Financing medicines on conditions

What the capital is for

Pharmaceuticals are an origination sector for the group: hard to enter, slow to build and profitable once built. The capital funds manufacturing capacity, process development, registration in new markets, launch working capital and the acquisition of licences. It is patient by design, because a plant qualification and a registration file run to years rather than to quarters.

The Board fixed one exclusion in 2022 and has restated it since. The group does not fund the acquisition of an established medicine where the case for the price paid rests on raising the price charged. Two opportunities of that kind were declined at screening in the twelve months to 30 June 2026, one of them at an entry multiple well below the sector.

Manufacturing, effluent and discharge

Every funded manufacturing site tests its effluent. Fermentation and synthesis sites test for antimicrobial residues, solvent load and the oxygen demand of the discharge, quarterly for the first two years after commitment and twice a year afterwards. Samples are drawn and analysed by a laboratory the group engages and pays, not by the site.

Antimicrobial discharge is a covenant matter rather than an environmental preference. Residues in water select for resistance, and resistance is the process that ends the commercial life of the product the group has financed. Limits are set in the investment documents at commitment, at the tightest level applied in any jurisdiction where the sponsor operates.

Eight sites were sampled in the twelve months to 30 June 2026. Six met their limits at every sampling. Two exceeded a limit once and entered remediation, one for solvent recovery and one for a failed effluent treatment stage. Both closed their plans within the 90 days the documents allow.

• Effluent limits set at commitment and tested by a laboratory the group engages.
• Antimicrobial residues measured separately and reported to the group each quarter.
• Solvent recovery rates reported with the effluent results.
• Energy and refrigerant use reported annually for cold-chain and storage operations.
• A single exceedance triggers a remediation plan with a closure date inside 90 days.

Evidence and disclosure

A funded development programme registers each study in a public registry of the jurisdiction where it runs, before the first participant or the first animal is enrolled. Results are disclosed within twelve months of the last observation, whether or not they support the product. A programme that discloses only its successes is not one the group continues to fund.

Human studies require the approval of an independent research ethics body before enrolment and the approval letter goes into the group file. Studies involving animals require an assessment by the Welfare Assessment Unit and are held to the Group Welfare Standard, whatever the local rule permits and whoever is conducting the work.

Data supporting a filing is held in a form the group can audit, with the raw records retained and traceable to every summary figure. Three data audits were commissioned in the twelve months to 30 June 2026. Each found the summaries supported by the underlying records, and one produced a recommendation on the retention of laboratory notebooks.

Supply integrity

Each funded manufacturer keeps a documented chain of custody from active ingredient to batch release. Each active ingredient supplier is audited before it enters that chain and again every two years, on site, by an auditor whose report the group is entitled to read. An unaudited supplier cannot be used, and a supplier that refuses an audit is removed.

Three suppliers were removed from funded chains in the twelve months to 30 June 2026: two after audit findings on batch records and one because it would not permit the audit at all. Cold-chain excursions are reported to the group monthly with the disposition of the stock affected. Product diverted to an unlicensed channel is a covenant breach.

• A documented chain of custody from active ingredient to batch release.
• On-site audit of every active ingredient supplier before use and every two years after.
• Monthly reporting of cold-chain excursions and the disposition of the stock affected.
• Immediate notice of any product found in an unlicensed channel, treated as a breach.

Supply and price conduct after launch

The group originates in Brazil, Mexico and South Africa and finances manufacture in each. A term sheet for a product made in those markets carries a supply undertaking: the sponsor registers and supplies the product in the country of manufacture, on terms no worse than those it offers elsewhere in the region.

Withdrawal from a market for margin reasons requires the written consent of the group during the covenant period. A supply interruption is notified within ten working days with its cause and its expected duration. Two interruptions were notified in the twelve months to 30 June 2026, both from raw material shortages, and both were resolved inside a quarter.