Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Canaccord Genuity Growth Conference 2021
19 slides from Dri Healthcare Trust's conference presentation, Aug 12, 2021
Slide 1: Advancing Science in the Fast Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast Growing Pharmaceutical and Biotechnology Sector Canaccord Genuity Growth Conference| August 12, 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 are accelerating… growth in $233 $195 3.6% Prescription Sales (US$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 14 6 Products Royalty streams ~8 yr. $1B+ 2020 Global Sales Weighted average Including 10 remaining duration(1) Products 2 Products $5B+ 2020 Global Sales $64M 89% YTD 2021 Pro forma Total Cash Pro forma adjusted EBITDA Royalty Receipts(2) margin(3) (1) As of June
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW 2020 Worldwide Sales H1 2021 Worldwide Sales H1 2021 Pro Forma Cash Product Name Primary Marketer(s) Therapeutic Area Expected Royalty Expiry(2) (US$M)(1) (US$M)(1) Royalty Receipts (US$M) Core Products Rare Diseases $2,052 $1,020 $10.9 Q3 2031 Respiratory $3,276 $1,677 $3.7 Q2 20
Slide 9: Growth Strategy
GROWTH STRATEGY Acquire traditional pharmaceutical royalties Growth strategy supported by DRI’s proven origination capabilities Create new synthetic royalty streams 9
Slide 10: Leveraging Our Strengths to Drive Growth
LEVERAGING OUR STRENGTHS TO DRIVE GROWTH Growth-focused, accretive Target transaction range represents an underserved niche transactions of $25M - $150M with high barriers to entry that allows us to source and execute attractive, often proprietary, transactions Medically necessary products Other
Slide 11: 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 12: 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 • $120M+ donated to NYU to support medical
Slide 13: Q2 2021 Financial Results – Portfolio Highlights
Q2 2021 FINANCIAL RESULTS – PORTFOLIO HIGHLIGHTS Cash Royalty Receipts (US$M) For the three months ended June 30, 2021 June 30, 2020 % Change Core Products Eylea(1) 4,352 3,644 19% FluMist 23 - n/a Natpara 513 305 68% Rydapt 3,856 1,970 96% Spinraza 5,615 5,642 - Xolair 1,417 1,406 1% Zytiga 9,498 8
Slide 14: Strong YTD Cash Flow Generation
STRONG YTD CASH FLOW GENERATION Pro Forma Adjusted EBITDA for the Six Months Ended June 30, 2021 (US$M)(1) $27.8 $63.9 ($3.5) Pro Forma ($3.0) $56.8 Adjusted EBITDA ($0.6) Margin(1)(4) ~89% $36.1 Adjusted Cash Earnings per Unit(5) US$0.97 Royalty Net Change in Pro Forma Total Cash Operating Manageme
Slide 15: Well Capitalized for Growth
WELL CAPITALIZED FOR GROWTH Strong balance sheet at June 30, 2021 US$145.7 million of cash and cash equivalents available to support acquisitions and operations (including US$30.1 million held in trust subject to July 15 debt payment) US$29.7 million of royalties receivable US$273.7 milli
Slide 16: Outlook and Summary
OUTLOOK AND SUMMARY Strong performance of our existing assets Target sustainable On track to deliver on growth targets compounded growth in cash US$650 to US$750 million five-year aggregate acquisition target royalty receipts Acquisition pipeline remains strong and growing; transactions adva
Slide 17: Appendices
Appendices DRI
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 — Canaccord Genuity Growth Conference 2021 on 6ix