PureTech Health plc (PRTC) Earnings Call Transcript & Summary

Good morning, everyone. Thank you all for attending, and thank you for all those at home watching live. Hope you all enjoyed your breakfast and all that, and the speakers so far. My name is Gavin Fernandez, and I'm an analyst on the UBS Healthcare team. I'm excited to introduce PureTech, a biotech company that develops and commercializes therapies for conditions with limited or no existing treatment options. Following this presentation, we will have a moderated Q&A session. But for now, PureTech. And George, thank you. Go ahead.

Great. Thanks for the introduction, Gavin. I'm George Farmer, Chief Financial Officer of PureTech. I'd like to thank the UBS for involving us in this conference today and for the opportunity to present, and I welcome everyone in the audience and on the webcast. During this presentation, we will be making some forward-looking statements, and I ask that you refer to our SEC filings available at sec.gov for a discussion of potential risks and uncertainties. All information presented is current as of today, and PureTech Health undertakes no duty to update this information unless required by law. At PureTech, we are driven by a mission to discover and develop new therapies for devastating diseases with a focus on orphan conditions where limited or no treatment options are available for patients. We're proud of the work that we've done to date to deliver on this mission, which you'll hear about today, as well as a number of anticipated milestones that we expect to report out later this year. Our unique R&D model is centered around the identification and invention of novel therapeutics through extensive collaboration with our network of scientists, clinicians and industry leaders. Our collaborative relationships with our network provides us first-hand knowledge of seminal discoveries before presentation at scientific conferences or publication in peer-reviewed journals. We're very proud of our track record, having now generated 27 therapeutics and therapeutic candidates, of which 16 are at clinical stage and 2 which have gone from PureTech through successful FDA and EU regulatory clearances. Notably, our track record of clinical success outperforms the industry average as shown on the right. A key component of our approach builds upon the validated biology and pharmacology of existing treatment modalities, while implementing a key inventive step to improve upon drug tolerability or enhance delivery. We have applied this approach to a number of disease areas, including inflammatory and fibrotic diseases, lymphatic disorders, oncological indications and neurological disorders, which we believe significantly mitigates the pipeline risk and which supports our -- the potential of success going forward. Our model has also led to the generation of a number of ideas and programs which we scrutinize through the execution of key experiments to inform whether to move forward with a particular program or to shut it down in order to allocate our resources most efficiently. This approach is supported by our diverse R&D model, which relieves us of having to be reliant on any one binary program in particular. This diversification provides us with choices on how to spend our time and money which we believe aligns well with our shareholders' best interests. As mentioned before, all of our programs have originated through our network of scientific collaborators and enables us to identify and co-invent key IP before it's published in major journals. In fact, there have been around 30 papers published in major journals like Nature Cell and Science, most of which have been published after we have in-licensed the technology. Thanks. Next slide, please. So here's a picture of our pipeline. When PureTech was founded, we built -- we're built on a model out of necessity with very little capital inventions and ideas that were conceived at PureTech were spun out into what we call our founded entities. These founded entities are separate companies that have their own individual management teams and we've also -- we have been successful to bring in outside capital to help forward the inventions and ideas that are founded -- that are placed in these founded entities. Sitting here today, where we have 8 of these founded entities at various stages of maturity. All have independent management teams. Most have PureTech Board participation. Probably our highest profile founded entity to date is Karuna. The invention at Karuna, KarXT, was conceived of at PureTech. We also have 3 others that are publicly traded, including Gelesis and Vor, and a fourth company, Akili is expected to go public this summer. Collectively, these founded entities have raised over $1.9 billion of capital, 94% of this -- of which has come from outside investors over the past few years. Building upon this success, our business model has now shifted. And we intend to keep 100% of the rights of any new pipeline products that come through. Well, this enables us to defer key strategic decisions until significant value has been created. And we can do this with a very strong cash position of about $378 million that we reported as of last March, which we have guided as sufficient to last into early 2025. So you can think of our founded entities now really is like partnered programs. These are all companies that are developing inventions that were conceived of at PureTech. And now they're bringing back value to the parent company, not only just through the equity but also through potential royalty rights and existing royalty rights, specifically through Karuna and through Gelesis. We're also entitled to sublicense partnership revenue as various deals are consummated with these companies. So now our mission is really to focus solely on our wholly owned pipeline which we intend to keep within the company for as long as possible, the wholly owned rights of these assets. 7 therapeutic candidates are now in our wholly owned pipeline, which includes 1 therapeutic candidate that is being developed by a partner. I'll spend most of our time talking about LYT-100 or deupirfenidone. This is our lead therapeutic candidate, which is in development for a range of indications involving both inflammation and fibrosis. The drug were -- our key area of focus with deupirfenidone is really focused on pulmonary disease, idiopathic pulmonary fibrosis, which may be familiar to many of you. This is a drug -- this is an indication where 2 pharmacologic agents are improved, including pirfenidone as well as nintedanib. We're also evaluating LYT-100 for treating post-acute or what's been referred to as Long COVID with respiratory complications and related sequelae. We'll have results from a Phase II trial before the end of June. And furthermore, we're developing the drug in the clinic for treating disorders of lymphatic flow like lymphedema, and we intend to report out results later this year from that study. Early results from a crossover study that compared LYT-100 to deupirfenidone showed a 50% reduction in the incidence of GI-related adverse advance in a clinical trial that enrolled healthy elder adults, and this is compared to pirfenidone. We'll talk more about this later. But this is -- the results from this trial have driven our development plan and moving to pirfenidone into treatment of IPF and other indications. The second drug in our clinical pipeline is LYT-200. This is a drug that is in Phase I studies for treating solid tumors. It's a novel immunotherapeutic candidate, which targets a foundational immunosuppressor called galectin-9. This is in a Phase I trial, and we'll be reporting the results later this half. And then another oncology drug that's in preclinical development is our LYT-210, which targets a subset of gamma delta T cells which are involved -- which have been shown to be tumor-promoting. And we'll have more to say about this program later this year. A third clinical candidate, LYT-300, is an oral version of allopregnanolone. This is a drug that's FDA-approved for treating postpartum depression. The allopregnanolone today needs to be infused via a 60-hour IV infusion, and we feel we can improve upon this consistent with our model of building upon validated biology and pharmacology with using our Glyph targeting platform, which enables oral administration of allopregnanolone in direct trafficking into the lymphatic system. We also have a number of drugs that are moving forward into the clinic, including those that are involved in inflammation target -- using our inflammation targeting technology. And these are specifically those that are built upon our Alivio platform. Moving on. I'd like to talk more about LYT-100 or deupirfenidone. Again, this is a deuterated form of pirfenidone, which is FDA approved for the treatment of IPF. Pirfenidone, as many of you know, has been FDA approved for quite some time now for treating IPF, which is a devastated lung disease with a median survival of about 3 to 5 years. Standard of care includes pirfenidone as well as another drug known as pirfenidone -- known as nintedanib, and both of these drugs are widely prescribed. The problem though, in treating IPF with these agents, is that both of these drugs while they work are associated with very poor tolerability, specifically GI adverse events. And oftentimes, dose adjustments are required and there's often lots of switching back and forth between these 2 drugs. Accordingly, only about 26% of IPF patients really end up being treated with over the long term with these agents. So if you can keep these drugs on treatment, then theoretically, you can make an improvement in their treatment outcomes. And that's what we intend to do with our lead drug, deupirfenidone. So here, as you can see on this slide, comparing pirfenidone with deupirfenidone, the only change in deupirfenidone relative to pirfenidone is the replacement of 3 hydrogen atoms with duterium or heavy hydrogen. This enables what we have shown to affect the pharmacokinetics of the drug, but it retains the pharmacology of pirfenidone and thereby therefore, may make an impact on the tolerability of the agent as I will show you in the next slide. Importantly, this pharma -- because this pharmacology is maintained, and the PK profile is altered in such a way, we believe that this can now have an improvement on treatment outcomes as evident from safety data shown on the next slide. These are results from a Phase I crossover study where we compared LYT-100 with pirfenidone in healthy volunteers of -- in older healthy volunteers. Patients were randomized to receive either LYT-100 or pirfenidone, treated for a number of days and then the drug was switched. And this was all done in a blinded fashion. And the main takeaway message from this trial was that we could reduce the incidence of GI adverse events by about 50% which made a significant impact -- which we believe is going to make a significant impact on ultimate patient care of these -- going forward in IPF and in other indications. The reason we believe that LYT-100 performs so much better in this clinical trial is really because the fact that the C max has been significantly altered relative to pirfenidone. And ultimately, this results in a much better tolerated dosing regimen. And we can do this without compromising on overall exposure. So the takeaway is that these patients or at least in the healthy volunteer study, they're getting the same amount of pirfenidone, but with a lower Cmax and that is what we believe is translating to the improved tolerability that was observed in this study. Our plans in moving forward in IPF are supported by a group of very highly esteemed physicians and industry leaders that have developed a number of drugs for the treatment of IPF. You can see included this list includes Bill Bradford, who is at InterMune who developed pirfenidone as well as other individuals who have also developed pirfenidone and nintedanib for the treatment of this disease. And we're very proud to have these members on our Clinical Advisory Board. So based on the Phase I results that we have that I just showed you as well as other Phase I results that we have collected, we have made the decision to move forward into a Phase II clinical trial with LYT-100 in patients naive to all prior pharmacological therapy, in IPF. This is going to be a 4-arm study that is designed to compare the dose of LYT-100 at 550 milligrams 3 times a day compared to the FDA-approved dose of 801-milligram pirfenidone 3 times a day. Based on our research, we believe that these 2 doses will provide the same exposure of pirfenidone in these patients. We're also going to be evaluating a higher dose of LYT-100 to see if we can improve upon the efficacy profile of pirfenidone. This is supported by earlier data showing that potentially more is better for treating IPF, but that still remains to be seen because, ultimately, the tolerability profile of pirfenidone really has limited the ability to dose higher, and we'll be doing that in this study. And then we'll also have a placebo arm. Patients are going to be treated for 6 months and the primary endpoint is a change in forced vital capacity over this period. We're also going to be relying on a 505(b)(2) pathway that we believe could greatly facilitate a regulatory path for defended for the treatment of IPF. And we believe that the data from the Phase II trial as well as other as well as potentially another Phase III trial will serve as the basis for LYT-100 for treating IPF in the U.S. So as mentioned, we're also investigating other treatment indications with LYT-100. We have -- not only our plans are moving forward with advancing the drug into a Phase II IPF study, but we're also expecting results to read out from a Phase II trial evaluating patients with post-acute or what has been referred to as Long COVID with respiratory complications and related sequelae, which is expected to read out before the end of June. This is a really interesting trial that's enrolling about 170 patients randomized one-to-one, LYT-100 versus placebo. We're really not sure how this trial is going to read out because ultimately, this trial was started at the early stages of the COVID pandemic. But nevertheless, we hope to learn a lot about safety once this trial is unblinded and analyzed. We're also evaluating LYT-100 for the treatment of lymphedema. We have a Phase II proof-of-concept trial that's ongoing in patients with lymphedema, an indication where there are no pharmacologic agents available for treatment. This is a huge unmet medical need. And results from this trial are expected to read out later this year. And we'll inform how -- whether we make -- whether we move forward for evaluating lymphedema further with LYT-100. And as you also mentioned, the Phase II results from the IPF study are expected to read out by the end of 2023. Okay. I'd like to shift and now talk about LYT-200, which is our immunotherapeutic drug candidate. This is a monoclonal antibody that targets a foundational immunosuppressor known as galectin-9. Galectin-9 is a really interesting target because it's, in fact, a secreted factor that is secreted by tumors that interacts with a number of different immune cells simultaneously through a number of different receptors, all with the goal of tamping down the immune system and enabling immune escape by the tumor. Think of this as another potential treatment modality for activating the immune system similar to the way checkpoint inhibitors are working. The difference being, again, that the target is a secreted factor rather than a receptor. Interestingly, galectin-9 has been shown to interact with PD-1, which makes it the third known ligand to interact with PD-1. The other 2 being PD-L1, which is a clinically validated target as well as PD-L2. Based on a lot of preclinical data that has been collected with LYT-200 and other related antibodies as well as other data in the literature showing the importance of galectin-9 as a potential target, we have moved forward with LYT-200 into a Phase I, Phase II clinical trial protocol. We're in the Phase I portion of the study, which is enrolling patients with solid tumors. And we're evaluating LYT-200 as a single agent in these patients to identify a maximum tolerated dose and identify the ultimate schedule to move forward into the Phase II portion of this study. Once we have these results, we will then likely move forward into the Phase II portion of the study, which will involve combining with a checkpoint inhibitor. In this case, we'll probably combine with Tocilizumab for which we have a supply agreement with BeiGene and/or chemotherapy. And it's very possible that we would choose gastrointestinal indications, again, based on the strength of preclinical data as well as the fact that GI indications are a huge unmet need for use of immunotherapeutics. So the Phase I portion of the study, we have guided that we'll give an update before the end of the first half of this year. Our third clinical candidate, LYT-300, as I've mentioned, is an oral version of allopregnanolone. This is actually a pro drug that is derived from our Glyph technology platform that we have in-house. What this platform enables us to do is to make -- is to deliver small molecules directly into the lymphatic system through mesenteric lymph nodes -- mesenteric lymph system in the gut that enables small molecule to avoid first-pass metabolism by the liver. First-pass metabolism by the liver is -- determines the fate of a number of different small molecules and often times choose them up or modifies them in such a way where they cannot be systemically active. So what we can do with this technology platform has enabled these drugs to bypass first-pass metabolism. And as you can see in the middle panel, we're able to achieve very high levels of natural allopregnanolone systemically in a nonhuman primate model system whereas natural allopregnanolone when it's delivered orally just does not get into circulation. Allopregnanolone, as I mentioned, is an FDA-approved drug marketed by Sage. It's approved for the treatment of postpartum depression. It requires a 60-hour IV infusion which may be the reason why the drug doesn't really sell very much. So we think that we can overcome this limitation using an oral version of this drug. Last December, we moved forward into a Phase I study enrolling healthy volunteers to get a better handle on the pharmacokinetics of the drug and to see if we can actually achieve systemic levels in humans. We're also going to be investigating target engagement with this agent, and then we'll make plans about what to do going forward once we have this data. Likely, we will develop this drug for treatment of other neurological and other psychiatric indications. PureTech also has other technology platforms, which are in the process of turning out potential new drug candidates that we hope to file INDs in the next few years. Our Orasome technology platform is a technology platform that is designed to deliver biological expression systems directly into the -- through the gut. We believe that this platform can potentially be used to synthesize and result in systemic circulation of complex, large biomolecules, like antibodies, vaccines, et cetera. We also have another technology platform known as Alivio, which is a polymer-based technology, which enables the targeting of drugs directly to sites of inflamed tissues, specifically in the gut as well as other organs, and we hope to have an IND candidate from this program sometime next year. And then another meningeal lymphatics discovery program with involving some very talented scientists at PureTech in collaboration with academic researchers that is looking for ways to deliver therapeutics directly into the brain lymphatic system. So we have a number of important value drivers in PureTech this year. Specifically, we are moving forward into -- with LYT-100 into our Phase II IPF study, again, comparing LYT-100 with pirfenidone at a dose that provides comparable exposure to pirfenidone as well as a higher dose. And that trial is expected to read out at the end of 2023. Before the end of June, we intend to announce results from our post-acute Long COVID study. that those results, again, should be informative, particularly potentially is whether the drug has any activity in this setting, but also importantly, will generate some really important safety data for us. And then we have also announced that we'll be reporting results from LYT-200. This is in the Phase I portion of the Phase I/II trial later this half. with lymphedema later this year, and we'll have results from LYT-300, our Phase I healthy volunteer study by the end of the year. Next slide. So there was another slide as we're also expecting a lot of catalysts from our founded entities. We have less visibility in what's going on at the founded entities. But those -- we believe that the success of the founder entity certainly could reflect on PureTech as well, given the various equity stakes we have in these companies and the rights to royalties on several -- a couple of these products. So now I'd like to ask Bharatt Chowrira, our Chief Business Officer and Chief Operating Officer, to come up to the stage and help us with Q&A.

Great. Thanks, George, for your presentation. And, Bharatt, great to have you joining us on stage. As a reminder, I think the tech team put the QR code on the screen. Just scan the QR code, if you have any questions, you can submit it anonymously. Let me grab the iPad that's over here for questions. And while we're waiting for those to pop up -- so your -- I'm sorry. So your team has invested in a wide range of companies ranging from gut-related chronic diseases to those treating epithelial aging. We'd love to learn more about how your team goes about thinking about new royalty investments and what you guys look for in a company when you next think about what royalty investments today.

Yes. So PureTech's model is not about investing in other people's companies, right? So our model is to really generate innovative new programs focused on initially -- currently on the immune-related indications. And the way we go about that is to identify a problem that is significant unmet need in a given condition involving the -- one or more of these immunological disorders. We bring together some of the key opinion leaders as well as experts in the field to brainstorm on novel ways to try and address some of those problems. And out of those discussions, we come up with a list of potential solutions that then we go out and try and identify either academia or other sources where we could access some of these potential solutions. We bring them in-house, do the early derisking experiments. And those that survive at early derisking experiments, then we decide to advance them internally and bring them into -- and invest in those programs and bring them to the clinic and beyond. So -- that's sort of our model. And then historically, what we have done is each one of those programs that we would start at PureTech, we would house them in a wholly owned subsidiary within PureTech, fund them to a certain milestone, and then as the programs mature, we would then bring in outside investors into those individual programs and management and they become independent over time. Over the last 5-plus years, as we have gotten good at this coal process and our track record has been excellent in terms of generating these new ideas and programs and clinical success as well as our balance sheet has strengthened, we have decided that we would continue the process of starting these new programs, but as a default, we would keep them internal and not spin them out into individual companies. And so that's been our focus in terms of building our wholly owned pipeline, and those are maturing quite nicely, and -- as George mentioned in his presentation.

Great. And you touched on this briefly, but I was hoping you guys could discuss more about how you guys view potential other therapeutics that can be used in synergistic combination with those in your pipeline right now?

So certainly, with -- in IPF, the field is really moving towards a combination-based treatment options. We believe that given that pirfenidone is kind of a backbone of all of those other treatment options that are currently in development as well as nintedanib, but also with pirfenidone is that we can replace pirfenidone as the backbone of those treatment options. So as those other programs succeed, we believe that reflects well on us because we can enter the market with what we think is a better tolerated agent with at least comparable efficacy. Regarding LYT-200, I mean, this is an oncology agent. The field it's clear that [ combo therapy ] is often used in treating cancer indications. And that's one thing that we're certainly looking forward to exploring in the Phase II portion of our ongoing protocol.

You currently have multiple assets in progress for Phase II. We'd be curious to learn more about what your plans are as you approach commercialization in terms of expanding to other markets, especially rest of world? And maybe if you'd consider partnerships in that sense to help you best commercialize?

Yes, an excellent point. Clearly, we have a pretty rich and growing pipeline of programs that are part of our wholly owned pipeline, and we are advancing them through various stages of development. And depending on the indication, we were continue to advance them as far as we can take them on our own and at least retain the U.S. rights to those programs and potentially more regional relationships with other companies to advance them in EU and other parts of the world. With respect to indications, it really depends for a small company, orphan indications are more feasible for us to advance them well into late-stage development and even possibly think about commercializing at some point. But some of the larger indications we would look to partner with other companies to advance those programs yet in a structure where we potentially maintain certain significant upside potential for those programs. So it really depends on indication and the programs, but we are open to working with other companies on a product-by-product basis, indication-by-indication basis.

Next question is, what are your expectations for the LYT-100 Long COVID data expected in H1 '22? Do you expect this could be a registrational data?

We don't know what to expect. Like I said, the trial started early in the pandemic. We saw a need, certainly through our network of clinicians. They were seeing these patients with these lunging symptoms, resembled very much diseases like IPF, which made sense to move forward an antifibrotic anti-inflammatory agent to test. But -- look, the data will be what the data is. Like I mentioned, 170-some patients, half of them will receive LYT-100. This will be the biggest will add to our total patient experience with the drug, which will be very important for how we think about moving forward. But you never know, a lot of these decisions are going to be data driven that had to move forward next.

And I think the important aspect of the Long COVID, I mean, there's been a lot of interest as the acute phase of the infection wins people who had these infections are not completely back to normal, and there are a whole range of sequela that make up Long COVID. And respiratory complications is a significant component of these people who have recovered, but not fully back to normal and continue to have significant complications with respect to their breathing as well as fatigue and other aspects related to the respiratory complication. So we think there is a significant unmet need there. as George said, the data will speak for itself. But at a minimum, we believe what the study can also give us is valuable safety information in patients that could be relevant to other interstitial lung diseases like IPF, and PF ILD and such. So at a minimum, this study, we expect to see that safety database. And if we see some safety efficacy signal, that would be fantastic for these patients. but then we'll know that soon.

Great. I mean, we had a couple of questions touch on market strategy, go-to-market strategy, partnerships and licensing, but I think you guys touched on that already. So if that's all -- thank you, George. Thank you, Bharatt, for attending this session. And thank you all for all the investors in the audience and those at home.

Thanks, Gavin.

Thank you.