DRI Healthcare PLC: Proposed listing on the London Stock Exchange

DRI Healthcare PLC (DHP) 
DRI Healthcare PLC: Proposed listing on the London Stock Exchange 
 
12-Feb-2020 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
 The information contained in this announcement is restricted and is not for 
   publication, release or distribution in the United States of America, any 
 member state of the European Economic Area, Canada, Australia, Japan or the 
            Republic of South Africa. 
 
      DRI Healthcare Plc 
 
      Proposed listing on the London Stock Exchange 
 
  Publication of prospectus in relation to the Initial Placing, Offer for 
  Subscription and Intermediaries Offer targeting the issue of 350 million 
      ordinary shares at US$1.00 per Ordinary Share 
 
      12 February 2020 
 
       DRI Healthcare plc (the "Company"), a closed-ended investment company 
    focused on investments in healthcare Royalty Assets, today announces the 
       publication of a prospectus in relation to an initial public offering 
   ("IPO") of shares on the premium segment of the main market of the London 
            Stock Exchange. 
 
The Company is seeking to raise US$350 million by way of an Initial Placing, 
 Offer for Subscription, Intermediaries Offer and certain direct placings by 
        the Company as principal of Ordinary Shares, forming part of a Share 
          Issuance Programme of up to 1,000 million Ordinary and/or C Shares 
   (including any Ordinary Shares issued pursuant to the Initial Issue) (see 
  note 1). The Company will seek to generate attractive, risk-adjusted total 
 returns by predominantly investing in a diversified portfolio of healthcare 
Royalty Assets, concentrating on investments in best-in-class pharmaceutical 
      Products indicated for treatment of serious and chronic conditions and 
            marketed by high quality Marketers. 
 
       The Company is targeting in respect of its first financial year after 
 Initial Admission, an initial annual dividend on the Ordinary Shares of 5.5 
cents and, thereafter, a Target Dividend on the Ordinary Shares of 7.0 cents 
 for each financial year with the intention to progressively grow the Target 
    Dividend over the medium term (the "Target Dividend"). Additionally, the 
Company is targeting the potential for Ordinary Shareholders to receive 8 to 
      10 per cent. base case net total NAV return on the Initial Issue Price 
     (inclusive of the Target Dividend), with upside potential, based on the 
    performance of the Assets over the long term (the "Target Return"). (See 
            note 2). 
 
The Company will be managed by Toronto-based DRI Capital, Inc. ("DRI" or the 
         "Investment Manager") and intends to acquire a seed asset portfolio 
 consisting of twenty cash flow generating healthcare Royalty Assets with an 
aggregated net asset value of US$290 million following the completion of the 
      Initial Issue. DRI intend to invest up to US$20 million in the Initial 
            Issue. 
 
Numis Securities Limited ("Numis") is acting as Sponsor and Joint Bookrunner 
       and Jefferies International Limited ("Jefferies") is acting as Global 
            Coordinator and Joint Bookrunner in relation to the IPO. 
 
   The prospectus is available to download at https://www.drihealthcare.com/ 
     and from the National Storage Mechanism (www.morningstar.co.uk/uk/NSM). 
 
            Paul Mussenden, chair of DRI Healthcare Plc, commented: 
 
   "Today represents a landmark for DRI Healthcare, providing investors with 
         the opportunity to gain global exposure to our portfolio of leading 
    pharmaceutical royalties. With diversified, tier-one assets, the Company 
     provides the potential for significant returns, including a sustainable 
   income target with limited downside risk. Investors will benefit from DRI 
  Capital's 17 years of market-leading experience, led by its dedicated team 
          who will target further investment opportunities, underpinned by a 
       differentiated sourcing model, rigorous due diligence and disciplined 
investment strategy. Listing on the London Stock Exchange provides the ideal 
   platform for DRI Healthcare to continue to grow its long-dated assets and 
            deliver on its strategic objectives". 
 
            Behzad Khosrowshahi, CEO of DRI Capital, Inc., added: 
 
       "DRI Healthcare's intention to float will enable us to bring our deep 
expertise and significant experience in pharmaceutical royalty investment to 
       global investors. By using its established and disciplined investment 
        strategy, DRI Capital focuses on sustainable royalties on proven and 
     speciality medicines that benefit from strong intellectual property and 
    regulatory protection. With global healthcare spending expected to reach 
 US$1.5 trillion by 2023, we continue to see compelling growth opportunities 
in the pharmaceuticals sector and associated increases in sales, development 
 and the approval of new drugs. This has driven a corresponding rise in life 
 sciences royalties, and DRI Capital remains uniquely positioned to leverage 
these trends, with its unparalleled track record and a compelling investment 
  proposition. Our activities and investments in the sector also continue to 
  support wider R&D activities and the further development of pioneering new 
            drugs." 
 
            Investment Highlights 
 
            Attractive Industry Fundamentals 
 
  · The pharmaceutical market has grown steadily, even in the face of 
  recessions and other market downturns. This is demonstrated in the US by 
  the growth in prescription drug sales that is largely uncorrelated to the 
  stock market performance. 
 
  · The worldwide pharmaceutical market is expected to experience steady 
  growth over the next five years, propelled in part by penetration of 
  existing pharmaceutical products in developed markets and the introduction 
  of additional products. 
 
  · DRI believes that there will continue to be a stable, inelastic demand 
  for the products in which it invests, namely drugs with a meaningful value 
  proposition for patients, payers, and physicians. 
 
       Predictable and Uncorrelated Cash Flow Generating Investment Strategy 
 
  · Cash flows that are derived from sales of underlying pharmaceutical 
  products without exposure to the risks of clinical development and the 
  costs of marketing or manufacturing the product. 
 
  · Returns from royalty investments are uncorrelated to other asset classes 
  or macroeconomic trends. 
 
  · Pharmaceutical products generate predictable cash flows due to the 
  highly regulated nature of the pharmaceutical industry. 
 
  · Approved drug products benefit from regulatory and patent protection 
  that prevents direct competition from generic or biosimilar products. 
 
  · Due to the lengthy and transparent clinical trial process required to 
  develop a drug, there is visibility into the potential future competitors 
  that may take market share. 
 
  · Debt assets will allow the Company to pursue investment opportunities in 
  products with compelling value propositions where there may not be a 
  royalty entitlement to purchase. 
 
            Differentiated Sourcing Model 
 
  · DRI has developed a systematic and repeatable approach to sourcing 
  transactions from inventors, academic institutions, small biotechnology 
  companies and large PharmaCos. 
 
  · The Company will benefit from DRI's unparalleled ability to identify and 
  execute royalty transactions as a result of (i) the relationships with key 
  decision makers that DRI has built and maintained at academic and 
  corporate institutions over the last two decades and (ii) DRI's 
  proprietary database that tracks over 6,500 known or potential royalty 
  entitlements on approximately 2,000 drugs. 
 
  · Furthermore, through asset diligence and continual review of the 
  pharmaceutical market, the Investment Manager is actively identifying 
  pharmaceutical products that it believes to have compelling value 
  propositions for patients, payers, and physicians. 
 
  · The Investment Manager intends to leverage these product insights and 
  its relationships to source debt transactions from companies that may have 
  a need for capital but do not have a royalty asset to divest. 
 
            Rigorous Due Diligence Process 
 
  · DRI's comprehensive due diligence process has been developed over 17 
  years of evaluating and forecasting sales of life sciences products. 
 
  · DRI's team operates in a highly integrated manner to conduct due 
  diligence that incorporates a detailed scientific, financial, intellectual 
  property, regulatory, and legal review. 
 
  · The diligence process that the Investment Manager undertakes for each 
  transaction is performed internally and complemented by external expert 
  advice. 
 
  · The Investment Manager leverages insights from its extensive experience, 
  proprietary data sources, and historical analyses to perform a rigorous 
  and disciplined due diligence on potential transactions. 
 
            Track Record 
 
  · DRI has raised US$2.6 billion across three funds and a co-investment 
  vehicle, generating a projected gross unlevered IRR of 20.2 per cent. and 
  gross multiple of 1.8x, and a projected net IRR of 21.9 per cent. and net 
  multiple of 1.8x, on an aggregate basis. (See note 3 below). 
 
  · DRI has acquired 62 royalty streams on 40 products that are estimated to 
  generate in excess of US$3.5 billion in revenue. 
 
            Investment Objective 
 
  The Company will seek to generate attractive, risk-adjusted total returns, 
            primarily through the distribution of income to Shareholders. 
 
            Investment Policy 
 
 The Company will seek to achieve its Investment Objective through investing 
  in a diversified portfolio of investments, predominantly through direct or 

(MORE TO FOLLOW) Dow Jones Newswires

February 12, 2020 02:00 ET (07:00 GMT)