Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Investor Presentation (February 2023)
27 slides from Dri Healthcare Trust's investor presentation, February 2023
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector February 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 12 months ended September 30, 2022 Autoimmune 34-year1 Ophthalmology 28% 1% $93M History Respiratory Total Income 22 9% $2.5B+ Royalty assets2 $87M Hormone Capital deployed 18 Dermatology disorders 6% Adjusted EBITDA 4% Products 69 86% Royalty acquisitions
Slide 4: A leading healthcare company focused on purchasing royalties on best-in-class therapeutics
A leading healthcare company focused on purchasing royalties on best-in-class therapeutics that treat serious medical conditions 1 specialized Seasoned team of investment 2 Disciplined capital allocation to growth 3 Exceptional execution from a kind database professionals with life assets based on r
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 – 2008 2009 – 2013 2013 – 2018 2021 - present 19 New Royalties 27 New Royalties 15 New Royalties 8 New Royalties & 1 Loan valued at valued at valued at valued at up to $645M $730M1 $586M $458M2 IRR I
Slide 6: Delivering on our long-term strategy
Delivering on our long-term strategy At IPO Today 2025 target $375 million deployed + Exceed top end of initial target Capital deployment $650 – 750 million over 5 years $82.5 million in milestones and range options Flat to slightly growing cash Sustainable cash Declining cash curve due to 7% - 9% a
Slide 7: Current deployment exceeds targets
Current deployment exceeds targets 28-Nov-22 ($M) 450 03-Oct-22 400 350 12-Sep-22 300 30-Sep-21 21-Jul-22 250 28-Feb-22 Ahead 200 of ADDITIONAL MILESTONES 2-year 25-Aug-21 150 + OPTIONS target post-IPO 100 ACTUAL 50 0 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 Successful executio
Slide 8: Industry requires significant cash for R&D
Industry requires significant cash for R&D Worldwide Total Pharmaceutical R&D Spend ($B)1 Total R&D spend 2021-2028 300 $1.8 trillion 280 260 240 220 200 180 160 140 120 100 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Expected annual R&D expenditure in excess of $350B
Slide 9: Biotechs' limited cash reserves
Biotechs’ limited cash reserves Cash Runway for Unprofitable Biotechs (months) Q1 2022 Q2 2022 Q3 2022 (estimate) <12 <12 >24 >24 >24 <12 12-18 18-24 18-24 12-18 18-24 12-18 >24 months = 39% >24 months = 34% >24 months = 30% <12 months = 28% <12 months = 33% <12 months = 40% 70% of unprofitable NASD
Slide 10: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 140 130 14 100 120 12 8.6% 110 80 Total Proceeds ($B) 10 100 Number of IPOs 90 8 60 -2.5% 80 6 70 -36.9% 40 4 60 20 50 2 40 Aug-21 Oct-21 Aug-22 Oct-22 Jan-21 Feb-21 Jan-22 Feb-22 Jan-23 Mar-21 Apr-21 Mar-22 Jun-21 Jul-21
Slide 11: 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 12: Proven track record of sourcing and closing accretive transactions
Proven track record of sourcing and closing accretive transactions Investment Thesis Transaction Size $110.0 million High-quality oncology product with strong + growth potential $25.0 million in potential milestones Dermatology product with existing $50.5 million commercial track record $24.5 millio
Slide 13: Sustainable and efficient business model focused on cashflow
Sustainable and efficient business model focused on cashflow % Sales of leading therapies Sourcing, research New royalty Adjusted cash & deal execution acquisitions receipts1 Cash for Adjusted redeployment EBITDA1 Cash distributions Diversified portfolio generates significant cash to deploy to new r
Slide 14: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area1 By Product1 Hormone disorders Autoimmune Rydapt Hematology Zytiga 4% 1% Natpara 4% 2% 5% 4% Dermatology Eylea Ophthalmology 6% 5% Omidria 28% 24% Empaveli Respiratory 5% 9% Xenpozyme 6% Oracea 6% Spinraza 17% Rare diseases Zejula 23% Oncology 6% 24%
Slide 15: Last 12 months financial highlights
Last 12 months financial highlights $101 million $93 million $87 million Total Cash Receipts1 Total Income Adjusted EBITDA1 (Q3 2022 - $19 million) (Q3 2022 - $27 million) (Q3 2022 – $16 million) $20 million $1.90 $0.52 Distribution per unit Net Earnings and Other Adjusted Cash Earnings per Comprehe
Slide 16: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended September 30, 2022 ($M)1 $9.5 ($0.7) $101.4 $5.4 $92.6 ($7.7) ($0.1) ($6.6) $87.0 Adjusted EBITDA $87.2 Margin1 86% Adjusted Cash Earnings per Unit4 Royalty Income Interest Income on Total Income Net Change in Non-Cash Royalties
Slide 17: 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 Upon approv
Slide 18: Empaveli royalty transaction
Empaveli royalty transaction 1 TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Empaveli (pegcetacoplan, marketed as Aspaveli in EU) represents a $24.5 million purchase price significant advancement in the standard of care for paroxysmal nocturnal hemoglobinuria Pegcetacoplan is also in <1% royalty on
Slide 19: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $10 million milestone payment if Zejula is approved by FDA for the $35 Million up front purchase price treatment of endometrial cancer by December 21, 2025 In development for metastatic castrate sensitive and resistant 0.5%
Slide 20: Omidria royalty transaction
Omidria royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH 1 Annual Royalty Receipt Caps ($M) $125 Million up front purchase price, $30 subject to annual cash receipt caps 26.25 27.50 25.00 25.00 25.00 25.00 $25 20.00 $20 Approved for intracameral use during cataract surgery or $15 intraoc
Slide 21: Xenpozyme royalty transaction
Xenpozyme royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $26.5 million in potential $30 Million up front purchase price milestone payments based on cumulative royalties received First and only approved product for Approximately 1% royalty on the treatment of Acid worldwide sale
Slide 22: Portfolio performance
Portfolio performance ($ thousands) Total Cash Royalty Receipts1,2 Net Book Value Asset Primary Marketer(s) Therapeutic Area LTM 9/30/22 9/30/22 Hematology - 24,036 Ophthalmology 13,547 24,492 Vaccine 3,128 2,803 Endocrinology 2,684 21,240 Ophthalmology - 125,603 Dermatology 8,120 33,763 Oncology 10
Slide 23: Growth opportunities from existing assets
Growth opportunities from existing assets Phase 1 Phase 2 Phase 3 Phase 4 Rydapt + HDM201 in r/r AML with FLT mutation Rydapt Rydapt + decitabine in unfit AML patients DEVOTE: Higher dose Spinraza Spinraza ASCEND: Higher dose Spinraza in patients who had received Evrysdi RESPOND: Spinraza in patient
Slide 24: Well capitalized for growth
Well capitalized for growth $20.5 million1 Cash and cash equivalents + Significant $36.4 million1 capacity for Royalties receivable further growth + $216.9 million1,2 Drawn on credit facilities Significant capital available for deployment 1. As a September 30, 2022. 2. Does not include $30 million d
Slide 25: 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 26: Our key priorities
Our key priorities Execute on strong pipeline with a focus on long-term, sustainable growth generating Accretive strong unitholder returns growth Talent Invest in our people and build the development industry leading royalty investment team Uncompromising execution Operate at peak performance in all
Slide 27: Contact Us
Contact Us Dave Levine ir@drihealthcare.com
DRI Healthcare Trust — Investor Presentation (February 2023) on 6ix