Mr. Behzad Khosrowshahi reports

DRI HEALTHCARE TRUST REPORTS FOURTH QUARTER AND FISCAL 2023 RESULTS

DRI Healthcare Trust has released its financial results for the fourth quarter and fiscal year ended Dec. 31, 2023. The trust's annual 2023 financial statements and management's discussion and analysis (MD&A) have been filed on SEDAR+. All dollar amounts are expressed in U.S. dollars unless otherwise indicated.

"Two thousand twenty-three marked a significant step forward for the growth of the trust," said Behzad Khosrowshahi, the trust's chief executive officer. "Our solid performance resonated through all aspects of the business. We invested in strong new assets to complement our existing portfolio, which continues to perform at a high level; we expanded our shareholder base with several new investors; and we rounded out our capital structure to enhance our deployment capability moving forward. In addition to our recently announced updated deployment and royalty income CAGR guidance targets, we are excited to announce for the first time our 2024 royalty income guidance of $153-million (U.S.) to $155-million (U.S.), excluding any new transactions. This figure also excludes milestone income, allowing for year-over-year comparability. Having deployed $500-million (U.S.) in the past 12 months coupled with these recently updated guidance targets, we believe we have laid a strong foundation upon which to continue delivering further accretive value for our unitholders."

Fourth quarter highlights:

• Total income of $75.8-million (U.S.);
• Normalized total cash receipts of $52.3-million (U.S.) (1);
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $46.5-million (U.S.) (1);
• Comprehensive earnings of $20.4-million (U.S.);
• Basic and diluted adjusted cash earnings per unit of $1.03 (U.S.) and $1.02 (U.S.), respectively (1) (2);
• Net earnings per unit of 39 U.S. cents (basic and diluted) (2);
• Increased total credit available under the trust's credit facility to $500.0-million (U.S.);
• Declared a special cash distribution of 26.62 U.S. cents per unit, a special unit distribution of 76.40 U.S. cents per unit and a regular quarterly cash distribution of 7.5 U.S. cents per unit to unitholders of record as at Dec. 31, 2023.

(1) Normalized total cash receipts and adjusted EBITDA are non-GAAP (generally accepted accounting principles) financial measures. Adjusted cash earnings per unit is a non-GAAP ratio. These measures are not standardized measures under IFRS (international financial reporting standards) and might not be comparable with similar financial measures disclosed by other issuers. The reconciliation of these measures can be found later in the trust's MD&A.

(2) The weighted average number of basic and diluted units for the three months ended Dec. 31, 2023, was 56,332,607 units and 56,464,102 units, respectively.

Fiscal 2023 highlights:

• Deployed $384.7-million (U.S.) in five royalty transactions;
• Completed two follow-on public offerings of 18,653,000 units at $8.12 (U.S.) (3) per unit for gross proceeds of $151.5-million (U.S.);
• Total income of $166.3-million (U.S.);
• Normalized total cash receipts of $131.2-million (U.S.) (1);
• Adjusted EBITDA of $113.2-million (U.S.) (1);
• Comprehensive earnings of $91.2-million (U.S.);
• Basic and diluted adjusted cash earnings per unit of $2.53 (U.S.) and $2.52 (U.S.), respectively (1) (4);
• Basic and diluted net earnings per unit of $2.08 (U.S.) and $2.07 (U.S.), respectively (4);
• Declared total distributions of $92.1-million (U.S.), comprising cash distributions of $49.1-million (U.S.) and unit distributions of $43.0-million (U.S.).

(3) Represents the weighted average cost per unit issued.

(4) The weighted average number of basic and diluted units for the year ended Dec. 31, 2023, was 44,479,802 units and 44,622,811 units, respectively.

Subsequent to the quarter-end:

• Deployed $115.0-million (U.S.) to expand interest in Omidria royalties by replacing previously agreed-upon annual royalty caps with a 30-per-cent royalty on all U.S. net sales;
• Declared a quarterly cash distribution of 8.5 U.S. cents per unit for the first quarter of 2024, payable on April 19, 2024, to unitholders of record on March 31, 2024.

Asset performance

As at Dec. 31, 2023, the trust's portfolio included 26 royalty streams on 20 products that address a variety of therapeutic areas, such as oncology, neurology, ophthalmology, endocrinology, hematology, dermatology, lysosomal storage disorders, immunology and influenza. On Dec. 31, 2023, the royalty asset portfolio had a book value, net of accumulated amortization, of $$706.1-million (U.S.), which generated total cash royalty receipts (1) of $52.3-million (U.S.) and $127.9-million (U.S.) during the three months and year ended Dec. 31, 2023, respectively, and royalty income of $75.4-million (U.S.) and $158.9-million (U.S.) during the three months and year ended Dec. 31, 2023, respectively.

Liquidity and capital

On Dec. 31, 2023, the trust had cash and cash equivalents of $62.8-million (U.S.). The trust's credit facility had an outstanding principal balance of $148.3-million (U.S.) on Dec. 31, 2023.

The trust had 56,358,240 units issued and outstanding on Dec. 31, 2023.

Distributions

On Nov. 13, 2023, the board of trustees approved a quarterly cash distribution of 7.5 U.S. cents per unit to unitholders of record as of Dec. 31, 2023, which was paid on Jan. 19, 2024. On Dec. 20, 2023, the board of trustees approved a special cash distribution of 26.62 U.S. cents per unit and a special unit distribution of 76.40 U.S. cents per unit to unitholders of record as of Dec. 31, 2023. The special cash distribution was paid on Jan. 19, 2024. The special unit distribution was issued to unitholders of record on Dec. 31, 2023, and the units were immediately consolidated such that the total number of units outstanding did not change.

The trust also announced today that its board of trustees has declared an increased quarterly cash distribution in the amount of 8.5 U.S. cents per unit for the first quarter of 2024, payable on April 19, 2024, to unitholders of record as of March 31, 2024.

Normal course issuer bid (NCIB)

During the year, the trust repurchased and cancelled 325,653 of its own units under its normal course issuer bid for an aggregate amount of $1.8-million (U.S.) at a weighted average price of $7.44 (Canadian) per unit ($5.43 (U.S.)). As previously announced, the trust received approval on Nov. 13, 2023, from the Toronto Stock Exchange to acquire, from time to time, if considered advisable, up to an aggregate of 3,280,195 of its units for cancellation. Purchases will conclude on the earlier of the date on which the trust has purchased the maximum number of units permitted under the NCIB and Nov. 19, 2024.

Omidria royalty amendment

On Feb. 1, 2024, the trust amended its existing royalty agreement with Omeros Corp. to expand its royalty interest on the U.S. net sales of Omidria for an upfront purchase price of $115.0-million (U.S.). In accordance with the terms of the amended royalty agreement, Omeros may also be entitled to additional consideration of up to $55.0-million (U.S.) in the event that Omidria sales exceed certain thresholds within a predefined period of time. As a result of the amendment, the trust will now be entitled to receive a 30-per-cent royalty on all U.S. net sales of Omidria until Dec. 31, 2031, and all previously agreed-upon annual royalty caps have been eliminated. As part of the amendment, the trust is no longer entitled to ex-U.S. royalties.

Omidria was approved by the U.S. Food and Drug Administration (FDA) in May, 2014, and the European Medicines Agency (EMA) 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.

2023 highlights

In addition to the strong performance of the asset portfolio during the year, the trust took a number of steps to execute on the strategy outlined to its unitholders since its initial public offering.

On March 8, 2023, the trust bought royalties on the sales of Tzield for $100.0-million (U.S.) from MacroGenics Inc. The transaction entitled the trust to a single-digit royalty on worldwide net sales of Tzield. On April 27, 2023, the trust sold its interest and milestone obligations in the worldwide sales of Tzield to a subsidiary of Sanofi S.A. for $210.0-million (U.S.). In connection with the sale, the trust announced a special cash distribution of $20.0-million (U.S.) to unitholders of record as of June 30, 2023. The proceeds were partially used to finance the special cash distribution, and partially used to pay down the amount outstanding under the trust's revolving acquisition credit facility and pay management and performance fees to the trust's manager.

On June 29, 2023, the trust bought royalties on the sales of Orserdu for $85.0-million (U.S.) from Eisai Co. Ltd (Orserdu I). The transaction entitles the trust to a mid-single-digit tiered royalty on the worldwide net sales of Orserdu. In addition to the running royalties, the trust is also entitled to receive milestones based on the achievement of regulatory approvals and sales performance thresholds. During the year ended Dec. 31, 2023, the trust recorded milestone royalty income of $6.1-million (U.S.) upon EMA approval of Orserdu and the achievement of certain sale performance thresholds.

On July 7, 2023, the trust bought an additional royalty interest in the worldwide sales of Vonjo for $66.0-million (U.S.) from S*Bio Pte. Ltd. (Vonjo II). The transaction entitles the trust to a tiered royalty on worldwide net sales of Vonjo. The trust is entitled to receive quarterly royalty payments on a one-quarter lag based on sales beginning April 1, 2023. The trust received its first payment in Q3 2023. The trust is also entitled to receive milestone payments based on the achievement of regulatory approvals and sales performance thresholds. During the year ended Dec. 31, 2023, the trust recorded milestone royalty income of $5.0-million (U.S.) upon the achievement of certain sales performance thresholds.

On July 19, 2023, the trust issued 9,223,000 units pursuant to a follow-on equity offering for gross proceeds of $74.1-million (U.S.). The 9,223,000 units included units issued pursuant to the exercise by the underwriters of their overallotment option. On Sept. 20, 2023, the trust issued an additional 9.43 million units pursuant to another follow-on equity offering, for gross proceeds of $77.4-million (U.S.). The 9.43 million units included units issued pursuant to the exercise by the underwriters of their overallotment option.

On Aug. 14, 2023, the trust bought an additional royalty interest on the sales of Orserdu for $130.0-million (U.S.) from Radius Health Inc. (Orserdu II). A milestone payment of $10.0-million (U.S.) will be paid upon the occurrence of certain prespecified events. The transaction entitles the trust to a net low-to-high-single-digit tiered royalty on the worldwide net sales of Orserdu. In addition, the trust is also entitled to receive milestone royalty payments on the achievement of sales performance thresholds. During the year ended Dec. 31, 2023, the trust recorded milestone royalty income of $30.3-million (U.S.) upon the achievement of certain sales performance thresholds.

The trust's manager is entitled to performance fees determined on a portfolio-by-portfolio basis pursuant to the terms of a management agreement. As a result of the trust selling its royalty interest in Tzield for $210.0-million (U.S.) and overall strong asset performance, including significant milestone royalty income earned, the conditions for performance fee payments to the manager have been met. For the year ended Dec. 31, 2023, the trust recorded total performance fees of $24.5-million (U.S.).

Throughout 2023, the trust declared and subsequently paid cash distributions totalling $1.10 (U.S.) per unit, for aggregate cash distributions of $49.1-million (U.S.).

Fourth quarter and fiscal 2023 conference call and webcast

As previously announced, management will hold a conference call on Thursday, Feb. 29, 2024, at 8 a.m. ET, to review the trust's 2023 annual results. You can join the call by dialling 1-888-664-6392 or 416-764-8659 approximately 15 minutes prior to the call to secure a line.

A live webcast of the conference call, including a slide presentation, will be available on-line. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived on the trust's website following the call date.

About DRI Healthcare Trust

DRI Healthcare is managed by DRI Capital Inc., 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 $3.0-billion (U.S.), acquiring more than 70 royalties on 45-plus drugs, including Eylea, Keytruda, Orserdu, Spinraza, Stelara, Vonjo, Zejula and Zytiga. DRI Healthcare's units are listed and traded on the Toronto Stock Exchange in Canadian dollars under the symbol DHT.UN and in U.S. dollars under the symbol DHT.U.

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