NexPoint Invests in Trust Fund with Focus on CDMOs, cGMPs Facilities

NexPoint, an investment platform, has made an initial investment in NexPoint Life Sciences II DST, a Delaware statutory trust (DST), through a fund advised by its affiliate.
The investment aligns NexPoint’s and DST investors’ interests and underscores the firm’s commitment to the life sciences sector. The DST acquired the two properties earlier this year in Philadelphia that are occupied by a subsidiary of Adare Pharmaceuticals Inc., a contract development and manufacturing organization (CDMO) focused on oral dosage forms for the pharmaceutical industry.

Within life sciences, NexPoint sees CDMOs and the manufacturing facilities they operate as a key area of growth. NexPoint sees a significant demand in the U.S. for facilities that meet the standards of current good manufacturing practices (cGMP).

In a statement, the company said that America’s existing cGMP infrastructure cannot support the development and production needs of the life sciences industry, which it says is rapidly evolving with the commercialization of novel and emerging products and therapies.

According to the company, other factors adding to demand for cGMP manufacturing facilities are bipartisan governmental initiatives to re-shore manufacturing and supply chains back to the U.S., as well as the sector growth in healthcare that is driving commercial-scale pharmaceutical manufacturing activity. NexPoint’s asserts that co-investment in the Life Sciences II DST is driven by these industry trends, along with the predictable cash flow offered by the properties’ triple-net tenant, Adare Pharmaceuticals, Inc.

“Real estate plays a critical role in this rapidly evolving industry and can help accelerate innovation for life sciences companies at all stages of development,” said Matt McGraner, NexPoint real estate advisors’ chief investment officer. “As we continue to grow our life sciences platform, our investment in NexPoint Life Sciences II DST allows us to dedicate capital alongside our investor base and increase our exposure to cGMP facilities, which we believe have some of the strongest tailwinds within life sciences real estate.”

NexPoint said it expects to pursue additional opportunities in the cGMP space and plans to continue to invest alongside investors in future life sciences offerings.