK-adopted International Accounting Standards and as applied in accordance with the Disclosure Guidance Transparency Rules sourcebook of the Financial Conduct Authority (FCA) and the AIC SORP (issued in April 2021) for the financial statements of investment trust companies and venture capital trusts, except to any extent where it is not consistent with the requirements of IFRS. The annual financial statements have been prepared in accordance with the Companies Act 2006, as applicable to companies reporting under those standards.

The financial statements are presented in US dollars, being the functional currency of the Company. The financial statements have been prepared on a going concern basis under historical cost convention, except for the measurement at fair value of investments measured at fair value through profit or loss.

The Company's condensed half-year information contained in this Half-Yearly Report does not constitute full statutory accounts as defined in Section 435 of the Companies Act 2006. The financial information for the periods ended 30 June 2022 and 30 June 2021 are not financial years and have not been audited. The information for the year ended 31 December 2021 has been extracted from the latest published financial statements, which have been delivered to the Registrar of Companies. The Auditor's Report on those financial statements contained no qualification or statement under Section 498 of the Companies Act 2006.

ASSESSMENT AS AN INVESTMENT ENTITY

Entities that meet the definition of an investment entity within IFRS 10 'Consolidated Financial Statements' are required to measure their subsidiaries at fair value through profit or loss rather than consolidate the entities. The criteria which define an investment entity are as follows:

· an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

· an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

· an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Directors have concluded that the Company meets the characteristics of an investment entity, in that it has more than one investor and its investors are not related parties; holds a portfolio of investments, predominantly in the form of loans which generate returns through interest income. All investments, including its subsidiary BPCR Limited Partnership, are reported at fair value to the extent allowed by IFRS.

B) PRESENTATION OF CONDENSED STATEMENT OF COMPREHENSIVE INCOME In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Condensed Statement of Comprehensive Income between items of a revenue and capital nature has been prepared alongside the Income Statement.

C) SEGMENTAL REPORTINGThe Directors are of the opinion that the Company has one operating and reportable segment being the investment in debt assets secured by royalties or other cash flows derived from the sales of approved life sciences products.

D) INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

The principal activity of the Company is to invest in interest-bearing debt assets with a contractual right to future cash flows derived from royalties or sales of approved life sciences products. In accordance with IFRS, the financial assets are measured at fair value through profit or loss. They are accounted for on their trade date at fair value, which is equivalent to the cost of the investment. The fair value of the asset reflects any contractual amortising balance and accrued interest.

The fair value hierarchy consists of the following three levels:

· Level 1 - Quoted market price for identical instruments in active markets

· Level 2 - Valuation techniques using observable inputs

· Level 3 - Valuation techniques using significant unobservable inputs

Listed level 1 investments where a financial instrument is active are priced by quoted market prices.

Level 2 investments may be valued using market data obtained from external, independent sources. The data used could include quoted prices for similar assets and liabilities in active markets, prices for identical or similar assets and liabilities in inactive markets, or models with observable inputs.

For unlisted level 3 investments where the market for a financial instrument is not active, fair value is established using valuation techniques in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines (issued in December 2018), which may include recent arm's length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has proved reliable from estimates of prices obtained in actual market transactions, that technique is utilised. More information can be found in Note 2(n) below.

Unlisted investments often require the manager to make estimates and judgements and apply assumptions or subjective judgement to future events and other matters that may affect fair value. For unlisted investments valued using a discounted cash flow analysis, the key judgements are the size of the market, pricing, projected sales of the product at trade date and future growth and other factors that will support the repayment of a senior secured or royalty debt instrument.

Changes in the fair value of investments held at fair value through profit or loss, and gains or losses on disposal, are recognised in the Condensed Statement of Comprehensive Income as gains or losses from investments held at fair value through profit or loss. Transaction costs incurred on the purchase and disposal of investments are included within the cost or deducted from the proceeds of the investments. All purchases and sales are accounted for on trade date.

E) FOREIGN CURRENCY

Transactions denominated in currencies other than US dollars are recorded at the rates of exchange prevailing on the date of the transaction. Items which are denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Condensed Statement of Comprehensive Income.

F) INCOME

There are six main sources of revenue for the Company: interest income, income from subsidiaries, royalty revenue, make-whole and prepayment income, dividends and paydown fees.

Interest income is recognised when it is probable that the economic benefits will flow to the Company. Interest is accrued on a time basis, by reference to the principal outstanding and the effective interest rate that is applicable. Accrued interest is included within trade and other receivables on the Condensed Statement of Financial Position.

The Company recognises accrued income for investments that it holds directly. The Company also holds an investment in BPCR Limited Partnership, its wholly owned subsidiary which it measures at fair value through profit or loss rather than consolidate. BPCR Limited Partnership also recognises accrued income for investments it holds directly. When the accrued income is recorded at the Partnership, the Company recognises the income in capital within the Condensed Statement of Comprehensive Income. When the Company's right to receive the income is established, funds are transferred from the Partnership to the Company and income is transferred to revenue within the Condensed Statement of Comprehensive Income.

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement (provided that it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably). Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement.

Make-whole and prepayment income is recognised when payments are received by the Company and is recorded to revenue within the Condensed Statement of Comprehensive Income.

Dividends are receivable on equity shares and recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends are recognised when the Company's right to receive payment is established. Dividends from investments in unquoted shares and securities are recognised when they become receivable.

Some investments include additional consideration in the form of structuring fees, which are paid on completion of the transaction. As the investments are classified as level 3 in the fair value hierarchy, there is no observable evidence of the fair value of the investments excluding the fees, therefore the fees should be included in the day one fair value of the investments. Such fees are included in the fair value of the investment and released to the Condensed Statement of Comprehensive Income over the life of the investment. We consider incorporating the fees in the fair value gains and losses over the life of the loans to be more reflective of the period over which the benefit is received. These fees are allocated to revenue within the Condensed Statement of Comprehensive Income.

Bank interest and other interest receivable are accounted for on an accruals basis.

G) DIVIDENDS PAID TO SHAREHOLDERS

The Company intends to pay dividends in US Dollars on a quarterly basis, however, shareholders can elect to have dividends paid in sterling. The Company may, where the Directors consider it appropriate, use the reserve created by the cancellation of its share premium account to pay dividends.

The Company intends to comply with the requirements for maintaining investment trust status for the purposes of section 1158 of the Corporation Tax Act 2010 (as amended) regarding distributable income. As such, the Company will distribute amounts such that it does not retain in respect of an accounting period an amount greater than 15 per cent. of its income (as calculated for UK tax purposes) for that period.

H) EXPENSES

All expenses are accounted for on an accruals basis, with the exception of director's expenses, which are accounted for on a cash basis. Expenses, including investment management fees, performance fees and finance costs, are charged through the revenue account except as follows:

· expenses which are incidental to the acquisition or disposal of an investment are treated as capital costs and separately identified and disclosed in Note 4; and

· expenses of a capital nature are accounted for through the capital account.

The performance fee is considered to be an annual fee and is only recognised at the end of each performance period. It is calculated in accordance with the details in Note 4(b) below. Any performance fee triggered, whether payable or deferred, is recognised in the Condensed Statement of Comprehensive Income. Where a performance fee is payable, it is treated as a current liability in the Condensed Statement of Financial Position. Where a performance fee is deferred, it is treated as a non-current liability in the Condensed Statement of Financial Position. It becomes payable to the Investment Manager at the end of the first performance period in respect to which the compounding condition is satisfied.t

I) TRADE AND OTHER RECEIVABLES

Trade and other receivables are recognised and carried at amortised cost as the Company collects contractual interest payments from its borrowers. An allowance for estimated unrecoverable amounts is measured and recognised where necessary. The Company assesses, on a forward-looking basis, the expected losses associated with its trade and other receivables.

J) CASH AND CASH EQUIVALENTS

Cash and cash equivalents are defined as cash in hand, demand deposits, and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Cash and cash equivalents includes interest and income from money market funds.

K) TRADE AND OTHER PAYABLES

Trade and other payables are recognised and carried at amortised cost, do not carry any interest and are short-term in nature.

L) TAXATION

The Company may, if it so chooses, designate as an 'interest distribution' all or part of the amount it distributes to shareholders as dividends, to the extent that it has 'qualifying interest income' for the accounting period. Were the Company to designate any dividend it pays in this manner, it should be able to deduct such interest distributions from its income in calculating its taxable profit for the relevant accounting period. The Company intends to elect for the 'streaming' regime to apply to the dividend payments it makes to the extent that it has such 'qualifying interest income'. Shareholders in receipt of such a dividend will be treated, for UK tax purposes, as though they had received a payment of interest, which results in a reduction of the corporation tax payable by the Company.

Tax on the profit or loss for the period comprises current and deferred tax. Corporation tax is recognised in the Condensed Statement of Comprehensive Income.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous periods. The tax effect of different items of expenditure is allocated between revenue and capital on the same basis as the particular item to which it relates, using the Company's marginal method of tax, as applied to those items allocated to revenue, for the accounting period.

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax basis of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

M) SHARE CAPITAL AND RESERVES

The share capital represents the nominal value of the Company's ordinary shares.

The share premium account represents the excess over nominal value of the fair value of consideration received for the Company's ordinary shares, net of expenses of the share issue. This reserve cannot be distributed.

The special distributable reserve was created on 29 June 2017 to enable the Company to buy back its own shares and pay dividends out of such distributable reserve, in each case when the Directors consider it appropriate to do so, and for other corporate purposes.

The capital reserve represents realised and unrealised capital and exchange gains and losses on the disposal and revaluation of investments and of foreign currency items. The realised capital reserve can be used for the repurchase of shares. This reserve cannot be distributed.

The revenue reserve represents retained profits from the income derived from holding investment assets less the costs and interest on cash balances associated with running the Company. This reserve can be distributed.

N) CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of these financial statements in conformity with UK-adopted IAS requires the Directors to make accounting estimates which will not always equal the actual results. The Directors also need to exercise judgement in applying the Company's accounting policies.

This note provides an overview of the areas that involve a higher degree of judgement or complexity and of items which are more likely to be materially adjusted due to estimates and judgements included in other notes, together with information about the basis of calculation for each line in the financial statements.

In particular estimates are made in determining the fair valuation of unquoted investments for which there is no observable market and may cause material adjustments to the carrying value of those investments. Determining fair value of investments with unobservable market inputs is an area involving management judgement, requiring assessment as to whether the value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain critical assumptions are required to be made including management's expectations of short and long term growth rates in product sales and the selection of discount rates to reflect the risks involved. These are valued in accordance with Note 2(d) above and using the valuation techniques described in Note 7 below.

Also, estimates including cash flow projections, discount rates and growth rates in product sales are made when determining any deferred performance fee; this may be affected by future changes in the Company's portfolio and other assets and liabilities.

Any deferred performance fee is calculated in accordance with Note 4(b) below and is recognised in accordance with Note 2(h) above.

These estimates are reviewed on an ongoing basis. Revisions to these estimates are also reviewed on an ongoing basis. Revisions are recognised prospectively.

O) NEW ACCOUNTING STANDARDS EFFECTIVE 1 JANUARY 2022

There are no new standards impacting the Company that have had a significant effect in the financial statements for the period ended 30 June 2022.

P) ACCOUNTING STANDARDS NOT YET EFFECTIVE

There are no standards or amendments not yet effective which are relevant or have a material impact on the Company. The standards or amendments not yet effective that will be adopted on their effective date are:

· Amendment to IAS1, presentation of financial statements on classification of liabilities, effective from 1 January 2024 clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period.

· Amendment to IAS12, Income taxes effective from 1 January 2023. These amendments require companies to recognise deferred tax on transactions that, on initial recognition give rise to equal amounts of taxable and deductible temporary differences.

· IFRS 9 'Financial Instruments', interest benchmark reform. USD LIBOR will be phased out from June 2023. The Phase 2 amendments address issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one.

3. INCOME

* In 2021 $136,000 of fixed investment income was received, which had been incorrectly deducted as tax at source in 2020.

** In 2021 the Company's senior secured term loan to Sebela included a prepayment premium of $1,474,000, which was paid upon the loan repayment and recognised as income in the year.

*** In 2022 $147,000 was recorded as additional income from the Company's investment in Optinose Warrants.

**** In 2021, $20,484,000 of undistributed net income earned by BPCR LP in 2020 was received by the Company and was recognised in Investment income in the Condensed Statement of Comprehensive Income and as a corresponding unrealised loss in the fair value of the investment. If this had been included in the period in which the income was received, Investment income for the period ending 30 June 2021 would have been $54,207,000.

4. FEES AND EXPENSES

Expenses

A) INVESTMENT MANAGEMENT FEE

With effect from the Initial Admission, the Investment Manager is entitled to a management fee ("Management Fee") calculated on the following basis: (1/12 of 1 per cent of the NAV on the last business day of the month in respect of which the Management Fee is to be paid (calculated before deducting any accrued Management Fee in respect of such month)) minus (1/12 of $100,000).

The Management Fee payable in respect of any quarter will be reduced by an amount equal to the Company's pro rata share of any transaction fees, topping fees, break-up fees, investment banking fees, closing fees, consulting fees or other similar fees which the Investment Manager (or an affiliate) receives in connection with transactions involving investments of the Company ("Transaction Fees"). The Company's pro rata share of any Transaction Fees will be in proportion to the Company's economic interest in the investment(s) to which such Transaction Fees relate.

B) PERFORMANCE FEE

Subject to: (i) the NAV attributable to the Ordinary Shares as at the end of a performance period representing a minimum of 6 per cent. annualised rate of return annualised on the Company's IPO gross proceeds (adjusted for dividends, share issues and buybacks as appropriate), (ii) the total return on the NAV attributable to the Ordinary Shares (adjusted for dividends, share issues and buybacks as appropriate) exceeding 6 per cent. over such performance period, and (iii) a high watermark, the Investment Manager will be entitled to receive a performance fee equal to the lesser of: (a) 50 per cent. of the total return above 6 per cent; and (b) 10 per cent. of the total return over such performance period provided always that the amount of any performance fee payable to the Investment Manager will be reduced to the extent necessary to ensure that after account is taken of such fee, condition (iii) above remains satisfied.

Where the Investment Manager is not entitled to a performance fee solely because condition (i) has not been satisfied, such fee will be deferred and paid in a subsequent performance period in which such condition is satisfied. Where condition (i) is satisfied in a performance period but the payment of a performance fee (or any deferred performance fee from previous performance periods) in full would result in that condition failing, the Investment Manager shall be entitled to such a portion of such fee that does not result in the failure of the condition (i) above and the balance would be deferred to a future performance period.

Any performance fee (whether deferred or otherwise) shall be paid as soon as practicable after the end of the relevant performance period and, in any event, within 15 business days of the publication of the Company's audited annual financial statements relating to such period.

Where the payment of performance fee (or any deferred performance fee from previous performance periods) in full would result in the failure of condition (i) above, the Investment Manager shall only be entitled to 50 per cent. of such fee that does not result in the failure of condition (i) with the balance being deferred to a future performance period.

If, during the last month of a performance period, the Shares have, on average, traded at a discount of 1 per cent. or more to the NAV per Share (calculated by comparing the middle market quotation of the Shares at the end of each business day in the month to the prevailing published NAV per Share (exclusive of any dividend declared) as at the end of such business day and averaging this comparative figure over the month), the Investment Manager shall (or shall procure that its Associate does) apply 50 per cent. of any Performance Fee paid by the Company to the Investment Manager (or its Associate) in respect of that performance period (net of all taxes and charges applicable to such portion of the Performance Fee) to make market acquisitions of Shares (the "Performance Shares") as soon as practicable following the payment of the Performance Fee by the Company to the Investment Manager (or its Associate) and at least until such time as the Shares have, on average, traded at discount of less than 1 per cent. to the NAV per Share over a period of five business days (calculated by comparing the middle market quotation of the Shares at the end of each such business day to the prevailing published NAV per Share (exclusive of any dividend declared) and averaging this comparative figure over the period of five business days). The Investment Manager's obligation:

1) shall not apply to the extent that the acquisition of the Performance Shares would require the Investment Manager to make a mandatory bid under Rule 9 of the Takeover Code; and

2) shall expire at the end of the performance period which immediately follows the performance period to which the obligation relates.

The Performance Fee for a performance period shall be paid as soon as practicable after the end of the relevant performance period and, in any event, within three calendar months of the end of such performance period.

During the period a performance fee of $2,222,000 was paid to Pharmakon (2021: $5,473,000).

The Performance Fee for a performance period shall be paid as soon as practicable after the end of the relevant performance period and, in any event, within three calendar months of the end of such performance period.

C) DIRECTORS

Each of the Directors is entitled to receive a fee from the Company at such rate as may be determined in accordance with the Articles. The Directors' remuneration is $73,500 per annum for each Director other than:

• the Chairman, who receives an additional $31,500 per annum; and

• the Chairman of the Audit and Risk Committee, who receives an additional $15,800 per annum.

5. TAXATION ON ORDINARY ACTIVITIES

It is the intention of the Directors to conduct the affairs of the Company so as to satisfy the conditions for approval of the Company by HMRC as an investment trust under Section 1158 of the Corporation Tax Act 2010 (as amended) and pursuant to regulations made under Section 1159 of the Corporation Tax Act 2010. As an investment trust, the Company is exempt from corporation tax on capital gains.

The current taxation charge for the period is different from the standard rate of corporation tax in the UK of 19.00 per cent, the effective tax rate was 0.00 per cent. The differences are explained below.

There will be an increase in the UK corporation tax rate from 19% to 25%, effective from April 2023, which was substantively enacted on 24 May 2021. This is expected to have no effect on the tax charge for the Company as the exemptions above will still apply.

At 30 June 2021, the Company had no unprovided deferred tax liabilities. At that date, based on current estimates and including the accumulation of net allowable losses, the Company had no unrelieved losses.

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Company meets (and intends to continue to meet for the foreseeable future to meet) the conditions for approval as an Investment Trust company.

6. DIVIDENDS

Dividends paid in respect of the period under review:

7. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS

* Does not include investments purchased or sold by BPCR Limited Partnership

There were no transaction costs for the acquisition or disposal of investments in any of the relevant periods.

The Company is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following three levels:

· Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

· Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level of the fair value hierarchy, within which the fair value measurement is categorised, is determined on the basis of the lowest level input that is significant to the fair value of the investment.

A reconciliation of fair value measurements in Level 3 is set out below.

LEVEL 3 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

* Redemptions are the proceeds received from the repayment of investments.

There were no transfers between levels during the period.

VALUATION TECHNIQUES

Unrealised gains and losses recorded on Level 1 financial instruments are reported in net gains on investments at fair value on the Condensed Statement of Comprehensive Income. The fund administrator utilises quoted prices in active markets that they have access to and the Investment Manager verifies the quoted prices on Bloomberg.

Unrealised gains and losses recorded on Level 2 and 3 financial instruments are reported in net gains on investments at fair value on the Condensed Statement of Comprehensive Income. Level 2 and Level 3 financial instruments are fair valued using inputs that reflect management's best estimate of what market participants would use in pricing the assets or liabilities at the measurement date. Consideration is given to the risk inherent in the valuation techniques and the risk inherent in the inputs of the model.

Level 3 financial instruments are fair valued using a discounted cash flow methodology. For capped royalty investments, discount rates are applied to the consensus forecasts or the manager's forecast for sales of the underlying products to determine fair value. The significant unobservable input used in the fair value measurement of the Company's level 3 investments is the discount rate used to discount future cash flows from borrowers.

Investments held in subsidiaries, namely BPCR Limited Partnership, are based on the fair value of the investments held in those entities.

The following table analyses the Company's investments at 30 June 2022:

The Company's unlisted investments, including those of it's wholly owned subsidiary BPCR Limited Partnership, are all classified as Level 3 investments. The fair values of the unlisted investments have been determined principally by reference to discounted cash flows. The significant unobservable input used is detailed below:

* The Company holds an investment in BPCR Limited Partnership, its wholly owned subsidiary, which it measures at fair value through profit or loss rather than consolidate.

1 The Company is restating the prior year discount rate and discount rate sensitivity calculations as the discount rate used in the prior year was incorrectly calculated. The restatement does not affect the reported carrying value of the related assets.

8. TRADE AND OTHER RECEIVABLES