Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Q1 2024 Earnings Presentation
22 slides from Dri Healthcare Trust's earnings presentation, May 7, 2024
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector Q1 2024 Earnings Call | May 7, 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by DRI Healthcare Trust (the “Trust”). The Trust is an unincorporated open-ended trust governed by the laws of the Province of Ontario, Canada and is externally managed by DRI Capital Inc. ( “DRI Healthcare”). The Trust completed an initial public offer
Slide 3: Recent highlights
Recent highlights Royalty Transaction Refinancing Dividend Declaration Omidria Optimizing capital structure Quarterly cash distribution • Deployed $115 million on • Completed a refinancing of our • Declared a distribution of $0.085 expansion of royalty through an preferred securities per unit for Q2
Slide 4: Q1 financial highlights
Q1 financial highlights Normalized Total Cash Receipts1 Total Income Adjusted EBITDA1 $63.5 million $42.1 million $55.1 million +154% over Q1 2023 +49% over Q1 2023 +157% over Q1 2023 Sdffsffsssssssssssssscc Adjusted Cash Earnings per Declared Cash Distributions Adjusted EBITDA Margin1 Unit1 per Uni
Slide 5: Portfolio performance as of March 31, 2024
Portfolio performance as of March 31, 2024 ($ millions) Q1 2024 Q1 2023 % Change1 Q4 2023 % Change1 Total Cash Royalty Receipts2,3 $63.5 $23.4 172% $52.3 22% 31.6 23.2 - n/a 36 Milestone receipts – 21.0 Milestone receipts – 12.7 8.5 2.0 320 3.7 129 Milestone receipts – 5.0 - - n/a 0.4 (100) 8.6 3.3
Slide 6: 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 7: Investment highlights
Investment highlights Founded in 1989, DRI Healthcare is the pioneer of and a global leader in healthcare royalty investing DRI Healthcare believes it is well positioned to capitalize on generational industry growth delivering attractive uncorrelated cash flows Diversified portfolio of products by t
Slide 8: Preferred security refinancing
Preferred security refinancing Transaction rationale • Replaces $114.76 million principal amount of Series A and Series B preferred securities and approximately 6.37 million warrants Transaction Scale with $135.2 million principal amount of new Series C preferred securities and approximately 1.75 mi
Slide 9: Positive effect of compounding of cash flows
Positive effect of compounding of cash flows New asset Total Cash acquisitions Receipts1 Cash for Adjusted redeployment EBITDA1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 2 Cumulative effect of compounding Annual CF without compounding Annual CF with compounding Virtuous
Slide 10: Current deployment exceeds targets
Current deployment exceeds targets ($M) 1000 1-Feb-24 14-Aug-23 900 Additional milestones Actual deployment 25-Jul-23 800 29-Jun-23 700 8-Mar-232 25-Nov-22 600 30-Sep-22 500 400 9-Sep-22 300 30-Sep-21 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 Fe
Slide 11: Well capitalized for growth
Well capitalized for growth Royalties receivable $45.5 million1 Cash and cash Credit facility availability equivalents $66.6 million1 $251.3 million1 Significant capacity for further growth 1. As at March 31, 2024 11
Slide 12: Omidria expansion transaction
Omidria expansion transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $115 million up front purchase price Mature product brings stable sales plus up to $55 million in potential history and predictable growth milestones Anticipated significant 30% royalty rate on US net sales contribution to
Slide 13: Long-term drivers support royalty financing growth
Long-term drivers support royalty financing growth Five year forward projected Projected growth of worldwide Projected growth of worldwide pipeline value ($B) biopharma R&D spend ($B)2 medicine spend ($B)3 +24% +15% +39% 263 302 2,238 212 262 1,607 2019 2023 2023 2028E 2023 2028E • New modalities •
Slide 14: Growth across the biopharma industry
Growth across the biopharma industry Revenue growth from biotech ($B)1 R&D expenditure by large pharma ($B)1 1000 Increase over +$389 billion 180 25% forecast period +77% total growth 900 160 24% 800 23% 140 700 22% 120 600 21% 100 500 20% 80 400 19% 300 60 18% 200 40 17% 100 20 16% 0 0 15% 2014 201
Slide 15: Portfolio areas of focus
Portfolio areas of focus Clinical trial starts 20231 Top therapeutic areas - 2028 projected global spending ($B)2 Oncology 20% Other Immunology 9% 21% Diabetes 8% Oncology Cardiovascular 6% Estimated global 44% medicine spend Neurology 10% Neurology 5% forecast 2028 $2.2 trillion Respiratory 4% Endo
Slide 16: Loss of exclusivity fuels business development and expands royalty opportunity set
Loss of exclusivity fuels business development and expands royalty opportunity set Revenue loss from pending loss of exclusivity ($B)1 Trailing three-year average value of transactions ($B)2 60 The impact in the next five 7 years is expected to increase to $192 billion 6 50 5 40 4 30 3 20 2 10 1 0 0
Slide 17: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 160 14 38% 100 140 12 120 80 Total Proceeds ($B) 10 Number of IPOs 100 -14% 8 60 80 -40% 6 40 4 60 20 2 40 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 18: Robust pipeline
Robust pipeline $3.0 billion in opportunities Address important Provides strong Marketed by leading unmet needs with life- intellectual property biotech or biopharma changing therapies for and regulatory companies patients protection Further portfolio diversification and extension with attractive re
Slide 19: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended March 31, 2024 ($M)1 $180.1 ($9.4) $174.0 $6.1 ($1.0) $169.7 ($10.4) ($17.3) $4.9 $146.9 Adjusted EBITDA Margin1 87% Royalty Interest Total Income Net Change in Non-Cash Normalized Operating Management Net Change in Adjusted 1 I
Slide 20: Delivering on our long-term objectives
Delivering on our long-term objectives Guidance at IPO Guidance Today (Feb 2021) Initial target of Raised deployment target to Capital deployment target $650 – 750 million over 5 years over $1.25 billion over 5 years1 High-teens royalty income CAGR through Declining cash curve due to expected asset
Slide 21: 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 21
Slide 22: Contact Us
Contact Us David Levine ir@drihealthcare.com