Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Investor Presentation (June 2023)
30 slides from Dri Healthcare Trust's investor presentation, June 2023
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector June 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 last twelve months ended March 31, 2023 34-year1 Neurology 17% Oncology 24% $92M History Total Income 23 $2.5B+ Other 7% Royalty assets2 $86M Capital deployed 19 Adjusted EBITDA3 Products 71 Dermatology 6% 86% Royalty acquisitions $1B+ Respiratory
Slide 4: Our competitive advantages
Our competitive advantages 1 Seasoned 2 Disciplined 3 Proactive 4 Strong 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 more on
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 – 20081 2009 – 20131 2013 – 20181 2021 - present 19 New Royalties 27 New Royalties 15 New Royalties 10 New Royalties & 1 Loan valued at valued at valued at valued at up to $645M $730M2 $586M $540M3 I
Slide 6: Delivering on our long-term objectives
Delivering on our long-term objectives At IPO Today 2025 target1 $485 million deployed to date Revised deployment target of Capital deployment $650 – 750 million over 5 years + $850 – 900 million $55 million in milestones and options Flat to slightly growing cash Sustainable cash Declining cash curv
Slide 7: Current deployment exceeds targets
Current deployment exceeds targets ($M) 8-Mar-232 700 Additional milestones 25-Nov-22 Actual deployment 600 500 30-Sep-22 400 9-Sep-22 300 30-Sep-21 20-Jul-221 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 May-23 Deployment pace and need for capital by
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 $1.9 trillion 300 2,000 280 1,800 260 1,600 240 1,400 220 1,200 200 1,000 180 800 160 600 140 400 120 200 100 0 2023E 2024E 202
Slide 9: R&D spending has resulted in many innovative products
R&D spending has resulted in many innovative products Novel Drug Approvals by the FDA1 60 50 40 30 20 10 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E FDA approval of novel drugs opens the door to abundant royalty acquisition opportunities 1. Source: Historic: FDA.gov, 2023 Forecast: Eva
Slide 10: Royalty transaction activity is expanding with strong industry tailwinds
Royalty transaction activity is expanding with strong industry tailwinds Trailing three-year average number of transactions1 Trailing three-year average value of transactions ($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 11.2% 12 110 80 Total Proceeds ($B) 10 100 -6.4% Number of IPOs 90 8 60 80 6 70 40 -39.2% 4 60 20 50 2 40 Aug-21 Aug-22 Jan-21 Oct-21 Oct-22 Feb-21 Jan-22 Feb-22 Jan-23 Feb-23 Apr-21 Jul-21 Apr-22 Jul-2
Slide 12: 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 13: 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 14: 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 15: 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 16: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area1 By Product1 Hormone Other disorders Zytiga Rydapt 3% 4% Natpara 4% 2% Dermatology 4% 6% Eylea 4% Omidria Lysosomal Storage Ophthalmology 24% Disorder 31% Empaveli/Syfovre 6% 5% Oracea Respiratory 6% 9% Xenpozyme 6% Spinraza 17% Zejula Neurology 7% 17
Slide 17: Q1 2023 financial highlights
Q1 2023 financial highlights $25.0 million $28.2 million $21.4 million Total Cash Receipts1 Total Income Adjusted EBITDA1 $0.49 $0.075 86% Declared Cash Distributions Adjusted Cash Earnings per Adjusted EBITDA Margin1 per Unit Unit1 1. Total Cash Receipts and Adjusted EBITDA are non-GAAP measures. A
Slide 18: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended March 31, 2023 ($M)1 $6.3 $98.6 $2.0 ($0.3) $100.3 ($7.4) $92.3 ($6.8) $86.1 Adjusted EBITDA Margin1 86% Adjusted Cash Earnings per Unit4 Royalty Income Total interest Income Total Income Net Change in Royalties Non-Cash Royalty
Slide 19: 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 Upo
Slide 20: Oracea royalty transaction
Oracea royalty transaction 1 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 mana
Slide 21: Empaveli royalty transaction
Empaveli royalty transaction 1 TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Represents a significant advancement in the standard of $28.2 million purchase price1 care for Paroxysmal Nocturnal Hemoglobinuria <1% royalty on worldwide net Approved as the first and only sales up to $500 million per ap
Slide 22: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $10 million milestone payment if Zejula is approved by FDA for the $35 million up front purchase price treatment of endometrial cancer by December 21, 2025 In development for metastatic castrate sensitive and resistant 0.5%
Slide 23: Omidria royalty transaction
Omidria royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH 1 Annual Royalty Receipt Caps ($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 intraoc
Slide 24: 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 25: Tzield royalty transactions
Tzield royalty transactions ACQUISITION FROM MACROGENICS SALE TO SANOFI 1 $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 $50 mi
Slide 26: Portfolio performance
Portfolio performance ($ thousands) Asset Primary Marketer(s) Therapeutic Area Total Cash Royalty Receipts1,2 Net Book Value LTM 3/31/2023 3/31/23 Hematology / Ophthalmology 456 22,898 Ophthalmology 10,832 21,622 Vaccine 2,179 1,405 Endocrinology 2,563 17,484 Ophthalmology 4,920 117,951 Dermatology
Slide 27: Growth opportunities from existing assets
Growth opportunities from existing assets1 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 Vonjo PACIFICA: Confirmatory trial in Myelofibrosis Xolair OUTMA
Slide 28: 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 29: 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 29
Slide 30: Contact Us
Contact Us Dave Levine ir@drihealthcare.com
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