Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Q2 2023 Earnings Presentation
24 slides from Dri Healthcare Trust's earnings presentation, Aug 15, 2023
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector Q2 2023 Earnings Call | August 15, 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: Business Highlights
Business Highlights Deployed $285M Sold TZIELD Strong Financial through Royalty and Results August 15th Received CTI Loan Repayment Completed Projecting Mid- Projecting Low Successful Teens CAGR by Single-Digits Follow-On- 2025 CAGR by 2030 Offering 3
Slide 4: Q2 highlights
Q2 highlights 1 Returning value 2 Accretive 3 Poised to unitholders transaction for growth • Special • Acquired first • $210 million gross distribution of Orserdu royalty proceeds from sale $0.5334 per unit for $85 million of Tzield royalty • Quarterly • $54.8 million from distribution of prepayment
Slide 5: 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 $0.6084 1. Nor
Slide 6: Portfolio performance as of June 30, 2023
Portfolio performance as of June 30, 2023 (US$ thousands) Primary Total Cash Royalty Receipts1 Therapeutic Area Marketer(s) Q2 2023 Q2 2022 % Change Remarks Total Cash Royalty Receipts1 $27,057 $24,022 13% Heme-Onc / Ophthalmology 251 - n/a New product Ophthalmology 1,642 2,875 (43%) Contractual ste
Slide 7: Post quarter-end highlights
Post quarter-end highlights Dividend Declaration Follow-On Offering Royalty Transactions Quarterly cash distribution Second public offering Additional Vonjo and Orserdu royalty streams • Declared a distribution of • Completed public offering of • Deployed $66 million for $0.075 per unit for Q3 2023
Slide 8: Investment Highlights
Investment Highlights The longest standing and a global leader in buying healthcare royalties Well positioned to capitalize on generational industry growth delivering attractive uncorrelated cash flows Diversified portfolio of products by therapeutic area and marketer High yield value opportunity th
Slide 9: Our competitive advantages
Our competitive advantages 1 Seasoned 2 Disciplined 3 Proactive 4 Strong team capital sourcing execution of specialized allocation proprietary fundamental investment based on robust database tracking ground-up professionals with investment criteria royalties on more diligence on life science that ha
Slide 10: Long-term drivers support royalty financing growth
Long-term drivers support royalty financing growth Growth of Biopharma Projected Growth of Worldwide Projected Growth of Worldwide clinical pipeline1 Biopharma R&D Spend ($B)2 Medicine Spending ($B)3 +49% +17% +27% 6,147 278 1,967 238 1,574 4,126 2017 2022 2022 2027E 2022 2027E • Genomics • Pace of
Slide 11: Biotechs' limited cash reserves
Biotechs’ limited cash reserves Cash Runway for Unprofitable Biotechs (months) Q4 2022 Q1 2023 (estimate) <12 <12 ≥24 ≥ 24 12-18 12-18 18-24 18-24 ≥24 months = 40% ≥ 24 months = 35% <12 months = 20% <12 months = 30% 65% of unprofitable NASDAQ-listed biotechs are estimated to have <2 years of cash Ti
Slide 12: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 140 130 14 24.0% 100 120 12 110 80 Total Proceeds ($B) 10 100 -7.2% Number of IPOs 90 8 60 80 6 70 40 -40.1% 4 60 20 50 2 40 Aug-21 Oct-21 Aug-22 Oct-22 Jan-21 Feb-21 Jan-22 Feb-22 Jan-23 Feb-23 Mar-21 Apr-21 Mar-22 Mar-2
Slide 13: 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 14: 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 $69 million in potential milestones Mid-teens total income CAGR 7% - 9% total income Sustainable cash
Slide 15: Current deployment exceeds targets
Current deployment exceeds targets 14-Aug-23 ($M) 25-Jul-23 900 Additional milestones 29-Jun-23 800 Actual deployment 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 De
Slide 16: 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 17: 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 18: 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 19: Robust pipeline
Robust pipeline $2.8 billion in near-term 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 att
Slide 20: Well capitalized for growth
Well capitalized for growth $121.3 million1 Cash and cash equivalents $29.1 million1 Royalties receivable Significant capacity for further $74.1 million2 growth Gross proceeds from public offering $168.2 million1 Available from credit facilities Significant capital available for deployment 1. As at
Slide 21: Sustainable and efficient business model
Sustainable and efficient business model focused on cashflow % Sales of leading therapies and/or interest payments Sourcing, research New asset Total Cash & deal execution acquisitions Receipts1 Cash for Adjusted redeployment EBITDA1 Cash distributions Business model allows for continuous compoundin
Slide 22: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended June 30, 2023 ($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 23: 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 23
Slide 24: Contact Us
Contact Us David Levine ir@drihealthcare.com