- With IPO complete, Trust is focused on
executing its business plan -
TORONTO, May 10, 2021 /CNW/ - DRI Healthcare Trust
(TSX: DHT.U) (TSX: DHT.UN) ("DRI" or "the Trust") today announced
its results for the period ended March 31, 2021. The Trust's
first quarter 2021 financial statements and Management's Discussion
& Analysis have been filed on SEDAR (www.sedar.com). This news
release is not in any way a substitute for reading the Trust's
financial statements, including notes to the financial statements
and the Trust Management's Discussion & Analysis.
Results and Highlights for the First Quarter Ended
March 31, 2021
- On February 19, completed an IPO
and concurrent private placement to raise aggregate gross proceeds
of US$400 million;
- On March 23, the Board of
Trustees approved the payment of a distribution of US$0.0167 per trust unit, subsequently paid on
April 20, 2021;
- Royalty Income of US$12.7 million
(for the period February 19
(completion of IPO) to March 31,
2021) 1
- Pro forma Adjusted EBITDA of US$28.0
million4
- Pro forma Adjusted EBITDA Margin of 91%4
Subsequent to Quarter End
- The Trust's board of trustees has declared a cash distribution
of US$0.0375 per unit for the second
quarter of 2021
"The key highlight of this past quarter was the completion of
our initial public offering in February," said Behzad Khosrowshahi, Chief Executive Officer of
DRI Healthcare Trust. "With this significant milestone, we are
ideally positioned to execute on the strategy we presented during
our IPO – to grow our diversified portfolio of pharmaceutical
royalties and provide investors with direct exposure to the
fast-growing, global bio-pharmaceutical industry. We are confident
that pharmaceutical royalties will continue to play an important
role in funding critical innovation, and that we will continue to
be the partner of choice to those innovators."
"We are pleased with the performance of our assets in the latest
quarter, which demonstrates our sound strategy of targeting
growth-oriented royalties on medically necessary pharmaceutical
products, and the value of our network of relationships and
proprietary methods of identifying and executing the acquisition of
new quality assets for our diversified portfolio," continued Mr.
Khosrowshahi.
Results of
Operations (thousands of U.S. dollars, except per unit
amounts)
|
Period ended
March 31, 20211
|
Royalty
Income
|
12,691
|
Management
fees
|
883
|
Amortization
expenses
|
6,793
|
Other operating
expenses
|
1,824
|
Net earnings and
other comprehensive earnings
|
3,191
|
Earnings per
unit2
|
0.17
|
Pro Forma Total Cash
Royalty Receipts3
|
30,590
|
Pro Forma Adjusted
EBITDA4
|
27,963
|
Pro Forma Adjusted
EBITDA Margin4
|
91%
|
Adjusted Cash
Earnings per Unit4
|
0.54
|
"As this is our first reporting quarter since closing the IPO on
February 19, 2021, the financial
results reflect our progress over just 39 days. For this quarter,
we have provided certain pro forma non-IFRS measures to aid
unitholders in evaluating the performance of our business over the
full quarter," added Chris
Anastasopoulos, CFO of the Trust.
Asset Performance
The Trust's existing
portfolio consists of 18 royalty streams on 14 products that
address medically necessary therapeutic areas, such as oncology,
rare diseases, ophthalmology, endocrinology, HIV, autoimmune and
vaccines. These assets were acquired as part of the IPO for
US$291.5 million. At
March 31, 2021 the royalty asset
portfolio had a book value, net of accumulated amortization, of
US$284.7 million. On a pro
forma basis, the royalty asset portfolio generated Total Cash
Royalty Receipts of US$30.6
million2 in the first quarter.
Royalty Portfolio (For the quarter ended
March 31, 2021)
(thousands of U.S. dollars)
Product
|
Therapeutic Area
|
Marketer(s)
|
Q1 2021
Pro Forma Cash Royalty
Receipts5
|
Core Products
|
|
|
|
Spinraza
|
Rare Diseases
|
Biogen
|
5,308
|
Eylea I
|
Ophthalmology
|
Regeneron, Bayer, Santen
|
3,027
|
Rydapt
|
Oncology
|
Novartis
|
2,601
|
Xolair
|
Respiratory
|
Roche, Novartis
|
2,266
|
FluMist
|
Vaccine
|
AstraZeneca
|
2,239
|
Eylea II
|
Ophthalmology
|
Regeneron, Bayer, Santen
|
1,345
|
Natpara
|
Endocrinology
|
Takeda
|
510
|
Zytiga
|
Oncology
|
Johnson & Johnson
|
—
|
Total Core Products
|
|
|
17,296
|
Mature Products
|
|
|
|
HIV Portfolio6
|
HIV
|
Johnson & Johnson, Gilead, ViiV
|
8,467
|
Autoimmune Portfolio7
|
Autoimmune
|
Johnson &
Johnson, Merck, Novartis
|
4,361
|
Total Mature Products
|
|
|
12,828
|
Legacy Products8
|
|
|
466
|
Pro Forma
Total Cash Royalty Receipts3,
5
|
|
30,590
|
|
|
1.
|
The Trust
completed its initial public offering ("IPO") on February 19, 2021.
The Trust had no active operations prior to February 19,
2021.
|
2.
|
The weighted
average number of units for the period ended March 31, 2021 is
18,271,153 units.
|
3.
|
Total Cash Royalty
Receipts is a non-IFRS measure that has been presented on a pro
forma basis. This includes cash royalties received by the
Trust from February 19, 2021 to March 31, 2021, as well as $2.3
million in cash royalties received prior to the acquisition from
January 1, 2021 to February 18, 2021, which has been recorded as an
increase in cash and cash equivalents as part of the purchase price
of the assets indirectly acquired by the Trust following completion
of the IPO.
|
4.
|
Adjusted EBITDA,
Adjusted EBITDA Margin and Cash Earnings per Unit are non-IFRS
measures for the period ended March 31, 2021 and have been
presented on a pro forma basis. These non-IFRS
measures do not have a standardized meaning prescribed
by IFRS and are therefore unlikely to be comparable to similar
measures presented by other issuers. Adjusted EBITDA represents net
earnings and other comprehensive earnings plus (i) amortization of
royalty assets, plus (ii) interest expense, plus (iii)
royalties receivable at the beginning of the period, less (iv)
royalties receivable at the end of the period, plus (v) acquired
royalties receivable, plus (vi) acquired cash royalties received,
and reversing the impact of the following: plus (vii) impairment of
royalty assets, less (viii) reversal of impairment of royalty
assets, less (ix) net gain on interest rate derivatives, less * net
gain on foreign exchange derivatives. Adjusted EBITDA Margin is
calculated as Pro Forma Adjusted EBITDA / Pro Forma Total Cash
Royalty Receipts. Cash Earnings per Unit represents net
earnings and other comprehensive earnings plus: (i) amortization of
royalty assets, plus (ii) impairment of royalty asset, less (iii)
reversal of impairment of royalty assets, less (iv) net gain on
interest rate derivatives, less (v) net gain on foreign exchange
derivatives.
|
5.
|
Cash royalty
receipts for the three months ended March 31, 2021 are presented on
a pro forma basis and represent the cash that the Trust would have
received had the assets been acquired as of January 1, 2021. The
Trust was the beneficiary of such cash receipts and has recorded
the increase in cash as a result of cash collections from January
1, 2021 to February 18, 2021, within cash and cash equivalents
acquired. The reconciliation of Total Cash Royalty Receipts, which
is a non-IFRS measure, can be found in the Trust's
MD&A.
|
6.
|
The HIV Portfolio
consists of an agreement to receive royalties on sales of Complera,
Edurant, Odefsey and Juluca.
|
7.
|
The Autoimmune
portfolio consists of an agreement to receive royalties on sales of
Stelara, Simponi and Ilaris. The royalty assets include two royalty
streams on each product, for a total of six royalty streams held
directly and indirectly.
|
8.
|
Legacy Products
represent royalty income from royalty assets that are fully
amortized and, where applicable, the entitlements to which have
generally expired.
|
Liquidity and Capital
At March 31, 2021 the Trust had
cash on hand of US$105.7 million as a
result of net proceeds of the IPO and related transactions, and
cash generated by the business in the subsequent period ended
March 31, 2021. The Trust's
secured notes had an outstanding balance of US$69.9 million at March
31, 2021, which was subsequently reduced with a payment of
US$10.7 million made on April 15, 2021.
"With a solid portfolio of cash-generating royalties to grow the
business and prudent debt levels, we look forward to building
long-term unitholder value as a publicly traded entity," commented
Chris Anastasopoulos.
The Trust had units outstanding of 40,107,407 on March 31, 2021, all of which were issued in
connection with the IPO and concurrent private placement on
February 19, 2021.
Distributions
A distribution to unitholders of US$0.0167 per trust unit was paid on April 20, 2021. The Trust also announced today
that its board of trustees has declared a quarterly cash
distribution in the amount of US$0.0375 per unit for the second quarter of
2021. The distribution will be payable on July 20, 2021, to unitholders of record at the
close of business on June 30,
2021.
2021 First Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Monday, May 10, 2021, at
10:30 a.m. (ET) to review the Trust's
2021 first quarter results. You can join the call by dialling
1-888-231-8191 or 647-427-7450. A live audio webcast of the
conference call will be available through
http://bit.ly/DRI2021Q1. An archived replay of the webcast
will be available for 90 days. A taped replay of the
conference call will also be available until Tuesday, May 18, 2021, at midnight by calling
1-855-859-2056 or 416-849-0833, reference number 1765677.
About DRI Healthcare Trust
DRI Healthcare Trust provides unitholders with differentiated
exposure to the anticipated growth in the global pharmaceuticals
and biotechnology markets. Our business model is focused on
managing and growing a diversified portfolio of pharmaceutical
royalties with the aim to deliver attractive growth in cash royalty
receipts over the long term. DRI Healthcare Trust is an
unincorporated open-ended trust governed by the laws of the
Province of Ontario, externally
managed by its manager, DRI Capital Inc. 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".
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
forward-looking 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 belief that pharmaceutical
royalties will continue to play an important role in funding
critical innovation, and that the Trust will continue to be the
partner of choice to those innovators our development and
acquisition opportunities. Forward-looking information is based on
a number of assumptions and 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.
Certain assumptions underlying the forward-looking information in
this news release include: the Trust's assumptions regarding demand
and growth in pharmaceutical sales, R&D and opportunities for
royalty investing; the competitive environment in which the Trust
operates; the performance of the Trust's manager; the Trust's
ability to implement its growth strategies; the Trust's ability to
obtain financing and maintain its existing financing on acceptable
terms; the Trust's ability to maintain good business relationships
with marketers and other industry partners; timely receipt of cash
royalty receipts; expectations regarding the duration of royalties;
the Trust's ability to keep pace with changing consumer
preferences; the absence of material adverse changes in the Trust's
industry or the global economy; currency exchange and interest
rates; the impact of competition; the changes and trends in the
Trust's industry or the global economy; and stability in laws,
rules, regulations and global standards in the pharmaceutical
industry. 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 dricapital.com.
SOURCE DRI Healthcare Trust