Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Investor Presentation (March 2023)
28 slides from Dri Healthcare Trust's investor presentation, March 2023
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector March 2023
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: Low risk exposure to rapid biopharma growth
Low risk exposure to rapid biopharma growth For the year ended December 31, 2022 Autoimmune 34-year1 Ophthalmology 28% 1% $93M History Respiratory Total Income 23 9% $2.5B+ Royalty assets2 $82M Hormone Capital deployed 20 Dermatology disorders 6% Adjusted EBITDA 4% Products 70 86% Royalty acquisitio
Slide 4: Our competitive advantages
Our competitive advantages 1 Seasoned 2 Disciplined 3 Proactive 3 Exceptional team capital sourcing execution allocation of specialized based on robust proprietary fundamental investment investment criteria database tracking ground-up diligence professionals with that has resulted in royalties on mo
Slide 5: Track record of delivering growth and value
Track record of delivering growth and value Drug Royalty I Drug Royalty II Drug Royalty III DHT 2006 – 2008 2009 – 2013 2013 – 2018 2021 - present 19 New Royalties 27 New Royalties 15 New Royalties 9 New Royalties & 1 Loan valued at valued at valued at valued at up to $645M $730M1 $586M $658M2 IRR I
Slide 6: Delivering on our long-term strategy
Delivering on our long-term strategy At IPO Today 2025 target $481.5 million deployed to date Revised deployment target of Capital deployment $650 – 750 million over 5 years + $850 – 900 million $176 million in milestones and options Flat to slightly growing cash Sustainable cash Declining cash curv
Slide 7: Current deployment exceeds targets
Current deployment exceeds targets ($M) 8-Mar-23 700 Additional milestones + options Milestone payment 25-Jan-23 Actual deployment 600 28-Nov-22 500 30-Sep-22 400 12-Sep-22 300 30-Sep-21 21-Jul-22 28-Feb-22 200 25-Aug-21 100 0 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 Deployment
Slide 8: Industry R&D spending is propelling innovation
Industry R&D spending is propelling innovation Worldwide Total Pharmaceutical R&D Spend ($B)1 Worldwide Medicine Spending ($B)2 Total R&D spend 2022-2028 2027 $1.8 trillion $1.9 trillion 300 2,000 280 1,800 260 1,600 240 1,400 220 1,200 200 1,000 180 800 160 600 140 400 120 200 100 0 2025 2013 2014
Slide 9: R&D spending has resulted in many innovative products
R&D spending has resulted in many innovative products Novel Drug Approvals by the FDA1 60 50 40 30 20 10 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 FDA approval of novel drugs opens the door to abundant royalty acquisition opportunities 1. Source: Historic: FDA.gov, 2023 Forecast: Eval
Slide 10: Royalty transaction activity is expanding with strong industry tailwinds
Royalty transaction activity is expanding with strong industry tailwinds Trailing three-year average number of transactions1 Trailing three-year average value of transactions ($B)1 40 7 35 6 30 5 25 4 20 3 15 2 10 5 1 0 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Aggregate royalty
Slide 11: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 140 130 14 100 120 12 7.3% 110 80 Total Proceeds ($B) 10 100 Number of IPOs 90 8 60 -8.4% 80 6 70 -41.3% 40 4 60 20 50 2 40 Aug-21 Jan-21 Oct-21 Aug-22 Feb-21 Jan-22 Oct-22 Jan-23 Dec-21 Feb-22 Feb-23 Apr-21 Jul-21 Apr-22
Slide 12: Creating win-win deals for multiple counterparties
Creating win-win deals for multiple counterparties Monetize long-term royalties in Provide royalty financing flexible, tax advantaged deals to fund capital projects Research Inventors institutions Flexible approach – Existing royalties – Synthetic royalties – Launch & development capital Monetize ex
Slide 13: Proven track record of closing accretive transactions
Proven track record of closing accretive transactions Investment Thesis Transaction Size High-quality oncology product with strong $116.5 million + growth potential $18.5 million potential milestone Dermatology product with existing $50.5 million commercial track record Hematology and ophthalmology
Slide 14: Sustainable and efficient business model focused on cashflow
Sustainable and efficient business model focused on cashflow % Sales of leading therapies Sourcing, research New royalty Adjusted cash & deal execution acquisitions receipts1 Cash for Adjusted redeployment EBITDA1 Cash distributions Diversified portfolio generates significant cash to deploy to new r
Slide 15: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area1 By Product1 Hormone disorders Autoimmune Rydapt Hematology Zytiga 4% 1% Natpara 4% 2% 5% 4% Eylea Dermatology Ophthalmology 4% 6% 28% Omidria 24% Empaveli 5% Respiratory 9% Xenpozyme 6% Oracea 6% Spinraza 17% Rare diseases Zejula 23% Oncology 7% 24%
Slide 16: 2022 financial highlights
2022 financial highlights $96.2 million $93.0 million $82.4 million Total Cash Receipts1 Total Income Adjusted EBITDA1 $1.87 $0.30 86% Declared Cash Distributions Adjusted Cash Earnings per Adjusted EBITDA Margin1 per Unit Unit1 1. Total Cash Receipts and Adjusted EBITDA are non-GAAP measures. Adjus
Slide 17: Strong cash generation
Strong cash generation Adjusted EBITDA for the Year Ended December 31, 2022 ($M)1 $3.7 $96.2 $87.3 $5.7 $93.0 ($0.5) ($7.3) ($6.5) $82.4 Adjusted EBITDA Margin1 86% Adjusted Cash Earnings per Unit4 Royalty Income Interest Income Total Income on Loan Net Change in Royalties Non-Cash Royalty Income To
Slide 18: Deal structure case study: CTI Biopharma / Vonjo
Deal structure case study: CTI Biopharma / Vonjo Funding for Vonjo launch preparation Pre-approval $50 million secured loan Secured loan provides downside protection if approval not granted Funding for Vonjo launch $60 million tiered royalty Sliding royalty rates as annual sales increase Upon approv
Slide 19: Empaveli royalty transaction
Empaveli royalty transaction 1 TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Represents a significant advancement in the standard of $24.5 million purchase price care for Paroxysmal Nocturnal Hemoglobinuria <1% royalty on worldwide net Approved as the first and only sales up to $500 million per app
Slide 20: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $10 million milestone payment if Zejula is approved by FDA for the $35 Million up front purchase price treatment of endometrial cancer by December 21, 2025 In development for metastatic castrate sensitive and resistant 0.5%
Slide 21: Omidria royalty transaction
Omidria royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH 1 Annual Royalty Receipt Caps ($M) $125 Million up front purchase price, $30 subject to annual cash receipt caps 26.25 27.50 25.00 25.00 25.00 25.00 $25 20.00 $20 Approved for intracameral use during cataract surgery or $15 intraoc
Slide 22: Xenpozyme royalty transaction
Xenpozyme royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $26.5 million in potential $30 Million up front purchase price milestone payments based on cumulative royalties received First and only approved product for Approximately 1% royalty on the treatment of Acid worldwide sale
Slide 23: Tzield royalty transaction
Tzield royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 Up to a $50 million potential milestone tied $100 Million up front purchase price for a to the successful advancement of single digit royalty on Provention Bio’s treatment of newly diagnosed or recent- worldwide net sales on
Slide 24: Portfolio performance
Portfolio performance ($ thousands) Total Cash Royalty Receipts1,2 Net Book Value Asset Primary Marketer(s) Therapeutic Area FY 2022 12/31/22 Hematology / Ophthalmology 269 23,437 Ophthalmology 11,280 23,041 Vaccine 2,952 2,096 Endocrinology 2,625 19,457 Ophthalmology 1,670 121,782 Dermatology 7,662
Slide 25: Growth opportunities from existing assets
Growth opportunities from existing assets Phase 1 Phase 2 Phase 3 Phase 4 RESPOND: Spinraza in patients who had received Zolgensma Spinraza ASCEND: Higher dose Spinraza in patients who had received Evrysdi DEVOTE: Higher dose Spinraza Tzield PROTECT: Treatment for stage 3 Type 1 Diabetes Vonjo PACIF
Slide 26: Committed to best practices in ESG
Committed to best practices in ESG Environmental Social Governance Building a platform for sustainability Accountability and integrity as core Valuing diversity and community values support • Review of sustainability practices of our • Highly diverse and inclusive team • Best practice governance pol
Slide 27: 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 27
Slide 28: Contact Us
Contact Us Dave Levine ir@drihealthcare.com
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