PureTech Health H2 2024 Earnings Report

PureTech Health EPS Results

• Actual EPS: N/A
• Consensus EPS: -$2.83
• Beat/Miss: N/A
• One Year Ago EPS: N/A

PureTech Health Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $30.20 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

PureTech Health Announcement Details

• Quarter: H2 2024
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 9:00AM ET

PureTech Health (NASDAQ:PRTC) plc, engages in the development and commercialization of biotechnology and pharmaceutical solutions in the United States. The company is developing LYT-100, which is under Phase 2 stage, to treat idiopathic pulmonary fibrosis (IPF); and LYT-200, a IgG4 monoclonal antibody, currently under Phase 1/2 stage, targeting galectin-9 for treating solid tumors and hematological malignancies. It also develops SPT-300, an oral drug of allopregnanolone for the treatment of anxious depression; SPT-320, a novel prodrug of agomelatine for the treatment of generalized anxiety disorder; and SPT-348, a prodrug of a non-hallucinogenic neuroplastogen for the treatment of mood and other neuropsychiatric disorders. In addition, the company is developing hydrogels to enable the oral administration of peptide therapeutics in preclinical development. The company was incorporated in 2015 and is headquartered in Boston, Massachusetts.

PureTech Health H2 2024 Earnings Call Transcript

Key Takeaways

• Duprofenidone Phase IIb delivered unprecedented results in IPF with durable lung-function stabilization and improved tolerability, and PureTech plans FDA discussions to align on a Phase III registration pathway by end of 2025.
• LYT200 oncology program showed a favorable safety profile with six complete responses in relapsed/refractory AML and early signs of efficacy in solid tumors, with top-line AML data expected in Q3 2025.
• CoBINFI approval for schizophrenia drove $27 million in Q1 2025 sales—48% above analyst estimates—and positions PureTech to receive royalties and up to $400 million in milestones from Royalty Pharma.
• PureTech maintains a strong balance sheet with ~$339 million in cash and equivalents, an operational runway into 2027, and an efficient hub-and-spoke R&D model that minimizes dilution and returned $100 million to shareholders in 2024.
• Despite multiple FDA approvals and a robust pipeline, PureTech’s market capitalization remains heavily discounted to its intrinsic value, prompting the board to evaluate strategic options including buybacks, spin-outs, partnerships, and potential take-private offers.

Presentation

[Operator]

Greetings, and welcome to the PureTech Health twenty twenty four Year End Financial Results Conference Call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and introductions will follow at that time. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alison Meade Talbot, Senior Vice President of Communications. Thank you, Alison. You may begin.

[Allison Talbot, Head of Communications & Investor Relations at PureTech Health]

Thank you for joining us today for PureTech's twenty twenty four financial results webcast. Our annual report will be made available later today, portions of which are also filed with our Form 20 F. This information is available on the investors page of our website at puretechhealth.com. Puretech is guided by a seasoned leadership team with a strong track record of translating scientific innovation into impactful medicines and long term shareholder value. Today, I'm pleased to be joined by members of the senior team, including Brock Chirrero, chief executive officer Eric Alenko, cofounder and president Chip Sherwood, general counsel and Michael Inbar, chief accounting officer.

[Allison Talbot, Head of Communications & Investor Relations at PureTech Health]

I would like to remind you that during today's call, we will be making certain forward looking statements. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially, and we ask that you refer to our annual report and our SEC filings for a complete discussion of these items. We undertake no obligation to revise or update any forward looking statements or information, except as required by law. I also want to remind you that we will be referring to certain non IFRS measures in this presentation. The presentation of this non IFRS financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with IFRS.

[Allison Talbot, Head of Communications & Investor Relations at PureTech Health]

A reconciliation of the IFRS to non IFRS measures that we will be referring to today can be found in this presentation and is also available on our Investor Relations website at investors.puretechhealth.com and in our SEC filings. I will now turn the call over to Barak Sherrara, PureTech's Chief Executive Officer.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Thank you, Allison. Welcome, everyone, and thank you for joining us today. 2024 was a defining year for PureTech, a year in which we delivered meaningful progress across our portfolio and achieved important value driving milestones. Underpinning our success is our r and d engine, which is translating scientific innovation into real world impact for patients. In 2024 and 2025 post period, we announced unprecedented results from our successful phase two b trial of duprofenidone, our wholly owned program for idiopathic pulmonary fibrosis or IPF.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

The open label extension portion of the phase two b study is ongoing. And based on preliminary analysis, we continue to see strong, durable data. Our oncology program, LYT 200, delivered strong clinical data from a phase one b trial in the AML as well as positive results from the recently completed phase one b trial in solid tumors. Our cofounder and president, doctor Eric Alenko, will walk us through both of these programs today. And finally, a standout achievement in 2024 was the FDA approval of CoBINFI, which was invented at Puretec for the treatment of schizophrenia in adults, marking a long overdue advance for patients and a major validation of the scientific foundation we established at Puretec.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We supported these achievements with strong financial execution. As of March 31, we had approximately $339,100,000 at the PureTech level. Our efficient and proven hub and spoke r and d model allows us to advance a broad portfolio without incurring dilution at the pure tech level. In 2024 alone, our founded entities raised $397,500,000 with over 88% coming from third party investors. We also generated $327,400,000 in proceeds from founded entity monetization events, including via our equity holdings and milestone payments, which enabled us to return $100,000,000 to shareholders via a tender offer, all the while continuing to advance our wholly owned programs in parallel.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Coming off of this strong momentum, we are at a key strategic inflection point. Today, we will share our strategic priorities for 2025, highlight our clinical momentum, and discuss how we are positioned to reshape treatment paradigms and deliver long term value for the shareholders. Let us start with the foundation of our business. Our core mission is to give life to new classes of medicine that can transform lives of patients with devastating diseases. We are delivering on this mission through our innovative hub and spoke R and D model that is the engine behind our clinical and financial success and has enabled us to build a robust pipeline of higher value programs.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

This r and d model is guided by three core principles, validated efficacy, clear patient benefit, and efficient derisk clinical development. We begin with drugs that can address significant unmet need and have already demonstrated some level of efficacy or clinical signals, but are held back by key limitations. We then apply innovative science or technology or an approach to overcome these limitations, unlocking greater patient benefit and meaningful commercial potential. From there, we advance these programs through key derisking milestones. If a program does not meet our predefined thresholds, we reallocate resources forward towards some more promising opportunities.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

This disciplined approach enables us to operate with exceptional capital efficiency and ensures that we are optimizing every stage of R and D life cycle to truly bring impactful therapies to patients. This innovative R and D model has enabled us to build a robust and strategically structured portfolio of therapeutic programs, which generally fall into two categories. Some are wholly owned and continue to be developed internally at PureTech. Others are being advanced through our founded entities with external investments after being identified and derisked by PureTech through key validation and value inflection points. These founded entities provide long term non dilutive capital back to us through our retained equity ownership as well as our right to certain milestones, royalties, and sublicense income.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

This model allows us to self fund our operations and continue fueling our innovation engine. By protecting our balance sheet and minimizing dilution, our hub and spoke r and d model has enabled us to avoid raising capital through public markets for more than seven years, thereby protecting shareholder value. Our unique hub and spoke R and D model that we pioneered offers significant upside potential while shielding investors from downside risk. As shown on the left side of this slide, our balance sheet accounts for almost all of our current market capitalization, which means that nothing else in our portfolio that includes several important components of value are recognized by the market. This value disconnect ought to provide a compelling opportunity for new investors to get into the story.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Let's now turn to the right side of the slide for a few examples of key components that make up our intrinsic value. Duprofanadone, our lead wholly owned program, achieved a major value validating milestone with the successful completion of the phase two b clinical trial in December 2024. The program has the potential to supplant the current standard of care treatments in IPF, treatments that despite limited patient uptake have reached multibillion dollar annual sales. So this program alone presents a compelling value proposition. LYT 200, our wholly owned program, is a first in class monoclonal antibody being developed for the treatment of hematological malignancies and solid tumors.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

To date, the program has generated robust clinical data supporting its differentiated mechanism. Additionally, we also maintain equity stakes across five public and private founded entities, including our significant holding in Seaport Therapeutics, which raised over $325,000,000,000 across two oversubscribed financing rounds in 2024. Beyond the equity stakes, we're also entitled to additional economics across our founded entities, including up to $400,000,000 in potential milestone payments related to COBINFRE sales from Royalty Pharma, two percent royalties on COBINFI annual sales above $2,000,000,000 and 3% to 5% royalties on certain Seaport programs as the inventor. Despite this significant upside potential, our market valuation continues to reflect a heavy discount to intrinsic value, a disconnect we are committed to addressing in 2025. So delivering shareholder value remains our top priority for this year.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Our core mission has always been and continues to be to advance life saving new medicines to positively impact patients with devastating disease and to translate that into meaningful value for the shareholder. While 2024 was particularly defining year for us, it also punctuated more than a decade of scientific innovation, clinical advancement, and financial discipline that has yielded three FDA approved products and multiple clinical successes. Despite this unparalleled track record, our market capitalization has not consistently reflected the intrinsic value of our business. Over time, we have taken a number of steps in light of this value disconnect to try and bridge the value divide, including share buybacks. We did a tender offer last year, a dual listing on NASDAQ, engaging in significant investor outreach and capital market activities both in The US and outside The US, and making strategic refinements to our R and D model.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We continue to believe there is an opportunity to better align our valuation with the underlying strength of our programs and track record of execution. This has, of course, been recognized by external parties as highlighted by the cash offer that was recently made public for the business. The board carefully considers all such opportunities that arise to try and address the value disconnect and create value for our shareholders and will continue to do so. Looking ahead, we remain committed to maximizing shareholder return in a way that reflects the maturity of our business, the strength of our assets and financial position and the opportunity that lay ahead. We will continue to thoughtfully evaluate opportunities to unlock value for our shareholders via a number of pathways, and we'll continue to assess these options, including any potential transactions across our business with a view to addressing the value disconnect in ways that are in the best interest of our shareholders.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And we will maintain our focus on capital discipline and strategic execution, deploying resources towards our highest impact programs and preserving our strong balance sheet, particularly in the current macroeconomic environment. In 2025, this strategic focus will translate into several key actions that highlight our capital allocation across the business. One of those areas of capital allocation involve advancing our wholly owned programs. Coming off the successful Phase 2b trial of duprofenidone in IPF, we are committed to advancing duprofenidone while maintaining capital efficiency. We intend to discuss these results with the FDA before the end of the third quarter of twenty twenty five to align on a potential registration pathway with the goal of initiating a phase three clinical trial by the end of this year.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We anticipate providing further guidance later this year following the finalization of the trial design and the FDA interactions. While we don't intend to fully fund a Phase III trial on our own based on historical data from the from other phase three IPF studies, we also don't believe our current cash balance would be sufficient to fully fund such a study. We have, therefore, initiated discussions to explore a range of funding mechanisms, including a potential spin out of the program into a new founded entity and accessing external equity financing. This would be similar to our approach we took with Corona and Seaport. We'll also look at project or royalty financing, and strategic partnerships are a combination of these three options to support the program's continued development.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We will continue to fund the program in the interim to maintain developed momentum while we seek external funding. In parallel, we continue to support the development of LYT two hundred through our founded entity, Gallup Oncology. Top line results from the ongoing phase one b trial in AML and MDS are expected in q three twenty twenty five, and the patients on the study can elect to remain on treatment given the potential life saving nature of LYT two hundred. We are pursuing third party financing to support Gallup Oncology's next phase of growth, and we'll continue to fund the program in the interim to maintain development momentum. We may also launch new founded entities or make additional investments into our existing founded entities when we believe it will preserve or enhance our ownership position and generate long term value.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Initial expenditures associated with any new innovation and sourcing activities would be relatively low. And finally, while our primary focus remains on scientific and operational execution, we recognize the importance of direct capital returns to the shareholders to help address the value disconnect to a certain extent. Therefore, the Board may evaluate additional capital return opportunities in the future as part of our broad strategy to maximize shareholder value. Our ability to deliver long term value is driven by six core components. Our strong balance sheet, our wholly owned programs, our equity stakes in our founded entities, future revenue stream from royalties and milestones, capital returns to shareholders, and most importantly, our exceptional team that's driving the innovation forward.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Our capital efficient r and d model has been tested and proven over the last decade, enabling us to protect our balance sheet while maintaining strategic flexibility in a volatile market environment. Puretec offers a compelling investment opportunity, especially given the significant value disconnect where the diversified risk profile and the various components of value provide downside protection while the upside potential is really uncapped. I remain confident in our ability to continue building value through disciplined execution and strategic agility. With that, I'd like to now turn the call over to our Co Founder and President, Doctor. Eric Elenko, who will walk us through our key programs and recent clinical progress. Eric?

[Eric Elenko, Co-Founder & President at PureTech Health]

Thank you, Bharat. We're very excited about the progress across our portfolio. And today, I'll highlight our wholly owned programs and the value they represent for both patients and shareholders. Let's start with buprofendone, which we're developing as a potential new treatment for IPF. For those less familiar, IPF is a rare, progressive, and fatal lung disease that affects more than two and thirty two thousand people in The U.

[Eric Elenko, Co-Founder & President at PureTech Health]

S. And The EU 5 countries, with a median survival of just two to five years after diagnosis. Despite generating peak annual revenues in the billions of dollars, the current standard of care treatments only modestly slow lung function decline. Their effectiveness is limited by tolerability challenges at higher doses, which creates a tolerability feeling, preventing patients from reaching dosing levels that could more meaningfully improve outcomes. This leads to suboptimal efficacy, reduced patient uptake, and lack of adherence.

[Eric Elenko, Co-Founder & President at PureTech Health]

Importantly, in The US, only one in four people living with IPS has ever been treated with either FDA approved therapeutic. There is an urgent need for better treatment options that can deliver meaningful disease management without compromising tolerability. Our Duperefendone program is deuterium modified form of perfendone, a molecule that is strategically engineered to improve the stability of its bonds without changing the overall pharmacology. With this targeted change, buprofendone retains the clinically validated efficacy of buprofendone while offering a differentiated and more favorable tolerability profile. We believe duprafendone has the potential to become standard of care in IPF.

[Eric Elenko, Co-Founder & President at PureTech Health]

In our successful Phase IIb trial, from which top line results were shared in December, duprefendone demonstrated the potential to stabilize lung function decline over at least twenty six weeks without sacrificing tolerability. Importantly, the duprefendone eight twenty five milligrams three times a day, or TID, arm had an effect size compared to placebo that was 50% greater than that seen with Burfendone. Additionally, preliminary pharmacokinetic results indicate that duperfendone eight twenty five milligram TID achieved about a 50% higher exposure than furfendone eight zero one milligrams TID, corresponding with the greater efficacy results demonstrated with buprofendone eight twenty five milligrams TID. I'm also pleased to share for the first time today that as of 03/14/2025, '1 hundred and '40 patients have continued in the open label extension, and eighty five patients have received at least fifty two weeks of treatment with duporfendone. Preliminary data from those receiving duprefendone eight twenty five milligrams CID indicate the significant slowing of lung function decline observed in Part A of the trial has been sustained through fifty two weeks of treatment.

[Eric Elenko, Co-Founder & President at PureTech Health]

Supporting the durability of the treatment effect with this dose and its potential to stabilize lung function decline over time. Detailed OLE results will be presented at an upcoming scientific forum. These results are unprecedented, especially for a monotherapy. And to our knowledge, this is an achievement unmatched by any other investigational IPF therapeutic to date. Based on the strength of our data, buprofendone has the potential to offer benefits to three patient segments.

[Eric Elenko, Co-Founder & President at PureTech Health]

The subgroup of those currently on treatment, those who discontinued due to side effects, and those who never start treatment at all with currently available options. By demonstrating a meaningful improvement in lung function decline over six months and the potential for stabilization without compromising tolerability, Duprafendone has potential to become a next generation IPF treatment by pushing for levels of efficacy that have not been possible for the past ten plus years and reach far more patients than today's therapies and to do so in a way that supports sustained disease management. We believe duprofendone represents a sizable commercial opportunity with the total addressable market, or TAM, that continues to expand. The IPF market size was valued at approximately $5,000,000,000 in 2024. With increased disease awareness, early diagnosis and the availability of new treatment options, the market is expected to grow to nearly $10,000,000,000 a year by 02/1933.

[Eric Elenko, Co-Founder & President at PureTech Health]

With its highly differentiated efficacy and safety profile, buprenfindone has blockbuster commercial potential in IPF, with additional upside in other interstitial lung diseases or ILDs, such as progressive pulmonary fibrosis, or while significantly enhancing patient impact. There remains a clear need for better treatment options in IPF. And based on the data to date, we believe dupirofendone has potential to become a next generation standard of care. We'll present additional details from the Phase II data at the American Thoracic Society International Conference this May. We also intend to discuss these results with the FDA before the end of the third quarter of twenty twenty five to align on a potential registration pathway with the goal of initiating a Phase III trial by the end of the year.

[Eric Elenko, Co-Founder & President at PureTech Health]

We anticipate providing further guidance later this year following the finalization of the trial design and FDA interactions. The next program I'll highlight today is LYT-two hundred, our wholly owned oncology program being advanced by our founded entity, Gallup Oncology. We're taking a differentiated approach to cancer treatment by targeting the probe tumor mechanisms of acute myeloid leukemia, or AML, and high risk myelodysplastic syndrome, or MDS, and head and neck cancers. The FDA has granted orphan and fast track designation for LYT-two hundred in AML, as well as fast track designation in head and neck cancers, reinforcing the urgency and potential impact of this program. Both preclinical and human data underscore the importance of COLLECTIN-nine as a potent oncogenic driver and immunohistochroprotein with LYT200 demonstrating direct cytotoxic, antieleukemic effects through multiple mechanisms as well as antitumor activity.

[Eric Elenko, Co-Founder & President at PureTech Health]

We're very encouraged by the clinical data we've generated to date across our LYT200 trials. On the left of this slide is new interim data from our ongoing Phase Ib trial in AML and high risk MDS, evaluating LYT200 as a monotherapy in combination with venetoclax and hypomethylating agents. At a high level, LYT200 has shown a favorable tolerability profile across both arms and all dose levels with no dose limiting toxicities, as well as evidence of clinical efficacy, hematological improvement, and sustained disease management. We last shared a detailed update on this trial at the American Society of Hematology Annual Meeting in December, noting that the combination arm had achieved two complete responses at that time. Today, I'm pleased to share that as of April 28, we have seen four additional complete responses in this arm, bringing the total to six.

[Eric Elenko, Co-Founder & President at PureTech Health]

I want to remind you that this trial is being conducted in a heavily pretreated relapsedrefractory AML MDS population whose time to progression tends to be less than one month and whose overall survival average is one point seven to two point four months with standard of care therapy. We're very pleased with the data generated to date in this indication, which is in desperate need of innovation. And we look forward to sharing top line results from this trial in the third quarter of this year. On the right of this slide is something we're also sharing for the first time today. Top line data from the recently completed Phase 1b trial in relapsedrefractory solid tumors, including head and neck cancers.

[Eric Elenko, Co-Founder & President at PureTech Health]

This study evaluated LYT200 both as a monotherapy and in combination with tislelizumab. And across all cohorts, LYT200 demonstrated a favorable safety profile along with disease control and early signs of efficacy. Together, these data highlight the broad potential of LYT200 across both hematological malignancies and solid tumors. As we look ahead, we expect 2025 to be another catalyst for each year across our wholly owned and founded entity programs, including the Phase III initiation of duprofen IPF and Phase Ib readout of LYT200 and AML, to name a few. We are proud that our efficient and proven hub and spoke model has enabled us to maintain a strong financial position even in a volatile market environment as we remain steadfast in our mission to deliver life changing medicines.

[Eric Elenko, Co-Founder & President at PureTech Health]

With that, I'll turn it back to Bharat for a recap of our 2024 financial results and closing remarks.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Thanks, Eric. I'm pleased to report that Puretec's cash position remains strong, reflecting our business model, track record of clinical success and commitment to financial discipline.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

At the Puretec level, we ended 2024 with cash, cash equivalents and short term investments of $366,800,000 compared to $326,000,000 at the end of twenty twenty three. On a consolidated basis, our cash, cash equivalents and short term investments were $367,300,000 at the end of twenty twenty four compared to $327,100,000 at the end of twenty twenty three. At the Puretec level, as of 03/31/2025, we held unaudited cash, cash equivalents and short term investments of $339,100,000 On a consolidated basis, our cash, cash equivalents and short term investments were $339,500,000 Based on our existing financial assets as of 12/31/2024, we expect our operational runway into at least 2027. Our revenues are mostly driven by milestone based payments and royalties from license agreements as well as grants and are expected to continue to fluctuate from year to year. On a consolidated basis, our revenue in 2024 was $4,800,000 compared to $3,300,000 in 2023.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We reported a lower 02/24 operating loss of $136,100,000 compared to $146,200,000 in 2023. This was largely due to a decrease in R and D expenses driven by the completion of duprofenidone Phase 2b clinical trial, development of Glyph platform candidates now being advanced by our founded entity Seaport Therapeutics as well as deconsolidation of Seaport. The decrease in R and D expenses is partially offset by an increase in G and A expenses that was largely driven by noncash stock based compensation expenses for new stock awards granted to founders, directors, executives and employees of Seaport Therapeutics in 2024 prior to its deconsolidation. On a consolidated basis, we reported a net income of $27,800,000 for 2024 compared to a net loss of $66,600,000 for 2023. This was largely due to a January gain that was recognized upon the deconsolidation of Seaport, coupled with the decrease in operating loss driven by the decrease in R and D expenses mentioned earlier.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

I'm pleased that our balance sheet remains strong. We are committed to maintaining financial discipline by allocating capital efficiently to high impact programs while actively pursuing external funding opportunities. This measured approach allows us to protect our balance sheet and preserve strategic flexibility even in today's volatile market environment. In closing, I'd like to thank the patients, caregivers, advocates, clinicians, and partners. We are deeply grateful for the engagement, participation, and believe you have placed in us and our team.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

I would also like to extend a sincere thank you to every member of the PureTech team, including our board of directors and advisers for their invaluable contributions to our work and culture. What we have accomplished together is both rare and highly meaningful. Finally, I'd like to thank our shareholders for continuing to support our journey to bring new classes of medicines to patients in need. We value our recent and continued engagement and your feedback as we remain steadfast in our commitment to maximizing positive patient impact and value for shareholders. Your trust and support have been essential to our journey, especially over the past year as I stepped into the role of the CEO.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

I'm proud of the progress we have made, and we remain focused on advancing our science to improve the lives of the patients. Thank you, and we will now take your questions.

[Operator]

Thank you. Our first question is from Myles Dixon of Peel Hunt. Myles, your line is now open. Please go ahead.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

Good morning, Barrett, Eric. Thank you so much. I've got a few, maybe we can take them one by one. But let's start with them. Let's call it Car XT rather than Cabenfi.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

But can you tell us a little bit about what you what your understanding is of how sales have started, please, with BMS?

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Thank you, Miles. Appreciate you joining the call. Yeah. So as you know, Cobenefi was approved last year by the US FDA for the treatment of schizophrenia in adults. And so BMS, acquired Kuruna, has launched this product in The US, believe in the last quarter of twenty twenty four.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And they recently announced their first quarter sales, which according to their announcement, it is going quite well. You know, the sales ramp has gone quite well. They, I think, generated about $27,000,000 in the first quarter, which currently, it's around 40 to 50 yeah. Around 48% above the average analyst estimate. So it's a it's a good sign.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

It's getting a lot of attention and traction and momentum. So we'll continue to, you know, monitor and watch that growth as BMS launches this product across The U. S. Great.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

Thank you. And then sticking on the same subject, you've obviously got quite a complicated but potentially profitable load of economics in there, whether it be the sublicense and royalty payments with BMS, but also the milestones with Royalty Pharma. I wonder, can you give us any more color on what the what might may happen, for instance, with BMS with the sublicense agreement and what the milestone structure might be with royalty? Is it too simplistic for me to imagine that those milestones may fool you at 500, one point five billion and two billion, sorry, 500, 1 billion, 1 point 5 billion, for instance, before they revert? Thank you.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Yeah. So as you mentioned, COBINFY was invented at PureTech. So we licensed that to Corona. And as part of that license, we were eligible for 3% royalty on product sales. So we set we monetized that 3% royalty with Royalty Pharma.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We received hundred million upfront. We are eligible for up to another 400,000,000 in milestones. Most of those milestones are sales threshold related. And there are a few smaller milestones on approvals. We could receive the small milestone on the approval of Probynfe in The US.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

There is another small milestone due for a second indication when that happens. But most of the remaining up to 400,000,000 milestones are sales threshold achievement driven. We have not broken that down into different layers for obvious reasons. Royal department and we have a confidentiality related to those tiers of milestones. So we're not able to disclose any more specifics in terms of those tiers of milestones.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

In addition to those milestones, we are eligible for 2% royalty above sales of $2,000,000,000 for CoBINFI. And so that, you know, depending on when those sales trends hit, we should start seeing the that two percent royalty above $2,000,000,000 from the sales of CoBINFI. In addition, we have small milestones from Bristol Myers Squibb as they advance the program through other indications. And so we have those small milestones due to us. And if they sublicense the COBIN fee in other countries, you know, we are eligible for small sublicense income.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

But we believe that given BMS's global footprint, we are unlikely to actually expect I don't think we expect BMS to sublicense this in other parts of the world. So primarily, it's small milestones on development milestones as well as royalty pharma milestones based on the monetization of the royalty.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

Got it. Thank you. And presumably, the the lower the sublicense income, the the higher the potential royalty payment from BMS if they do commercialize it elsewhere. But if I could move on maybe to LYT100, you obviously had some brilliant trial data last year. But you've indicated the potential trial costs might be beyond that of your balance sheet, which is why you're looking to partner.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

But can you just break down for me a little bit what it is about that potential trial? Is it the scope, the timeline that means that it's going to be more than your typical respiratory trial? Thank you.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Yeah. Thank you for that, Miles. So it's a combination of the two. So when you look at LYT100 that we are advancing for idiopathic pulmonary fibrosis or IPF. And when you look at historical phase three trials that people have run, other companies have run-in this space, they are generally a fifty two week study.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

It's a one year treatment study, which is takes around two years to enroll a Phase III study in IPF depending on the size of the study and the number of patients required in that study and depending on the trial design. But historically, that's sort of what we have seen is a one year treatment that takes about two to three years to read out, top line results to read out. So we are looking at, from the start of the study, three year duration for the top line results to be announced. And the most recent example is Boehringer Ingelheim, who ran a phase three study. They had about 400 patients per arm.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And they had, I think, two or three arms. And so you can imagine the size of that study. I'm not saying that that's the trial design we are going to follow, but that is an example of the Phase III study that the FDA has required BI to run. We will, of course, have a discussion with the FDA. We'll discuss our Phase IIb data with the FDA in the third quarter of this year, and we'll reach alignment with them regarding the trial design.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And we'll have a better sense for what the study design and the scope of the study and the duration of that study could look like. And so we'll be able to provide better guidance. But our goal is to coming out of those discussions is to try and initiate a Phase III study before end of this year.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

Great. Thank you. Yeah. I think Boehringer's was 400 locations. Incredible.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

But lastly, I can just ask one more on Seaport. Obviously, now a kind of arm's length company, if you like, but you're a significant shareholder. They raised a huge amount of money. But can you just give me a bit of a flavor for what's going on? How's the funding going in Seaport?

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

I know that we've seen some early safety data on SPT 300, but have they got everything they need? Thank you.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Yeah. So they're private companies, so there is a limited amount of information that they have shared regarding the timing and progress of their programs internally. But what we have previously disclosed is that the lead program LYT 300 is advancing towards a phase 2b study initiation in major depressive disorder. And they, you know, are on track for that. So they haven't provided any more guidance in terms of the timing of that study.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

They also have a second study that's initiating phase one clinical study, which is in SPT three twenty, which is a GLIFT version of agomelatin, and they are studying that for generalized anxiety disorder. And so they expect to start that study sometime this year. But beyond that, we have not provided any additional guidance. And they have a third program, which is slightly behind further behind in preclinical. And so they're well funded.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

They raised 325,000,000 across two venture rounds. So they are well capitalized, and so they're they should be able to execute on these programs in the foreseeable future.

[Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt]

Thank you very much. Just thought I'd try my luck. Thank you.

[Operator]

Next question comes from Basil Kirshid from Leerink Partners. Your line is now open. Please go ahead.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Hey guys, thank you so much for taking the questions. Just want to ask, as you think about the path forward for LYT100, like, what could those potential paths look like? And how are you thinking about retaining upside in the program?

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Yeah. Thanks, first of all, and thanks for your question. So we see we are very bullish on LYT100, our duprofenidone. Based on the unprecedented data from Phase 2b that we announced in December, we have built quite a lot of momentum around this program. And the key opinion leaders we have spoken to are really excited about the data, especially the ability of duprofenidone to potentially stabilize lung function is we believe it's a really big deal for this indication.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And so, are committed to advancing this forward. And, you know, so we have looked at a number of different approaches to try and bring together the funding necessary to advance this into phase three. So one of them is, of course, what we have historically done, which is to house the program into a new founded entity and bring in external capital like venture round. So part of the funding required for phase three, we believe, would come from such equity financing from external sources. And similar to what we have done with Runa and most recently with Seaport Therapeutics.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

In addition, we are also speaking to people who provide what we call project financing or synthetic royalty type financing where these firms actually lend you the money to run the phase three study at risk. And if the study is successful, then they would get some back end economics in return for that. And so, is very common way of funding some of the large phase three studies. So, another portion of the phase three funding required would come potentially from a project financing. And then a third approach we are also looking at in parallel is speaking to potential strategics pharma companies for regional rights.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

So we would potentially keep The US rights and then license out outside The US and then use some of those upfront proceeds to then also provide funding for the phase three. So this could be a combination of these three and maybe there are other ways to bring in some additional funding to advance this program into phase three. So that's sort of how we're looking at it. And how do we maintain the upside is primarily through equity ownership, as well as because we have generated significant amount of intellectual property around this program over the years that we would be eligible for milestones and royalties as the programs would move forward, very similar to what we have done with Corona and Seaport.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Got it. Great. And the other thing I wanted to ask about, so you mentioned kind of like the your perceived value disconnect between the stock price and just the value of your cash and like the RxC economics. Could you talk a little bit more about, like, how you're thinking about that and what the potential options could look like to sort of rectify that?

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

Yeah. So now we share the frustration of our shareholders in terms of the value disconnect. We've been looking at different ways to try and address this. So we have, you know, a range of options that we can look at. We have looked at, you know, in the past, you know, we have done share buybacks.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

We did a $50,000,000 share buyback. We last year in 2024, we did a $100,000,000 tender offer. And so we continue to evaluate other potential opportunities to try and unlock the value. And most recently, there was an announcement that was that we had to put out prematurely because of some media speculation about some discussions with private equity firm to potentially explore ways to take the company private. And so we're looking at a number of those opportunities and the board and the management team regularly evaluate those opportunities on an ongoing basis.

[Bharatt Chowrira, CEO & Executive Director at PureTech Health]

And we'll continue to do that in the try and and our focus in 2025 is gonna be not only in executing and advancing our pipeline programs and portfolio, but also, you know, spend a lot of time trying to figure out how to bridge this value disconnect.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Got it. Thank you for taking the questions.

[Operator]

Thank you. In the interest of time, we unfortunately have to conclude this Q and A. You may now disconnect your lines.

Participants

Executives

• Allison Talbot, Head of Communications & Investor Relations
• Bharatt Chowrira, CEO & Executive Director
• Eric Elenko, Co-Founder & President

Analysts

• Miles Dixon, Research Analyst - Healthcare & Life Sciences at Peel Hunt
• Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners