Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Q4 2023 Earnings Presentation
22 slides from Dri Healthcare Trust's earnings presentation, Feb 29, 2024
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector Q4 and FY 2023 Earnings Call | February 29, 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by DRI Healthcare Trust (the “Trust”). The Trust is an unincorporated open-ended fund trust governed by the laws of the Province of Ontario, Canada and is externally managed by DRI Capital Inc. (“DRI Capital” or the “Manager” and together with the Trust
Slide 3: 2023 highlights
2023 highlights 1 Accretive 2 Significant capacity 3 Returning value transactions for growth to unitholders • Deployed $385 • Completed two follow-on • $50.9 million cash million in 5 royalty offerings and issuance of returned via transactions preferred securities for gross distributions and proceed
Slide 4: 2023 financial highlights
2023 financial highlights Normalized Total Cash Receipts1 Total Income Adjusted EBITDA1 $131.2 million $166.3 million $113.2 million +36% over 2022 +79% over 2022 +37% over 2022 Adjusted Cash Earnings per Declared Cash Distributions Adjusted EBITDA Margin1 Unit1 per Unit 86% $2.53 – Basic $1.10 $2.5
Slide 5: Post year-end highlights
Post year-end highlights Updated Guidance Dividend Declaration Royalty Transaction Roadmap for continued growth Quarterly cash distribution Omidria • 2024 royalty income guidance of • Announced increase to • Deployed $115 million on $153 - $155 million1 quarterly distribution expansion of royalty in
Slide 6: Portfolio performance as of December 31, 2023
Portfolio performance as of December 31, 2023 (US$ millions) Q4 2023 Q4 2022 % Change 2023 2022 % Change Total Cash Royalty Receipts1 $52.3 $29.6 76% $127.9 $90.8 41% 23.2 - n/a 26.6 - n/a 3.7 1.8 113 11.2 3.2 254 0.4 - n/a 0.7 - n/a 3.3 1.7 95 13.0 1.7 678 0.9 0.7 25 3.1 0.7 352 1.4 0.3 435 1.9 0.3
Slide 7: Investment Highlights
Investment Highlights The longest standing and a global leader in buying healthcare royalties Well positioned to capitalize on generational industry growth delivering attractive uncorrelated cash flows Diversified portfolio of products by therapeutic area and marketer High yield value opportunity th
Slide 8: Our competitive advantages
Our competitive advantages 1 Seasoned 2 Disciplined 3 Proactive 4 Strong team capital sourcing execution of specialized allocation proprietary fundamental investment based on robust database tracking ground-up professionals with investment criteria royalties on more diligence on life science that ha
Slide 9: Positive effect of compounding of cash flows
Positive effect of compounding of cash flows New asset Total Cash acquisitions Receipts1 Cash for Adjusted redeployment EBITDA1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 2 Cumulative effect of compounding Annual CF without compounding Annual CF with compounding Virtuous
Slide 10: Delivering on our long-term objectives
Delivering on our long-term objectives Guidance at IPO Guidance Today (Feb 2021) $650 – 750 million over 5 years Over $1.25 billion over 5 years1 Capital deployment target (2021-2025) (2021-2025) High-teens royalty income CAGR through Declining cash curve due to expected asset 2025 and mid- to high-
Slide 11: Current deployment exceeds targets
Current deployment exceeds targets ($M) 1000 1-Feb-24 14-Aug-23 900 Additional milestones Actual deployment 25-Jul-23 800 29-Jun-23 700 8-Mar-232 25-Nov-22 600 30-Sep-22 500 400 9-Sep-22 300 30-Sep-21 28-Feb-22 20-Jul-221 200 25-Aug-21 100 0 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Fe
Slide 12: Sustainable value creation
Sustainable value creation Adjusted Cash Earnings per Unit1 - Basic $3.00 $2.50 $2.53 +37% $2.00 Adjusted Cash $1.85 $1.87 Earnings per Unit1 $1.50 $2.53 basic $1.00 $2.52 diluted $0.50 $0.00 2021 2022 2023 Strong performance drives accretive value for unitholders 1. Adjusted Cash Earnings per Unit
Slide 13: Long-term drivers support royalty financing growth
Long-term drivers support royalty financing growth Growth of Biopharma Projected Growth of Worldwide Projected Growth of Worldwide clinical pipeline1 Biopharma R&D Spend ($B)2 Medicine Spending ($B)3 +49% +15% +39% 6,147 302 2,238 262 4,126 1,607 2017 2022 2023 2028E 2023 2028E • Genomics • Pace of
Slide 14: Loss of exclusivity fuels business development and expands royalty opportunity set
Loss of exclusivity fuels business development and expands royalty opportunity set Revenue loss from pending loss of exclusivity ($B)1 Trailing three-year average value of transactions ($B)2 60 The impact in the next five 7 years is expected to increase to $192 billion 6 50 5 40 4 30 3 20 2 10 1 0 0
Slide 15: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 160 14 38% 100 140 12 120 80 Total Proceeds ($B) 10 Number of IPOs 100 -9% 8 60 80 6 -31% 40 4 60 20 2 40 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 16: US SMID Biotechs' limited cash reserves
US SMID Biotechs’ limited cash reserves Net Loss vs. Capital Raised ($B)1 Cash Runway for Unprofitable NASDAQ Biotechs2 14 12 ≥24 10 <12 8 YE 2023 Estimate 6 18-24 4 2 12-18 0 3Q22 4Q22 1Q23 2Q23 3Q23 • 43% have cash runway of less than 12 months • 30% have cash runway between 12-24 months Net Loss
Slide 17: Omidria expansion transaction
Omidria expansion transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $115 million up front purchase price Mature product brings stable sales plus up to $55 million in potential history and predictable growth milestones Anticipated significant 30% royalty rate on US net sales contribution to
Slide 18: Robust pipeline
Robust pipeline $3.7 billion in opportunities Address important Provides strong Marketed by leading unmet needs with life- intellectual property biotech or biopharma changing therapies for and regulatory companies patients protection Further portfolio diversification and extension with attractive re
Slide 19: Well capitalized for growth
Well capitalized for growth Royalties receivable $64.1 million2 Cash and cash Available from credit equivalents facilities $62.8 million1 $219.3 million3 Significant capacity for further growth 1. As at December 31, 2023. 2. Includes $26.0 in milestone royalties receivable on Orserdu I, Orserdu II a
Slide 20: Strong cash generation
Strong cash generation Adjusted EBITDA for the Year Ended December 31, 2023 ($M)1 $7.4 $166.3 ($34.0) $158.9 ($1.1) $131.2 ($9.4) ($14.5) $5.9 $113.2 Adjusted EBITDA Margin1 86% Royalty Total Interest Total Income Net Change in Non-Cash Normalized Operating Management Net Change in Adjusted Income a
Slide 21: Our key priorities
Our key priorities Invest in our people and build the industry leading royalty investment team People Execute on strong pipeline and operate at Execution peak performance in all aspects of our business Results Focus on long-term, sustainable growth generating strong unitholder returns 21
Slide 22: Contact Us
Contact Us David Levine ir@drihealthcare.com