Life sciences lender BioPharma Credit (BPCR ) has made its second loan since record annual results a month ago, bringing another special dividend into view.

Pedro Gonzalez de Cosio, manager of the dollar-denominated fund, told Citywire in March that the 7 cent per share dividend targeted this year was ‘easily covered’ even with $333m of cash on the balance sheet, given higher interest rates and the bigger proportion of its loans on floating rates of interest.

A month later, the $1bn trust has ploughed $158m across two senior secured floating rate loans, meaning special dividends, which it has paid out every year after listing in 2017, are once again a prospect. Last year, the £1bn trust paid out a record 13.1 cents per share in ordinary and special dividends giving a 13.8% yield.

BPCR has extended a $180m senior secured loan with Nasdaq-listed BioCryst Pharmaceuticals alongside parent company BioPharma-V, which will invest $270m.

BioCryst specialises in oral medicine for serious and rare diseases and has drawn $120m, with a further $60m available until the end of September next year.

The five-year floating rate loan is priced at 7% over the secured overnighth financing rate (SOFR) with a 1.75% floor should interest rates fall further. BioCryst may elect to payment-in-kind, issuing bonds instead of using cash, to pay off 50% of interest payable for the first six quarters.

The $1.6bn drugs company is currently marketing Orladeyo, which is used to prevent attacks of heredity angioedema, or swelling, in patients older than 12. The drug was approved in the US in December 2020 and the following year in the EU, UK, UAE and Japan. Last year BioCryst reported net sales of $251.6m, more than doubling those in 2021.

Two weeks ago, BPCR lent $62.5m to Nasdaq-listed ImmunoGen alongside BioPharma-V, giving it a 4.6% weighting. The five-year loan is secured against ImmunoGen’s ovarian cancer drug, Elahere, which was approved in November.

Immunogen drew down $37.5m in a first tranche and can borrow a further $25m by the end of next March. The floating rate loan is priced at 8% over the SOFR, with a 2.75% floor should interest rates fall further. ImmunoGen paid a 2% arrangement fee.

Numis analyst Ewan Lovett-Turner said BPCR was an ‘attractive investment that has demonstrated an ability to deliver a consistent return regardless of the environment for biotech companies.’ 

Currently trading at a 2.5% discount to NAV, the sterling shares have risen 7.6% versus the direct lending sector average of 8.6% year to date. Over five years they have delivered a total return of 41.8%.