Good morning, everyone. Welcome to DRI Healthcare Trust 2025 Second Quarter Earnings Call. Listeners are reminded that certain statements made in this earnings call presentation, including responses to questions, may contain forward-looking statements within the meaning of the Safe Harbor provisions of Canadian provincial securities laws. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for this quarter, the Risk Factors section of the Annual Information Form, and DRI Healthcare 's other filings with Canadian securities regulators. DRI Healthcare does not undertake to update any forward-looking statements.
Such statements speak only as of the date made. Today's presentation also references non-GAAP measures. The definition of these measures and the reconciliations to measures recognized under IFRS are included in our earnings press release as well as in our MD&A for this quarter, both of which are available on our website and on SEDAR Plus. Unless otherwise specified, all dollar amounts discussed today are in US dollars. I want to remind everyone that this conference call is being recorded today, Thursday, August 14, 2025. DRI Healthcare Trust's quarterly results press release and the slides of today's call will be available on the investor page of the company's website at drihealthcare.com. I would now like to introduce Mr. Gary Collins, Executive Chair of the Board of DRI Healthcare . Please go ahead, Mr. Collins.
Thank you, Operator, and good morning, everyone. Thank you for taking the time to join us today. With me are Ali Hedayat, CEO and Board Trustee, Navin Jacob, Chief Investment Officer, and Amit Kapur, Chief Financial Officer. I'll begin the call by briefly discussing our internalization, which closed on July 1st. Ali will provide an overview of our operating highlights. Next, Navin will discuss our portfolio assets and provide an update on the market outlook. Finally, Amit will discuss our key financial highlights before moving on to questions and answers. We're pleased to have completed the internalization of our investment management function as of July 1st. The employees of DRI Capital have now transitioned to a subsidiary of DRI Healthcare . Internalization will lead to better strategic alignment of interest between unitholders and DRI Healthcare , with stronger governance and a more investor-friendly structure that offers greater transparency.
We expect this will open up a new audience of investors, potentially leading to a broader unitholder base, a heightened corporate profile, and enhanced trading liquidity. Additionally, it's important to note that we estimate this will result in cumulative savings of over $200 million over the next 10 years. Operationally, we'll have more flexible capital and a stronger cash position. With internalization complete, I've assumed the role of Executive Chair of DRI Healthcare , and Ali has taken the role of Chief Executive Officer. Today, we are announcing that Amit Kapur will be departing DRI Healthcare at the end of September. Amit very kindly agreed to join us at DRI at a uniquely challenging point last summer to help stabilize the company and put us on a more solid footing.
Amit played a significant leadership role as the Trust evaluated all options as part of the Board's strategic review, which has resulted in our successful internalization of the manager. During his tenure, Amit played an integral role in shaping the financial strategy, governance framework, and the growth trajectory of the Trust. Amit led critical initiatives that quickly strengthened the Trust's financial foundation and governance framework and enhanced operational efficiency while supporting our continued long-term value creation for unitholders. On behalf of the Board, our team, and indeed our unitholders, I want to express our gratitude to Amit for his unique skills and leadership and as a highly valued partner in a very challenging period. We all wish him the very best as he brings that leadership and skill to his next venture.
The Board and I are confident that we'll continue the strong growth and value creation that unitholders have benefited from since the company's inception. With that, I'll turn the call over to Ali, who will discuss our recent highlights.
Thank you, Gary. Our team is pleased to have completed the important milestone of internalizing the manager. We've come a long way since the events of last summer, and I'm greatly appreciative of the hard work and constructive approach Gary and the Board took in helping us to chart a path through these events to what we believe is a better long-term structure for all of our stakeholders. This quarter, our portfolio receipts were impacted by weak performance in our Bonjour and Omidria investments, which were offset by continued strength in our Xolair royalty in the legacy portfolio, as well as in our Orserdu and Zempzyre assets. Navin will discuss our performance in detail, but at a high level, we believe the weakness in Bonjour is likely to persist due to the impact of Medicare and 340B headwinds, while we are likely to see some normalization in Omidria.
Orserdu and Xolair continue to significantly outperform our expectations, demonstrating the value in the breadth of our portfolio. Looking forward, we also expect stronger performance in our Ectorly asset than what we had originally underwritten. The second quarter also continues to reflect an elevated cost structure, both due to one-off expenses related to the internalization process itself, as well as the absence of the synergies resulting from the process, which we expect will be reflected in run rate expenses exiting the fourth quarter. With the completion of internalization, we have taken a more proactive approach to optimizing our capital structure. The reactivation of our normal course issuer bid gives us the ability to purchase approximately 3.15 million units in aggregate. As of June 30th of this year, we acquired and canceled approximately 958,000 units for $9.1 million.
We also took further steps to increase unitholder value by redeeming and canceling $10 million of face value of our Series C preferred securities for $9.5 million, along with outstanding and accrued interest. I want to reiterate that this more dynamic approach to our capital base does not come at the expense of deployment, but is complementary to it and also helps us manage the cadence of what is naturally a lumpy outflow on the investment side. Our intention is to constantly optimize our mix of deployment dollars, NCIB, and debt repayment to sustain an optimal spread between our portfolio returns and our cost of capital. In July, we were pleased to see the approval of KalVista subetrostat, now named Ectorly, by the FDA. Ectorly is the first and only oral on-demand therapy for treating attacks associated with hereditary angioedema, a rare genetic disorder.
A royalty interest in Ectorly was acquired in November of last year. It was DRI 's first acquisition of a purely pre-approval asset and our first synthetic royalty transaction in over three years. The aggregate purchase price was up to $179 million. This consisted of a $100 million upfront payment, a $57 million sales-based milestone payment, and an optional one-time payment of $22 million. DRI also made a $5 million investment in KalVista ' common stock. With Ectorly's approval, KalVista exercised its option under the agreement to receive the one-time $22 million payment. As a result, DRI 's first-year royalty rate will increase from 5%- 6% on net sales up to and including $500 million, 1.1% on net sales above $500 million and up to and including $750 million, and 0.25% on net sales above $750 million.
The sales-based milestone payment also increased from $50 million to the $57 million in conjunction with the exercise of this $22 million option. Royalty receipts on Ectorly are expected to begin next quarter and will be collected on a one-quarter lag basis. We anticipate cash receipts through at least 2041. I will leave it to Navin to further discuss this asset in detail, but I want to highlight that Ectorly showcases our ability to structure creative, mutually beneficial deals and through structures like the adjacent equity investment generate additional potential value. We intend to continue to carefully deploy a measured portion of our assets to similar pre-approval deals, with the benefits to our portfolio manifesting in both longer duration and better returns.
With over $255 million available in our facilities following the $22 million payment to KalVista , we have significant additional capital to continue exercising our proven strategy and a robust pipeline of opportunities to deploy that capital. I will now turn the call over to Navin Jacob, our Chief Investment Officer.
Thank you, Ali. Regarding our existing portfolio performance, the table on slide nine shows the individual royalty receipts for the second quarter of 2025 compared to the same period in the previous year and the previous quarter. Our portfolio generated total cash receipts of more than $40 million this quarter. Receipts decreased by 7% from the first quarter of 2024 for a few reasons, including primarily a decrease in the sales volume of Omidria and achieving the annual royalty cap of the original Ampavelli investment. The decrease was partially offset by the increase in Orserdu sales, the removal of certain deductions in Orserdu too, and the additional Zempzyre royalty stream. As we discuss the key assets in the portfolio, let me first spend a moment on subetrostat, now marketed as Ectorly.
As Ali mentioned, on July 7, the FDA approved Ectorly as the first and only oral on-demand therapy for hereditary angioedema or HAE attacks, offering patients a welcome alternative to injectable rescue medicines. This approval is a significant milestone for us for several reasons. It was our first pre-approval royalty deal and our first direct equity stake in an innovator partner, a clear sign that the platform can originate transactions earlier in the drug development cycle. The success of that strategy is now validated by the FDA approval less than nine months after we closed the deal. Additionally, in July, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion recommending marketing authorization for subetrostat, and the European Commission's final decision is expected by early October. The United Kingdom's regulatory agency, MHRA, approved Ectorly on July 15, which was earlier than we anticipated.
Ectorly introduces a new therapeutic area to our portfolio and carries cash flow duration through at least 2041, lengthening the weighted average lifespan of our royalty stream. The transaction has pushed our cumulative deployment since our 2021 IPO above the billion-dollar mark, reinforcing our ability to scale while remaining selective. A commercial launch is expected this quarter. Royalty receipts follow on a one-quarter lag, meaning initial cash flows are anticipated to begin in the second half of this year, although meaningful contribution is likely only to start in 2026, given early launch dynamics such as reimbursement. Ectorly is a textbook example of how we can create value for patients, biopharma partners, and unitholders by moving earlier, structuring creatively, and taking on a measure of disciplined risk in our deployment. We look forward to updating you as royalties begin to come in.
Omidria royalty receipts decreased 20% from the previous year because of continued pressure from the Merit-based Incentive Payment System, or MIPS, but increased 12% from the previous quarter. As we highlighted last quarter, Omidria sales are notably lower in January, driven by reduced purchasing patterns as wholesalers appear to reduce inventory to reflect weaker demand. This weakness was seen in Q2 2025, albeit not as weak as Q1 2025. We are now observing a slow stabilization in demand as physicians refine their usage patterns to avoid potential penalties tied to overutilization. Looking ahead, we anticipate a gradual recovery in Omidria sales, with growth resuming in the second half of 2025. This outlook reflects intensified commercial efforts by the marketer and the upcoming launch of Omidria in the hospital outpatient department setting.
Orserdu royalty receipts were up 43% year-over-year at $12.8 million versus $8.9 million in Q2 2024, as a result of growing sales and the removal of certain deductions for Orserdu, for which we are now experiencing a higher royalty rate on a go-forward basis. In the U.S., we are seeing robust sales growth driven by marketer initiatives and a growing prescription base, despite Medicare policy changes. Outside the U.S., we expect targeted launches of Orserdu and ongoing efforts by the marketer to secure national reimbursement in priority markets. Based on Q2 2025 sales, we anticipate Q3 2025 royalty receipts of over $15 million. Orserdu is now annualizing at over $600 million and is vastly outperforming our expectations. Finally, ongoing clinical trials in early-stage breast cancer indications position Orserdu for potentially expanded indications and treatment settings which were not included in our acquisition forecast.
In other words, new combinations and/or indications would mean even greater upside for this important asset that is already outperforming our expectations. Spinraza royalty receipts increased 16% year-over-year, driven by sustained favorable net pricing in the U.S. and increased sales volume in international markets. Spinraza is an important part of Biogen's rare disease portfolio. Bonjour royalty receipts for the quarter decreased 11% compared to the previous year, due mainly to changes in U.S. reimbursement impacting gross net adjustment, with the Part D Medicare discounts that came into effect in 2025. Sobey recently reported second quarter 2025 sales of roughly $31 million. This represents a year-over-year decline in revenue, but an 11% increase in volume growth. Sobey commented that continued demand was outweighed by the impact from gross net adjustments, highlighting two factors: 340B reforms and an increase in Medicare Part D rebates driven by the Inflation Reduction Act.
The company provided updates on its ongoing strategic efforts in label expansion, guideline support, geographic expansion, and continued progress in advancing new indications such as the Pacifica and Paxos studies. Looking ahead, we remain confident in Sobey's aims to broaden Bonjour's label through the Europe-focused Pacifica Phase III trial and other new indications, which, as a reminder, were not included in our original acquisition forecast. Turning to Kesgevi, recall that we get paid in the first quarter of every year an annual license fee and a separate sales-based license fee. Even though we're unlikely to earn a sales-based fee for a few years, the performance of that drug should not be ignored. When we review all key performance indicators, including the number of authorized treatment centers that are now up and running, cell collections, and patients infused, we see an asset that is outperforming our expectations.
The strength in the KPIs is translating to better-than-anticipated sales as well. For Q2 2025, Vertex announced sales of $30 million. In other words, annualizing at well over $100 million. Kesgevi is exhibiting a ramp that is roughly one year faster than we initially anticipated. In summary, Bonjour and Omidria are underperforming our underwriting. However, Orserdu, Kesgevi, and Xolair are outperforming our expectations. Furthermore, we anticipate in the medium term, Ectorly will also outperform our initial expectations. Because our royalties are spread across therapeutic areas and mechanisms, any temporary headwind in a single molecule is naturally smoothed out by the strength of the rest of the portfolio. This diversification underpins the stable cash flows you see in our results, and lets us continue to deploy capital without outsized exposure to any single investment's performance.
The biotech sector faced significant volatility in the first half of 2025, driven by persistent inflation, elevated interest rates, and macroeconomic pressures. In the second quarter, we saw the continuation of an elevated interest rate environment from the first quarter, as well as continued tariff uncertainty, budget and personnel cuts affecting the FDA, and headlines regarding potential drug pricing reform. Despite these headwinds, during Q2 2025, we tracked nine royalty transactions totaling $3 billion in total value, which compares to 25 equity deals for the total of $3.6 billion raised by biopharma companies across the U.S. and Europe. This remarkable increase in the biopharmaceutical industry's interest in royalty transactions is reflected in our pipeline, which continues to be over $3 billion, representing the aggregate value of potential opportunities under review by our investment team.
More broadly, we view today's market conditions as a fundamental shift in the biotech funding environment rather than a temporary dip. The era when early-stage companies could easily tap public equity markets, particularly during the 2020 and 2021 boom, has given way to a new paradigm. In this environment, non-diluted royalty funding has emerged as a critical and lasting tool in capital formation. We anticipate that this trend will continue, driven by the steady increase in royalty-based and structured financing across the sector. Amid these changing markets, we remain focused on sourcing and creating royalties-hypertherapies with the potential to meaningfully improve patient outcomes and quality of life. I will now turn the call over to our CFO, Amit Kapur.
Thank you, Navin. We posted financial results for the quarter that were in line with our expectations.
We recorded $40.2 million in total cash receipts, a 7% decrease over the prior period, reflecting the changes in receipts noted by Navin. We recorded $44.1 million in total income, a 6% increase over the prior year period. We recorded $30.4 million in adjusted EBITDA, an 8% decrease over the prior year period. The decline in adjusted EBITDA reflects the impact of non-recurring charges in professional fees and other expenses related to internalization transactions, totaling $2.3 million. Total internalization expenses are just over $6 million for the year. Our adjusted EBITDA margin year-to-date was 80%. Without these non-recurring expenses, year-to-date adjusted EBITDA margin would have been 87% in line with historical performance. With internalization complete, we expect adjusted EBITDA to return to these levels in future quarters. Finally, we delivered $0.51 in basic adjusted cash earnings per unit and declared cash distributions of $0.10 per unit.
Moving to slide 13, we continue to generate strong cash flow from our assets. For the 12 months ending June 30th, 2025, we recorded royalty income of $186.8 million, plus the change in the fair value of royalty assets, the unrealized gain on marketable securities, and other interest income for a total income of $191.2 million. After adjusting for royalties receivables, the unrealized gain on marketable securities, and the change in the financial royalty assets, we achieved normalized total cash receipts of $185.7 million. Our operating expenses, management fees, and performance fees totaled $35.4 million, resulting in adjusted EBITDA of $150.3 million and an adjusted EBITDA margin of 81%. We also generated adjusted cash earnings per unit of $2.15.
Moving to slide 14, as at June 30th, we had $82.5 million of cash and cash equivalents on hand, $49 million of which was used to fund the termination of a previous management contract subsequent to June 30. We also had $49.6 million of royalty receivables and $273.1 million of credit availability from our bank syndicate. We are prudent allocators of capital, and our focus remains on growing our portfolio through the attractive opportunities we are seeing in the market that Navin outlined earlier. In addition, we will continue to pursue all opportunistic capital deployment strategies to maximize value creation for unitholders. As highlighted by Ali in his remarks, this quarter presented an opportunity to redeem and cancel $10 million base value of our Series C preferred securities at a discount.
Additionally, we strategically allocated capital to repurchase and retire approximately 958,000 units through our share buyback program, further reinforcing our commitment to optimizing capital structure and returning value to unitholders. We will continue to retain discretion, whether to make purchases under the NCIB, if any, and to determine the timing and amount and acceptable price of any such purchases, subject at all times to applicable TSX and other regulatory requirements. All units purchased by DRI under the NCIB will be canceled. With that, we will now take your questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Les Sulewski with Truist Securities. Your line is now open.
Good morning. Thank you for taking my questions. Maybe for Ali and the team, could you provide any latest kind of commentary around transactions and deal flows, whether it's something that you walked away from or an early stage or late stage perhaps? How do you view the current valuation environment for commercial assets? Is there a disconnect versus clinical stage assets on the valuation front? For Navin, on Ectorly, was the $22 million optional payment partial to KalVista's decision or a mutual decision? How do you view the challenges around the approval of Ectorly that potentially have any spill through on the commercialization front? On Omidria, can you provide any comments on how the No Pain Act has translated to the drug uptake? Thank you.
Ali, do you want to take that first question? I'm happy to as well.
Yeah, I'll take it. Sorry, we were just on mute there. Look, I think I'll give you a broader panorama of what we're seeing out there in the market, and then I'll let Navin address the pipeline and the drug-specific questions. I think, you know, probably a framing comment here is that, you know, as with many other areas of the market, you're seeing a lot of competition from alternative fixed income in our space. I think naturally where that moves towards is transactions that are relatively simpler in structure and with fixed income-like characteristics in terms of caps and collars and those types of features.
I think when you think through our pipeline, and this touches also on your question about pre-approval, you know, we're naturally going to areas where we can extract excess return, and those areas are basically complex structuring, probably areas that go to our strengths in terms of analysis of IP and sales forecasting, have more equity-like components to the return profile, and also to some extent towards a little bit more pre-approval exposure. I think the sum of all of those are things that we have to balance and come up with a framework around in terms of how we want to allocate risk and drive returns.
You know, I think the easier part of the transaction structure, which I think was an area where we weren't particularly present in a large way historically, but certainly was part of our transaction flow, has become more competed on the margin, and returns there have gotten a little bit more compressed.
Let me start with the easy one on Ectorly. It was a mutual decision pre-approval, or rather at the time of deal closing, that KalVista would have that option to buy in more into the royalty. It was their option, but obviously we had to decide together that this is something that made sense. They chose, upon approval, to call that option. That gave them more cash and it increased our exposure to the asset, which we wanted because we're quite happy with the profile of that asset. As stated before, we think in the medium term, there's actually more upside relative to our initial expectations. With regards to Omidria, how is the No Pain Act affecting uptake? From everything we've seen, the question around whether physicians want to use the drug or not has not changed, or rather our thesis around that has not changed.
What has been weaker than we anticipated was some of the reimbursement challenges, specifically around MIPS. Because of that demand, the unit volume demand that each physician has or utilizes has decreased and has been decreasing and is now starting to slowly stabilize. The individual physician had to decrease that level of volume because there were some incentive payment offsets that happen if there's too much volume, basically, by each physician. With that said, towards the tail end of Q2, we started seeing some stabilization as we had anticipated. In the second half of this year, the No Pain Act has a benefit insofar as the HOPD setting coming online. It came online at the beginning of this year, but we anticipated we would start seeing some of that impact in the second half of this year.
The HOPD setting, again, is the hospital outpatient setting where there was no reimbursement before, and now there is starting in 2025.
That's helpful. Thank you.
Yep.
Your next question comes from Erin Kyle with CIBC. Your line is now open.
Hi. Good morning. It's Erin Kyle on for Scott Fletcher here. I want to start maybe with Ampavelli. It was approved for a new indication last month, I believe at the end of July. Maybe you can just talk about whether that new indication was factored into your acquisition analysis or if there's any upside you see from that.
We did not include that in our initial assessment, and that is all upside. Now, having said that, Erin, recall that Ampavelli's FOB acquisition is capped at $500 million annually. We only receive royalties up until $500 million of sales. What this new indication does, or two indications provide for us, is greater certainty around achieving that cap. The product has already been achieving above that cap. This just increases the likelihood of continuing to receive royalties up to that cap.
Thank you. It may be fair to say from a modeling perspective, we might model you hitting that cap a little bit earlier than you have in this year so far. My other question was on Zytiga. Just for our model, the cash receipts from Zytiga were a bit below our expectations. I understand that generics have entered the European market. I am just wondering if you could comment on whether the impact of sales has been as you expected or if it has been a little bit more significant or what you have seen there.
Overall, Zytiga has been performing, I would say, relatively in line with, if not slightly better than expectations. There is nothing here that we're seeing that concerns us.
Okay. Thank you. That's helpful there. Maybe I'll just ask one more question just on the pipeline here and the timing of royalty deals. I believe at the beginning of the year, we kind of talked about 2025 being a second-half weighted year for acquisitions, just given what a large deal kind of fell out of the pipeline earlier this year. Just in terms of cadence, what have you been seeing so far, and should we be expecting a ramp-up in acquisitions in the second half still?
Look, it's just.
Go ahead, Ali. Sorry.
No, I'm going to say, look, it's always intrinsically hard for us to forecast within a year or within a few months what we're going to deploy, right? It's intrinsically a pretty lumpy process, and we're negotiating multiple large transactions simultaneously and some progress to the finish line and others don't. I think we had a little bit of dislocation in the earlier part of this year because of the transaction that you referred to. I think at this point, we're back to our sort of normal cadence and process in terms of looking for and progressing deals. To say that we'll close one in September instead of November is probably false precision to some extent. I don't know, Navin, if you have.
No, that summarizes it.
Thank you. That's fair. I'll pass the line.
Your next question comes from Ash Verma with UBS. Your line is now open.
Hey, good morning. This is Dee on behalf of Ash. Thanks for taking our questions. I just have one on Ectorly for HAE. Where do you think the revenue opportunity lies in the long run? Is this for acute treatment or preventative? Also, how do you think about the duration of the treatment in either setting? Thank you.
Just as a reminder, Ectorly is approved as a treatment for HAE attacks. This is not a prophylactic, i.e., it's not a preventative treatment. It is not a prophylaxis. It's not preventing the attack. It is treating the attack. The upside comes from multiple key performance indicators that we're seeing, the first of which is the number of patients that have shown interest. The company has spoken about several thousand patients signing onto the website and that they are now tracking as interested in utilizing Ectorly. All of those numbers are significantly ahead of where we had anticipated they would be, the company at this point in time of the launch would have found, and they have. That's a lot of upside, potential upside for us. Secondly, the price came in quite strong, so we're happy about that.
Thirdly, volumes in the broader on-demand setting have been quite stable, and there has been a lot of discussion, I think, leading into the Ectorly launch that the broader market had been declining. We're not seeing any signs of that. That was part of our research before even entering the deal, and we thought that there was a disconnect there with regards to the size of the market relative to expectations, which is why we went after the asset. From everything we're seeing, we anticipate it should be a strong launch. The first couple of quarters, just to set expectations, will be light relative to how much royalties we get in, just because there are some reimbursement systems that have to be put into place, some effectively sampling that also has to happen.
We feel extremely confident that towards the end of next year, you're going to see quite robust sales.
Thank you. Very helpful.
Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Prashanth Kamath with National Bank. Your line is now open.
Morning. Prashanth here calling in for Zach. Can you walk us through the impacts of the reimbursement program changes for Bonjour in Q2, and what are your expectations for the coming quarters?
Yes. On Bonjour, we had described some of that during our Q1 call as well, that we had started seeing a significant impact there, mostly coming from the IRA impact, inflation reduction impact on Medicare Part D, and some of the changes to what is effectively what used to be called the donut hole, but coverage there and reimbursement that pharmaceutical companies have to make. That has turned out to be worse than we had anticipated. We are seeing a little bit of stabilization offset there with regards to the volume, but the impact of the reimbursement is here to stay, as we noted in the preparatory remarks.
Got it. Thank you. Just one more for me. Orserdu is firing on all cylinders. Can you give us some color on what's driving the success there?
Several things. There's a continued increase in volumes in the U.S. Some folks had been thinking that volumes there had flattened out. We're not seeing that. That is actually continuing to grow there. The ex-U.S. launch has been extremely robust. They have achieved reimbursement in several countries and launches in several countries faster than we anticipated. I think, broadly speaking, the ESR1 landscape, the size of the market was bigger than we had initially anticipated.
Good color. Thank you for the clarity. I'll turn it over. Thanks.
There are no further questions at this time. I will now turn the call over to Gary Collins for closing remarks.
Thank you, everyone, for joining us today. We look forward to discussing our Q3 results with you all in November. Thank you again for your continued commitment to DRI Healthcare Trust.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.