– Transaction will allow DHT to redeploy capital into new deals generating compounding returns for unitholders –
TORONTO, April 27, 2023 /CNW/ – DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (“the Trust”) announces that its wholly-owned subsidiary has sold its royalty interest and milestone payment obligations in the worldwide sales of TZIELD™ to a subsidiary of Sanofi S.A. (“Sanofi”) for US$210 million.
“DRI Healthcare is excited about the dramatic positive impact that TZIELD™ will have on patients who are at risk of developing Type 1 Diabetes,” said Behzad Khosrowshahi, Chief Executive Officer of DRI Healthcare Trust. “This is only the second time in 21 years that we have sold a royalty to a third party. Having only recently announced the TZIELD™ royalty acquisition, DRI Healthcare was not looking to sell the royalty.”
“The Trust originally purchased the TZIELD™ royalty on March 8, 2023 for US$100 million upfront and a commitment to make certain milestone payments. We have sold the royalty for US$210 million upfront and assigned our obligations to make any milestone payments to Sanofi. The proceeds generated by this transaction provide significant value for unitholders and allow us to compound that value by allocating capital to transactions in our pipeline of royalty opportunities.”
DRI Healthcare intends to use US$20 million of the proceeds from this transaction to pay an additional special cash distribution to unitholders of record as of June 30, 2023. A further portion of the proceeds will be used to pay down the entire debt outstanding under DRI Healthcare’s revolving acquisition credit facility, leaving significant cash and credit available to invest in its pipeline of innovative opportunities.
The Trust’s wholly-owned subsidiary has assigned all of its rights and obligations under the purchase agreement with MacroGenics, Inc. (“MacroGenics”) to Sanofi. The Trust’s wholly-owned subsidiary previously agreed to pay MacroGenics a milestone payment of up to US$50 million upon the occurrence of certain pre-specified events and a second milestone payment of US$50 million in the event TZIELD™ sales exceed certain thresholds.
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 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 drihealthcaretrust.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.
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 intended use of proceeds of the transaction and the impact of the transaction on the Trust. 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. 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 drihealthcaretrust.com.
SOURCE DRI Healthcare Trust