Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Q4 2021 Earnings Presentation
21 slides from Dri Healthcare Trust's earnings presentation, Mar 8, 2022
Slide 1: Advancing Science in the Fast Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast Growing Pharmaceutical and Biotechnology Sector Q4 and FY2021 Earnings Call | March 8, 2022
Slide 2: Disclaimer
DISCLAIMER Certain statements made in this fiscal year 2021 earnings call presentation, including responses to questions, may contain forward- looking statements within the meaning of the safe harbor provisions of Canadian provincial securities laws. Forward-looking statements involve risks and unce
Slide 3: Agenda
AGENDA 1. 2021 Accomplishments 2. Growth Environment 3. Business Overview 4. Financial Results 5. Question & Answer All amounts are expressed in U.S. dollars, unless indicated otherwise. 3
Slide 4: 2021 Accomplishments
2021 ACCOMPLISHMENTS Strong Accretive Poised for Unitholder performance growth growth returns $116 million PF Two transactions $154 million credit Returned $21 Total Cash Receipts1 totaling up to $186 facility availability2 million in cash to million unitholders in $101 million $62 milli
Slide 5: Our Business Model
OUR BUSINESS MODEL DRI Healthcare Trust utilizes our high operating leverage to generate sustainable, growing cash flow through ownership of pharmaceutical royalty assets Wealth diversification or Fund raising for capital Non-dilutive financing for Non-dilutive financing for using proceeds for estat
Slide 6: Long History of Value Creation
LONG HISTORY OF VALUE CREATION 2006 – 2008 2009 – 2013 2013 – 2018 2021 - present 4 Royalties & 19 Royalties 27 Royalties 15 Royalties 1 Loan valued at valued at valued at valued at up to $645M $730M1 $586M $186M2 pacritinib 1. Includes $82 million in capital deployed via co-investments through RMF
Slide 7: Expanding Opportunity Universe
EXPANDING OPPORTUNITY UNIVERSE The opportunity for royalty transactions continues to be very strong as FDA approvals have maintained their historic highs FDA Approval of New Molecular Entities (NMEs) 70 Number of NewMolecular Entities Approved by FDA 59 60 53 50 50 48 45 46 25 41 22 39 40 24 27 30 2
Slide 8: Compelling Royalty Opportunity
COMPELLING ROYALTY OPPORTUNITY Global spending on medicine is expected to driving R&D expenditure and generating an continue to show strong growth unprecedented demand for external capital Global Medicine Spending Worldwide Total R&D Expenditure 2,000 300 1,800 Total Worldwide Pharmaceutical R&D Spe
Slide 9: State of the Biotech Market
STATE OF THE BIOTECH MARKET The rapid expansion of the biotech market with coupled with a struggling equity capital >500 IPOs in the last 10 years markets for biotech companies Biotech IPOs Biotech Equities Performance 16 160 140 14 140 130 120 12 120 +17.6% Total Proceeds (US$ billions) Indexed Clo
Slide 10: Growth of Therapeutic Areas
GROWTH OF THERAPEUTIC AREAS Oncology and immunology spending expected to continue to lead growth in global spending, therapeutic areas where we have significant experience and expertise 2026 Projected Spending by Therapeutic Area DRI’s Oncology Experience 2022-2026 CAGR 9-12% Oncology 306 6-9% Immun
Slide 11: 2021 Pipeline Funnel
2021 PIPELINE FUNNEL We saw significant number of opportunities in 2021 from the time of our IPO, and continue to evaluate a number of attractive potential transactions Preliminary Assessment 140+ preliminary assessment Second Level 40 second level due diligence Diligence Letters of Intent 5 LOIs su
Slide 12: DRI Portfolio Metrics
DRI PORTFOLIO METRICS 18 14 ~9 years Weighted average Royalty assets 1 Products1 remaining duration1 8 5 Products Therapeutic areas $1B+ Annual Global Sales (1) Pro forma including Vonjo royalty per the CTI transaction and the products acquired in the Oracea transactions. 12
Slide 13: 2021 Transactions
2021 TRANSACTIONS Secured long-term royalty stream on high quality Immediately accretive acquisition of established high product, with immediate contribution to cash flow quality product $50 million secured loan $51 million gross purchase price $60 million tiered royalty upon FDA approval (gra
Slide 14: CTI BioPharma / Pacritinib
CTI BIOPHARMA / PACRITINIB Our transaction with CTI BioPharma highlights DRI’s ability to provide flexibility in structuring to meet our partners’ needs balanced with an appropriate risk tolerance US$50 million secured loan • Funding for pacritinib launch preparation Pre-Approval • Secured loan prov
Slide 15: Portfolio Performance
PORTFOLIO PERFORMANCE DHT’s core assets have continued to show strong performance (US$ thousands) Pro Forma Total Cash Royalty Receipts1 Net Book Value Primary Marketer(s) Therapeutic Area Q4 2021 Q4 2020 % Change 2021 2020 % Change 12/31/21 Core Products Ophthalmology 9,6822 7,8142 24% 18,406 15,65
Slide 16: Growth Opportunities from Existing Assets
GROWTH OPPORTUNITIES FROM EXISTING ASSETS There are a number of undergoing clinical trials on our Core Products that could create growth opportunities 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 Spi
Slide 17: 2021 Financial Highlights
2021 FINANCIAL HIGHLIGHTS $82 million $116 million $101 million Total Total Cash Adjusted EBITDA1 Income Receipts1 87% $1.85 $21 million Adjusted EBITDA Adjusted Cash Cash Returned to Margin1 Earnings per Unit1 Unitholders2 1. Total Cash Receipts and Adjusted EBITDA are non-GAAP measures and Adjuste
Slide 18: Strong YTD Cash Flow Generation
STRONG YTD CASH FLOW GENERATION Pro Forma Adjusted EBITDA for the Year Ended December 31, 2021 (US$M)(1) Pro Forma ($7.6) Adjusted EBITDA $1.9 ($0.5) $115.6 ($6.3) Margin(4) $34.3 ($1.1) $100.6 87% $79.9 Adjusted Cash Earnings per Unit(5) US$1.85 Royalty Net Change in Interest Income Non-Cash Pro Fo
Slide 19: Cash Distributions
CASH DISTRIBUTIONS Our distribution policy, including the increase to our quarterly distribution in Q4 and the special distribution declared in December, reflects our commitment to returning cash to unitholders 2021 Cash Distributions per Unit1 $0.30 $0.2950 $0.25 Total distributions $0.20 $0.2200 p
Slide 20: Strong Balance Sheet
STRONG BALANCE SHEET As at December 31, 2021: $62 million of cash and cash equivalents $30 million of royalties receivable On October 22, 2021, a subsidiary of the Trust secured 3-year senior secured revolving facilities with a syndicate of banks: $175 million investment credit facility +
Slide 21: 2022 Priorities
2022 PRIORITIES Grow asset Accretive Unitholder base growth returns Execute on strong Be in position to Continue focus on pipeline to acquire sustainably grow unitholder returns royalties on high top line royalty and appropriate quality assets that receipts and cash distribution policy meet our flow