– Uncapped deal structure complements current
VONJO royalty entitlement –
– Now projecting Total Income CAGR at high end
of our 7-9% guidance through 2025 and flat to slightly growing
Total Income until 2030 –
– The transaction extends DRI's overall
portfolio duration to over 10 years –
TORONTO, July 7, 2023
/CNW/ - DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (the
"Trust" or "we"), a global leader in providing financing to advance
innovation in the life sciences industry, is pleased to announce
that it has agreed to purchase of a royalty interest in the
worldwide net sales of VONJO from S*Bio Pte Ltd for US$66 million.
VONJO is an oral, small-molecule JAK2 inhibitor currently
marketed by Swedish Orphan Biovitrum AB ("Sobi"), used for the
treatment myelofibrosis ("MF") patients with severe
thrombocytopenia. It was approved by the U.S. Food and Drug
Administration ("FDA") in February
2022 and is the only approved treatment for the
indication.
"VONJO has addressed a significant unmet need in cytopenic MF
patients and has seen an incredible uptake in its first year on the
market," said Behzad Khosrowshahi,
Chief Executive Officer of the Trust. "We are excited to purchase a
second royalty on this long duration, high-quality asset. This is
the second royalty acquisition our team has completed in the past
month and is a testament to our team's ability to execute on our
unique pipeline opportunities. With this transaction, DRI
Healthcare has now deployed US$636
million with an additional US$59
million in potential milestone payments since our IPO. With
a pipeline of over US$2.5 billion in
high-quality assets, we are confident in our ability to reach our
deployment target of US$850-900
million by the end of 2025 and to continue to generate value for
our unitholders."
Speaking on behalf of the Trust's investment manager, Chief
Investment Officer Navin Jacob
commented, "For MF patients with thrombocytopenia, VONJO is the
only FDA approved option, thereby providing a protected niche
opportunity for the product. Favourable guidelines and labeling
have allowed VONJO to grow faster than our initial expectations and
as such we were excited to increase our exposure to this product.
We thank the S*Bio team for working with us to complete this
transaction."
The transaction entitles DRI Healthcare to a tiered royalty on
worldwide net sales of VONJO. DRI Healthcare is entitled to receive
quarterly royalty payments based on sales beginning April 1, 2023, with the first payment expected to
be received in Q3 2023. VONJO is patent protected until at least
January 2034. DRI Healthcare is also
entitled to receive up to US$107.5
million in milestone payments.
The transaction is subject to customary closing conditions and
is expected to close by the end of the month.
Guidance Update
As a result of the VONJO transaction, we believe we will achieve
the high end of our target CAGR range of 7-9% for Total Income
through 2025. In addition, we anticipate the combined effect of
this transaction and the recently announced purchase of
Orserdu™ royalties will provide visibility on stable to
slightly growing Total Income through 2030, without accounting for
growth from any future royalty transactions, and an extension of
our overall portfolio duration to over 10 years. "We are very
excited to be able to achieve this important growth milestone and
look forward to the continued long-term growth of the Trust," said
Behzad Khosrowshahi.
Recent Updates in Relation to
TZIELD® Sale
On March 8, 2023, DRI Healthcare
announced the US$100 million
acquisition of a royalty interest on worldwide net sales of TZIELD.
On April 27, 2023, DRI Healthcare
sold the TZIELD royalty interest to an affiliate of Sanofi SA for
US$210 million. In relation to the
sale, DRI Healthcare announced a US$20
million aggregate special cash distribution to unitholders.
The distribution will be paid on July 20,
2023 to unitholders of record on June
30, 2023. The final per unit amount will be US$0.5334 based on the 37,494,980 units
outstanding as of June 30, 2023.
The relatively unique set of circumstances that allowed the
Trust to monetize the TZIELD royalty in a highly accretive
transaction accelerated the payment of performance fees pursuant to
the Trust's management agreement with its manager, DRI Capital Inc.
("DRI Capital"). The Trust anticipates performance fees of
approximately US$17-20 million being
payable to DRI Capital for the quarter ended June 30, 2023, in accordance with the terms of
the management agreement. Performance fees are based on a number of
assumptions and will be subject to verification in accordance with
the terms of the management agreement. While management believes
that DRI Healthcare's attractive pipeline of deals will continue to
generate returns for the Trust and its unitholders, thereby
triggering future performance fees, the magnitude and timing of the
current performance fee payable is directly attributable to the
particular circumstances of the TZIELD transaction.
About VONJO (pacritinib)
VONJO is an oral kinase inhibitor with activity against
wild-type JAK2, mutant JAK2V617F form and FMS-like tyrosine kinase
3 (FLT3) which contribute to signalling of a number of cytokines
and growth factors that are important for hematopoiesis and immune
function. Myelofibrosis is often associated with dysregulated JAK2
signalling. Pacritinib has higher inhibitory activity for JAK2 over
other family members, JAK3 and TYK2. At clinically relevant
concentrations, pacritinib does not inhibit JAK1. In a clinical
study of MF patients with low platelet count (below 50 × 109/L),
use of VONJO resulted in a clinically significant reduction in
spleen volume compared to the best available therapy.
VONJO is indicated for the treatment of adults with intermediate
or high-risk primary or secondary (post-polycythemia vera or
post-essential thrombocythemia) myelofibrosis with a platelet count
below 50 × 109/L. This indication was approved by the FDA under
accelerated approval based on spleen volume reduction. Continued
approval for this indication may be contingent upon verification
and description of clinical benefit in a confirmatory trial(s).
About DRI Healthcare
Trust
DRI Healthcare Trust is managed by DRI Capital, the pioneer in
global pharmaceutical royalty monetization with a more than 30-year
history of accelerating innovation by providing capital to
inventors, academic institutions and biopharma companies. Since
our founding in 1989, DRI Capital has deployed more than
US$2.5 billion, acquiring more than
70 royalties on 40-plus drugs, including Eylea, Spinraza, Zytiga,
Remicade, Keytruda and Stelara. DRI Healthcare Trust's units are
listed and trade on the Toronto Stock Exchange in Canadian dollars
under the symbol "DHT.UN" and in U.S. dollars under the symbol
"DHT.U". To learn more, visit drihealthcare.com or follow us
on LinkedIn. References in this news release to "DRI Healthcare"
refer to the Trust and its subsidiaries, on a consolidated
basis.
Caution concerning forward-looking
statements
This news release may contain forward-looking information within
the meaning of applicable securities legislation. Forward-looking
information generally can be identified by the use of words such as
"expect", "continue", "anticipate", "intend", "aim", "plan",
"believe", "budget", "estimate", "forecast", "foresee", "close to",
"target" or negative versions thereof and similar expressions. Some
of the specific forward-looking information in this news release
may include, among other things, statements regarding our
deployment target, the timing of the first royalty payment
pursuant to the VONJO transaction, our growth in Total Income, our
overall portfolio duration and our ability to reach our targets.
This forward-looking information is subject to a number of
assumptions, including potential royalty transactions which we
reasonably expect to complete based on our historical track record,
the terms and conditions of the transaction documentations, and our
assumptions with respect to future sales of the products underlying
our existing royalties. We are not providing any estimates with
respect to Total Income beyond 2030. Forward-looking information is
subject to a number of risks and uncertainties, many of which are
beyond the Trust's control that could cause actual results to
differ materially from those that are disclosed in or implied by
such forward-looking information. These risks and uncertainties
include, but are not limited to, those that are disclosed in the
Trust's most recent annual information form. The anticipated
royalty terms for products in our portfolio may be shorter than the
period of patent protection for the applicable product, depending
on many factors, including the entry of generic drugs into the
marketplace and competition, all of which are outside our control.
The preliminary estimate of the performance fees owed by DRI
Healthcare Trust to its manager, DRI Capital, have been calculated
based on management's preliminary estimates with respect to the
Trust's financial results for the three months ended June 30, 2023, which are based on currently
available information, have not been reviewed or audited and are
subject to change. You are cautioned not to place undue reliance
upon the preliminary estimates of the performance fees. DRI
Healthcare Trust has not completed its standard quarterly closing
process, including the completion of all of its control procedures,
which could identify adjustments causing actual results to differ
from the expectations presented in this press release. The
following key assumptions were used when estimating the performance
fees payable: projected aggregate cash receipts of the Trust's
existing royalty investments, projected operating expenses of the
Trust, projected recovery of acquisition cost, and projected
interest expense. All forward-looking information in this news
release speaks as of the date of this news release. The Trust does
not undertake to update any such forward-looking information
whether as a result of new information, future events or otherwise
except as required by law. Additional information about these
assumptions and risks and uncertainties is contained in the Trust's
filings with securities regulators, including its latest annual
information form and management's discussion and analysis. These
filings are also available at the Trust's website at
drihealthcare.com.
SOURCE DRI Healthcare Trust