Trading Statement

RNS Number : 3301F

PureTech Health PLC

20 February 2018

 

20 February 2018

PureTech Health plc

Trading Statement

PureTech Health plc ("PureTech Health," "PureTech" or the "Company," LSE: PRTC), comprised of PureTech Health plc and its subsidiaries (together, the "Group"), an advanced, clinical-stage biopharmaceutical company, today issued the following trading statement for the financial year ended 31 December 2017.

Daphne Zohar, Co-founder and Chief Executive Officer of PureTech Health, commented:

"We have had an exciting and productive year at PureTech Health, including positive clinical results from two pivotal stage affiliates that are now filing for FDA approval. It is both inspiring and humbling to have brought these programmes from academic discovery to the verge of potential commercial launch where they could have a huge impact on people's lives. We look forward to building on these successes and to delivering results to our shareholders from the many valuable components of our pipeline. We are also extremely pleased with the recent IPO of our affiliate, resTORbio which is now valued at over $538 million (as of 19 February 2018) on NASDAQ and expects to announce Phase 2b clinical trial results for its lead indication later this year. This is a clear demonstration of the value which can be achieved from our pipeline. We believe that PureTech Health is on the cusp of major value inflection points across multiple affiliates as well as through our next wave of internally-funded immunology-focused programmes."

Operational Highlights

During 2017, the Group continued to make significant progress across its advanced pipeline of seven clinical and seven preclinical programmes focused on the crosstalk and biological processes associated with the brain-immune-gut (BIG) axis. During 2017, PureTech Health reported positive clinical results from two pivotal stage affiliates, Akili and Gelesis, and anticipates regulatory filings from both affiliates with the U.S. Food and Drug Administration (FDA) in the first half of 2018:

·      Akili Interactive Labs, an affiliate of PureTech Health developing prescription digital medicines, achieved the primary endpoint in a pivotal study of an investigational digital medicine for paediatric ADHD. AKL-T01, the lead investigational digital medicine from the Project:EVO^TM platform, successfully showed a statistically significant improvement compared to an active control (p=0.006) on the predefined primary endpoint, a composite score from the Test of Variables of Attention (T.O.V.A.®), an objective measure of sustained attention and inhibitory control. Akili is advancing a broad pipeline of programmes to treat cognitive deficiency and improve symptoms associated with medical conditions across neurology and psychiatry, including attention-deficit/hyperactivity disorder (ADHD), cognition in major depressive disorder (MDD), autism spectrum disorder (ASD), Parkinson's disease, multiple sclerosis (MS) and various neuroinflammatory diseases. Akili is also developing complementary and integrated clinical monitors and measurement-based care applications; and

·      Gelesis, an affiliate of PureTech Health developing first-in-class mechanotherapeutics to treat chronic diseases related to the gastrointestinal (GI) pathway, achieved significant weight loss with an excellent safety profile in its pivotal Gelesis Loss of Weight (GLOW) clinical trial with Gelesis100. The study achieved and exceeded one of two co-primary endpoints, with 58% of adults in the Gelesis100 treatment arm achieving 5% or more weight loss. The percentage of patients who achieved 5% or more weight loss was statistically significant compared to placebo (p=0.0028). Additionally, almost twice as many adults on Gelesis100 lost 10% or more of their body weight compared to the placebo group (p=0.027). Gelesis' second product candidate, Gelesis200, created from the same proprietary technology as Gelesis100, is optimised to induce weight loss and improve glycaemic control in people with type 2 diabetes. Having completed a first-in-man study demonstrating positive efficacy and safety results, Gelesis has initiated a six-month efficacy proof-of-concept study (LIGHT-UP) in people with prediabetes or untreated diabetes, with results expected this year. Gelesis is advancing a broad pipeline of programmes using its novel and tuneable orally administered hydrogel platform for the treatment of other obesity-related co-morbidities, including liver diseases such as non-alcoholic steatohepatitis (NASH) and non-alcoholic fatty liver disease (NAFLD), along with GI disorders such as inflammatory bowel disease (IBD) and intestinal mucositis.

PureTech's other affiliates continued to advance innovative candidates through clinical development:

·      resTORbio (NASDAQ: TORC), an affiliate of PureTech Health focused on the development and commercialisation of novel therapeutics for the treatment of aging-related diseases, advanced its RTB101 and RTB101/RAD001 candidates for the selective inhibition of the target of rapamycin complex 1 (TORC1) pathway into a Phase 2b clinical study in respiratory tract infections in the elderly. The study, which is expected to read out in the second half of 2018, will evaluate the effectiveness of RTB101 alone or in combination with RAD001 in reducing the incidence of respiratory tract infections (RTIs) in elderly patients at increased risk of morbidity and mortality related to RTIs. RTB101 and RAD001 (along with more than 75 issued patents) were in-licensed from Novartis in March 2017 for aging-related indications. These proprietary and selective mTORC1 inhibitors have potential broad application to conditions associated with aging, including immunosenescence (aging of the immune system), neurodegenerative diseases, and organ dysfunction;

·      Vedanta Biosciences, an affiliate of PureTech Health developing a new category of therapies for immune-mediated and infectious diseases based on rationally-defined consortium of human microbiome-derived bacteria, initiated a Phase 1a/1b clinical trial of VE303, its lead, orally-administered, product candidate. VE303 is the first known investigational drug consisting of rationally-defined bacterial consortium in powder form to enter the clinic and is being evaluated for the treatment of recurrent C. difficile infection (rCDI). Key in-house manufacturing milestones have also been achieved, which places a Phase 2 study of VE303 on track to start in 2018. Additionally, the collaboration with Janssen Biotech, Inc. on VE202 for inflammatory bowel disease continues and is anticipated to enter the clinic in the second half of 2018. Vedanta Biosciences is also working in collaboration with leading oncology researchers around the world, to gather data from interventional human clinical studies of checkpoint inhibitors for its immuno-oncology platform. In collaboration with its cofounder, Dr Kenya Honda, Vedanta Biosciences is advancing a candidate consisting of a rationally-defined bacterial consortium that potentiates cytotoxic CD8+ T-cells, which are key modulators of checkpoint therapy responses. Vedanta Biosciences intends to file an IND for that immuno-oncology candidate in 2018. Vedanta Biosciences is also planning for the initiation of a Phase 1 clinical trial of food allergy candidate VE416 in the second half of 2018;

·      Karuna, an affiliate of PureTech Health focused on targeting muscarinic receptors for the treatment of central nervous system (CNS) disorders including schizophrenia and Alzheimer's Disease, has developed a single capsule co-formulation of its proprietary combination of trospium chloride and xanomeline (KarXT). A dose-ranging study using the single capsule formulation is underway, following which a Phase 2 clinical trial for schizophrenia will begin in the third quarter of 2018;

·      Follica, an affiliate of PureTech Health developing an innovative platform to address androgenetic alopecia, has made additional progress toward the initiation of the RAIN pivotal study in androgenetic alopecia as well as the identification and testing of next-generation, proprietary compounds based on the Group's intellectual property. The Follica RAIN pivotal study is expected to commence following the completion of an ongoing optimisation study; and

·      Sonde Health, an affiliate of PureTech Health developing a voice-based technology platform for monitoring and diagnosing mental and physical medical conditions, has collected voice data from over 3,000 subjects as part of the ongoing validation of its vocal biomarker technology for the detection of depression, suicidality, and Parkinson's disease. The Company has also initiated research and development to expand its proprietary technology in Alzheimer's, respiratory and cardiovascular disease, and other health and wellness conditions. Sonde's Vocal Biomarker programme has demonstrated the potential to effectively screen and monitor for disease using information obtained from an individual's voice on commonly-owned devices and has the potential to fundamentally change the way mental and physical health is monitored and diagnosed.

The Group has also grown its internally-funded, immunology-focused pipeline by generating compelling pre-clinical data and securing key intellectual property for:

·      a novel approach harnessing the lymphatic system to enable certain drugs for the treatment of inflammatory and auto-immune disease and cancer to potentially have greater efficacy by targeting those drugs directly to lymph nodes. The technology could also enable oral administration of medicines that otherwise would not be orally bioavailable;

·      a milk exosome-based technology designed to enable the oral administration of biologics, nucleic acids (eg. siRNA, mRNA, antisense oligonucleotides), and complex small molecules;

·      a monoclonal antibody therapeutic approach to target newly discovered immunosuppressive mechanisms in pancreatic cancer, and other solid tumours; and

·      a technology that targets local inflammation to achieve a therapeutic effect without systemic immunosuppression.

More widely in 2017, PureTech Health continued to build on its leading intellectual property position, with more than 100 patents and patent applications issued or filed since 1 January 2017. This brought the Group's total number of owned and licensed patents and applications to more than 400, including:

·      10 new patents issued in the US and Japan for the Vedanta Biosciences microbiome platform technology;

·      additional composition of matter, methods of use, and methods of making allowances in the EU, Japan, Russia, and South Korea for the Gelesis weight loss technology;

·      broad coverage for methods of assessing mental and physical condition from human speech for the Sonde vocal biomarkers technology; and

·      more than 75 issued and pending patents licensed relating to resTORbio's TORC1 programme.

PureTech Health has a scalable infrastructure capable of supporting the future growth of its business. The Group further strengthened its leadership by adding business, scientific, and commercial leaders to its team, including Bharatt Chowrira, PhD, JD, as President and Chief of Business and Strategy.

Financial Highlights

The Group had cash reserves* at 31 December 2017 of $242.1 million (31 December 2016: $281.5 million), of which $126.7 million (31 December 2016: $192.1 million) was held at the Company level.  PureTech Health owns approximately 9.8 million of resTORbio's publicly traded common shares, which represented $147 million at the IPO offer price of $15.00 and is $184 million at the time of this Trading Update based on the final trading price of $18.76 on 16 February 2018.

*Cash reserves consists of cash, cash equivalents and US Treasuries, including those with maturities beyond one year. Group cash reserves are inclusive of subsidiaries consolidated within the Group's consolidated statement of financial position as well as affiliates in which the Company owns a minority interest and which are not included in the Group's consolidated statement of financial position.

The Board believes that the value of PureTech Health's holdings in its growth stage affiliates ("Growth Stage Holdings Value") increased substantially from 31 December 2016 to 31 December 2017 driven by the noteworthy progress made over the year. Specifically, this sizable increase is due in large part to (i) the resTORbio programme launch with an in-license of lead clinical candidates from Novartis, clinical advancement of those candidates, private financings and a successful initial public offering bringing the PureTech Health holdings value in resTORbio to $184 million as of 16 February 2018, (ii) the positive results from the Akili pivotal clinical trial of its lead product candidate, (iii) the positive results from the Gelesis100 pivotal clinical trial of its lead product candidate, (iv) the initiation of Vedanta Biosciences' Phase 1a/1b clinical trial for the treatment of recurrent C. difficile infection and  in-licensing of an immuno-oncology candidate, (v) clinical advancement of the Karuna programme, (vi) Entrega's collaboration with Eli Lilly and Company and (vii) new internally-developed and funded immunology programmes not included in the 2016 Net Asset Value (NAV).

Despite the notable growth in value, the Board, in consultation with its strategic advisors and key shareholders, has decided not to disclose its internal valuations of its growth stage affiliates going forward, commencing as of 31 December 2017. The Company's view is that such disclosure, on balance, may not be in the best interests of PureTech Health and its shareholders. The Company maintains a conservative approach to valuation and the Company believes that it may be creating an artificially low external benchmark for the programmes and affiliates that may otherwise be ascribed substantially higher valuations by potential partners, investors and acquirers.

The Group's affiliates continued to attract external funding from key partners and investors. Some key financial highlights:

·      On 25 January 2018, resTORbio announced the pricing of its initial public offering (IPO) on NASDAQ raising gross proceeds of $97.8 million. The IPO followed successful Series A and Series B financing rounds in 2017 that yielded a combined $65 million in proceeds. The Series B financing was led by OrbiMed and included participation from Fidelity Management & Research Company, Rock Springs Capital, Quan Capital and Nest Bio. PureTech Health invested $19.0 million in resTORbio prior to its IPO and invested $3.5 million in the IPO. After giving effect to the IPO and overallotment, PureTech Health owns approximately 34.2% of resTORbio, which represented $147 million at the IPO offer price of $15.00 and is $184 million at the time of this Trading Update based on the final trading price of $18.76 on 16 February 2018;

·      Vedanta Biosciences was awarded a research grant of up to $5.4 million from CARB-X (Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator) to support clinical testing of its lead oral product candidate, VE303, a novel human-microbiome drug candidate, to address serious bacterial infections. Vedanta Biosciences also closed/realised the second tranche ($25 million) of its 2016 financing round;

·      Entrega announced $5 million in equity and research funding from Eli Lilly and Company to investigate the application of Entrega's peptide delivery technology to certain Lilly products and therapeutic candidates;

·      Follica secured $11.8 million in financing from PureTech Health and LightHouse Capital Partners; and

·      The Sync Project was acquired in February 2018 by Bose Corporation as part of a strategic decision to move that technology to a more consumer-facing path. As a result of the transaction, the Group recovered almost all of the invested capital in the Sync Project, demonstrating the Group's disciplined approach to managing its portfolio and strict focus on capital allocation.

Upcoming Milestones

Over the next 12 months, PureTech Health anticipates reaching several key milestones, including:

·      regulatory filings anticipated from both Akili and Gelesis with the FDA in the first half of 2018;

·      results anticipated from the Akili proof-of-concept clinical trial looking at cognition in depression;

·      results anticipated from the Gelesis200 LIGHT-UP study for weight loss and glycaemic control in people with prediabetes or type 2 diabetes;

·      results anticipated from the resTORbio Phase 2b clinical trial in elderly individuals at increased risk of respiratory tract infections in the second half of 2018;

·      results anticipated from the Vedanta Biosciences VE303 (recurrent C. difficile infections programme) Phase 1 clinical trial in healthy volunteers in the first half of 2018;

·      initiation of the Vedanta Biosciences VE202 (collaboration with Janssen Biotech, Inc. for inflammatory bowel disease) Phase 1 clinical trial anticipated in the second half of 2018;

·      initiation of the Vedanta Biosciences VE416 Phase 1 clinical trial in food allergy anticipated in the second half of 2018;

·      filing of an investigational new drug (IND) application for VE800, Vedanta Biosciences' cancer immunotherapy candidate; and

·      initiation of a Phase 2 clinical trial in schizophrenia by Karuna with the co-formulated candidate KarXT expected in the third quarter of 2018.

Ownership of PureTech Health's Growth Stage Affiliates (as at 31 December 2017)

Programme	PureTech Health Ownership*
Akili	54.32%
Gelesis	20.98%
Vedanta Biosciences	71.51%
Karuna	76.00%
Follica	55.63%
Entrega	73.87%
Alivio	82.84%
Commense	90.00%
Sonde	93.08%
resTORbio	44.21%
Vor	81.34%
Nybo	93.51%
Additional internally-funded programmes focus on the immune/lymphatics system

*Relevant ownership interests were calculated on a diluted basis as of 31 December 2017, including issued and outstanding shares, outstanding options and warrants, and written commitments to issue options, but excluding unallocated shares authorised to be issued pursuant to equity incentive plans and any shares issuable upon conversion of outstanding convertible promissory notes.

The Group plans to issue its 2017 Annual Report and Results for the year ended 31 December 2017, based on its audited statutory accounts, on Thursday, 12 April 2018.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For more information, please contact:

PureTech Health	[phone]
Daphne Zohar, Chief Executive Officer
Allison Mead Talbot, Director, Communications and Investor Relations
FTI Consulting (Communications adviser to PureTech Health)	[phone]
Ben Atwell
Rob Winder

About PureTech Health

PureTech Health is an advanced, clinical-stage biopharmaceutical company developing novel medicines targeting serious diseases that result from dysfunctions in the nervous, immune, and gastrointestinal systems (brain-immune-gut or the "BIG" axis), which together represent the adaptive human systems. PureTech Health is at the forefront of understanding and addressing the biological processes and crosstalk associated with the BIG axis. By harnessing this emerging field of human biology, PureTech Health is pioneering new categories of medicine with the potential to have great impact on people with serious diseases. PureTech Health is advancing a rich pipeline of innovative therapies that includes two pivotal stage programmes, multiple human proof-of-concept studies and a number of early clinical and pre-clinical programmes. PureTech's rich research and development pipeline has been advanced in collaboration with some of the world's leading scientific experts, who along with PureTech's team of biopharma pioneers, entrepreneurs and seasoned Board, identify, invent, and clinically de-risk new medicines. With this experienced team pursuing cutting edge science, PureTech Health is building the biopharma company of the future focused on improving and extending the lives of people with serious disease. For more information, visit www.puretechhealth.com or connect with us on Twitter @puretechh.

Forward Looking Statement

This press release contains statements that are or may be forward-looking statements, including statements that relate to PureTech's future prospects, developments and strategies. The forward-looking statements are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from current expectations, including, but not limited to, those risks and uncertainties described in the risk factors included in the regulatory filings for PureTech Health. These forward-looking statements are based on assumptions regarding the present and future business strategies of the Company and the environment in which it will operate in the future. Each forward-looking statement speaks only as at the date of this press release. Except as required by law and regulatory requirements, neither PureTech Health nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Currency and rounding

Unless otherwise indicated, references to US dollar or $ are to the lawful currency of the United States. Certain data in this trading statement, including percentages, have been rounded.

 

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