PureTech Health plc (PRTC) Earnings Call Transcript & Summary

Okay. Good morning, and welcome to Day 2 of the Barclays Global Healthcare Conference. My name is Carter Gould, senior biotech analyst here at Barclays. And I am pleased to welcome to the next the next slide here to PureTech Health. Presenting for the company will be CFO, George Farmer. He's got a very interesting story here to tell you a unique business model as well as some of their own proprietary products. And with that, I'll pass it off to George. Thank you.

Great. Thanks very much, Carter. Very pleased to be here at the Barclays Healthcare conference to tell the PureTech story. We have a very unique story to tell here about PureTech, which involves a highly promising therapeutic development pipeline that I'll be discussing today. We also have a number of anticipated milestones and catalysts that are expected in the back half of this year, all of which are related to our goal of developing novel medicines for serious diseases with limited or no treatment options. Before I begin, I'd like to remind you that during this present presentation I will be making certain forward-looking statements. And ask that you refer to our SEC filings for a discussion on the potential risks and uncertainties. I'd like to note that the exciting momentum and progress would not be possible without our dedicated management team shown here, and our outstanding scientific collaborators who are leading experts in their field. We're also very fortunate to have an amazing Board and R&d Committee, which includes former CEOs and CSOs of major pharmaceutical companies, entrepreneurs and award-winning academics and clinical leaders who have provided their support and expertise to advance our mission in a very hands-on manner. As we look forward and look at PureTech's R&D engine on the next slide, I'd like to note that PureTech's platforms and underlying programs have led to 24 therapeutic candidates, 13 of which have advanced into clinical development and 2 which have secured regulatory clearance from FDA and EU authorities. This accomplishment is a testament to the unique business model employed at PureTech and would not have been possible without the broad network of collaborators and our skilled development team. As I mentioned, this is our distinctive R&D model, which is built on a collaboration with the world's leading experts in specific diseases. Together, with these experts, we identify, invent and advance scientific breakthroughs through early access to data before publication in scientific journals. Next slide, please. In the early days of PureTech, we partnered with Venture Capital and other investors and sharing our development costs by housing each program of our new medicines in what we call founded entities. Around 4 years ago, as these programs were making great progress and PureTech's financial resources grew, we decided to keep these new programs internally and build out our Wholly Owned Pipeline, where we maintain 100% ownership, and we expect to be the key value driver for the company going forward. Nevertheless as we view our founded entities as significant sources of non-dilutive capital as they continue to mature. For example, through the liquidation of part of our stake in Karuna last year, which was founded around the CARXT program developed by PureTech scientists, we're able to fortify our cash position to about $387 million as of September 30 last year. We also sold an additional $118 million of stock last month and remain as one of the company's largest shareholders with about a 9% stake. We're also entitled to royalties on potential sales of CARXT. We also have a stake -- about an 8% stake in VOR, another founded entity that recently went public. Our mission now, though, is to use these resources towards the development of our internal pipeline, which is 100% owned by us, in which I will be spending the remainder of my time. Next slide. Our Wholly Owned Pipeline candidates, again, here highlighted in yellow, may appear relatively divergent from one another, but all are based on a common theme focused on the lymphatic system and related immunology. Our clinical programs to date are designed to treat fibrotic and oncology indications, while our preclinical delivery platforms are designed to target the gut and lymphatic systems for the purpose of administering small molecules that face challenges associated with oral bioavailability and oral administration of biologic expression systems. Next slide. Here, we highlight LYT-100, which is our lead development candidate. This came through our interest in a condition known as lymphedema, which is a disease or condition characterized by defects in lymphatic flow associated with tissue damage caused by radiation treatments and surgical procedures for treatment of breast cancer. It affects about 1 million people in the U.S. and is associated with significant disfigurement, pain and low-quality of life. Early data generated by collaborators and FDA -- by our collaborators with an FDA-approved drug called pirfenidone, show that this drug was -- had activity in preclinical models. This led us to the in-licensing of LYT-100 from Teva Pharmaceuticals, which is the deuterated form of pirfenidone, originally developed by Pharmaceuticals and acquired by Teva. We were able to in-license LYT-100 under very favorable terms and have since confirmed that LYT-100 is also active in these same preclinical models of lymphedema. I'll come back to this later in the presentation, but we think that LYT-100 could be applicable for a wide range of conditions based on what we have seen so far. Given that LYT-100 is a derivative of pirfenidone, the most obvious opportunity with this drug, we think, is idiopathic pulmonary fibrosis, or IPF. Next slide, please. Pirfenidone marketed as ESBRIET is 1 of the only 2 pharmacological standards of care for treatment of IPF, the other being nintedanib market is Ofeb. Pirfenidone has demonstrated clear evidence of clinical activity in several randomized trials and subsequent clinical studies thereafter. However, it's real world use, along with Ofeb, has met with significant limitations. Both drugs are associated with significant side effects, most notably gastrointestinal in nature. In fact, a recent publication that followed about 11,000 patients in a real-world treatment setting since -- showed that since these drugs were approved back in 2014, only about 25% of patients started therapy, about half and half on pirfenidone and many cease administration due to GI side effects. Nevertheless, both drugs had generated combined sales of almost $3 billion. We see this as an enormous opportunity for an active drug in IPF, but with a tolerability profile that is superior to standards of care. Use of such an agent could lead to better treatment compliance and potentially better clinical outcomes as well. Next slide. We think that LYT-100 could be the answer, and here's why lit. LYT-100 is a derivative of pirfenidone where selected hydrogens are substituted with deuterium. The idea here is to create a drug with a more favorable pharmacokinetic profile, while maintaining the parent drug's pharmacology. As shown on the lower right, the CMAX of the overall drug exposure appears enhanced over pirfenidone in this -- in a single agent -- a single ascending dose crossover study, suggesting that LYT-100 could be dosed much more conveniently potentially under a twice a day regimen versus a 3 times a day regimen as indicated with pirfenidone. Duration is -- also leads to the generation of novel intellectual property and which we think could -- gives us patent estate, which could provide confirmed market exclusivity to LYT-100 potentially out to about 2040. And on the next slide, our results from a multiple ascending dose study that we conducted at PureTech, in which we announced results from last November. In this study, we dosed healthy volunteers with escalating doses of LYT-100 or placebo, treating twice per day. And we showed that LYT-100 was extremely well tolerated. There was no relationship between dose and tolerability and LYT-100 exhibited extremely clean safety profile at 1,000 milligrams administered twice per day, which is equivalent to the 801-milligram 3 times per day dose that is indicated with pirfenidone. We also ran a food effect study with LYT-100 and showed that food had little effect on drug absorption compared with what was known -- what has been known with pirfenidone. In fact, IPF patients are recommended to take pirfenidone with food in order to blend the GI side effect profile, which we believe is not going to be necessary with LYT-100. So on the next slide, we show results from experiments that shows that LYT-100 maintains its antifibrotic and anti-inflammatory properties as evident by the reduction in the pro-inflammatory cytokine TGF-beta and its impact on collagen production. Hence, the pharmacology of elevated LYT-100 appears to be unchanged. With all this data in combination, we think -- that we have generated so far, we think that LYT-100 has the same pharmacological properties of pirfenidone, but with a much more attractive pharmacokinetic profile, which we believe should ultimately make a big difference in patient care. This is evident from feedback from the survey that we conducted within the pulmonology community to seek -- to ask whether how pulmonologists would perceive a drug like LYT-100 with such a profile. And based on results from the survey, about 30% said that they would put patients on to a drug with a profile that -- of LYT-100 before advancing them to existing standards of care, if such a drug was available. This feedback was very positive. In particular, one particular physician said that they would put all 100% of his ESBRIET patients, normally indicated for ESBRIET onto a drug like LYT-100, if available. So our major goal here at Puretech is to be able to develop LYT-100 to be able to supplant pirfenidone as a backbone of the standard of care for treatment of IPF. So how do we get there? We've been strategizing internally with -- amongst ourselves and with advisers on the best way to bring this drug to patients. On the next slide, you can see that IPF is actually a disease that is part of a broader collection of interstitial lung diseases with similar pathologies. And theoretically, where drugs like pirfenidone and LYT-100 could offer clinical benefit. Hence, one way to develop lit 100 would be to evaluate drug activity in this broader population where pirfenidone does not have regulatory approvals. And with a drug like LYT-100, and with the profile that we have exhibited so far, we think this drug can make a big difference for these patients with a broad case -- broad classes of interstitial lung diseases as well. So this is just one way that we're thinking about how to bring LYT-100 to the market for the treatment of IPF and possibly a collection of other progressive fibrotic ILDs as well. We'll have more to say about this strategy later in the year. Next slide, please. In the meantime, we have 2 Phase II clinical trials that are underway. The first study that I'd like to talk about is evaluating LYT-100 in patients with chronic pulmonary complications that arise following an acute phase of COVID-19 infection. Such patients have been described as long haulers who have been dealing with these lingering chronic symptoms of COVID-19 for months after recovery from their initial infection. We started hearing about long COVID as becoming a major problem before it began being reported in the mainstream press and believe that there are possibly millions of patients out there with these severe lingering pulmonary issues. These pulmonary issues appear to be related to fibrotic complications that are very similar to what has been seen in IPF. And hence, the idea is to capture these patients early in the chronic course of their disease, and see if LYT-100 can make a difference. The design of our Long COVID Clinical Trial has been informed also by lessons learned from observational studies involving patients recovering from SARS and MERS, also related -- diseases related to similar coronavirus infections, and which also present with a particular type of pneumonia and shortens of breath similar to what has been seen in COVID-19. We're very pleased to have launched this global trial last year, which is a placebo-controlled trial that has powered to show an improvement in 6-minute-walk distance after 3 months of treatment, and we expect to have these results -- to be able to report these results by the end of this year. On the next slide, we come back to lymphedema. As described before, lymphedema is a result of the inability of lymph to drain from tissues as a result of some sort of a salt on neighboring lymph nodes. There is a vicious cycle of inflammation and fibrosis that occurs, which exacerbates this condition, in which, we believe, that LYT-100 could potentially perturb. There are no pharmacologic agents that have been approved for this indication. And like I mentioned before, preclinical data has shown that the antifibrotic and anti-inflammatory properties of both pirfenidone and LYT-100 be applicable here in restoring lymphatic flow around injured tissues. We have an ongoing Phase II proof-of-concept study underway that is designed to establish a read on whether LYT-100 may have an impact on treating this condition. The primary endpoint of the trial is safety and tolerability, with secondary exploratory endpoints encompassing a number of clinical parameters to help us design future studies. Ultimately, we'll be looking for signals of improved lymphatic flow and associated with LYT-100 treatment. So on the next slide is just a summary of what we're expecting with our LYT-100 development program this year. We'll be looking for Phase II results from our Long COVID Trial. We will be looking for Phase II results from our proof-of-concept study in lymphedema, and we intend to communicate to investors what our registration path will be for developing LYT-100 in IPF and related interstitial lung diseases. Moving on, I'd like to talk about LYT-200, which is a clinical stage monoclonal antibody that is designed to target Galectin-9. Galectin-9 is a lectin that is secreted by tumors and also has a number of different effects on modulating a variety of different immune cells through interactions with multiple different types of receptors. What's unique here is that we believe by inhibiting Galectin-9, we can affect immunological pathways that are involved in mechanisms of immune escape by the tumor by targeting one particular molecule, and hence, affecting multiple different pathways. Very interestingly, a few weeks ago, results were published showing that Galectin-9 was actually a ligand for PD1, indicating that there may be -- supporting possible evidence here that Galectin-9, in fact, a clinically relevant target. On the next slide, we have shown -- there is an example of some preclinical data that we have generated along with our collaborator showing that an antibody raised against Galectin-9 can shrink tumors in the KPC pancreatic cancer model in a mouse. This is a model where anti-PD-1 approaches do not work. And also in a tumor organoid culture system, we can show that LYT-100 can have an impact on cytokine secretion that is consistent with immunoactive phenotype, indicating that indeed, per turbine Galectin-9, at least in this model system may have a clinical benefit. In activating immune attack against patient tumors. So to test this idea in the clinic, we've advanced collectible -- advanced LYT-200 into a Phase I study, as shown on the next slide. This is a typical Phase I trial, which we expect to roll up to about 26 patients. It's designed to assess the safety and tolerability of single-agent LYT-200 in patients with solid tumors. Based on these results, we hope to expand the trial to evaluate the combination of with LYT-200 with anti-PD-1 approaches and chemotherapy and maybe other treatment modalities most likely for the treatment of GI tumors, including pancreatic cancer cholangiocarcinoma and perhaps other indications based on the preclinical data that we have collected so far and also the fact -- due to the fact that these tumors tend to be less amenable to immunological approaches for treatment. And we hope to have results from the Phase I portion of this study later this year. I'd like to switch gears now and talk about a drug delivery platform that we have -- that we're developing here at PureTech. This is a cartoon, describing our Glyph technology platform, which harnesses natural lipid trafficking pathways in order to transport drugs directly into the lymphatic system after oral delivery. So on the left, this is a conventional path that a small molecule will take upon ingestion. The first major organ that these drugs see is typically the liver, where these tends -- where the liver tends to be the major organ that ultimately leads to the degradation of these compounds and prevents exposure to the rest of the body system in order to to illicit drug effect. So this is a big problem in drug development. What we can do with this platform is avoid first pass metabolism by the liver by directing these cells directly into the lymphatic system upon ingestion, and thereby, improving their oral bioavailability and potential impact on other organ systems throughout the body. So on the next slide is an example of this technology, harnessing LYT-300, which is a pro-drug of allopregnanolone that we have been developing. Allopregnanolone is the same drug as Sage Pharmaceutical's ZULRESSO, which requires a 60 hour IV infusion for administration. What we have been able to do using this technology is to enhance the oral bioavailability of allopregnanolone in such a manner where we can target directly into the lymphatic system and improve the drug's exposure throughout the rest of the body. And here, you can see an example from a nonhuman primate system, where we can increase -- significantly increase serum concentrations of allopregnanolone using this technology much better than if a natural allopregnanolone was administered orally in the system as well. So the idea here is to confirm whether we can, in fact, achieve the same result in humans. Can we, in fact, achieve blood levels of allopregnanolone? And if so, this opens the door to addressing multiple indications where we think allopregnanolone could work in various depressive disorders and potentially other neurological indications where neurosteroids have been shown to have potential benefit. We can also use this technology for virtually any small molecule, including other natural neurosteroids that may also have potential clinical benefit in treating other CNS directed -- related diseases. And we hope to have a Phase I clinical trial data to present in the first half of next year. Next slide, please. So this is a snapshot of our catalysts. We have the catalyst highlighted in both here are the ones that we believe for 2021 and probably the most important value drivers for the company. Like I said, we'll be looking for Phase II results in both Long COVID and lymphedema with LYT-100. We'll be looking for results from our Phase I study with LYT-200, our anti Galectin-9 antibody. And we'll also have some preclinical results with a -- from another drug discovery delivery platform, which I did not have time to talk about today, but we are keenly interested in seeing those results. We're also expecting some key events from our founded entities, which admittedly, we have less visibility into just because they've kind of grown up and gone on their own way. But we think all of these particular events coming out of them could also reflect important value on PureTech given our equity stakes in these companies. So just to close, I'd like to remind everyone of our clinical pipeline. Again, all of these agents are designed to treat what we believe are serious unmet medical needs and to improve upon drugs with that already have existing limitations, and we think we could provide a better profile. And also, we had also -- we're highlighting our drug delivery platforms here, which we think could have even greater potential and it lead to enormous pipeline expansion growth in the near future. And then so just finishing up, again, we ended the third quarter of last year with $387 million in cash. We -- again, we also -- we sold a $118 million stake in Karuna last month, which adds to our cash position, and we hope to report our full year results later in April. And with that, I'd like to say thank you to the Barclays team for allowing PureTech to present.