– 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.