– Immediate and accretive cash flow generation
replaces structured annual caps –
– Increasing capital deployment guidance to
over US$1.25 billion deployed for the
five years ending 2025 –
– Now expecting high-teens Royalty Income CAGR
through 2025 and mid- to high-single digit Royalty Income CAGR
through 2030, excluding any new transactions –
TORONTO, Feb. 1, 2024
/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 expanded its interest
in royalties on the US net sales of Omidria by amending its
existing agreement with Omeros Corporation ("Omeros") for
US$115 million on closing and up to
US$55 million in potential
sales-based milestone payments. As a result, the Trust will now
receive 100% of Omeros' royalties on the US net sales of Omidria
through December 31, 2031.
Omidria was approved by the US Food and Drug Administration in
May 2014 and the European Medicines
Agency in July 2015 for intracameral
use during cataract surgery or intraocular lens replacement to
maintain pupil dilation and reduce postoperative pain. Omidria was
launched in the United States in
2014 but has yet to be launched in the European Union. Omidria is
marketed by Rayner Surgical, one of the world's leaders in the
field of cataract surgery with operations in over 80 countries
worldwide.
Increased Capital Deployment
Target and CAGR Guidance
DRI Healthcare is increasing its deployment target for the five
years ending 2025 to over US$1.25
billion, up from US$850
million to US$900 million.
Since its initial public offering, the Trust has deployed
US$881 million with potential
milestones up to US$106 million, for
total potential deployment of up to US$987
million in 12 transactions. DRI Healthcare continues to see
significant opportunities in the market with a robust pipeline of
over US$3.0 billion in possible
transactions in the near- to medium-term. As a result of the
Omidria transaction, DRI Healthcare is increasing its long-term
Royalty Income CAGR guidance (2022 through 2030) to mid- to
high-single digits, up from the prior guidance of low single
digits, excluding any new transactions.
"We are excited to increase our royalty entitlement on Omidria
as this deal not only generates immediate accretive value for
unitholders but also gives us exposure to an important non-opioid
pain drug that provides an alternative to physicians combating the
ongoing opioid epidemic," said Behzad
Khosrowshahi, Chief Executive Officer of the Trust.
"Bolstering our balance sheet over the recent months with equity
raises and the expansion of our credit facilities laid the
foundation for us to continue the strong execution we saw in 2023.
With this transaction, we now have upside exposure to Omidria which
will have a significant impact on both our near- and long-term cash
flow profile. We are updating our guidance to reflect the next
phase of growth for DRI Healthcare including a new deployment
target and increased CAGR guidance."
Speaking on behalf of the investment manager, Chief Investment
Officer Navin Jacob commented, "This
transaction highlights DRI Healthcare's focus on creating winning
solutions for our partners while remaining steadfast in our mission
to deliver accretive returns to unitholders. We value our long-term
partnership with Omeros and were happy to once again work with the
management team to address their business and financial needs.
Omidria's Separate Payment Status established in 2021 coupled with
the Consolidated Appropriations Act 2023 ("CAA'23") provides
long-term clarity on reimbursement for the product. We believe
CAA'23 will provide reimbursement for Omidria in the hospital
outpatient department setting starting in 2025, and as such we
anticipate Omidria sales to continue growing in the coming years.
We would like to thank the Omeros team for working with us to
complete this transaction."
The transaction entitles DRI Healthcare to Omeros' entire 30%
royalty on the US net sales of Omidria through December 31, 2031. DRI Healthcare is entitled to
receive monthly royalty payments on a two-month lag based on sales
beginning November 1, 2023, with its
first payment to be received in January
2024. Omeros is also eligible to receive from DRI two
milestone payments, each up to $27.5
million, payable in January
2026 and January 2028,
respectively, based on achievement of certain OMIDRIA net sales
thresholds.
About Omidria
Omidria is a bisulfite-free and preservative-free product that
is indicated for intracameral irrigation during cataract surgery to
maintain pupil dilation and reduce post operative pain. Sufficient
mydriasis during cataract surgery is critical to a successful
surgical outcome by providing visualization of the surgical field,
a good red reflex and adequate room for intraocular manipulation of
surgical instruments. Unlike pre-operatively administered topical
drugs for mydriasis and pain management that are washed out of the
eye by irrigation solution used during intraocular lens
replacement, intracameral irrigation of Omidria exposes target
tissues to consistent concentrations of phenylephrine and ketorolac
throughout the entire procedure thereby maintaining intraoperative
mydriasis and reducing post operative pain.
Omidria requires no modification to the current surgical
procedure offering an easy addition to current treatments and
surgical technique and, unlike products from unregistered
compounding facilities, offers the added benefit of uniform
production under Good Manufacturing Practices. There are no other
intracameral administered mydriatic or pain management products in
development.
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$3.0
billion, acquiring more than 70 royalties on 45-plus drugs,
including Eylea, Keytruda, Orserdu,
Spinraza, Stelara, Vonjo, Zejula and Zytiga. 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", "us", "we" and "our" 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 words such as
"expect", "continue", "anticipate", "intend", "aim", "plan",
"believe", "budget", "estimate", "forecast", "foresee", "close to",
"target", "guidance" 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 deployment target and capacity available for
deployment, portfolio, royalty cash receipts, the timing of royalty
payments, growth in total income, anticipated royalty income,
anticipated sales of the products underlying our royalties and our
ability to reach our targets and expected timing of reimbursement
for Omidria. This forward-looking information is subject to a
number of assumptions, including, but not limited to: statements
regarding potential royalty transactions which we reasonably expect
to complete are based on our historical track record, statements
regarding the terms and conditions of our transactions are based on
the transaction documentation, statements with respect to royalty
income, total income and future sales of the products underlying
our existing 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 statements regarding
expected timing of reimbursement for Omidria under the CAA'23 are
based on our and our expert consultant's interpretation of the
legislation, 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.
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