Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Non-Deal Roadshow (November 2022)
23 slides from Dri Healthcare Trust's roadshow presentation, November 2022
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector November 2022
Slide 2: Disclaimer
Disclaimer Certain statements made in this 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 uncertainties, and undue reliance sh
Slide 3: Low risk exposure to rapid biopharma growth
Low risk exposure to rapid biopharma growth 12 months ended September 30, 2022 33-year1 Autoimmune Ophthalmology 30% 1% $93M history Total Income 21 Respiratory 10% $2B+ Royalty assets2 $87M capital deployed Hormone disorders 17 Dermatology 7% Adjusted EBITDA Products 67 4% 86% royalty acquisitions
Slide 4: A leading acquirer of pharmaceutical royalties
A leading acquirer of pharmaceutical royalties 1 Strong track record 2 Disciplined 3 Compounding growth of delivering high teens deployment has poised driven by the unique ability returns to investors over the company to show to reinvest free cash flow 16 years strong cash flow growth in attractive
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 Public Listing 2006 – 2008 2009 – 2013 2013 – 2018 2021 - present 19 New Royalties 27 New Royalties 15 New Royalties 7 New Royalties & 1 Loan valued at valued at valued at valued at up to $645M $730M1 $586M $
Slide 6: Delivering on our long-term strategy
Delivering on our long-term strategy At IPO Today 2025 target $345 million deployed + Exceed top end of initial target Capital deployment $650 – 750 million over 5 years $56 million in milestones and range options Flat to slightly growing cash Sustainable cash Declining cash curve due to 7% - 9% ann
Slide 7: Current deployment exceeds targets
Current deployment exceeds targets ($M) 03-Oct-22 400 350 21-Sep-22 300 21-Jul-22 30-Sep-21 250 28-Feb-22 200 Ahead of 2-year 25-Aug-21 ADDITIONAL MILESTONES target post-IPO 150 + OPTIONS 100 ACTUAL 50 0 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 Successful execution of IPO strat
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 $350B
Slide 9: Biotechs' limited cash reserves
Biotechs’ limited cash reserves Cash Runway for Unprofitable Biotechs (months) Q1 2022 Q2 2022 Q3 2022 (estimate) <12 <12 >24 >24 >24 <12 12-18 18-24 18-24 12-18 18-24 12-18 >24 months = 39% >24 months = 34% >24 months = 30% <12 months = 28% <12 months = 33% <12 months = 40% 70% of unprofitable NASD
Slide 10: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 140 130 14 100 120 -32.9% 12 110 80 Total Proceeds ($B) 10 100 Number of IPOs 90 -13.6% 8 60 80 6 70 40 -43.7% 4 60 20 50 2 40 Aug-21 Oct-21 Aug-22 Oct-22 Jan-21 Feb-21 Jan-22 Feb-22 Mar-21 Apr-21 Mar-22 Jun-21 Jul-21 Apr
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 $24.5 millio
Slide 13: Sustainable and efficient business model focused on cashflow
Sustainable and efficient business model focused on cashflow % Sales of leading therapies Sourcing, research New royalty Adjusted cash & deal execution acquisitions receipts1 Cash for Adjusted redeployment EBITDA1 Cash distributions Diversified portfolio generates significant cash to deploy to new r
Slide 14: Sustainable growth in cash flows and shareholder returns
Sustainable growth in cash flows and shareholder returns Cumulative Equity Value Creation ($M)1 350 300 250 200 150 100 50 Initial $62.5 million equity investment - 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Omidria Cumulative Cash Available for Reinvestment Cumulative Additional Ca
Slide 15: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area1 By Product1 Hormone Autoimmune disorders Rydapt 1% Zytiga Hematology 4% 2% 5% Natpara 4% 4% Dermatology Eylea Ophthalmology 5% Omidria 7% 30% 25% Empaveli 5% Respiratory 10% Oracea 7% Zejula 7% Spinal Muscular Spinraza Atrophy 18% 18% Oncology Xolair
Slide 16: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended September 30, 2022 ($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: Our key priorities
Our key priorities Execute on strong pipeline to acquire royalties on high-quality assets that meet Grow asset our investment criteria base Focus on long-term, sustainable growth in Accretive growth top line royalty receipts and cash flow per unit Strong unitholder returns Continue focus on unithold
Slide 18: Contact Us
Contact Us Dave Levine ir@drihealthcaretrust.com
Slide 19: Appendix
Appendix
Slide 20: 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 21: 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 22: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL 1 $10 million milestone payment if Zejula is approved by FDA for the $35 Million up front purchase price treatment of endometrial cancer by December 21, 2025 In development for metastatic castrate sensitive and resistant 0.5%
Slide 23: Omidria royalty transaction
Omidria royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH 1 Annual Royalty Receipt Caps ($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
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