Mr. David Levine reports

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

DRI Healthcare Trust has acquired a royalty interest in the worldwide net sales of all formulations of sebetralstat from KalVista Pharmaceuticals for an aggregate purchase price of up to $179-million (U.S.), comprising a $100-million (U.S.) upfront payment, up to $57-million (U.S.) in a sales-based milestone payment and a one-time $22-million (U.S.) optional payment. Additionally, the trust is making a $5-million (U.S.) 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 biopharmaceutical company headquartered in Cambridge, Mass. 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 preapproval 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 per cent on net sales up to and including $500-million (U.S.), 1.10 per cent on net sales above $500-million (U.S.) and up to and including $750-million (U.S.) and 0.25 per cent on net sales above $750-million (U.S.). KalVista is entitled to a potential one-time sales-based milestone payment of $50-million (U.S.) if annual worldwide net sales of sebetralstat meet or exceed $550-million (U.S.) in any calendar year before Jan. 1, 2031.

If sebetralstat is approved prior to Oct. 1, 2025, KalVista will have the option to receive a one-time payment of $22-million (U.S.). If KalVista chooses to receive this optional payment, the royalty rate on net sales up to and including $500-million (U.S.) will increase from 5.00 per cent to 6.00 per cent and the sales-based milestone amount will increase to from $50-million (U.S.) to $57-million (U.S.).

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 $5-million (U.S.) in KalVista's common stock in a private placement transaction. The private placement transaction is expected to close on Nov. 5, 2024, subject to the satisfaction of customary closing conditions.

About DRI Healthcare Trust

The trust is managed by DRI Capital Inc., a pioneer in global pharmaceutical royalty monetization. Since its initial public offering in 2021, the trust has deployed more than $1-billion (U.S.), acquiring more than 25 royalties on 20-plus drugs, including Eylea, Orserdu, Omidria, Spinraza, Stelara, Vonjo, Zejula and Zytiga.

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