Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — UBS Global Healthcare Conference 2021
19 slides from Dri Healthcare Trust's conference presentation, May 25, 2021
Slide 1: Advancing Science in the Fast Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast Growing Pharmaceutical and Biotechnology Sector UBS Global Healthcare Conference| May 25, 2021
Slide 2: Disclaimer
DISCLAIMER This presentation contains “forward‐looking information” within the meaning of applicable securities laws in Canada. Forward‐looking information may relate to our future financial outlook and anticipated events or results and may include information regarding our financial position, busin
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Partner of choice in the global pharmaceutical royalty sector focused on small to medium‐sized growth transactions Direct exposure to the fast‐growing, global pharmaceutical industry Attractive business model with less susceptibility to traditional pharmaceutical model ri
Slide 4: Partnering with Innovators to Advance Science
PARTNERING WITH INNOVATORS TO ADVANCE SCIENCE 32‐year history of collaboration with leading biotech & pharmaceutical DRI is a leading companies, hospitals, universities and acquiror of inventors pharmaceutical Successful track record of acquiring royalties, and partner and replenishing a portfolio o
Slide 5: Compelling Industry Fundamentals
COMPELLING INDUSTRY FUNDAMENTALS R&D Spend (US$B)(2) Worldwide prescription drug sales …driving growth in $233 are accelerating… 3.6% $195 Prescription Sales (US$B)(1) worldwide CAGR $1,391 R&D spending… 7.6% CAGR $963 2021E 2026E …and unprecedented demand for external innovation and capital. Share
Slide 6: Track Record of Growth Through Acquisition
TRACK RECORD OF GROWTH THROUGH ACQUISITION DRI has made approximately $2.1 billion in royalty acquisitions, including approximately $2 billion through its predecessor funds and approximately $100 million from co‐investors DRUG ROYALTY I DRUG ROYALTY II DRUG ROYALTY III (2006 – 2008) (2009 – 2013) (2
Slide 7: Portfolio Delivers Solid Cash Flow
PORTFOLIO DELIVERS SOLID CASH FLOW 18 ~8 yr. 5 Products Royalty streams Weighted average $1B+ Global annual sales remaining duration(1) Including 14 Products 2 Products $5B+ Global annual sales 9 Products $31M 91% Included in Q1 2021 Pro forma Total Cash Pro forma adjusted EBITDA Royalty Receipts(3)
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW 2020 Worldwide Sales Q1 2021 Worldwide Sales Q1 2021 Pro Forma Cash Product Name Primary Marketer(s) Therapeutic Area Expected Royalty Expiry(2) (US$M)(1) (US$M)(1) Royalty Receipts (US$M) Core Products Rare Diseases $2,052 $521 $5.3 Q3 2031 Respiratory $2,025 $435 $2.3 Q2 2032 (3
Slide 9: Growth Strategy
GROWTH STRATEGY Acquire existing pharmaceutical royalties Create new synthetic royalty streams 9
Slide 10: DRI's Attractive Market Niche
DRI’S ATTRACTIVE MARKET NICHE Medically necessary products Growth‐focused Market leading products with strong growth accretive small to potential mid‐sized transactions of Benefit from strong and long‐lasting $25M to $150M intellectual property Developed or marketed by industry leading, high
Slide 11: Repeatable Process to Identify and Select Assets
REPEATABLE PROCESS TO IDENTIFY AND SELECT ASSETS Proprietary database with >6,500 royalties on >2,000 products IDENTIFY QUALIFY ORIGINATE EXECUTE Secure and sustainable market position Out of scope of large‐cap public investors, Relationships and process are not easily High barriers to entry for new
Slide 12: Proven Due Diligence Process
PROVEN DUE DILIGENCE PROCESS PRELIMINARY DILIGENCE COMPREHENSIVE DUE DILIGENCE Medical & Commercial Initial Review IP & Regulatory Review Legal Review Review Clinical profile In‐depth review of Obtain IP opinions Review underlying Sales drivers clinical data Consult with regulatory agree
Slide 13: Remicade Case Study
REMICADE CASE STUDY DRI has the experience and flexibility to structure deals that address counterparty needs Partnership Repeat Transactions Favourable Outcomes Transaction 1 (2001) • DRI acquired portion of Dr. Vilcek’s U.S. Remicade royalties Dr. Vilcek • $120M+ donated to NYU to support medical
Slide 14: Q1 2021 Financial Results – Portfolio Highlights
Q1 2021 FINANCIAL RESULTS – PORTFOLIO HIGHLIGHTS Pro Forma Cash Royalty Receipts (US$M)(1) For the three months ended March 31, 2021 March 31, 2020 % Change Core Products Spinraza $5.3 $5.5 (4)% Eylea(2) $4.4 $4.2 4% Rydapt $2.6 $2.7 (4)% Xolair $2.3 $2.4 (5)% FluMist $2.2 $1.2 91% Natpara $0.5 $0.3
Slide 15: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Q1 2021 Pro Forma Adjusted EBITDA (US$M)(1) Pro Forma Adjusted EBITDA Margin(1)(4) ~91% $17.9 $30.6 ($1.5) $28.0 ($0.9) ($0.2) $12.7 Royalty Net Change in (2) Pro forma Total Cash Operating Management Servicer Pro forma Adjusted EBITDA (1) Income Royalty Receivables Royal
Slide 16: Well Capitalized for Growth
WELL CAPITALIZED FOR GROWTH Strong cash position at March 31, 2021 US$106 million of cash and cash equivalents available to support acquisitions and operations US$39.6 million of royalty receivables US$285 million of royalty assets (net book value) US$69.9 million of secured notes (princip
Slide 17: Outlook
OUTLOOK US$650 to US$750 million five‐year aggregate acquisition target Target sustainable compounded Long duration assets: will seek to growth in cash maintain and extend weighted average royalty receipts remaining duration for the portfolio Active and growing pipeline 17
Slide 18: The Pharmaceutical Royalty Model
THE PHARMACEUTICAL ROYALTY MODEL DRI provides unitholders with direct exposure to the fast‐growing, global pharmaceutical industry with reduced development and R&D risk Through Traditional Royalty acquisitions or the creation of Synthetic Royalties, DRI advances science by supporting the invento
Slide 19: Tax Efficient Structure
TAX EFFICIENT STRUCTURE Canadian Trust with Irish Subsidiary Closing Transactions • We are structured as a pass‐through entity, eliminating all trust / entity‐level income tax Unitholders • External management facilitates our efficient operating and tax DRI Capital (Manager) structure DRI Healthcare
DRI Healthcare Trust — UBS Global Healthcare Conference 2021 on 6ix