Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — 2024 Bloom Burton Healthcare Investor Conference
24 slides from Dri Healthcare Trust's conference presentation, Apr 17, 2024
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector April 17, 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: Seeks to provide low risk exposure to rapid biopharma growth
Seeks to provide low risk exposure to rapid biopharma growth Ophthalmology 31% For the year ended December 31, 2023 35-year1 Dermatology $166M History Endocrinology 1% 26 4% Total Income Royalty assets $3.0B+1 $113M Capital deployed Neurology 9% 20 Hematology Adjusted EBITDA2 Products 15% 741 86% Ro
Slide 4: 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 5: Experienced and engaged team
Experienced and engaged team Behzad Khosrowshahi Navin Jacob Chris Anastasopoulos Ali Hedayat Chief Executive Officer EVP & Chief Investment EVP & Chief Financial Board Member / Investment Officer Officer Committee Member 22 years with 2 years with 8 years with 18 years with DRI Healthcare DRI Healt
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: 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 13 New Royalties & 1 Loan valued at valued at valued at valued at up to $645M $730M2 $586M $987M3 G
Slide 8: 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 $1.25 billion over 5 years1 High-teens royalty income CAGR through Declining cash curve due to expected asset
Slide 9: Current deployment exceeds targets
Current deployment exceeds targets ($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 10: Pharmaceutical royalty model
Pharmaceutical royalty model TRADITIONAL SYNTHETIC ROYALTY ROYALTY acquisition acquisition opportunities opportunities Each constituent sells royalties for different reasons Inventors Academic institutions Drug developers Drug marketers sell royalties for tax planning sell royalties to offset sell r
Slide 11: 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 ($B)2 Medicine Spend ($B)3 +49% +15% +39% 6,147 302 2,238 262 4,126 1,607 2017 2022 2023 2028E 2023 2028E • Genomics • Pace of inn
Slide 12: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 160 14 42% 100 140 12 120 80 Total Proceeds ($B) 10 Number of IPOs 100 -8% 8 60 80 -32% 6 40 4 60 20 2 40 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 13: US SMID biotechs' limited cash reserves
US SMID biotechs’ limited cash reserves Net Loss vs. Capital Raised ($B)1 Cash Runway for Unprofitable NASDAQ Biotechs2 14 12 ≥24 10 <12 8 YE 2023 Estimate 6 18-24 4 2 12-18 0 3Q22 4Q22 1Q23 2Q23 3Q23 • 43% have cash runway of less than 12 months • 30% have cash runway between 12-24 months Net Loss
Slide 14: 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 15: Robust pipeline
Robust pipeline $3.7 billion in opportunities1 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 r
Slide 16: Proven track record of closing accretive transactions
Proven track record of closing accretive transactions Investment Thesis Transaction Size Uncapped transaction on established product $125 million Up to $170 million1 providing cash accretion Newly approved and first in class oncology product $85 million Up to $140 million2 with uncapped growth poten
Slide 17: 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 18: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area1 By Product1 Dermatology 4% Endocrinology Other Lysosomal Storage 1% Empaveli/Syfovre 5% Disorder Oracea 3% 4% 3% Immunology Xenpozyme Omidria 5% 4% Oncology 27% 31% Zejula Neurology 4% 9% Xolair 5% Spinraza Hematology 9% 15% Vonjo 15% Orserdu Ophthal
Slide 19: Preferred security refinancing
Preferred security refinancing Transaction rationale • Replaces US$114.76 million principal amount of Series A and Series B preferred securities and approximately 6.4 million Transaction Scale warrants with US$135.2 million principal amount of new Series C preferred securities and approximately 1.7
Slide 20: Strong cash generation
Strong cash generation Adjusted EBITDA for the Year Ended December 31, 2023 ($M)1 $7.4 $166.3 ($34.0) $158.9 ($1.1) $131.2 ($9.4) ($14.5) $5.9 $113.2 Adjusted EBITDA Margin1 86% Royalty Total Interest Total Income Net Change in Non-Cash Normalized Operating Management Net Change in Adjusted Income a
Slide 21: Sustainable value creation
Sustainable value creation Adjusted Cash Earnings per Unit $3.00 $2.50 $2.53 +37% $2.00 Adjusted Cash $1.85 $1.87 Earnings per Unit1 $1.50 $2.53 basic $1.00 $2.52 diluted $0.50 $0.00 2021 2022 2023 Strong performance drives accretive value for unitholders 1. Adjusted Cash Earnings per Unit is a non-
Slide 22: 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 22
Slide 23: Contact Us
Contact Us David Levine ir@drihealthcare.com
Slide 24: Appendix – Industry Metrics and Ratios
Appendix – Industry Metrics and Ratios Industry Metrics References in this presentation to a securities index or other benchmark are made for informational purposes only and an investment in the Trust is unlike an investment in an index of securities or the aggregate funds constituting such benchmar
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