Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Investor Presentation (September 2023)
26 slides from Dri Healthcare Trust's investor presentation, September 2023
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector September 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 Heme-Onc Dermatology 17% For the last twelve months ended June 30, 2023 4% 34-year1 $105M History Neurology Total Income Respiratory 6% 26 11% $2.5B+ Royalty assets $90M Capital deployed 20 Adjusted EBITDA2 Lysosomal Storage Products Disorder 74 Ophthalmol
Slide 4: 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 5: 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 6: Delivering on our long-term objectives
Delivering on our long-term objectives At IPO Today 20251 $766 million deployed Target of $650 – 750 million to date Revised deployment target Capital deployment over 5 years + of $850 – 900 million $69 million in potential milestones Mid-teens total income CAGR 7% - 9% total income Sustainable cash
Slide 7: Current deployment exceeds targets
Current deployment exceeds targets 14-Aug-23 ($M) 25-Jul-23 900 Additional milestones 800 Actual deployment 29-Jun-23 8-Mar-232 700 25-Nov-22 600 30-Sep-22 500 400 9-Sep-22 30-Sep-21 300 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 Feb-23 May-23 Au
Slide 8: 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 9: Proven track record of closing accretive transactions
Proven track record of closing accretive transactions Investment Thesis Transaction Size Newly approved and first in class oncology product $85 million Up to $140 million1 with uncapped growth potential High-quality oncology product with strong growth Up to $135 million2 $66 million3 potential Newly
Slide 10: Orserdu royalty transactions
Orserdu royalty transactions TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Orserdu I $85 million up front purchase price Approved by the FDA in January Mid single digit tiered royalty on 2023 and currently under review by worldwide net sales the EMA for potential approval Orserdu II Significant PFS
Slide 11: Vonjo II royalty transaction
Vonjo II royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $66 million purchase price for tiered First year of sales strongly exceeded royalty on worldwide net sales analyst consensus estimates Approved by the FDA in $6.5 million payment made to CTI February 2022 as the only in Janu
Slide 12: Tzield royalty transactions
Tzield royalty transactions ACQUISITION FROM MACROGENICS SALE TO SANOFI $100 million up front purchase price for a Sanofi announced agreement to acquire single digit royalty on Provention Bio’s Provention Bio days after DRI Healthcare’s worldwide net sales acquisition of the royalty Up to a $50 mill
Slide 13: Sustainable and efficient business model focused on cashflow
Sustainable and efficient business model focused on cashflow % Sales of leading therapies and/or interest payments Sourcing, research New asset Total Cash & deal execution acquisitions Receipts1 Cash for Adjusted redeployment EBITDA1 Cash distributions Business model allows for continuous compoundin
Slide 14: Q2 financial highlights
Q2 financial highlights Normalized Total Cash Total Income Adjusted EBITDA1 Receipts1 $28.1 million $25.1 million $28.7 million +32% over Q2 2022 +17% over Q2 2022 +13% over Q2 2022 Adjusted EBITDA Margin1 Adjusted Cash Earnings per Declared Cash Distributions Unit1 per Unit 87% $0.40 $0.6084 1. Nor
Slide 15: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended June 30, 2023 ($M)1 $9.9 $105.4 ($0.5) ($1.2) $103.7 ($7.0) $95.5 ($7.0) $89.7 Adjusted EBITDA Margin1 87% Adjusted Cash Earnings per Unit1,5 Royalty Income Total Interest and Other Total Income Net Change in Royalties Non-Cash
Slide 16: Trust units are undervalued relative to royalty peers
Trust units are undervalued relative to royalty peers Price / Price / book operating Dividend yield cash flow 0.9x 4.3x 9.1% 2.1x 8.3x 2.6% 1. 5x Neg 0.0% 1.7x 8.0x 0.0% 4.1x 27.1x 0.9% 2.8x 25.5x 1.4% Valuation comps highlight Trust’s underlying value Information sourced from respective companies’
Slide 17: DHT undervalued vs. large pharmas despite favourable revenue growth, profitability and risk profile
DHT undervalued vs. large pharmas despite favourable revenue growth, profitability and risk profile 2022-2030 EV / Revenue CAGR 2024 EBITDA Low single digit 4.3x 1.3% 12.1x 1.4% 9.7x -2.8% 8.5x 1.8% 11.3x 2.3% 11.9x 2.5% 9.6x DHT trades at a discount relative to multiple comparable peer sets Informa
Slide 18: 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 18
Slide 19: Contact Us
Contact Us David Levine ir@drihealthcare.com
Slide 20: Appendix – Deal Summaries
DRIHEALTHCARE Appendix - Deal Summaries , ° _ ie
Slide 21: Xenpozyme royalty transaction
Xenpozyme royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $26.5 million in potential $30 million up front purchase price milestone payments based on cumulative royalties received First and only approved product Approximately 1% royalty on for the treatment of Acid worldwide sales
Slide 22: Omidria royalty transaction
Omidria royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH Annual Royalty Receipt Caps ($M) $125 million up front purchase $30 price, subject to annual cash receipt 26.25 27.50 caps 25.00 25.00 25.00 25.00 $25 20.00 $20 Approved for intracameral use during cataract surgery or $15 intraocul
Slide 23: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $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% ne
Slide 24: Empaveli royalty transaction
Empaveli royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Represents a significant $28.2 million purchase price1 plus advancement in the standard of a $4.0 million potential milestone care for Paroxysmal Nocturnal payment Hemoglobinuria Approved as the first and only <1% royalty on
Slide 25: Oracea royalty transaction
Oracea royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Immediate accretive value with $50.5 million purchase price for substantial royalty receipts netted royalties on worldwide sales out of purchase price Among leading treatment Two additional royalty interests options for managi
Slide 26: 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 provided downside protection if approval not granted - Funding for Vonjo launch $60 million tiered royalty - Sliding royalty rates as annual sales increase Upo
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