– Patent-protected exclusivity and uncapped deal structure offers attractive return profile –
– Acquisition generates substantial near-term cash flows and long-term portfolio growth –
– DRI Healthcare expects flat to slightly growing cash receipts through 2030 –
TORONTO, June 30, 2023 /CNW/ – DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (the “Trust”), a global leader in providing financing to advance innovation in the life sciences industry, has purchased a royalty interest in the worldwide net sales of Orserdu™ from Eisai Co., Ltd. (“Eisai”) for US$85 million. This transaction brings DRI Healthcare’s total deployments since its IPO in February 2021 to US$570 million, with an additional US$55 million in potential milestones and options.
Orserdu™ is an oral, selective estrogen receptor degrader (“SERD”) discovered by Eisai and marketed by Stemline Therapeutics, Inc., a subsidiary of the Menarini Group. It is the first and only approved targeted therapy used in the treatment of postmenopausal women or adult men with ESR1-mutated ER+/HER2- metastatic breast cancer, who have experienced disease progression despite prior endocrine therapy. Orserdu™ was approved by the U.S. Food and Drug Administration in January 2023 and is under review by the European Medicines Agency for potential approval.
“Orserdu™ provides a safe, effective, and convenient treatment for patients that have progressed on initial therapy,” said Behzad Khosrowshahi, Chief Executive Officer of the Trust. “This transaction provides a tangible example of how we can compound returns for our investors by redeploying our cash receipts into new deals. Through this acquisition, we have significantly enhanced the cash flow profile of our portfolio and anticipate flat to slightly growing royalty cash receipts through 2030, without considering potential transactions generated by our active pipeline.”
Speaking on behalf of the investment manager (DRI Capital), Chief Investment Officer Navin Jacob, commented “We are excited to have exposure to Orserdu™ with its strong first-in-class (oral SERD) position and excellent risk/benefit profile for patients with ESR1 mutations. Physician feedback on Orserdu™ has been very enthusiastic which is translating into strong initial uptake of the product. It was a pleasure working the Eisai team and we are grateful for their efforts in completing this transaction in record time.”
The acquisition entitles DRI Healthcare to a mid-single digit tiered royalty on the worldwide net sales of the drug. DRI Healthcare is entitled to receive quarterly royalty payments on a one-quarter lag based on sales beginning April 1, 2023, with its first payment expected to be received in Q3 2023. Orserdu™ is patent protected up to January 2038. In addition to the running royalties, the Trust is also entitled to receive milestones based on the achievement of regulatory and sales performance thresholds.
OrserduTM is an oral SERD specifically designed for postmenopausal women or adult men with advanced or metastatic breast cancer who have experienced disease progression following at least one line of endocrine therapy. Clinical studies show that OrserduTM provides a statistically significant benefit in terms of median progression-free survival (mPFS) when compared to standard-of-care treatments. Notably, patients who have been treated with CDK4/6 inhibitors for at least 12 months experienced particularly strong benefits, with a mPFS of 8.6 months compared to 1.9 months with standard-of-care therapies. Unlike traditional SERDs, OrserduTM offers the significant advantage of being administered orally once daily, providing patients with a more convenient and less painful treatment option compared to intramuscularly administered SERDs and has a discontinuation rate of less than 4%.
DRI Healthcare Trust is managed by DRI Capital Inc. (“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.
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 portfolio, royalty cash receipts and the timing of royalty payments. 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. 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. 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