– Transaction adds a ground-breaking type 1 diabetes therapy to DRI’s expanding portfolio –
– Excluding any new transactions, DRI now expects 2030 cash receipts to be at least as high as 2022 cash receipts –
– Extends DRI’s overall portfolio duration to over 10 years –
TORONTO, March 8, 2023 /CNW/ – DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (“DRI” or “the Trust”) today announced that a wholly-owned subsidiary of DRI has agreed to purchase MacroGenics, Inc.’s (“MacroGenics”) royalty interest in the worldwide sales of TZIELD (teplizumab-mzwv) for an up-front purchase price of US$100 million. DRI expects to fund the transaction through cash raised in its recently announced US$95 million private placement of preferred securities.
TZIELD is a biologic drug indicated to delay the onset of stage 3 type 1 diabetes in adults and pediatric patients aged 8 years and older that have stage 2 (at-risk) type 1 diabetes. It was approved by the U.S. Food and Drug Administration in November 2022. TZIELD is currently the only approved preventative treatment indicated for stage 2 type 1 diabetes patients and is marketed by Provention Bio, Inc. (“Provention”) and Sanofi S.A. through a co-promotion agreement. TZIELD is also being investigated in a phase III study of newly diagnosed stage 3 type 1 diabetes patients.
“TZIELD represents a meaningful step forward in the treatment of type 1 diabetes, a disease that affects millions worldwide,” said Behzad Khosrowshahi, Chief Executive Officer of DRI Healthcare Trust. “With the completion of this deal, and without assuming additional new deals in the future, we believe that our 2030 cash receipts will be at least as high as our 2022 cash receipts and calculate that our overall portfolio duration now sits at over 10 years.”
The transaction entitles DRI to a single digit royalty on Provention’s worldwide net sales of TZIELD. Upon the occurrence of certain pre-specified events that may occur between mid-2023 and 2028 tied to the successful advancement of TZIELD for the treatment of newly diagnosed or recent-onset type 1 diabetes, DRI will pay MacroGenics an additional milestone payment of up to US$50 million. A second milestone payment of US$50 million may be paid in the event TZIELD sales exceed certain thresholds.
DRI will be entitled to receive quarterly royalty payments on a one-quarter lag based on TZIELD sales beginning January 1, 2023. TZIELD is protected by patent and regulatory exclusivities for 12 years from its first commercial sale.
The transaction is expected to close within five business days.
About TZIELD (teplizumab-mzwv)
TZIELD is an IV-administered Fc receptor–nonbinding anti-CD3 monoclonal antibody that binds to T-cell receptor CD3 causing a partially agonistic effect and deactivation of pancreatic beta cell autoreactive T lymphocytes. It works by modulating the body’s immune system to stop attacking its own pancreatic beta cells. Clinical trial data demonstrated the treatment effect of TZIELD in delaying type 1 diabetes (“T1D”) diagnosis in at-risk relatives of T1D patients for a median time of approximately 2 years. Staging T1D prior to the symptomatic form provides opportunities to screen for at-risk individuals and delay or prevent the onset of clinical symptoms. TZIELD is the first treatment to delay the onset of stage 3 T1D for stage 2 T1D patients and is also being developed to treat newly diagnosed stage 3 T1D. The phase 3 PROTECT trial is ongoing with data expected in mid-2023.
About Type 1 Diabetes
T1D is a chronic autoimmune disease that leads to lifelong insulin therapy due to hyperglycemia arising from immune-mediated loss of functional pancreatic β-cells caused by genetic, immunological, and environmental factors. T1D is a burdensome disease that impacts healthcare systems and patients, as well as their caretakers – especially given the significant number of adolescent or pediatric patients. The economic cost of T1D in the U.S. was estimated to be US$27.8 billion in 2014, and other studies suggest the lifetime economic burden is greater than type 2 diabetes because of higher medical costs to treat long-term complications. Despite advancements made in insulin therapies, many T1D patients do not achieve sufficient glycemic control and can experience life-long microvascular (e.g., retinopathy, nephropathy, neuropathy) and macrovascular (e.g., cardiovascular disease, peripheral artery disease) complications. Insulin therapy also brings its own set of complications (e.g., hypoglycemia and weight gain) that further burdens patients and their caretakers.
There are no curative therapies for T1D. Intensive insulin therapy combined with frequent glucose monitoring is the predominant approach to manage symptomatic T1D. Advances in insulin-based therapies, monitoring systems, and drug delivery devices (insulin pumps) have improved glycemic control and reduced the long-term risks of diabetic complications. Other important interventions include nutrition and physical activity.
About DRI Healthcare Trust
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 its founding in 1989, DRI Capital has deployed more than US$2.5 billion, acquiring more than 60 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.
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 that DRI expects to receive its first royalty payment on sales of TZIELD in Q2 2023, that TZIELD is protected by patent and regulatory exclusivities for 12 years from its first commercial sale, and statements regarding DRI’s future cash receipts and overall portfolio duration. 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. No assurance can be given that these are all the factors that could cause actual results to vary materially from the forward-looking statements in this press release. You should not put undue reliance on forward-looking statements. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, the actual results, performance or achievements of the Trust could differ materially from the results expressed in, or implied by, any forward-looking statements. The forward-looking information in this news release is based on our assumptions regarding the performance of our royalty interest in TZIELD, including with respect to worldwide sales. 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
