Dri Healthcare Trust · TSX:DHT.U
Dri Healthcare Trust — Investor Presentation (May 2024)
40 slides from Dri Healthcare Trust's investor presentation, May 2024
Slide 1: Advancing Science in the Fast-Growing Pharmaceutical and Biotechnology Sector
ADVANCING SCIENCE in the Fast-Growing Pharmaceutical and Biotechnology Sector May 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 twelve months ended March 31, 2024 35-year1 Dermatology $179M History 25 3% Total Income Royalty assets $3.0B+1 $147M Capital deployed Neurology 9% 19 Hematology Adjusted EBITDA2 Products 16% 741 87% Royalty acqui
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 6
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 Five year forward projected Projected growth of worldwide Projected growth of worldwide pipeline value ($B) biopharma R&D spend ($B)2 medicine spend ($B)3 +24% +15% +39% 263 302 2,238 212 262 1,607 2019 2023 2023 2028E 2023 2028E • New modalities •
Slide 12: Growth across the biopharma industry
Growth across the biopharma industry Revenue growth from biotech ($B)1 R&D expenditure by large pharma ($B)1 1000 Increase over +$389 billion 180 25% forecast period +77% total growth 900 160 24% 800 23% 140 700 22% 120 600 21% 100 500 20% 80 400 19% 300 60 18% 200 40 17% 100 20 16% 0 0 15% 2014 201
Slide 13: Portfolio areas of focus
Portfolio areas of focus Clinical trial starts 20231 Top therapeutic areas - 2028 projected global spending ($B)2 Oncology 20% Other Immunology 9% 21% Diabetes 8% Oncology Cardiovascular 6% Estimated global 44% medicine spend Neurology 10% Neurology 5% forecast 2028 $2.2 trillion Respiratory 4% Endo
Slide 14: Loss of exclusivity fuels business development and expands royalty opportunity set
Loss of exclusivity fuels business development and expands royalty opportunity set Revenue loss from pending loss of exclusivity ($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 $192 billion 6 50 5 40 4 30 3 20 2 10 1 0 0
Slide 15: State of the biotech market
State of the biotech market Biotech IPOs1 Biotech Equities Performance2 16 120 160 14 38% 100 140 12 120 80 Total Proceeds ($B) 10 Number of IPOs 100 -14% 8 60 80 6 -40% 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
Slide 16: Robust pipeline
Robust pipeline $3.0 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 17: 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 18: 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 19: Robust diversified portfolio
Robust diversified portfolio By Therapeutic Area By Product Dermatology Other Lysosomal Storage 3% Empaveli/Syfovre 5% Disorder 4% Oracea 3% Immunology 3% 5% Xenpozyme Omidria 4% 27% Oncology Neurology Zejula 32% 9% 4% Xolair 5% Hematology Spinraza 16% 9% Vonjo 15% Orserdu Ophthalmology 25% 31% No i
Slide 20: Q1 2024 financial highlights
Q1 2024 financial highlights Normalized Total Cash Receipts1 Total Income Adjusted EBITDA1 $63.5 million $42.1 million $55.1 million +154% over Q1 2023 +49% over Q1 2023 +157% over Q1 2023 Sdffsffssssssssssssssscc Declared Cash Distributions Adjusted Cash Earnings per Adjusted EBITDA Margin1 per Uni
Slide 21: Strong cash generation
Strong cash generation Adjusted EBITDA for the Last Twelve Months Ended March 31, 2024 ($M)1 $180.1 ($9.4) $174.0 $6.1 ($1.0) $169.7 ($10.4) ($17.3) $4.9 $146.9 Adjusted EBITDA Margin1 87% Royalty Interest Total Income Net Change in Non-Cash Normalized Operating Management Net Change in Adjusted 1 I
Slide 22: Omidria expansion transaction
Omidria expansion transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $115 million up front purchase price Mature product brings stable sales plus up to $55 million in potential history and predictable growth milestones Anticipated significant 30% royalty rate on US net sales contribution to
Slide 23: Orserdu royalty transactions
Orserdu royalty transactions TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Orserdu I Approved by the FDA in January 2023 $85 million up front purchase price and the EMA in September 2023 for Mid single digit tiered royalty on advanced/metastatic breast cancer worldwide net sales patients with ESR1
Slide 24: Vonjo II royalty transaction
Vonjo II royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $66 million purchase price for tiered First year of sales strongly exceeded royalty on worldwide net sales analyst consensus estimates Approved by the FDA in February $6.5 million payment made to CTI 2022 as the only treatme
Slide 25: Portfolio performance
Portfolio performance Total Cash Royalty Receipts1 Net Book Value ($ millions) Therapeutic Area LTM 03/31/2024 03/31/2024 Total $168.1 $789.5 Oncology 58.2 200.2 Hematology 17.7 118.0 Lysosomal Storage Disorder 0.7 28.3 Ophthalmology 18.3 213.1 Oncology 3.3 29.8 Hematology / Ophthalmology 1.7 24.1 D
Slide 26: Growth opportunities from existing assets
Growth opportunities from existing assets1 Phase 1 Phase 2 Phase 3 Phase 4 RESPOND: Spinraza in patients who had received Zolgensma Spinraza ASCEND: Higher dose Spinraza in patients who had received Evrysdi DEVOTE: Higher dose Spinraza Vonjo PACIFICA: Confirmatory trial in Myelofibrosis FIRST: 1L tr
Slide 27: Trust units are undervalued relative to royalty peers
Trust units are undervalued relative to royalty peers1 Price / Price / book operating Dividend yield cash flow 1.2x 5.7x2 4.9% 1.9x 5.6x 2.5% 3.3x Neg 0.0% 1.7x 24.4x 0.0% 4.0x 23.3x 1.1% 3.4x 31.5x 1.2% Valuation comps highlight the Trust’s underlying value 1. Information sourced from the Trust’s Q
Slide 28: Committed to best practices in ESG
Committed to best practices in ESG Environmental Social Governance Building a platform for sustainability Valuing diversity and community Accountability and integrity as core support values • Review of sustainability practices of our • Highly diverse and inclusive team • Best practice governance pol
Slide 29: 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 29
Slide 30: Contact Us
Contact Us David Levine ir@drihealthcare.com
Slide 31: Appendix A – Deal Summaries
DRIHEALTHCARE Appendix A - Deal Summaries S é = aie
Slide 32: Tzield royalty transactions
Tzield royalty transactions ACQUISITION FROM MACROGENICS SALE TO SANOFI Sanofi announced agreement to $100 million up front purchase price acquire Provention Bio days after for a single digit royalty on the Trust’s acquisition of the Provention Bio’s worldwide net sales royalty Up to a $50 million p
Slide 33: Xenpozyme royalty transaction
Xenpozyme royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $26.5 million in potential $30 million up front purchase price milestone payments based on cumulative royalties received First and only approved product Approximately 1% royalty on for the treatment of Acid worldwide sales
Slide 34: Omidria I royalty transaction
Omidria I royalty transaction TRANSACTION HIGHLIGHTS STRUCTURED GROWTH Annual Royalty Receipt Caps ($M) $30 $26.5 million in potential $125 million up front purchase price, milestone payments based on 26.25 27.50 subject to annual cash receipt caps cumulative royalties 25.00 25.00 received 25.00 25.
Slide 35: Zejula royalty transaction
Zejula royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL $10 million milestone payment if Zejula is approved by FDA for the $35 million up front purchase price treatment of endometrial cancer by December 31, 2025 In development for metastatic castrate sensitive and resistant 0.5% ne
Slide 36: Empaveli royalty transaction
Empaveli royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Represents a significant $28.2 million purchase price1 plus a advancement in the standard of $4.0 million potential milestone care for Paroxysmal Nocturnal payment Hemoglobinuria Approved as the first and only <1% royalty on
Slide 37: Oracea royalty transaction
Oracea royalty transaction TRANSACTION HIGHLIGHTS STRONG GROWTH POTENTIAL Immediate accretive value with $50.5 million purchase price for substantial royalty receipts netted royalties on worldwide sales out of purchase price Among leading treatment options Two additional royalty interests for managi
Slide 38: 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 provided downside protection if approval not granted - Funding for Vonjo launch $60 million tiered royalty - Sliding royalty rates as annual sales increase Upo
Slide 39: Appendix B – Industry Metrics
Appendix B – Industry Metrics
Slide 40: Industry Metrics
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 benchmark. The investment characteristics of su
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