- Quarter highlighted by strong performance from existing
pharmaceutical products portfolio -
TORONTO, Aug. 5, 2021 /CNW/ - DRI Healthcare Trust (TSX:
DHT.UN) (TSX: DHT.U) ("DRI" or "the Trust") today announced its
results for the quarter ended June 30,
2021. The Trust's second 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 Second Quarter Ended
June 30, 2021
- On May 7, 2021, the Board of
Trustees approved the payment of a distribution of US$0.0375 per trust unit, subsequently paid on
July 20, 2021
- Royalty Income of US$23.4
million
- Adjusted EBITDA of US$28.8
million1
- Adjusted Cash Earnings per Unit of US$0.461,2
Subsequent to Quarter End
- The Trust's board of trustees has declared a cash distribution
of US$0.0375 per unit for the third
quarter of 2021 payable on October 20,
2021
"We are pleased to announce our first full quarter as a public
issuer," said Behzad Khosrowshahi,
Chief Executive Officer of DRI Healthcare Trust. "We continue to
experience strong performance from our existing assets and remain
active advancing the transactions in our robust and healthy deal
pipeline. Our primary focus is to execute on our strategy to
leverage our assets and experience to acquire growth-oriented
royalties on medically necessary pharmaceutical products. Our
thorough due diligence process has been developed to ensure that we
continue our track record of acquiring high quality assets. We are
confident in our deal pipeline and remain on track to deliver on
our growth targets – to purchase between US$650 million to US$750
million of royalties over the next five years, which will
allow us to generate sustainable annual growth in cash royalty
receipts."
Results of
Operations (thousands of U.S. dollars, except per unit
amounts)
|
Three months
ended
June 30, 2021
|
Six months
ended
June 30, 20213
|
Royalty
Income
|
23,448
|
36,139
|
Management
fees
|
2,167
|
3,050
|
Amortization
expenses
|
11,005
|
17,798
|
Other
expenses
|
2,904
|
4,728
|
Net earnings and
other comprehensive earnings
|
7,375
|
10,566
|
Earnings per
unit2
|
0.18
|
0.36
|
Total Cash Royalty
Receipts/ Pro Forma Total Cash Royalty
Receipts1,4
|
33,329
|
63,919
|
Adjusted EBITDA/ Pro
Forma Adjusted EBITDA1, 5
|
28,829
|
56,792
|
Adjusted EBITDA
Margin/ Pro Forma Adjusted EBITDA Margin1,5
|
86%
|
89%
|
Adjusted Cash
Earnings per Unit/ Pro Forma Adjusted Cash Earnings per
Unit1,5
|
0.46
|
0.97
|
Asset Performance
During the second quarter, the Trust's portfolio included 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 on February 19, 2021
for US$291.5 million, as part of the
Trust's initial public offering. On June 30, 2021, the royalty asset portfolio had a
book value, net of accumulated amortization, of US$273.7 million. The royalty asset
portfolio generated Total Cash Royalty Receipts of US$33.3 million1 in the second
quarter, which was an increase from US$31.8
million in the same period in 2020, on a pro forma basis.
The Trust received its final royalty payments for the Rilpivirine
Portfolio in the second quarter as the entitlement has expired in
accordance with the terms of the royalty agreement.
Royalty Portfolio (for the three months ended
June 30th)
(thousands of U.S. dollars)
|
|
|
|
|
|
|
Cash Royalty
Receipts4
|
Product
|
Therapeutic Area
|
Marketer(s)
|
June 30,
2021
|
Pro
Forma June 30,
20204
|
Core Products
|
|
|
|
|
Eylea I
|
Ophthalmology
|
Regeneron, Bayer, Santen
|
3,013
|
2,523
|
Eylea II
|
Ophthalmology
|
Regeneron, Bayer, Santen
|
1,339
|
1,121
|
FluMist
|
Vaccine
|
AstraZeneca
|
23
|
-
|
Natpara
|
Endocrinology
|
Takeda
|
513
|
305
|
Rydapt
|
Oncology
|
Novartis
|
3,856
|
1,970
|
Spinraza
|
Rare Diseases
|
Biogen
|
5,615
|
5,642
|
Xolair
|
Respiratory
|
Roche, Novartis
|
1,417
|
1,406
|
Zytiga
|
Oncology
|
Johnson & Johnson
|
9,498
|
8,267
|
Total Core Products
|
|
|
25,274
|
21,234
|
|
|
|
|
|
Mature Products
|
|
|
|
|
Autoimmune Portfolio6
|
Autoimmune
|
Johnson &
Johnson, Merck, Novartis
|
1,747
|
2,503
|
Rilpivirine Portfolio7
|
HIV
|
Johnson &
Johnson, Gilead, ViiV
|
5,901
|
7,629
|
Total Mature Products
|
|
|
7,648
|
10,132
|
Legacy Products8
|
|
|
407
|
442
|
Total Cash Royalty Receipts1,4
|
|
33,329
|
31,808
|
1.
|
Adjusted EBITDA,
Adjusted EBITDA Margin, Adjusted Cash Earnings per Unit, and Total
Cash Royalty Receipts are non-IFRS measures for the three
and six months ended June 30, 2021. 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 Adjusted EBITDA / Total Cash Royalty Receipts.
Adjusted 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; divided by weighted average units outstanding. The
reconciliation of non-IFRS measures to IFRS can be found in the
Trust's MD&A.
|
2.
|
The weighted
average number of units for the three months ended June 30, 2021,
was 40,107,407 units and for the six months ended June 30, 2021,
was 29,249,601 units.
|
3.
|
The Trust
completed its initial public offering ("IPO") on February 19, 2021.
The Trust had no active operations prior to February 19,
2021.
|
4.
|
Total Cash Royalty
Receipts and cash royalty receipts by product for the for the six
months ended June 30, 2021, and the three and six months ended June
30, 2020, include cash that was received by the Trust's current
subsidiaries prior to completion of the Trust's acquisition of
those subsidiaries and are presented on a pro forma
basis.
|
5.
|
For the six months
ended June 30, 2021, results are presented on a pro forma basis
consistent with the treatment of Total Cash Royalty Receipts
described in note 4.
|
6.
|
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.
|
7.
|
The Rilpivirine
Portfolio consists of an agreement to receive royalties on sales of
Complera, Edurant, Odefsey and Juluca. The Trust's
entitlement to royalties ended during the quarter ended June 30,
2021, in accordance with the terms of the royalty
agreement.
|
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
On June 30, 2021, the Trust had
cash on hand of US$115.6 million and
US$30.1 million funds held in trust.
The Trust's secured notes had an outstanding balance of
US$59.2 million on June 30, 2021, which was subsequently reduced
with a principal payment of US$12.1
million made on July 15, 2021,
which was paid from the funds held in trust, following which the
balance was released to the Trust.
The Trust had units outstanding of 40,107,407 on June 30, 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$0.0375 per trust unit was paid on July 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 third quarter of 2021.
The distribution will be payable on October
20, 2021, to unitholders of record at the close of business
on September 30, 2021.
2021 Second Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Friday, August 6, 2021, at
8:30 a.m. (ET) to review the Trust's
2021 second quarter results. You can join the call by dialling
1-888-664-6392 or 416-764-8659. A live webcast of the
conference call, including a slide presentation, will be available
at https://bit.ly/DHT2021Q2. An archived replay of the webcast will
be available for 90 days. A taped replay of the conference
call will also be available until Friday,
August 13, 2021, at midnight by calling 1-888-390-0541 and
entering the reference number 769505.
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