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DRI Healthcare Trust Announces Acquisition of a Synthetic Royalty Interest in the Worldwide Sales of Sebetralstat for the Treatment of Hereditary Angioedema Plus an Equity Investment in KalVista Pharmaceuticals
– First pre-approval royalty acquisition and first equity investment highlight evolving investment strategy –
– Up to US$184 million investment brings capital deployment to over US$1 billion since IPO –
– Long-term asset in new therapeutic area further increases portfolio duration and diversification –
TORONTO, Nov. 4, 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 acquired a royalty interest in the worldwide net sales of all formulations of sebetralstat from KalVista Pharmaceuticals ("KalVista") for an aggregate purchase price of up to US$179 million, comprised of a US$100 million upfront payment, up to US$57 million in a sales-based milestone payment and a one-time US$22 million optional payment. Additionally, the Trust is making a US$5 million investment in KalVista's common stock in a private placement transaction.
If approved, sebetralstat would be the first and only oral on-demand therapy for treating attacks associated with hereditary angioedema ("HAE"). HAE is a rare genetic disorder characterized by recurring episodes of severe swelling in various parts of the body, including the face, extremities, gastrointestinal tract, and airways. Sebetralstat was developed by KalVista, a publicly listed (NASDAQ: KALV) biopharmaceutical company headquartered in Cambridge, Massachusetts. KalVista operates in both the United States and the United Kingdom with approximately 150 employees.
Sebetralstat has a highly attractive clinical profile and has exhibited significant efficacy and favourable safety in clinical trials. The efficacy of sebetralstat has been evaluated in a phase II trial as well as the phase III KONFIDENT trial, a randomized, double-blind, placebo-controlled, three-way crossover design which enrolled 136 adult and adolescent HAE patients. Sebetralstat showed statistically and clinically significant efficacy in time reduction to beginning of symptom relief, time reduction in attack severity and time to complete attack resolution compared to placebo. On the safety front, sebetralstat showed a safety profile similar to that of placebo.
The U.S. Food and Drug Administration ("FDA") has accepted KalVista's New Drug Application ("NDA") submission for sebetralstat, and the agency set a Prescription Drug User Fee Act ("PDUFA") date of June 17, 2025. Additionally, the European Medicines Agency ("EMA") has validated the submission of the Marketing Authorization Application ("MAA") for sebetralstat, and KalVista has submitted further MAAs in the United Kingdom, Switzerland, Australia, and Singapore. KalVista will use the proceeds of this transaction to fund the continued clinical development and commercialization of sebetralstat.
"We are excited to add our first pre-approval asset to the portfolio," said Ali Hedayat, Acting Chief Executive Officer of the Trust's investment manager. "Creating this synthetic royalty on such a high-quality asset like sebetralstat showcases our ability to expand our addressable market by seeking out opportunities with new partners like KalVista. Sebetralstat has exhibited robust clinical data, and we are excited about the potential long duration of cash flows that this deal presents to our unitholders. We continue creating deal structures that add further accretive value to all stakeholders within our curated and well-diversified portfolio."
"We create solutions with high-quality partners working to benefit the lives of patients around the world with high unmet medical needs," said Navin Jacob, Chief Investment Officer of the investment manager. "Our royalty investment reflects our research driven belief that sebetralstat has the potential to be the foundational treatment for all people living with HAE. We would like to thank the KalVista team for working together to craft a mutually beneficial deal for both organizations."
The transaction entitles the Trust to a tiered royalty of 5.00% on net sales up to and including US$500 million, 1.10% on net sales above US$500 million and up to and including US$750 million, and 0.25% on net sales above US$750 million. KalVista is entitled to a potential one-time sales-based milestone payment of US$50 million if annual worldwide net sales of sebetralstat meet or exceed US$550 million in any calendar year before January 1, 2031.
If sebetralstat is approved prior to October 1, 2025, KalVista will have the option to receive a one-time payment of US$22 million. If KalVista chooses to receive this optional payment, the royalty rate on net sales up to and including US$500 million will increase from 5.00% to 6.00%, and the sales-based milestone amount will increase to from US$50 to US$57 million.
Royalty receipts will be collected quarterly on a one-quarter lag, with the first royalty receipt being paid to the Trust in the quarter immediately following the launch of sebetralstat. Royalty receipts are anticipated to be collected through at least 2041.
The Trust will also invest US$5 million in KalVista's common stock in a private placement transaction. The private placement transaction is expected to close on November 5, 2024, subject to the satisfaction of customary closing conditions.
About Sebetralstat
Discovered and developed entirely by the scientific team at KalVista, sebetralstat is a novel, investigational oral plasma kallikrein inhibitor for the on-demand treatment of HAE. Sebetralstat received Fast Track and Orphan Drug Designations from the FDA, as well as Orphan Drug Designation and an approved Pediatric Investigational Plan from the EMA.
About Hereditary Angioedema
HAE is a rare genetic disease resulting in deficiency or dysfunction in the C1 esterase inhibitor (C1INH) protein and subsequent uncontrolled activation of the kallikrein-kinin system. People living with HAE experience painful and debilitating attacks of tissue swelling in various locations of the body that can be life-threatening depending on the location affected. All currently approved on-demand treatment options require either intravenous or subcutaneous administration.
About KalVista Pharmaceuticals, Inc.
KalVista Pharmaceuticals, Inc. is a global pharmaceutical company whose mission is to develop and deliver life-changing oral medicines for people affected by rare diseases with significant unmet need. Sebetralstat, KalVista's novel, investigational candidate for the oral, on-demand treatment of hereditary angioedema, is under regulatory review by the FDA with a PDUFA goal date of June 17, 2025. In addition, KalVista has completed MAA submissions for sebetralstat to the EMA as well as regulatory authorities in the United Kingdom, Switzerland, Australia, and Singapore, and KalVista anticipates filing a MAA in Japan in late 2024. For more information about KalVista, please visit www.kalvista.com or follow on social media at @KalVista and LinkedIn.
About DRI Healthcare Trust
The Trust is managed by DRI Capital Inc. ("DRI Healthcare"), a pioneer in global pharmaceutical royalty monetization. Since its initial public offering in 2021, the Trust has deployed more than US$1.0 billion, acquiring more than 25 royalties on 20-plus drugs, including Eylea, Orserdu, Omidria, Spinraza, Stelara, Vonjo, Zejula and Zytiga. The 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.
Caution concerning forward-looking statements
This news release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information can generally be identified by the use of 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, the potential and timing of royalty payments, the timing of closing of the private placement transaction in KalVista's common stock, expectations regarding KalVista's regulatory submissions, the anticipated royalty income and anticipated sales of the products underlying such royalties. This forward-looking information is subject to a number of assumptions, including, but not limited to: statements regarding the terms and conditions of our transaction being based on the transaction documentation, statements with respect to royalty income, total income and future sales of the products underlying our existing royalties being 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 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 on the Trust's website at drihealthcare.com.
