PureTech Announces Annual Results for Year Ended December 31, 2021
PureTech Health reported a solid capital base with cash equivalents of $465.7 million as of December 31, 2021. The company has a robust pipeline featuring 27 therapeutics, with 11 clinical trials initiated in 2021. Notably, PureTech's Founded Entities have achieved significant milestones, including FDA marketing approvals for two products. The company is evaluating capital allocation strategies to enhance shareholder value, including potential returns through dividends or buybacks. Its cash runway extends into 2025, supporting ongoing development across its pipeline.
- Strong cash position with $465.7 million in cash and equivalents as of December 31, 2021.
- 27 therapeutics in the pipeline, with 11 clinical trials initiated in 2021.
- Two FDA-approved products from Founded Entities, indicating success in commercialization.
- Cash runway extended into 2025, providing financial stability for ongoing projects.
- None.
Strong capital base with
Rapidly progressing pipeline of 27 therapeutics and therapeutic candidates, across Wholly Owned and Founded Entity programs, with 11 clinical trials initiated and 6 clinical trial readouts in 2021
Founded Entities continuing to mature and generate value for
Reviewing capital allocation strategy to drive additional value to shareholders with potential returns of capital through various mechanisms
Company to host a webcast and conference call today at
Webcast and conference call details
Members of the PureTech Management Team will host a conference call at
All other locations: +44 20 3936 2999
Access code: 942895
For those unable to listen to the call live, a replay will be available on the
Commenting on the annual results,
“I’m very proud of what our team has achieved in 2021. The collaboration and commitment to discovering and developing highly differentiated medicines for devastating diseases where novel treatment options are greatly needed, has resulted in another year full of important accomplishments for
“Across our Wholly Owned and Founded Entity programs, we now have 27 therapeutics and therapeutic candidates advancing towards clinical, regulatory and commercial milestones. Twenty of these sit within our Founded Entities where we already have two products that have been cleared for marketing by the
“The other seven therapeutic candidates are being developed within our rapidly advancing and growing Wholly Owned Pipeline, which is curated around our focus on immunological, fibrotic and lymphatic system disorders and builds upon pharmacology that has been validated in humans where our key innovations enable potential unlocking of the broad potential of these therapies. Across our Wholly Owned Programs, we generated significant fundamental value and achieved a number of clinical and business milestones towards our mission of developing transformational medicines for millions of people
“Importantly, we are in the fortunate position to be growing our business that is generating non-dilutive capital and we do not currently have to look at public equity markets to raise capital. As such, we have a strong financial position that will allow us to build on the momentum of 2021 and deliver on value driving milestones. In 2021, our consolidated business ended the year with a capital base of
“Based on the strong foundation we have built to support PureTech’s future growth, our Board and senior leadership team have been considering various approaches to drive additional value for our shareholders, including reviewing a capital allocation strategy that balances investment in the continued growth of our business with potential returns of capital to shareholders. As we evaluate our capital allocation strategy, we intend to engage with shareholders to understand preferences and market perspectives with respect to certain potential near term activities related to the implementation of this strategy.
“We look to the coming months and years with excitement and optimism as we continue to create significant value from innovative science and develop therapeutics that we sincerely believe have the potential to significantly improve treatment outcomes for patients all over the world.”
Continued advancement and growth of our Wholly Owned Programs5
Our team, network and insights and expertise in immunology and therapeutic development have enabled the rapid advancement and growth of our Wholly Owned Programs. Focused on immunological, fibrotic and lymphatic system disorders, our Wholly Owned Pipeline builds upon validated biologic pathways and proven pharmacology, and currently consists of seven therapeutic candidates, including LYT-100 (deupirfenidone), a clinical therapeutic candidate that we are pursuing for the potential treatment of a range of conditions involving inflammation and fibrosis and disorders of lymphatic flow, LYT-200, a clinical immuno-oncology fully human monoclonal antibody candidate targeting a foundational immunosuppressive protein, galectin-9, that we are developing for the potential treatment of difficult‑to‑treat solid tumors, LYT-210, a preclinical immuno-oncology therapeutic candidate targeting immunomodulatory gamma delta-1 T cells that we are developing for a range of cancer indications, LYT‑300 (oral allopregnanolone), a clinical therapeutic candidate that we are developing for a range of neurological and neuropsychological conditions, which was generated from our Glyph™ lymphatic targeting platform, and three therapeutic candidates generated from Alivio™, our technology platform that enables targeting of therapeutics locally to the sites of inflammation while minimizing systemic exposure, for the potential treatment of a range of chronic and acute inflammatory disorders: LYT-510 (oral immunosuppressant molecule), in development for the potential treatment of inflammatory bowel disease (IBD) and chronic pouchitis, LYT-500 (oral combination of two therapeutic agents), in development for IBD, and LYT-503/IMB-150, which is being advanced as a partnered program as a potential non-opioid treatment for interstitial cystitis or bladder pain syndrome (IC/BPS). In addition to these programs, we are advancing Orasome™ and other Technology Platforms for the oral administration of therapeutics. Finally, we are pursuing our meningeal lymphatics research program to develop potential treatments for neurodegenerative and neuroinflammatory diseases. In addition to programs originating from these innovative platforms to fuel our pipeline, we also continually identify external clinical-stage programs that are highly differentiated and complementary to the immuno‑modulation focus of our Wholly Owned Pipeline. Key developments and progress include the following:
Program Highlights
LYT-100
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In the
January 2022 post-period, we were pleased to announce results from a randomized, double-blind crossover study in healthy older adults demonstrating that approximately50% fewer subjects treated with LYT-100 experienced gastrointestinal (GI)-related adverse events (AE) compared to subjects treated with pirfenidone (17.4% vs.34.0% ). Based on these results, additional data generated from our robust LYT-100 clinical program and recent regulatory feedback, we intend to advance LYT-100 into late-stage clinical development for the treatment of idiopathic pulmonary fibrosis (IPF), beginning with a dose-ranging study evaluating six months of treatment with LYT-100 with topline results expected by the end of 2023. - In 2021, we progressed two Phase 2 clinical trials of LYT-100 including 1) a global, randomized, double-blind, placebo-controlled Phase 2 trial to evaluate the efficacy, safety and tolerability of LYT-100-COV in adults with Long COVID6 respiratory complications and related sequelae and 2) a Phase 2a proof-of-concept study of LYT-100-LYMPH in patients with breast cancer-related, upper limb secondary lymphedema. Topline results from the LYT-100-COV trial are expected in the first half of 2022, and topline results from the LYT-100-LYMPH trial are expected in 2022.
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In 2021, we also initiated a three-month, open-label extension of the LYT-100-COV Phase 2 trial in adults with Long COVID respiratory complications and related sequelae
who completed the first portion of the trial. The primary endpoint of the extension trial will measure change in distance walked on the six-minute walk test (6MWT), with secondary endpoints to assess the longer-term safety and tolerability of LYT-100- COV up to 182 days of treatment. - In 2021, we initiated additional clinical studies to further evaluate the pharmacokinetic (PK), dosing and tolerability of LYT-100 in healthy volunteers and healthy older adults to inform the clinical development of LYT-100 across multiple indications. Results from these studies demonstrated that LYT-100 was well-tolerated at 824mg TID dosing with low rates of GI AEs that were comparable to placebo. These results will further inform our dose-ranging study design in treatment-naïve IPF patients.
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In 2021, we formed a
Clinical Advisory Board for IPF and other progressive fibrosing interstitial lung diseases (PF-ILDs). These physicians and researchers with deep expertise in the clinical development of novel therapies in PF-ILDs includeBill Bradford , M.D., Ph.D., biopharma advisor with broad expertise in drug development;Vincent Cottin , M.D., Professor of Respiratory Medicine at UniversitéClaude Bernard Lyon and Coordinator of theNational Coordinating Reference Center for Rare Pulmonary Diseases atLouis Pradel Hospital , HospicesCivils de Lyon ,Lyon, France ;Kevin Flaherty , M.D., Professor at theUniversity of Michigan specializing in IPF and other ILDs;Toby Maher , M.D., Ph.D., Professor of Clinical Medicine and Director of Interstitial Lung Disease atKeck School of Medicine of the University ofSouthern California ;Paul Noble , M.D., Chair of theDepartment of Medicine atCedars-Sinai Medical Center and a noted researcher in lung inflammation and fibrosis; andMarlies Wijsenbeek , M.D., Ph.D., pulmonary physician at theErasmus Medical Center . -
In
August 2021 , we presented the results of the Phase 1 multiple ascending dose and food effect study of LYT-100 at the virtualEuropean Respiratory Society (ERS) International Congress . The results from the study were subsequently published in the journal Clinical Pharmacology in Drug Development inNovember 2021 .
LYT-200
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In 2021, we progressed the first stage of an adaptive Phase 1/2 clinical trial evaluating LYT-200 (anti-galectin-9 fully human monoclonal antibody) as a single agent for the potential treatment of difficult-to-treat solid tumors. In
November 2021 , we presented a scientific poster describing the trial at theSociety for Immunotherapy of Cancer (SITC) 36th annual meeting. Topline results from the Phase 1 portion of the study are expected in the first half of 2022. Pending these results, we intend to initiate the Phase 2 expansion cohort portion of the trial, which is designed to evaluate LYT-200 both as a single agent and/or in combination with BeiGene’s tislelizumab, an anti-PD-1 monoclonal antibody, or chemotherapy. The Phase 2 portion of the study is currently planned to enroll patients with a range of solid tumor types, including pancreatic cancer and other GI solid tumors. Under the terms of the clinical trial and supply agreement we entered into with an affiliate of BeiGene, Ltd. inJuly 2021 , we will maintain control of the LYT-200 program, including global R&D and commercial rights, and BeiGene has agreed to supply tislelizumab for use in combination with LYT-200 for the planned Phase 2 study cohorts. -
In
November 2021 , the FDA granted orphan drug designation to LYT-200 for the treatment of pancreatic cancer. The FDA grants orphan drug designation to novel drug and biologic products for the treatment, diagnosis or prevention of conditions affecting fewer than 200,000 persons in theU.S. Orphan drug designation qualifiesPureTech for incentives under the Orphan Drug Act, including tax credits for some clinical trials and eligibility for seven years of market exclusivity in theU.S. if the drug is approved, in addition to our broad intellectual property coverage which can extend the exclusivity into 2038.
LYT-210
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In
April 2021 , we presented a scientific poster detailing promising preclinical results for LYT-210 (anti-gamma-delta-1 fully human monoclonal antibody) at the 2021American Association for Cancer Research (AACR) AnnualVirtual Meeting . The research demonstrated that LYT-210 is both highly specific and highly potent, rapidly inducing cell death of immunomodulatory gamma delta-1 cells, while sparing other T cells, such as cytotoxic gamma delta T cells, that play important roles in a healthy immune response.
LYT-300
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In
December 2021 , we initiated a Phase 1 clinical study of LYT-300 (oral allopregnanolone), the first therapeutic candidate generated from our Glyph platform, for the potential treatment of neurological and neuropsychological conditions. Results from the study are expected in the second half of 2022 and will be used to inform the design of possible future studies evaluating LYT-300 in indications that could include depression, anxiety, sleep disorders, fragile X tremor-associated syndrome, essential tremor and epileptic disorders, among others.
Alivio Technology Platform
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In
June 2021 , we announced the acquisition of the remaining22% of outstanding shares in our Founded Entity, Alivio Therapeutics (“Alivio”). Alivio’s therapeutic candidates, in development for inflammatory disorders including IBD, have been integrated into our Wholly Owned Pipeline, and the underlying Alivio technology platform has been added to our lymphatic and inflammation platforms. -
The Alivio technology platform has generated three therapeutic candidates:
- In the 2022 post-period, we nominated a new therapeutic candidate, LYT-510, to our pipeline. LYT-510 is an orally-administered therapeutic candidate for the potential treatment of IBD and chronic pouchitis, which is a rare orphan disease. We intend to file for regulatory approval to initiate first-in-human studies at year end 2022 and initiate a clinical study evaluating LYT-510 as a single agent for the potential treatment of IBD and chronic pouchitis in early 2023.
- LYT-500 is an orally administered combination of therapeutic agents in development for IBD. We expect preclinical proof-of-concept data for LYT-500 in the first half of 2022.
- LYT-503/ IMB-150 is a non-opioid pain candidate being developed as a partnered program for the potential treatment of IC/BPS. An Investigational New Drug (“IND”) application is expected to be filed for LYT-503/IMB-150 in 2022.
Glyph Technology Platform
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In
September 2021 , preclinical proof-of-concept research supporting the Glyph technology platform, which showed for the first time that restoring normal function of the mesenteric lymphatics may reverse insulin resistance and modify obesity-associated metabolic disease, was published in Nature Metabolism. Preclinical proof-of-concept work published in theJournal of Controlled Release inFebruary 2021 also supported the platform’s ability to directly target the lymphatic system.
Orasome and Other Technology Platforms for
- In 2021, we also progressed versatile and programmable oral biotherapeutics approaches, such as our Orasome platform, which is a novel programmable and scalable approach for the oral administration of nucleic acids and other biologics. We established preclinical proof-of-concept supporting the platform’s potential to achieve therapeutic levels of proteins in circulation following the oral administration of therapeutic protein expression systems. We expect to generate additional preclinical data, with Orasomes and other technologies, in 2022.
Meningeal Lymphatics Research Program
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In
April 2021 , preclinical work supporting our meningeal lymphatics research program was published in Nature. The research suggests that restoring lymphatic flow in the brain, either alone or in combination with passive immunotherapies such as antibodies directed at amyloid beta, has the potential to address a range of neurodegenerative diseases including Alzheimer’s and Parkinson’s diseases and the associated neuroinflammation. The work also uncovered a link between dysfunctional meningeal lymphatics and damaging microglia activation in Alzheimer’s disease, which potentially impairs the efficacy of passive immunotherapies such as amyloid-beta-targeting antibodies. This suggests another route by which restoring healthy drainage patterns could improve clinical outcomes.
Corporate Highlights
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In 2021, we continued to build our clinical development team by bringing together seasoned experts focused on tackling diseases with significant unmet medical needs.
Julie Krop , M.D., was appointed as Chief Medical Officer.Dr. Krop oversees all clinical development, regulatory, CMC and medical affairs for advancing our Wholly Owned Pipeline. Other additions to our team includedPaul Ford , M.D., Ph.D., SVP of Clinical Developmentwho is primarily overseeing the overall LYT-100 development program, including for IPF. -
In the
March 2022 post-period, we appointed Sharon Barber‑Lui to our board of directors as a non‑executive director and as a member of the Audit Committee. She previously ledU.S. Oncology Portfolio Strategy, Operations and Business Analytics at Merck & Co. Inc. Ms. Barber-Lui brings extensive experience in finance, operations, portfolio management and commercialization to our board of industry, business, and academic leaders. - In 2021, we remained deeply committed to making progress in our Environmental, Social and Governance (ESG) program. The second edition of our ESG report has been published as part of the annual report and a new ESG webpage has been launched which can be accessed at investors.puretechhealth.com.
Capital Allocation Strategy
- Based on the strong foundation we have built to support PureTech’s future growth, our Board and senior leadership team have been considering various approaches to drive additional value for our shareholders, including reviewing a capital allocation strategy that balances investment in the continued growth of our business with potential returns of capital to shareholders. Our strategy includes the maintenance of a minimum of three years of cash on hand to fund the continued development and expansion of our Wholly Owned Pipeline and strategic investment in our Founded Entities. Our cash runway is expected into the first quarter of 2025.
- In the future, when appropriate to do so, we will also aim to return a portion of the proceeds we may generate from either (1) the monetization of equity interests in our Founded Entities, (2) the receipt of potential royalty and sublicense income, and/or (3) other sources of proceeds such as strategic partnerships, to shareholders through various mechanisms, including share buybacks or special dividends.
- We may augment this approach should opportunities arise to use available funds for strategic growth opportunities, such as in-licensing of therapeutic candidates or intellectual property, asset purchases, or strategic M&A, to the extent such opportunities are aligned with our long-term strategic vision.
- As we evaluate our capital allocation strategy, we intend to engage with shareholders to understand preferences and market perspectives with respect to certain potential near-term activities related to the implementation of this capital allocation strategy. Any plan to return capital to shareholders will be subject to market and industry conditions at the time, the approval of our Board of Directors, restrictions under the law and other corporate considerations.
Financial Highlights
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In 2021,
PureTech sold 1,750,000 shares of Karuna common stock for cash consideration of approximately in two separate transactions in February and November.$218 million -
PureTech Level Cash and Cash Equivalents were
as of$418.9 million December 31, 2021 1. We reiterated our cash runway guidance into the first quarter of 2025. -
Consolidated cash and cash equivalents, which includes cash held at the
PureTech level and at Controlled Founded Entities, were as of$465.7 million December 31, 2021 2. -
PureTech’s Founded Entities raised
in 20217 and approximately an additional$731.9 million in the 2022 post-period, almost all of which came from third parties.$105 million -
PureTech Level Cash and Cash Equivalents were
, based on consolidated cash and cash equivalents of$377.9 million as of$413.2 million March 31, 2022 8, with spend largely attributed to the successful progression of Wholly Owned Programs into more advanced stages of development.
PureTech’s Founded Entities matured over the year, with significant clinical and financial momentum9
PureTech’s Founded Entities have made significant progress advancing 20 therapeutics and therapeutic candidates, of which two have been cleared for marketing by the FDA and granted marketing authorization in the European Economic Area and 13 are clinical stage. Key developments included the following:
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Karuna Therapeutics, Inc. (
PureTech ownership as ofFebruary 15, 2022 :5.6% ; We also are eligible to receive payments under our license agreement, including sublicense payments and royalties on net sales)-
In
November 2021 , Karuna announced further updates to the EMERGENT program’s four ongoing Phase 3 trials, including that topline data from EMERGENT-2, a five-week inpatient trial evaluating the efficacy and safety of KarXT compared to placebo in 246 adults with schizophrenia in theU.S. , are expected in mid-2022. EMERGENT-3, a five-week inpatient trial evaluating the efficacy and safety of KarXT compared to placebo in 246 adults with schizophrenia in theU.S. andUkraine , is underway. EMERGENT-4, a 52-week outpatient, open-label extension trial evaluating the long-term safety and tolerability of KarXT in 350 adults with schizophreniawho completed EMERGENT-2 or EMERGENT-3, and EMERGENT-5, a 52-week outpatient, open-label trial evaluating the long-term safety and tolerability of KarXT in adults with schizophreniawho were not enrolled in EMERGENT-2 or EMERGENT-3, are also underway. -
In 2021, Karuna initiated the Phase 3 ARISE trial evaluating the safety and efficacy of KarXT compared to placebo as an adjunctive treatment in adults with schizophrenia
who experience an inadequate response to current standard of care. -
In
June 2021 , Karuna announced data from its completed Phase 1b trial evaluating the safety and tolerability of KarXT in healthy elderly volunteers, which followed a preliminary analysis of data from the first two cohorts in the trial announced earlier this year. The results suggest that KarXT can be administered to elderly volunteers at doses which achieve xanomeline blood levels similar to those reported in the Phase 2 EMERGENT-1 trial in adults with schizophrenia while maintaining a favorable tolerability profile. Data from the trial also suggest that a lower dose ratio of trospium to xanomeline, compared to the ratios used in Phase 1 trials in healthy adult volunteers and in the Phase 2 EMERGENT-1 trial evaluating KarXT in adults with schizophrenia, was better tolerated by healthy elderly volunteers. -
In
November 2021 , Karuna announced the evaluation of KarXT for the treatment of dementia-related psychosis (DRP) will initially focus on psychosis in Alzheimer’s disease, the most common subtype of DRP. The initial focus on the Alzheimer’s disease dementia subtype reflects various strategic development, regulatory and commercial considerations, and Karuna remains interested in exploring KarXT in other dementia subtypes in future development programs. Karuna plans to initiate a Phase 3 program in mid-2022. - In late 2021, Karuna initiated a Phase 1 trial of an advanced formulation of KarXT as it continued to advance its earlier pipeline of muscarinic receptor targeted programs and novel formulations of KarXT. Karuna is also advancing its artificial intelligence-based target agnostic discovery program for treating psychiatric and neurological conditions.
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In
November 2021 , Karuna announced its entry into an exclusive license agreement with Zai Lab for the development, manufacturing and commercialization of KarXT inGreater China , including mainlandChina ,Hong Kong ,Macau andTaiwan . Under the terms of the agreement, Karuna received a upfront payment and is eligible to receive certain development and regulatory milestone and sales milestone payments, as well as royalties based on annual net sales of KarXT in$35.0 million Greater China . -
In
February 2021 , Karuna announced that results from the EMERGENT-1 Phase 2 clinical trial evaluating KarXT for the treatment of schizophrenia were published in theNew England Journal of Medicine (NEJM). -
In
March 2021 , Karuna completed a follow-on public offering of its common stock, from which it received net proceeds of .$270.0 million -
In 2021,
PureTech sold 1,750,000 shares of Karuna common stock for cash consideration of approximately in two separate transactions in February and November.$218 million
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In
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Akili Interactive Labs, Inc. (PureTech ownership as ofDecember 31, 2021 :22.3% )-
In the
January 2022 post-period, Akili entered into a definitive agreement to become publicly traded via a merger withSocial Capital Suvretta Holdings Corp. I (“SCS”) (Nasdaq: DNAA), a special purpose acquisition company. The transaction is expected to close in mid-2022, after which Akili will be listed on the Nasdaq stock market under the new ticker symbol “AKLI”. The transaction implies a post-money equity value of the combined company of up to approximately and is expected to deliver up to$1 billion in gross cash proceeds to Akili, including the contribution of up to$412 million of cash held in SCS’s trust account and$250 million from PIPE investors at$162 million per share.$10 -
In
May 2021 , Akili announced the closing of a combined equity and debt financing. With the completion of the oversubscribed Series D financing, the funding is expected to accelerate commercialization of EndeavorRx®4, enable expansion of core technologies to treat acute and chronic cognitive disorders and drive further research and development of potential new digital therapeutics.$160 million -
In
March 2021 , the full data from a multi-site open-label study (the STARS Adjunct study) evaluating the impact of EndeavorRx (AKL-T01) on symptoms and functional impairments in children with attention-deficit/hyperactivity disorder (ADHD) was published in Nature Digital Medicine. Statistically significant improvement was demonstrated in all predetermined endpoints of the study, which included parent and clinician ratings of children’s ADHD symptoms and related impairments in daily life. -
In the
February 2022 post-period, Akili announced the publication of full data in the medical journal PLOS ONE from a single arm, unblinded study conducted by Dr.Elysa Marco atCortica Healthcare and Drs.Joaquin Anguera andCourtney Gallen at theUniversity of California, San Francisco . The study measured electroencephalography (EEG) data alongside behavioral and clinical metrics of attention in children with ADHD using AKL-T01 (EndeavorRx). Data from the study show that EndeavorRx treatment resulted in increased brain activity related to attention function, as measured by EEG, which correlated with improvements in objective behavioral measures of attention. -
In
September 2021 , Akili announced topline results of a Phase 2 study of SDT-001 (Japanese version of AKL-T01), a digital therapeutic designed to improve measures of attention in children diagnosed with attention-deficit/hyperactivity disorder (ADHD). The study, conducted by Akili partner Shionogi & Co., Ltd., was designed to evaluate the feasibility, safety and efficacy of the digital therapeutic in children with ADHD and to inform the design of a potential pivotal study. Results showed the treatment was well-received by patients and demonstrated improvements in ADHD inattention symptoms consistent with those seen across previous studies of AKL-T01. -
In the
March 2022 post-period, Akili announced it had been named toFast Company ’s prestigious list of the World’s Most Innovative Companies for 2022. This list honors businesses that are making the biggest impacts on their industries and culture as a whole and thriving in today’s ever-changing world. -
In
July 2021 , Akili introduced new gaming features and functionalities to its EndeavorRx treatment. Akili is releasing these new gameplay features as it expands its pre-launch activities to bring EndeavorRx to families and healthcare professionals. -
In
April 2021 , Akili announced collaborations with Weill Cornell Medicine,New York-Presbyterian Hospital andVanderbilt University Medical Center to evaluate Akili digital therapeutic AKL-T01 as a treatment for patients with cognitive dysfunction following COVID-19 (also known as “COVID fog”). Under each collaboration, Akili will work with research teams at each institution to conduct two separate randomized, controlled clinical studies evaluating AKL-T01’s ability to target and improve cognitive functioning in COVID-19 survivorswho have exhibited a deficit in cognition. Akili expects data from the studies in COVID fog in the second half of 2022. -
In
August 2021 , Akili and Australian digital health company TALi® (ASX:TD1), completed an agreement for Akili to license TALi’s technology designed to address early childhood attention impairments. The companies plan to work together to execute clinical trials of the TALi technology in pediatric ADHD in theU.S. and pursue FDA regulatory clearance. Under the terms of the agreement, Akili will lead potentialU.S. commercialization and roll-out. -
In the
March 2022 post-period, Akili appointedJon David as Chief Product Officer. A 20-year veteran of the games industry,Mr. David joins Akili to develop and execute the strategic vision of Akili’s future product pipeline after serving as Vice President and General Manager at Glu Mobile, acquired in 2021 by Electronic Arts, where he led the development of both new IP and hit franchises including Covet Fashion and Diner Dash Adventures.Mr. David also guided the success of fan-favorite franchises and the launches of hit titles including Plants vs. Zombies 2 and Plants vs. Zombies Garden Warfare.
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In the
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Gelesis Holdings, Inc. (
PureTech ownership as ofMarch 31, 2022 :23.5% ; We also are eligible to receive payments under our license agreement, including sublicense payments and royalties on net sales)-
In
December 2021 , Gelesis announced that Plenity® is now broadly available across theU.S. to adultswho meet the prescription criteria. -
In the
January 2022 post-period, Gelesis announced the completion of its business combination withCapstar Special Purpose Acquisition Corp. (NYSE: CPSR) (“Capstar”). Gelesis Holdings, Inc. began trading on theNew York Stock Exchange under the ticker symbol “GLS” onJanuary 14, 2022 . -
In
January 2022 post-period, Gelesis launched the “Who Said?” marketing campaign across theU.S. , which challenges many long-held cultural and societal assumptions around weight loss. Plenity’s multichannel campaign encompasses TV, digital, social and Out of Home (OOH) to grow awareness of Plenity’s novel approach to weight management. -
In the
March 2022 post-period, Gelesis announced preliminary results from its broad awareness media campaign, noting that within the first three weeks, the company saw a 3-fold increase in web traffic and 3.5-fold increase in the number of individuals seeking a new prescription compared to previous months when supply was limited. -
In
November 2021 , Gelesis’ first commercial-scale manufacturing line was completed and validated, and the company announced that it had received a fully paid pre-order, in addition to the$30 million pre-order received in$10 million January 2021 , for its first commercial product for weight management, Plenity, from Ro, a leadingU.S. direct-to-patient healthcare company. -
In late 2021, both primary endpoints were achieved in the Gelesis LIGHT-UP study of GS200 in adults with overweight or obesity
who also have prediabetes or type 2 diabetes. -
In
November 2021 , Gelesis announced a publication in Nature’s Scientific Reports describing the genesis of the underlying technology and engineering process for Gelesis’ non-systemic superabsorbent hydrogels. These new materials were designed to replicate compositional and mechanical properties of raw vegetables, and the paper describes their therapeutic approach for weight management as well as possible future solutions for other gut-related conditions. -
In
May 2021 , Gelesis presented a scientific poster at theAmerican Association of Clinical Endocrinology (AACE) 2021 Annual Virtual Meeting. The post-hoc analysis showed that treatment for weight management with Plenity decreased a marker for liver fibrosis (the NAFLD fibrosis score) compared to placebo. -
In the
January 2022 post-period, Gelesis appointed Inogen Co-Founder and former CFO,Ali Bauerlein , to its Board of Directors and Audit Committee.Ms. Bauerlein brings success in scaling to$300M + revenue in a direct-to-consumer business model and public company execution as Gelesis plans to scale Plenity to meet growing consumer demand.
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In
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Vor Bio Inc. (PureTech ownership as ofMarch 4, 2022 :8.6% )-
In
February 2021 , Vor Bio announced the pricing of its initial public offering of common stock on the Nasdaq Global Market under the symbol “VOR”. The aggregate gross proceeds to Vor Bio from the offering were approximately , before deducting the underwriting discounts and commissions and other offering expenses payable by Vor Bio.$203.4 million -
In the
March 2022 post-period, Vor Bio announced VCAR33 is now made up of two programs with different cell sources. The VCAR33 programs are chimeric antigen receptor T (CAR-T) cell therapy candidates designed to target CD33, a clinically-validated target for AML. VCAR33AUTO uses autologous cells from each patient, and is being studied in an ongoing Phase 1/2 clinical trial sponsored by theNational Marrow Donor Program (NMDP) in young adult and pediatric patients with relapsed/refractory AML in a bridge-to-transplant study. VCAR33ALLO uses allogeneic healthy donor-derived cells. Vor Bio also announced it plans to collect initial data on VOR33 from the VBP101 clinical trial and initial clinical data from the VCAR33ALLO program prior to IND submission for the Treatment System following ongoing discussions with the FDA and alongside improved scientific understanding of the differences in T-cell sources. -
In
September 2021 , the FDA granted Fast Track designation to VOR33, Vor Bio’s lead engineered hematopoietic stem cell (eHSC) therapeutic candidate for the treatment of acute myeloid leukemia (AML). -
Vor Bio initiated VBP101,a Phase 1/2a clinical trial of VOR33 for AML patients
who currently have limited treatment options and expects to report VOR33’s initial clinical data in the first half of 2022. -
In
November 2021 , Vor Bio announced its first multi-targeted treatment system comprising VOR33-CLL1 multiplex-edited eHSC therapy and VCAR33-CLL1 multi-specific CAR-T therapy. Vor Bio continues to make progress on editing multiple antigens with its eHSC platform. -
In
June 2021 , Vor Bio announced the build-out of an in-house clinical manufacturing facility inCambridge, Massachusetts in the same premises as Vor Bio’s current headquarters, to support flexible manufacturing for the company’s eHSC and CAR-T product candidate pipeline for patients with blood cancers. Vor Bio anticipates that the facility will be operational in 2022. -
In
July 2021 , Vor Bio announced the formation of a collaboration withJanssen Biotech, Inc. (Janssen), one of the Janssen Pharmaceutical Companies of Johnson & Johnson. The agreement was facilitated by Johnson & Johnson Innovation. Under the terms of the collaboration, Vor Bio will investigate the combination of these two technologies into a treatment solution, pairing Vor Bio’s “invisible” eHSC transplant platform with one of Janssen’s bi-specific antibodies in development for AML. The collaboration agreement provides that each company retains all rights and ownership to their respective programs and platforms. -
In
June 2021 , Vor Bio entered into a multi-year strategic collaboration and license agreement with Abound Bio to research both single- and multi-targeted CAR-T treatments to be used in combination with Vor Bio’s eHSC platform, with the goal of generating novel treatment systems for patients fighting AML and other devastating forms of blood cancer. -
In
January 2021 , Vor Bio announced that the FDA had accepted the company’s IND application for VOR33. InMay 2021 , Vor Bio announced that it received the Canadian clinical trial application clearance for VOR33 fromHealth Canada . -
In
June 2021 , Vor Bio announced the appointment ofMatthew R. Patterson as Chairman of its Board of Directors.Mr. Patterson brings nearly 30 years of senior leadership experience in the research, development and commercialization of innovative therapeutics, most recently atAudentes Therapeutics, Inc. , which he co-founded and led as the company’s Chief Executive Officer from its inception in 2012 through its acquisition by Astellas Pharma Inc. inJanuary 2020 .
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In
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Vedanta Biosciences, Inc. (PureTech ownership as ofDecember 31, 2021 :41.4% )-
In
October 2021 , Vedanta announced that its Phase 2 clinical trial of VE303, an orally administered investigational live biotherapeutic product (LBP) in development for the prevention of recurrent C. difficile infection (CDI) in high-risk patients, met its primary endpoint of preventing disease recurrence through Week 8. VE303 achieved a31.7% absolute risk reduction in rate of recurrence when compared with placebo, representing a greater than80% reduction in the odds of a recurrence. This is believed to be the most advanced clinical trial of an investigational drug based on a rationally defined bacterial consortium, a microbiome-based therapeutic approach that delivers orally administered candidates of precisely known composition that can be manufactured with pharmaceutical-grade consistency. Based on the Phase 2 data, theBiomedical Advanced Research and Development Authority (BARDA) exercised its first contract option for additional funding of , pursuant to its existing 2020 contract with Vedanta, to support a planned Phase 3 clinical trial of VE303.$23.8 million -
In
January 2021 , Vedanta announced a investment from Pfizer, as part of the Pfizer Breakthrough Growth Initiative. Vedanta will retain control of all of its programs and has granted Pfizer a right of first negotiation on VE202, Vedanta’s 16-strain defined bacterial consortium candidate. As part of the investment,$25 million Michael Vincent , M.D., Ph.D., Senior Vice President and Chief Scientific Officer, Inflammation & Immunology Research Unit at Pfizer, joined Vedanta’sScientific Advisory Board . - In late 2021, Vedanta also completed the build-out of its Phase 3 and commercial launch CGMP manufacturing facility for supply of VE303.
-
In
June 2021 , Vedanta presented additional results from a Phase 1 study in healthy volunteers of VE202, Vedanta’s 16-strain defined bacterial consortium candidate for IBD, at theInternational Human Microbiome Consortium Congress 2021 (IHMC). The data summarized the long-term safety and colonization dynamics of the 16-strain version of VE202 in 31 healthy volunteers. Vedanta plans to initiate a Phase 2 clinical trial of VE202 in mild to moderate ulcerative colitis patients. - In 2021, Vedanta’s ongoing Phase 1/2 clinical trial of VE416 for food allergy continued to progress.
-
In
July 2021 , Vedanta announced results from the Phase 1 study evaluating the safety and initial clinical activity of VE800, an immuno-oncology therapeutic candidate, in combination with Bristol Myers Squibb’s Opdivo® (nivolumab) in 54 patients across select types of advanced or metastatic cancers. VE800 demonstrated an acceptable safety and tolerability profile, though the observed response rates did not meet the prespecified criteria to advance into the next stage of the study. Vedanta is analyzing blood, stool and tumor samples from patients in whom response or disease control was observed in order to profile patient subtypes that might benefit from microbiome manipulation. Vedanta plans to present the results at a future medical conference and will continue work to identify cancer settings and patient populations that might benefit from microbiome manipulation with its defined bacterial consortia. -
In
July 2021 , Vedanta closed a financing, which included the$68 million investment from Pfizer as part of the Pfizer Breakthrough Growth Initiative announced in$25 million January 2021 . Vedanta plans to use the proceeds to advance its pipeline of defined bacterial consortia, including progressing VE303 into a Phase 3 clinical trial in patients at high risk for recurrent CDI, initiating a Phase 2 clinical trial of VE202 in mild to moderate ulcerative colitis and continuing to advance programs in additional indications. -
In
February 2021 , Vedanta appointedMark Mullikin as Chief Financial Officer.Mr. Mullikin brings 25 years of experience raising and deploying capital for life sciences companies, and most recently held leadership roles in finance and investor relations at publicly-traded companies such as Editas Medicine and Novartis. -
In
October 2021 , Vedanta announced the appointment ofSimona Levi , Ph.D., J.D., as Chief Legal Officer and Corporate Secretary.Dr. Levi brings over 25 years ofU.S. and international legal experience with private and public companies across the life sciences industry focusing on complex transactions, intellectual property law and litigation as well as corporate governance.
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In
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Follica, Incorporated (PureTech ownership as ofDecember 31, 2021 :76.0% . We also are eligible to receive payments under our license agreement, including sublicense payments and royalties on net sales)-
In
January 2021 ,Follica announced the appointment of two leaders in aesthetic medicine and dermatology to its Board of Directors.Tom Wiggans , former Chief Executive Officer ofDermira , joined as Executive Chairman with over 30 years of experience leading biopharmaceutical companies from the start-up stage to global commercialization, andMichael Davin , former Chief Executive Officer of Cynosure, joined as an Independent Director with over 30 years of experience in the medical device industry. - Preparations are underway for the registration clinical program in male androgenetic alopecia and initiation is anticipated in 2022.
-
In
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Sonde Health, Inc. (PureTech ownership:44.6% )-
In
October 2021 , Sonde launchedSonde Mental Fitness , a voice-enabled mental health detection and monitoring technology that uses a brief voice sample to evaluate mental well-being.Sonde Mental Fitness is currently available through its API platform for integration into third-party apps. It’s also available as a standalone app for iOS and Android, mobile devices to serve as a proof-of-concept for health systems, employers and wellness services interested in testing out the API’s capabilities. -
In the
January 2022 post-period, Sonde announced the signing of a multi-year strategic partnership withGN Group to research and develop commercial vocal biomarkers for mild cognitive impairment. The research will serve as the backbone for new voice-based tools to help at-risk individuals gain timely and accurate health insights using GN Group’s device technologies and, ultimately, to enable early detection and management of life-threatening diseases for the millions of people living with hearing loss. -
In
July 2021 , Sonde announced a strategic collaboration with leading chipmakerQualcomm Technologies, Inc. (Qualcomm) to embed Sonde’s vocal biomarker technology into its flagship and high-tier Qualcomm® Snapdragon™ 888 and 778G 5G Mobile Platforms to help bring native, machine learning-driven vocal biomarker capabilities to mobile and IoT devices globally. The optimization has the potential to unlock several native health screening and monitoring applications on up to the hundreds of millions of mobile devices that use these Snapdragon mobile platforms.
-
In
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Entrega, Inc. (PureTech ownership as ofDecember 31, 2021 :74.3% )- Entrega continued to advance its platform for the oral administration of biologics, vaccines and other drugs that are otherwise not efficiently absorbed when taken orally. As part of its collaboration with Eli Lilly, Entrega has continued to investigate the application of its peptide administration technology to certain Eli Lilly therapeutic candidates. The partnership has been extended into 2022.
- Entrega has also continued advancement of its ENT-100 platform for the oral administration of biologics, vaccines and other drugs that are otherwise not efficiently absorbed when taken orally.
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Annual Report and Accounts for the year ended
December 31, 2021 ; and - Notice of 2022 Annual General Meeting.
Printed copies of these documents together with the Form of Proxy will be posted to shareholders. Copies are also available electronically on the Investor Relations section of the Company's website at https://investors.puretechhealth.com/financials-filings/reports.
PureTech’s 2021 Annual General Meeting (AGM) will be held on
While the Company’s preference had been to welcome shareholders in person to the 2022 AGM in the
The Company appreciates that a number of its shareholders are not resident or located in
Shareholders are encouraged to complete and return their votes by proxy, and to do so no later than
About
This pipeline, which is being advanced both internally and through
For more information, visit www.puretechhealth.com or connect with us on Twitter @puretechh.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that are or may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation those statements that relate to expectations regarding PureTech’s future prospects, development plans and strategies, the progress and timing of clinical trials and data readouts, the timing of potential IND applications, the sufficiency of cash and cash equivalents and expected cash runway, and PureTech’s potential implementation of a capital deployment strategy and plans to return capital to shareholders.. The forward-looking statements are based on current expectations and are subject to known and unknown risks, uncertainties and other important factors that could cause actual results, performance and achievements to differ materially from current expectations, including, but not limited to, the following: our history of incurring significant operating losses since our inception; our need for additional funding to achieve our business goals, which may not be available and which may force us to delay, limit or terminate certain of our therapeutic development efforts; our limited information about and limited control or influence over our Non-Controlled Founded Entities; the lengthy and expensive process of preclinical and clinical drug development, which has an uncertain outcome and potential for substantial delays; potential difficulties with enrolling patients in clinical trials, which could delay our clinical development activities; side effects, adverse events or other safety risks which could be associated with our therapeutic candidates and delay or halt their clinical development; our ability to obtain regulatory approval for and commercialize our therapeutic candidates; our ability to realize the benefits of our collaborations, licenses and other arrangements; our ability to maintain and protect our intellectual property rights; our reliance on third parties, including clinical research organizations, clinical investigators and manufacturers; our vulnerability to natural disasters, global economic factors, geo-political actions and unexpected events, including health epidemics or pandemics like the COVID-19 pandemic, and conflicts such as the
Notes
-
Cash and cash equivalents held at
PureTech Health plc and only wholly-owned subsidiaries (please refer to Note 1 to our consolidated financial statements for further information with respect to our wholly-owned subsidiaries) as ofDec 31, 2021 . This represents a non-IFRS number. For a reconciliation of this number to IFRS, please see below under the heading "Financial Review.” -
Cash and cash equivalents held at
PureTech Health plc and consolidated subsidiaries (please refer to Note 1 to our consolidated financial statements for further information with respect to our consolidated subsidiaries) as ofDecember 31, 2021 . -
Important Safety Information about Plenity®: Patients
who are pregnant or are allergic to cellulose, citric acid, sodium stearyl fumarate, gelatin, or titanium dioxide should not take Plenity. To avoid impact on the absorption of medications: For all medications that should be taken with food, take them after starting a meal. For all medications that should be taken without food (on an empty stomach), continue taking on an empty stomach or as recommended by your physician. The overall incidence of side effects with Plenity was no different than placebo. The most common side effects were diarrhea, distended abdomen, infrequent bowel movements, and flatulence. Contact a doctor right away if problems occur. If you have a severe allergic reaction, severe stomach pain, or severe diarrhea, stop using Plenity until you can speak to your doctor. Rx Only. For the safe and proper use of Plenity or more information, talk to a healthcare professional, read the Patient Instructions for Use, or call 1-844-PLENITY. -
EndeavorRx® is a digital therapeutic indicated to improve attention function as measured by computer-based testing in children ages 8-12 years old with primarily inattentive or combined-type ADHD,
who have a demonstrated attention issue. Patientswho engage with EndeavorRx demonstrate improvements in a digitally assessed measure, Test of Variables of Attention (TOVA®) of sustained and selective attention and may not display benefits in typical behavioral symptoms, such as hyperactivity. EndeavorRx should be considered for use as part of a therapeutic program that may include clinician-directed therapy, medication, and/or educational programs, which further address symptoms of the disorder. There were no serious adverse events;9.3% of subjects experienced side effects, including frustration, headache, dizziness, emotional reaction, nausea or aggression. EndeavorRx is only available to your patients through a prescription, and is not intended as a stand-alone therapeutic or a substitute for your patient’s medication. -
References in this report to “Wholly Owned Programs” refer to the Company’s seven therapeutic candidates (LYT-100, LYT-200, LYT-210, LYT-300, LYT-510, LYT-500 and LYT- 503/IMB-150), four lymphatic and inflammation platforms and potential future therapeutic candidates and platforms that the Company may develop or obtain. References to “Wholly Owned Pipeline” refer to LYT-100, LYT-200, LYT-210, LYT-300, LYT-510, LYT-500 and LYT-503/IMB-150. On
July 23, 2021 ,Imbrium Therapeutics exercised its option to license LYT-503/IMB-150 pursuant to which it is responsible for all future development activities and funding for LYT-503/IMB-150. - Long COVID is a term being used to describe the emerging and persistent complications following the resolution of COVID-19 infection, also known as post-acute COVID-19 syndrome (PACS).
-
Funding figure includes private equity financings, loans and promissory notes, public offerings or grant awards. Funding figure excludes future milestone considerations received in conjunction with partnerships and collaborations. Funding figure does not include Gelesis’ gross proceeds of
from its$105.0 million January 2022 post-periodSPAC merger. -
Cash and cash equivalents held at
PureTech Health plc and only wholly-owned subsidiaries as ofMarch 31, 2022 . The measure includes cash outflows and inflows for the first quarter of 2022. This represents a non-IFRS number. For a reconciliation of this number to IFRS, please see below under the heading "Financial Review.” -
While
PureTech maintains ownership of equity interests in its Founded Entities, the Company does not, in all cases, maintain control over these entities (by virtue of (i) majority voting control and (ii) the right to elect representation to the entities’ board of directors) or direct the management and development efforts for these entities. Consequently, not all such entities are consolidated in the financial statements. WherePureTech maintains control, the entity is referred to as a Controlled Founded Entity in this report and is consolidated in the financial statements. WherePureTech does not maintain control, the entity is referred to as a Non-Controlled Founded Entity in this report and is not consolidated in the financial statements. As ofDecember 31, 2021 , Controlled Founded Entities includeFollica Incorporated ,Vedanta Biosciences, Inc. ,Sonde Health, Inc. andEntrega, Inc. , and Non-Controlled Founded Entities include Gelesis Holdings, Inc., Karuna Therapeutics, Inc.,Akili Interactive Labs, Inc. ,Vor Bio Inc.
Financial Review
Reporting Framework
You should read the following discussion and analysis together with our Consolidated Financial Statements, including the notes thereto, set forth elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business and financing our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including the risks set forth on pages 90 to 93 and in the Additional Information section from pages 217 to 252, our actual results could differ materially from the results described in or implied by these forward-looking statements.
Our audited Consolidated Financial Statements as of
The following discussion contains references to the Consolidated Financial Statements of
Business Background and Results Overview
The business background is discussed from pages 1 to 72, which describe in detail the business development of our Wholly Owned Programs and Founded Entities.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our wholly-owned or Controlled Founded Entities’ therapeutics candidates, which may or may not occur. Our Founded Entities,
We deconsolidated a number of our Founded Entities, specifically Karuna Therapeutics, Inc. ("Karuna"), Vor Biopharma Inc. ("Vor"), and Gelesis during 2019. We expect this trend to continue into the foreseeable future as our Controlled Founded Entities raise additional funding that reduces our ownership interest. Any deconsolidation affects our financials in the following manner:
- our ownership interest does not provide us with a controlling financial interest;
- we no longer control the Founded Entity's assets and liabilities and as a result we derecognize the assets, liabilities and non-controlling interests related to the Founded Entity from our Consolidated Statements of Financial Position;
- we record our non-controlling financial interest in the Founded Entity at fair value; and
- the resulting amount of any gain or loss is recognized in our Consolidated Statements of Comprehensive Income/(Loss).
We anticipate our expenses to continue to increase proportionally in connection with our ongoing development activities related mostly due to the advancement into late-stage studies of the clinical programs within our Wholly Owned Pipeline and Controlled Founded Entities. In addition, having completed our
- continue our research and development efforts;
- seek regulatory approvals for any therapeutic candidates that successfully complete clinical trials;
- add clinical, scientific, operational financial and management information systems and personnel, including personnel to support our therapeutic development and potential future commercialization claims; and
-
operate as a
U.S. public company.
In addition, our internal research and development spend will increase in the foreseeable future as we may initiate additional clinical studies for LYT-100, LYT-200 and LYT-300, and advance LYT-210, LYT-510 and LYT-500 into the clinic and continue to progress our GlyphTM, OrasomeTM and AlivioTM technology platforms as well as our meningeal lymphatics research program.
In addition, with respect to our Founded Entities’ programs, we anticipate that we will continue to fund a small portion of development costs by strategically participating in such companies’ financings when it is in the best interests of our shareholders. The form of any such participation may include investment in public or private financings, collaboration and partnership arrangements and licensing arrangements, among others. Our management and strategic decision makers consider the future funding needs of our Founded Entities and evaluate the needs and opportunities for returns with respect to each of these Founded Entities routinely and on a case-by-case basis.
As a result, we may need substantial additional funding in the future, following the assessment period described above, to support our continuing operations and pursue our growth strategy until such time as we can generate sufficient revenue from product sales to support our operations, if ever. Until such time we expect to finance our operations through a combination of monetization of our interests in our Founded Entities, collaborations with third parties and also potentially from public or private equity or debt financings or other sources. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we are unable to raise capital or enter into such agreements as, and when needed, we may have to delay, scale back or discontinue the development and commercialization of one or more of our wholly-owned therapeutic candidates.
Measuring Performance
The Financial Review discusses our operating and financial performance, our cash flows and liquidity as well as our financial position and our resources. The results for each year are compared primarily with the results of the preceding year.
Reported Performance
Reported performance considers all factors that have affected the results of our business, as reflected in our Consolidated Financial Statements.
Core Performance
Core performance measures are alternative performance measures (APM) which are adjusted and non-IFRS measures. These measures cannot be derived directly from our Consolidated Financial Statements. We believe that these non-IFRS performance measures, when provided in combination with reported performance, will provide investors, analysts and other stakeholders with helpful complementary information to better understand our financial performance and our financial position from period to period. The measures are also used by management for planning and reporting purposes. The measures are not substitutable for IFRS results and should not be considered superior to results presented in accordance with IFRS.
Cash flow and liquidity |
|
PureTech Level Cash and Cash Equivalents |
Measure type: Core performance. |
Definition: Cash and cash equivalents held at |
|
|
Why we use it: PureTech Level Cash and Cash Equivalents is a measure that provides valuable additional information with respect to cash and cash equivalents available to fund the Wholly Owned Programs and make certain investments in Founded Entities. |
The Company no longer presents in the reported periods Consolidated Cash Reserves or PureTech Level Cash Reserves as the Company does not have short-term investments in addition to its cash and cash equivalents in all reported periods.
COVID-19
In
Recent Developments (subsequent to
On
On
Financial Highlights
Following is the reconciliation of the amounts appearing in our Statement of Financial Position to the Alternative Performance Measure described above:
|
As of: |
|||||||||||
(in thousands) |
|
|
|
|||||||||
Consolidated Cash and cash equivalents |
|
413,217 |
|
|
465,708 |
|
|
403,881 |
|
|||
Less: Cash and cash equivalents held at non-wholly owned subsidiaries |
|
(35,303 |
) |
|
(46,856 |
) |
|
(54,473 |
) |
|||
PureTech Level Cash and Cash Equivalents |
$ |
377,914 |
|
$ |
418,851 |
|
$ |
349,407 |
|
* Information as of
Basis of Presentation and Consolidation
Our Consolidated Financial Information consolidates the financial information of
Basis for Segmentation
Our Directors are our strategic decision-makers. Our operating segments are based on the financial information provided to our Directors periodically for the purposes of allocating resources and assessing performance. We have determined that each Founded Entity is representative of a single operating segment as our Directors monitor the financial results at this level. When identifying the reportable segments we have determined that it is appropriate to aggregate multiple operating segments into a single reportable segment given the high level of operational and financial similarities across the entities. We have identified multiple reportable segments which are outlined below. Substantially all of our revenue and profit generating activities are generated within
There was no change to reportable segments in 2021, except the change in the composition of the segments with respect to Alivio, as explained below.
During the year ended
Following is the description of our reportable segments:
Internal
The Internal segment is advancing Wholly Owned Programs, which is focused on immunological, fibrotic and lymphatic system disorders and builds upon validated biologic pathways and proven pharmacology. The Internal segment is comprised of the technologies that are wholly owned and will be advanced through either
Controlled Founded Entities
The Controlled Founded Entities segment is comprised of our subsidiaries that are currently consolidated operational subsidiaries that either have, or have plans to hire, independent management teams and have previously raised, or are currently in the process of raising, third-party dilutive capital. These subsidiaries have active research and development programs and either have entered into or plan to seek a strategic partnership with an equity or debt investment partner,
Non-Controlled Founded Entities
The Non-Controlled Founded Entities segment is comprised of the entities in respect of which
The Non-Controlled Founded Entities segment incorporates the operational results of the aforementioned entities to the date of deconsolidation. Following the date of deconsolidation, we account for our investment in each entity at the parent level, and therefore the results associated with investment activity following the date of deconsolidation is included in the Parent Company and Other segment (the “Parent Company and Other segment”).
Parent Company and Other
Parent Company and Other includes activities that are not directly attributable to the operating segments, such as the activities of the Parent, corporate support functions and certain research and development support functions that are not directly attributable to a strategic business segment as well as the elimination of intercompany transactions. Parent Company and Other also captures the accounting for our holdings in entities for which control has been lost, which is inclusive of the following items: gain on deconsolidation, gain or loss on investments held at fair value, gain on loss of significant influence, and the share of net loss of associates accounted for using the equity method. As of
The table below summarizes the entities that comprised each of our segments as of
Internal Segment |
|
PureTech LYT |
100.0 % |
|
100.0 % |
|
100.0 % |
Controlled Founded Entities |
|
|
77.3 % |
|
85.4 % |
|
51.8 % |
|
48.6 % |
Non-Controlled Founded Entities |
|
|
26.7 % |
|
24.5 % |
Karuna Therapeutics, Inc. |
5.6 % |
Vor Biopharma Inc. |
8.6 % |
Parent Segment1 |
|
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
1 Includes dormant, inactive and shell entities that are not listed here.
Components of Our Results of Operations
Revenue
To date, we have not generated any meaningful revenue from product sales and we do not expect to generate any meaningful revenue from product sales for the near term future. We derive our revenue from the following:
Contract revenue
We generate revenue primarily from licenses, services and collaboration agreements, including amounts that are recognized related to upfront payments, milestone payments, royalties and amounts due to us for research and development services. In the future, revenue may include additional milestone payments and royalties on any net product sales under our collaborations. We expect that any revenue we generate will fluctuate from period to period as a result of the timing and amount of license, research and development services and milestone and other payments.
Grant Revenue
Grant revenue is derived from grant awards we receive from governmental agencies and non-profit organizations for certain qualified research and development expenses. We recognize grants from governmental agencies as grant income in the Consolidated Statement of Comprehensive Income/(Loss), gross of the expenditures that were related to obtaining the grant, when there is reasonable assurance that we will comply with the conditions within the grant agreement and there is reasonable assurance that payments under the grants will be received. We evaluate the conditions of each grant as of each reporting date to ensure that we have reasonable assurance of meeting the conditions of each grant arrangement and it is expected that the grant payment will be received as a result of meeting the necessary conditions.
For proceeds from sale of our investments held at fair value, please see our Consolidated Cash flow Statements, Net cash provided by investing activities.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our wholly-owned and our Controlled Founded Entities’ therapeutic candidates, which include:
- employee-related expenses, including salaries, related benefits and equity-based compensation;
- expenses incurred in connection with the preclinical and clinical development of our wholly-owned and our Founded Entities’ therapeutic candidates, including our agreements with contract research organizations, or CROs;
-
expenses incurred under agreements with consultants
who supplement our internal capabilities; - the cost of lab supplies and acquiring, developing and manufacturing preclinical study materials and clinical trial materials;
- costs related to compliance with regulatory requirements; and
- facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other operating costs.
We expense all research costs in the periods in which they are incurred and development costs are capitalized only if certain criteria are met. For the periods presented, we have not capitalized any development costs since we have not met the necessary criteria required for capitalization. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.
Research and development activities are central to our business model. Therapeutic candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase for the foreseeable future in connection with our planned preclinical and clinical development activities in the near term and in the future. The successful development of our wholly-owned and our Founded Entities’ therapeutic candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development of these therapeutic candidates. We are also unable to predict when, if ever, material net cash inflows will commence from our wholly-owned or our Founded Entities’ therapeutic candidates. This is due to the numerous risks and uncertainties associated with developing therapeutics, including the uncertainty of:
- progressing research and development of our Wholly Owned Pipeline, including LYT-100, LYT-200, LYT-210, LYT-300, LYT-510, LYT-500 and continue to progress our GlyphTM, OrasomeTM and AlivioTM technology platforms as well as our meningeal lymphatics research program and other potential therapeutic candidates based on previous human efficacy and clinically validated biology within our Wholly Owned Programs;
- establishing an appropriate safety profile with investigational new drug application enabling studies to advance our preclinical programs into clinical development;
- the success of our Founded Entities and their need for additional capital;
- identifying new therapeutic candidates to add to our Wholly Owned Pipeline;
- successful enrollment in, and the initiation and completion of, clinical trials;
- the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;
- commercializing our wholly-owned and our Founded Entities’ therapeutic candidates, if approved, whether alone or in collaboration with others;
- establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
- addressing any competing technological and market developments, as well as any changes in governmental regulations;
- negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations under such arrangements;
- maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how, as well as obtaining and maintaining regulatory exclusivity for our wholly-owned and our Founded Entities’ therapeutic candidates;
- continued acceptable safety profile of our therapeutics, if any, following approval; and
- attracting, hiring and retaining qualified personnel.
A change in the outcome of any of these variables with respect to the development of a therapeutic candidate could mean a significant change in the costs and timing associated with the development of that therapeutic candidate. For example, the FDA, the EMA, or another comparable foreign regulatory authority may require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a therapeutic candidate, or we may experience significant trial delays due to patient enrollment or other reasons, in which case we would be required to expend significant additional financial resources and time on the completion of clinical development. In addition, we may obtain unexpected results from our clinical trials and we may elect to discontinue, delay or modify clinical trials of some therapeutic candidates or focus on others. Identifying potential therapeutic candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our wholly-owned and our Founded Entities’ therapeutic candidates, if approved, may not achieve commercial success.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services, travel expenses and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our portfolio of therapeutic candidates. We also expect to incur increased expenses associated with being a public company in
Total Other Income/(Loss)
Gain on Deconsolidation
Upon losing control of a subsidiary, the assets and liabilities are derecognized along with any related non-controlling interest (“NCI”). Any interest retained in the former subsidiary is measured at fair value when control is lost. Any resulting gain or loss is recognized as profit or loss in the Consolidated Statements of Comprehensive Income/(Loss).
Gain/(Loss) on Investments Held at Fair Value
Investments held at fair value include both unlisted and listed securities held by us, which include investments in Akili, Gelesis, Karuna, Vor and certain insignificant investments. Our ownership in Akili is in preferred shares. Our ownership in Vor was in preferred shares until
Loss Realized on Investments Held at Fair Value
Loss realized on investments held at fair value relates to realized differences in the per share disposal price of a listed security as compared to the per share exchange quoted price at the time of disposal. The difference is attributable to a block sale discount, attributable to a variety of market factors, primarily the number of shares being transacted was significantly larger than the daily trading volume of a given security.
Gain on Loss of Significant Influence
Gain on loss of significant influence relates to the assessment related to the loss of our ability to exert significant influence over an investment in a Non-Controlled Founded Entity that is accounted for under the equity method. For the year ended
Other Income (Expense)
Other income (expense) consists primarily of gains and losses related to the sale of an asset and certain investments as well as sub-lease income.
Finance Costs/Income
Finance costs consist of loan interest expense and the changes in the fair value of certain liabilities associated with financing transactions, mainly preferred share liabilities in respect of preferred shares issued by our non wholly owned subsidiaries to third parties. Finance income consists of interest income on funds invested in money market funds and
Share of
Associates are accounted for using the equity method (equity accounted investees) and are initially recognized at cost, or if recognized upon deconsolidation they are initially recorded at fair value at the date of deconsolidation. The consolidated financial statements include our share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence commences until the date that significant influence ceases. When the share of losses exceeds the net investment in the investee, including the investment in preferred shares that are considered Long-term Interests, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that we have incurred legal or constructive obligations or made payments on behalf of an investee.
We compare the recoverable amount of the investment to its carrying amount on a go-forward basis and determine the need for impairment. We recorded an impairment in the common stock investment in Gelesis in the year ended
Income Tax
We must make certain estimates and judgments in determining income tax expense for financial statement purposes. The amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are not recorded if we do not assess their realization as probable. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in our financial statements in the period that includes the substantive enactment date.
Results of Operations
The following table, which has been derived from our audited financial statements for the years ended
|
Year Ended |
|||||||||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
Change
|
Change
|
|||||||||||||||
Contract revenue |
$ |
9,979 |
|
$ |
8,341 |
|
$ |
8,688 |
|
$ |
1,638 |
|
$ |
(347 |
) |
|||||
Grant revenue |
|
7,409 |
|
|
3,427 |
|
|
1,119 |
|
|
3,982 |
|
|
2,308 |
|
|||||
Total revenue |
|
17,388 |
|
|
11,768 |
|
|
9,807 |
|
|
5,621 |
|
|
1,961 |
|
|||||
Operating expenses: |
|
|
|
|
|
|||||||||||||||
General and administrative expenses |
|
(57,199 |
) |
|
(49,440 |
) |
|
(59,358 |
) |
|
(7,760 |
) |
|
9,918 |
|
|||||
Research and development expenses |
|
(110,471 |
) |
|
(81,859 |
) |
|
(85,848 |
) |
|
(28,612 |
) |
|
3,988 |
|
|||||
Operating income/(loss) |
|
(150,282 |
) |
|
(119,531 |
) |
|
(135,399 |
) |
|
(30,751 |
) |
|
15,868 |
|
|||||
Other income/(expense): |
|
|
|
|
|
|||||||||||||||
Gain/(loss) on deconsolidation |
|
— |
|
|
— |
|
|
264,409 |
|
|
— |
|
|
(264,409 |
) |
|||||
Gain/(loss) on investments held at fair value |
|
179,316 |
|
|
232,674 |
|
|
(37,863 |
) |
|
(53,358 |
) |
|
270,537 |
|
|||||
Loss realized on sale of investment |
|
(20,925 |
) |
|
(54,976 |
) |
|
— |
|
|
34,051 |
|
|
(54,976 |
) |
|||||
Gain/(loss) on disposal of assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Gain on loss of significant influence |
|
— |
|
|
— |
|
|
445,582 |
|
|
— |
|
|
(445,582 |
) |
|||||
Other income/(expenses) |
|
1,592 |
|
|
1,035 |
|
|
39 |
|
|
557 |
|
|
996 |
|
|||||
Other income/(loss) |
|
159,983 |
|
|
178,732 |
|
|
672,167 |
|
|
(18,749 |
) |
|
(493,434 |
) |
|||||
Net finance income/(costs) |
|
5,050 |
|
|
(6,115 |
) |
|
(46,147 |
) |
|
11,164 |
|
|
40,032 |
|
|||||
Share of net gain/(loss) of associates accounted for using the equity method |
|
(73,703 |
) |
|
(34,117 |
) |
|
30,791 |
|
|
(39,587 |
) |
|
(64,908 |
) |
|||||
Impairment of investment in associate |
|
— |
|
|
— |
|
|
(42,938 |
) |
|
— |
|
|
42,938 |
|
|||||
Income/(loss) before income taxes |
|
(58,953 |
) |
|
18,969 |
|
|
478,474 |
|
|
(77,922 |
) |
|
(459,504 |
) |
|||||
Taxation |
|
(3,756 |
) |
|
(14,401 |
) |
|
(112,409 |
) |
|
10,645 |
|
|
98,008 |
|
|||||
Net income/(loss) including non-controlling interest |
|
(62,709 |
) |
|
4,568 |
|
|
366,065 |
|
|
(67,277 |
) |
|
(361,497 |
) |
|||||
Net (loss)/income attributable to the Company |
$ |
(60,558 |
) |
$ |
5,985 |
|
$ |
421,144 |
|
$ |
(66,543 |
) |
$ |
(415,159 |
) |
Comparison of the Years Ended
Total Revenue |
||||||||||
|
Year Ended |
|||||||||
(in thousands) |
2021 |
2020 |
Change |
|||||||
Contract Revenue: |
|
|
|
|||||||
Internal Segment |
$ |
8,129 |
$ |
5,297 |
$ |
2,833 |
|
|||
Controlled Founded Entities |
|
1,615 |
|
990 |
|
625 |
|
|||
Non-Controlled Founded Entities |
|
— |
|
— |
|
— |
|
|||
Parent Company and other |
|
235 |
|
2,054 |
|
(1,819 |
) |
|||
Total Contract Revenue |
$ |
9,979 |
$ |
8,341 |
$ |
1,638 |
|
|||
Grant Revenue: |
|
|
|
|||||||
Internal Segment |
$ |
1,253 |
$ |
1,563 |
$ |
(310 |
) |
|||
Controlled Founded Entities |
|
6,156 |
|
1,864 |
|
4,292 |
|
|||
Non-Controlled Founded Entities |
|
— |
|
— |
|
— |
|
|||
Parent Company and other |
|
— |
|
— |
|
— |
|
|||
Total Grant Revenue |
$ |
7,409 |
$ |
3,427 |
$ |
3,982 |
|
|||
Total Revenue |
$ |
17,388 |
$ |
11,768 |
$ |
5,621 |
|
Our total revenue was
Research and Development Expenses |
|||||||||||
|
Year Ended |
||||||||||
(in thousands) |
2021 |
2020 |
Change |
||||||||
Research and Development Expenses: |
|
|
|
||||||||
Internal Segment |
$ |
(65,444 |
) |
$ |
(45,346 |
) |
$ |
20,098 |
|||
Controlled Founded Entities |
|
(43,783 |
) |
|
(36,279 |
) |
|
7,504 |
|||
Non-Controlled Founded Entities |
|
— |
|
|
— |
|
|
— |
|||
Parent Company and other |
|
(1,244 |
) |
|
(234 |
) |
|
1,010 |
|||
|
$ |
(110,471 |
) |
$ |
(81,859 |
) |
$ |
28,612 |
Our research and development expenses were
General and Administrative Expenses |
||||||||||||
|
Year Ended |
|||||||||||
(in thousands) |
2021 |
2020 |
Change |
|||||||||
General and Administrative Expenses: |
|
|
|
|||||||||
Internal Segment |
$ |
(8,673 |
) |
$ |
(3,482 |
) |
$ |
5,191 |
|
|||
Controlled Founded Entities |
|
(20,729 |
) |
|
(13,691 |
) |
|
7,038 |
|
|||
Non-Controlled Founded Entities |
|
— |
|
|
— |
|
|
— |
|
|||
Parent Company and other |
|
(27,797 |
) |
|
(32,267 |
) |
|
(4,470 |
) |
|||
Total General and Administrative Expenses |
$ |
(57,199 |
) |
$ |
(49,440 |
) |
$ |
7,760 |
|
Our general and administrative expenses were
Total Other Income (Loss)
Total other income was
Net Finance Income (Costs)
Net finance Income was
Share of
For the year ended
Taxation
Income tax expense was
Comparison of the Years Ended
Total Revenue |
||||||||||
|
Year Ended |
|||||||||
(in thousands) |
2020 |
2019 |
Change |
|||||||
Contract Revenue: |
|
|
|
|||||||
Internal Segment |
$ |
5,297 |
$ |
7,077 |
$ |
(1,780 |
) |
|||
Controlled Founded Entities |
|
990 |
|
1,474 |
|
(484 |
) |
|||
Non-Controlled Founded Entities |
|
— |
|
— |
|
— |
|
|||
Parent Company and other |
|
2,054 |
|
137 |
|
1,917 |
|
|||
Total Contract Revenue |
$ |
8,341 |
$ |
8,688 |
$ |
(347 |
) |
|||
Grant Revenue: |
|
|
|
|||||||
Internal Segment |
$ |
1,563 |
$ |
928 |
$ |
635 |
|
|||
Controlled Founded Entities |
|
1,864 |
|
191 |
|
1,673 |
|
|||
Non-Controlled Founded Entities |
|
— |
|
— |
|
— |
|
|||
Parent Company and other |
|
— |
|
— |
|
— |
|
|||
Total Grant Revenue |
$ |
3,427 |
$ |
1,119 |
$ |
2,308 |
|
|||
Total Revenue |
$ |
11,768 |
$ |
9,807 |
$ |
1,961 |
|
Our total revenue was
Research and Development Expenses |
||||||||||||
|
Year Ended |
|||||||||||
(in thousands) |
2020 |
2019 |
Change |
|||||||||
Research and Development Expenses: |
|
|
|
|||||||||
Internal Segment |
$ |
(45,346 |
) |
$ |
(28,874 |
) |
$ |
16,472 |
|
|||
Controlled Founded Entities |
|
(36,279 |
) |
|
(39,883 |
) |
|
(3,603 |
) |
|||
Non-Controlled Founded Entities |
|
— |
|
|
(15,555 |
) |
|
(15,555 |
) |
|||
Parent Company and other |
|
(234 |
) |
|
(1,536 |
) |
|
(1,302 |
) |
|||
|
$ |
(81,859 |
) |
$ |
(85,848 |
) |
$ |
(3,988 |
) |
Our research and development expenses were
General and Administrative Expenses |
||||||||||||
|
Year Ended |
|||||||||||
(in thousands) |
2020 |
2019 |
Change |
|||||||||
General and Administrative Expenses: |
|
|
|
|||||||||
Internal Segment |
$ |
(3,482 |
) |
$ |
(3,252 |
) |
$ |
230 |
|
|||
Controlled Founded Entities |
|
(13,691 |
) |
|
(13,569 |
) |
|
122 |
|
|||
Non-Controlled Founded Entities |
|
— |
|
|
(10,439 |
) |
|
(10,439 |
) |
|||
Parent Company and other |
|
(32,267 |
) |
|
(32,098 |
) |
|
168 |
|
|||
Total General and Administrative Expenses |
$ |
(49,440 |
) |
$ |
(59,358 |
) |
$ |
(9,918 |
) |
Our general and administrative expenses were
Total Other Income (Loss)
Total other income was
Net Finance Income (Costs)
Net finance costs were
Share of
The share of net loss in associates was
Taxation
Income tax expense was
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards (IFRSs) as adopted for use in the
Our estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revisions and future periods if the revision affects both current and future periods.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing at the end of this report, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements. See Note 1 to our consolidated financial statements for a further detailed description of our significant accounting policies.
Financial instruments
We account for our financial instruments according to IFRS 9. As such, when issuing preferred shares in our subsidiaries we determine the classification of financial instruments in terms of liability or equity. Such determination involves significant judgement. These judgements include an assessment of whether the financial instruments include any embedded derivative features, whether they include contractual obligations upon us to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party at any point in the future prior to liquidation, and whether that obligation will be settled by exchanging a fixed amount of cash or other financial assets for a fixed number of the Group's equity instruments.
In accordance with IFRS 9 we carry certain investments in equity securities at fair value as well as our subsidiary preferred share, convertible notes and warrant liabilities, all through profit and loss (FVTPL). Valuation of the aforementioned financial instruments (assets and liabilities) includes making significant estimates, specifically determining the appropriate valuation methodology and making certain estimates of the future earnings potential of the subsidiary businesses, appropriate discount rate and earnings multiple to be applied, marketability and other industry and company specific risk factors.
Consolidation:
The consolidated financial statements include the financial statements of the Company and the entities it controls. Based on the applicable accounting rules, the Company controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Therefore an assessment is required to determine whether the Company has (i) power over the investee; (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect the amount of the investor’s returns. Judgement is required to perform such assessment and it requires that the Company considers, among others, activities that most significantly affect the returns of the investee, its voting shares, representation on the board, rights to appoint board members and management, shareholders agreements, de facto power, investee dependence on the Company and other contributing factors.
Investment in Associates
When we do not control an investee but maintain significant influence over the financial and operating policies of the investee the investee is an associate. Significant influence is presumed to exist when we hold 20 percent or more of the voting power of an entity, unless it can be clearly demonstrated that this is not the case. We evaluate if we maintain significant influence over associates by assessing if we have the power to participate in the financial and operating policy decisions of the associate.
Associates are accounted for using the equity method (equity accounted investees) and are initially recognized at cost, or if recognized upon deconsolidation they are initially recorded at fair value at the date of deconsolidation. The consolidated financial statements include our share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence commences until the date that significant influence ceases. When our share of losses exceeds the net investment in an equity accounted investee, including preferred share investments that are considered to be Long-Term Interests, the carrying amount is reduced to zero and recognition of further losses is discontinued except to the extent that we have incurred legal or constructive obligations or made payments on behalf of an investee. To the extent we hold interests in associates that are not providing access to returns underlying ownership interests, the instrument held by
Judgement is required in order to determine whether we have significant influence over financial and operating policies of investees. This judgement includes, among others, an assessment whether we have representation on the Board of Directors of the investee, whether we participate in the policy making processes of the investee, whether there is any interchange of managerial personnel, whether there is any essential technical information provided to the investee and if there are any transactions between us and the investee.
Judgement is also required to determine which instruments we hold in the investee form part of the investment in the associate, which is accounted for under IAS 28 and scoped out of IFRS 9, and which instruments are separate financial instruments that fall under the scope of IFRS 9. This judgement includes an assessment of the characteristics of the financial instrument of the investee held by us and whether such financial instrument provides access to returns underlying an ownership interest.
Where the company has other investments in an equity accounted investee that are not accounted for under IAS 28, judgement is required in determining if such investments constitute Long-Term Interests for the purposes of IAS 28 (please refer to Notes 5 and 6). This determination is based on the individual facts and circumstances and characteristics of each investment, but is driven, among other factors, by the intention and likelihood to settle the instrument through redemption or repayment in the foreseeable future, and whether or not the investment is likely to be converted to common stock or other equity instruments
Recent Accounting Pronouncements
For information on recent accounting pronouncements, see our consolidated financial statements and the related notes found elsewhere in this report.
Cash Flow and Liquidity
Our cash flows may fluctuate and are difficult to forecast and will depend on many factors, including:
- the expenses incurred in the development of wholly-owned and Controlled Founded Entity therapeutic candidates;
- the revenue, if any, generated by wholly-owned and Controlled-Founded Entity therapeutic candidates;
- the revenue, if any, generated from licensing and royalty agreement with Founded Entities;
- the financing requirements of the Internal segment, Controlled-Founded Entities segment and Parent segment; and
- the investment activities in the Internal, Controlled-Founded Entities, and Non-Controlled Founded Entities and Parent segments.
As of
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
|
Year Ended |
|||||||||||
(in thousands) |
2021 |
2020 |
2019 |
|||||||||
Net cash used in operating activities |
$ |
(158,274 |
) |
$ |
(131,827 |
) |
$ |
(98,156 |
) |
|||
Net cash provided by investing activities |
|
197,375 |
|
|
364,478 |
|
|
63,659 |
|
|||
Net cash provided by financing activities |
|
22,727 |
|
|
38,869 |
|
|
49,910 |
|
|||
Effect of exchange rates on cash and cash equivalents |
|
— |
|
|
— |
|
|
(104 |
) |
|||
Net increase in cash and cash equivalents |
$ |
61,827 |
|
$ |
271,520 |
|
$ |
15,309 |
|
Operating Activities
Net cash used in operating activities was
Net cash used in operating activities was
Investing Activities
Net cash provided by investing activities was
Net cash provided by investing activities was
Financing Activities
Net cash provided by financing activities was
Net cash provided by financing activities was
Funding Requirements
We have incurred operating losses since inception. Based on our current plans, we believe our existing cash and cash equivalents at
- the costs, timing and outcomes of clinical trials and regulatory reviews associated with our wholly-owned therapeutic candidates;
- the costs of commercialization activities, including product marketing, sales and distribution;
- the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
- the emergence of competing technologies and products and other adverse marketing developments;
-
the effect on our therapeutic and product development activities of actions taken by the
U.S. Food and Drug Administration (“FDA”), theEuropean Medicines Agency (“EMA”) or other regulatory authorities; - our degree of success in commercializing our wholly-owned therapeutic candidates, if and when approved; and
- the number and types of future therapeutics we develop and commercialize.
A change in the outcome of any of these or other variables with respect to the development of any of our wholly-owned therapeutic candidates could significantly change the costs and timing associated with the development of that therapeutic candidate.
Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or other committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our wholly-owned therapeutic candidates, we have only a general estimate of the amounts of increased capital outlays and operating expenditures associated with our current and anticipated therapeutic development programs and these may change in the future.
Financial Position
Summary Financial Position |
|||||||
|
As of |
||||||
(in thousands) |
2021 |
2020 |
Change |
||||
Investments held at fair value (*) |
397,179 |
530,161 |
(132,982 |
) |
|||
Other non-current assets |
47,018 |
45,484 |
1,534 |
|
|||
Non-current assets |
444,197 |
575,645 |
(131,448 |
) |
|||
Cash and cash equivalents |
465,708 |
403,881 |
61,827 |
|
|||
Other current assets |
36,101 |
10,468 |
25,634 |
|
|||
Current assets |
501,809 |
414,348 |
87,461 |
|
|||
Total assets |
946,006 |
989,994 |
(43,988 |
) |
|||
Lease Liability |
29,040 |
32,088 |
(3,048 |
) |
|||
Deferred tax liability |
89,765 |
108,626 |
(18,861 |
) |
|||
Other non-current liabilities |
16,921 |
14,818 |
2,103 |
|
|||
Non-current liabilities |
135,725 |
155,531 |
(19,806 |
) |
|||
Trade and other payables |
35,760 |
20,566 |
15,194 |
|
|||
Notes payable |
3,916 |
26,455 |
(22,539 |
) |
|||
Warrant liability |
6,787 |
8,206 |
(1,419 |
) |
|||
Preferred shares |
174,017 |
118,972 |
55,045 |
|
|||
Other current liabilities |
5,654 |
6,724 |
(1,069 |
) |
|||
Current liabilities |
226,135 |
180,924 |
45,211 |
|
|||
Total liabilities |
361,859 |
336,455 |
25,405 |
|
|||
Net assets |
584,147 |
653,539 |
(69,392 |
) |
|||
Total equity |
584,147 |
653,539 |
(69,392 |
) |
(*) Fair value of investments accounted for at fair value, does not take into consideration contribution from milestones that occurred after
Investments Held at Fair Value
Investments held at fair value decreased
Cash and Cash Equivalents
Consolidated cash, cash equivalents increased
Non-Current Liabilities
Non-current liabilities decreased
Trade and Other Payables
Trade and other payables increased
Notes Payable
Notes payable decreased
Preferred Shares
Preferred share liability increased
Quantitative and Qualitative Disclosures about Financial Risks
Interest Rate Sensitivity
As of
Foreign Currency Exchange Risk
We maintain our consolidated financial statements in our functional currency, which is the
We recorded foreign currency losses in respect of foreign operations of
We do not currently engage in currency hedging activities in order to reduce our currency exposure, but we may begin to do so in the future. Instruments that may be used to hedge future risks include foreign currency forward and swap contracts. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully protected against material foreign currency fluctuations.
Controlled Founded Entity Investments
We maintain investments in certain Controlled Founded Entities. Our investments in Controlled Founded Entities are eliminated as intercompany transactions upon financial consolidation. We are however exposed to a preferred share liability owing to the terms of existing preferred shares and the ownership of Controlled Founded Entities preferred shares by third parties. The liability of preferred shares is maintained at fair value through the profit and loss. Our strong cash position, budgeting and forecasting processes, as well as decision making and risk mitigation framework enable us to robustly monitor and support the business activities of the Controlled Founded Entities to ensure no exposure to credit losses and ultimately dissolution or liquidation. Accordingly, we view exposure to third party preferred share liability as low. Please refer to Note 16 to our consolidated financial statements for further information regarding our exposure to Controlled Founded Entity Investments.
Non-Controlled Founded Entity Investments
We maintain certain investments in Non-Controlled Founded Entities which are deemed either as investments and accounted for as investments held at fair value or associates and accounted for under the equity method (please refer to Note 1 to our consolidated financial statements). Our exposure to investments held at fair value was
Equity Price Risk
As of
The investments in Karuna and Vor are exposed to fluctuations in the market price of these common shares. The effect of a 10.0 percent adverse change in the market price of Karuna common shares and Vor common shares as of
Subsequent to
Liquidity Risk
We do not believe we will encounter difficulty in meeting the obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. While we believe our cash and cash equivalents do not contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes or decline in value based on market conditions.
Credit Risk
We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity and to meet operating needs. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Also, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.
Credit risk is also the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. We assess the credit quality of customers on an ongoing basis, taking into account its financial position, past experience and other factors. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to credit ratings (if available) or to historical information about counterparty default rates. We are also potentially subject to concentrations of credit risk in accounts receivable. Concentrations of credit risk with respect to receivables is owed to the limited number of companies comprising our customer base. However, our exposure to credit losses is currently de minimis due to the credit quality of our receivables, which are primarily from the US government and large funds with respect to grants.
Foreign Private Issuer Status
Owing to our
- the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;
-
sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders
who profit from trades made in a short period of time; -
the rules under the Exchange Act requiring the filing with the
SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and - Regulation FD, which regulates selective disclosures of material information by issuers.
The following information, which is required in connection with the Company as a company incorporated under the United Kingdom’s Companies Act 2006 and having its ordinary shares admitted to premium listing on the Official List of the United Kingdom’s
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Public Relations
publicrelations@puretechhealth.com
Investor Relations
IR@puretechhealth.com
EU Media
+44 (0) 20 3727 1000
ben.atwell@FTIconsulting.com
+1 774 278 8273
nichole@tenbridgecommunications.com
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