– Proceeds from follow-on offering quickly redeployed into value accretive transaction –
– DRI Healthcare’s third significant royalty acquisition within six weeks –
– Now expecting mid-teens total income CAGR through 2025 and low single digit total income CAGR through 2030, excluding any new transactions –
TORONTO, Aug. 14, 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 second royalty interest in the worldwide net sales of ORSERDU®. DRI Healthcare entered into a purchase agreement with Radius Pharmaceuticals, Inc., a wholly owned subsidiary of Radius Health, Inc. (“Radius”) for an upfront purchase price of US$130 million. This brings DRI Healthcare’s total deployment to US$766 million since its IPO, with an additional US$69 million in potential milestone payments.
ORSERDU® is an oral, selective estrogen receptor degrader (“SERD”) marketed in the United States 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.
“We are excited to add another royalty to our portfolio and increase our exposure to a high-quality and long-duration asset like ORSERDU®,” said Behzad Khosrowshahi, Chief Executive Officer of the Trust. “The confidence shown by our unitholders with the recently completed follow-on equity offering enhanced our capital resources to continue executing on value accretive transactions. The addition of this royalty to the portfolio marks significant progress towards our long-term growth objectives. We now anticipate mid-teens total income CAGR through 2025 and low single digit total income CAGR through 2030, providing an attractive and differentiated profile to unitholders.”
Speaking on behalf of the investment manager, Chief Investment Officer Navin Jacob, commented “ORSERDU® showcases significant clinical benefit compared to the current standard of care for second line treatment of ER+/HER2- metastatic breast cancer, which represents about 70% of breast cancers. Feedback from physicians has been very strong on ORSERDU®’s benefit to patients so much so that ORSERDU® has performed better than our initial expectations at the time of our transaction with Eisai (LINK). 2023 sales are now expected to reach at least US$175 million. We are excited to increase our exposure to this asset and we view this deal as highly accretive to unitholders. We thank the Radius team for working with us to complete this transaction.”
The acquisition entitles DRI Healthcare to a net low to high single digit tiered royalty on the worldwide net sales of the ORSERDU®. DRI Healthcare is entitled to receive quarterly royalty payments on a one-quarter lag based on sales beginning July 1, 2023, with its first payment expected to be received in Q4 2023. ORSERDU® is patent protected until January 2038. In addition to the running royalties, DRI Healthcare is also entitled to receive milestone payments of up to US$40 million on the achievement of sales performance thresholds. Upon the occurrence of pre-specified events, DRI Healthcare is obligated to pay a US$10 million milestone to Radius.
ORSERDU® 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 ORSERDU® 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, ORSERDU® 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 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, the timing of royalty payments, growth in total income, and anticipated sales of the products underlying our royalties. Forward-looking information is based on a number of assumptions, including, but not limited to: statements regarding anticipated sales of the products underlying our royalties are based on assumptions with respect to timing of generic drugs entering the market, competitor drugs receiving approval and entering the market, and regulatory measures under the Inflation Reduction Act and are 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. We are not providing any estimates with respect to total income beyond 2030. 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