PURETECH HEALTH PLC – ANNUAL REPORT AND ACCOUNTS 2024
PureTech Health plc Annual Report and Accounts 2024 1
BOSTON
MA
Headquarters
PRTC
Nasdaq and LSE
PureTech Health plc (“PureTech Health”, “PureTech” or “the Company”), together with its
subsidiaries (the “Group”), is a clinical-stage biotherapeutics company dedicated to giving life to
new classes of medicine that transform the lives of patients with devastating diseases. Our broad and
deep portfolio is driven by a seasoned research and development team and an extensive network
of leading scientists, clinicians, and industry experts. We advance our programs¹ both internally and
through our Founded Entities² via an innovative hub-and-spoke model3.
Our R&D engine has powered the development of multiple therapeutics and therapeutic candidates,
including three that have received regulatory approvals from agencies such as the U.S. Food and
Drug Administration and the European Medicines Agency. Each program is rooted in robust scientific
validation and designed to address serious patient needs by leveraging key signals of human efficacy
and validated pharmacology. This strategic focus underpins our track record of success in clinical
development and positions us to continue translating breakthrough science into meaningful patient
impact and long-term shareholder value.
1 Programs refers to the Company’s current and future therapeutic candidates and technologies, including those that are being developed internally by PureTech and those being
advanced within PureTech’s Founded Entities. Wholly-Owned Programs are comprised of the Company’s current and future therapeutic candidates and technologies that are
developed by the Company’s wholly-owned subsidiaries, whether they were announced as a Founded Entity or not, and will be advanced through with either the Company’s
funding or non-dilutive sources of financing. As of December 31 ,2024, Wholly-Owned Programs were developed by the wholly-owned subsidiaries including PureTech LYT, Inc.,
PureTech LYT 100, Inc. and Gallop Oncology, Inc. and included primarily the programs deupirfenidone (LYT-100) and LYT-200.
2 As of the date of this report, Founded Entities represent companies founded by PureTech in which PureTech maintains ownership of an equity interest and/or, in certain
cases, is eligible to receive sublicense income, milestone payments and royalties on product sales. References in the Strategic Report, ESG Report, Governance section, and
Additional Information section to Founded Entities include PureTech’s ownership interests in Gallop Oncology, Inc., Seaport Therapeutics, Inc., Vedanta Biosciences, Inc., Vor Bio,
Inc., Entrega, Inc., Sonde Health, Inc., for all dates prior to July 2, 2024, Akili Interactive Labs, Inc., for all dates prior to March 18, 2024, Karuna Therapeutics, Inc., for all dates prior
to October 30, 2023, Gelesis, Inc., for all dates prior to December 21, 2023, Follica, Incorporated, and for all dates prior to December 18, 2019, resTORbio.
3 See page 10 for further details
4 PureTech level cash, cash equivalents and short-term investments excludes cash and cash equivalents at non-wholly owned subsidiary of $0.5m. PureTech level cash, cash
equivalents and short-term investments is a non-IFRS measure. For more information in relation to the PureTech level cash, cash equivalents and short-term investments and
Consolidated cash, cash equivalents and short-term investments measures used in this Annual Report, please see page 69 of the Financial Review. The balance shown for each
year may include short-term investments for any positions that Puretech holds as of each year end.
5 Funding figure includes private convertible notes and public offerings. Funding figure excludes future milestone considerations received in conjunction with partnerships
and collaborations.
6 Number represents figure for the relevant fiscal year only and is not cumulative.
Relations with Stakeholders
91
Directors’ Report
93
Report of the Nomination Committee
98
Report of the Audit Committee
99
Directors’ Remuneration Report
102
Directors’ Remuneration Policy
106
Annual Report on Remuneration
110
Financial statements
Independent Auditor’s Report to the Members of PureTech Health plc
121
Consolidated Statements of Comprehensive Income/(Loss)
126
Consolidated Statements of Financial Position
127
Consolidated Statements of Changes in Equity
128
Consolidated Statements of Cash Flows
129
Notes to the Consolidated Financial Statements
130
PureTech Health plc Statement of Financial Position
176
PureTech Health plc Statements of Changes in Equity
177
Notes to the Financial Statements
178
Additional information
History and Development of the Company
181
Risk Factor Annex
182
Directors, Secretary and Advisors to PureTech Health plc
220
Overview
Highlights of the Year
1
Letter from the Chair
2
Strategic report
Letter from the Chief Executive Officer
4
2025 Strategy to Deliver Shareholder Value
6
Our Key Components of Value
8
Our R&D Approach
9
Our Hub-and-Spoke Model
10
Our Programs
11
ESG report
Building and Maintaining a Sustainable Business
22
Governance
Risk Management
60
Viability
65
Key Performance Indicators
67
Financial Review
68
Chair’s Overview
81
Board of Directors
82
Management Team
85
The Board
86
Highlights 2024
$397.5m5,6
Amount of Funding Secured
for Founded Entities
$367.3m4
Consolidated Cash,
Cash Equivalents and Short-term
Investments as of Year End
Includes cash held at the PureTech level
and at Controlled Founded Entities
$366.8m4
PureTech Level Cash,
Cash Equivalents and Short-term
Investments as of Year End
Highlights of the Year – 2024
2023: $578.4m
2022: $1.28b
2021: $731.9m
2020: $247.8m
2019: $666.8m
2018: $274.0m
2023: $327.1m
2022: $350.1m
2021: $465.7m
2020: $403.9m
2019: $162.4m
2018: $250.9m
2023: $326.0m
2022: $339.5m
2021: $418.9m
2020: $349.4m
2019: $120.6m
2018: $177.7m
2 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 3
A standout achievement was the U.S. FDA
approval of KarXT—now marketed by
Bristol Myers Squibb (BMS) as
Cobenfy™—for the treatment of
schizophrenia in adults. Invented and
initially developed at PureTech, Cobenfy
represents the first drug with a novel
mechanism of action for schizophrenia in
over 50 years, underscoring our scientific
invention and leadership. Complementing
this historic approval was a major financial
milestone: the acquisition of Karuna
Therapeutics, our Founded Entity that
shepherded Cobenfy through late-stage
development, by BMS for $14 billion.
Through the monetization of our equity
holdings—including proceeds from the
BMS acquisition and a strategic royalty
agreement—PureTech has generated
approximately $1.1 billion in cash from the
$18.5 million it initially invested in the
program. Together, these achievements
highlight the power of our proven
hub-and-spoke model (see page 10) to
advance science, build value, and deliver
meaningful outcomes.
Expanding on this success, we launched
Seaport Therapeutics—our latest
Founded Entity. Seaport builds on our
leadership in neuroscience, a field where
we reignited broader investment interest
through the success of Karuna. Several key
team members from Karuna are now
involved at Seaport, leveraging their
expertise to advance a promising pipeline
of neuropsychiatric medicines. With over
$325 million raised across two
oversubscribed Series A and Series B
financings, Seaport is now advancing
multiple drugs developed at PureTech
using the Glyph platform that PureTech
validated and advanced.
2024 was a landmark year for PureTech—
one defined by breakthrough
achievements that created long-term
value for both patients and shareholders.
These accomplishments reflect not only
the power of our innovation engine but
also the dedication, discipline, and
excellence of the PureTech team. From
bold scientific bets to smart capital
decisions, this year demonstrated what’s
possible when vision meets execution.
We reached major milestones throughout
the year, including the third FDA approval
for a therapeutic invented at PureTech,
transformative financings for Seaport
Therapeutics (a PureTech Founded Entity),
and unprecedented clinical results for
deupirfenidone (LYT-100), an asset fully
owned by PureTech. These achievements,
supported by a strong year-end balance
sheet of $367 million1, underscore the
strength of our capital-efficient and
disciplined approach.
A Year of Successes
for PureTech
Innovation
These achievements highlight the power of our proven hub-and-spoke model
to advance science, build value, and deliver meaningful outcomes.
Raju Kucherlapati, Ph.D.
Chair of the Board of Directors
Letter from the Chair
Letter from the Chair
The Board has been a steadfast partner
throughout this journey—providing
strategic oversight, financial discipline,
and an unwavering commitment to our
long-term mission. As part of this
commitment, I traveled to the UK in 2024
to meet directly with several shareholders,
reflecting the Board’s active engagement
and dedication to maintaining strong,
direct relationships with our investor base.
I am proud to serve alongside such a
thoughtful and forward-looking group.
Their counsel has been instrumental in
navigating complexity and driving results.
On behalf of the Board, I extend my
deepest gratitude to our shareholders for
their continued support. Your confidence
empowers us to pursue life-changing
therapies and deliver on our vision. To the
entire PureTech team—thank you. Your
scientific excellence, operational rigor,
and relentless drive have made this
year possible.
Looking ahead, we remain grounded in
the disciplined approach that has long
defined PureTech—prioritizing capital
efficiency, thoughtful resource allocation,
and strategic agility and flexibility. The
momentum we have built in 2024 has
positioned us for a future of continued
impact, and we remain steadfast in our
mission to deliver novel medicines that
transform patient outcomes.
Raju Kucherlapati, Ph.D.
Board Chair
April 30, 2025
Perhaps the most defining moment of
2024 came in December with the
announcement of positive results from
ELEVATE IPF, our global Phase 2b trial of
deupirfenidone in idiopathic pulmonary
fibrosis (IPF). The trial met its primary and
key secondary endpoints, demonstrating
the potential of deupirfenidone to
stabilize lung function decline and
meaningfully improve patient
outcomes—an advance that could
redefine the standard of care for IPF.
These results again prove the strength of
our scientific platform and our team’s
ability to translate bold ideas into
patient-impacting innovation. Advancing
deupirfenidone into Phase 3 is now a
strategic priority for PureTech, which we
aim to accomplish with financial partners.
Recognizing the significant cash
realizations made from our success with
Karuna, we also were able to return
significant levels of cash to our
shareholders during the year against a
challenging macroeconomic backdrop.
We returned $100 million through a
Tender Offer and completed a $50 million
share buyback program, which was
initiated in 2022. Notably, we
accomplished these returns without
raising capital from public equity markets
for seven consecutive years—all while
driving significant patient progress,
advancing our pipeline, and maintaining a
very strong balance sheet. These actions
reflect our confidence in PureTech’s
intrinsic value and our commitment to
delivering returns for shareholders. At the
same time, the Board recognizes that
there remains a disconnect between the
value of PureTech’s assets and our share
price. We are working closely with the
CEO and management team to explore all
strategic options to address this gap—
including recent take-private
discussions—with the goal of unlocking
value in a manner that is in the best
interest of all shareholders.
Letter from the Chair
Note: Certain third-party trademarks are included here; PureTech does not claim any rights to any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing Information,
including Patient Information on COBENFY.com. Following the acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb and will be marketed as Cobenfy.
1 This amount represents PureTech level cash, cash equivalents and short-term investments and excludes cash and cash equivalents at non-wholly owned subsidiary of $0.5m.
PureTech level cash, cash equivalents and short-term investments is a non-IFRS measure. For more information in relation to the PureTech level cash, cash equivalents and short-
term investments and Consolidated cash, cash equivalents and short-term investments measures used in this Annual Report, please see page 69 of the Financial Review.
Letter from the Chair continued
4 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 5
We remain deeply focused on executing
a strategy that maximizes value for our
shareholders while advancing our mission
to improve patients’ lives, and we will
carefully consider any opportunity that
arises to create value for our shareholders.
Our balance sheet remains strong, with
$367 million as of December 31, 2024,1 and
we are committed to maintaining financial
discipline by allocating capital efficiently
to high-impact programs while actively
pursuing external funding opportunities.
This measured approach allows us to
protect our balance sheet while
preserving flexibility in a volatile market
environment. Our model has always
emphasized capital efficiency, and we
remain confident in our ability to build
value through disciplined execution
and strategic agility.
I want to thank each member of the
PureTech team for their contributions
to our work and culture—what we’ve
accomplished together is rare and
meaningful. I’m also grateful to our Board
of Directors for their steadfast guidance
and partnership.
Finally, to our broader community of
collaborators—patients, advocates,
clinicians, partners—and to our
shareholders, thank you. Your trust and
support have been essential to our
journey, especially over the past year as
I stepped into the role of CEO. We’re
deeply grateful for the belief you’ve
placed in our vision, our model, and our
team. It is a privilege to pursue this mission
with you, and we are committed to
delivering value to all of our stakeholders.
We are proud of what we have achieved
together—and we are energized by the
impact our science continues to make
in the world.
Bharatt Chowrira, Ph.D., J.D.
Chief Executive Officer and Director
April 30, 2025
progression tends to be less than one
month and whose overall survival averages
1.7-2.4 months with standard-of-care
therapy. We’re also pleased to share
topline results from the head and neck
cancer study, which showed a favorable
safety profile in all cohorts, disease
control, and initial efficacy signals,
including one CR lasting more than two
years. Additional details from both studies
are available on pages 14-15.
Our Founded Entity Vedanta Biosciences
initiated its pivotal Phase 3 program for
VE303 in recurrent C. difficile infection,
and Vor Bio continued to make clinical
progress with trem-cel (VOR33), a
promising shielded transplant platform
for patients with AML.
Taken together, these milestones reflect a
robust innovation engine that spans the
biotech lifecycle from discovery through
commercialization and delivers impact
across multiple therapeutic areas. Our
hub-and-spoke model has enabled us to
achieve this with scientific rigor,
executional discipline, and
capital efficiency.
Despite the strength of our innovation
engine and the significant milestones we
have achieved, our market capitalization
has not reflected the underlying value of
the business for some time. This persistent
disconnect has remained despite
meaningful efforts over the past several
years—including the return of $150 million
to shareholders via share buybacks and a
Tender Offer, attaining a dual listing on
Nasdaq, engaging in significant investor
outreach and capital market activities, and
making strategic shifts in our model—all
while delivering meaningful scientific,
clinical, and financial milestones that we
believe demonstrate the inherent strength
of our business. In response, we have been
evaluating a range of potential pathways
to better align our market value with the
strength of our underlying assets and
long-term potential. These efforts are
grounded in a clear objective: to address
structural challenges and deliver value to
shareholders in a way that reflects both the
maturity of our business and the
opportunity ahead.
funded cycle that fuels our
broader pipeline.
Another example of our flexible funding
model in motion is Seaport Therapeutics,
launched in 2024 to develop
neuropsychiatric candidates based on the
Glyph platform validated and advanced
by PureTech. The rapid growth of
Seaport—including more than
$325 million raised across its Series A
and B rounds in just six months—
demonstrates continued external
conviction in our R&D engine and our
ability to build high‑quality companies
around transformational programs.
Several other programs had important
developments this year. Our newest
Founded Entity, Gallop Oncology, is
advancing LYT-200 for the potential
treatment of hematological malignancies
and solid tumors. LYT-200, which targets
galectin-9, received FDA Fast Track
designation for both acute myeloid
leukemia (AML) and head and neck
cancers, was granted Orphan Drug
Designation for AML, and delivered
encouraging data across its two clinical
trials. The ongoing Phase 1b trial in AML
and high-risk myelodysplastic syndromes
(MDS) has shown clinical activity and
disease stabilization in heavily pretreated
patients, both as a monotherapy and in
combination with venetoclax/
hypomethylating agents (HMA), along
with a favorable safety profile. Data were
presented at the American Society for
Hematology in 2024, and – since then –
the trial has continued to demonstrate
robust efficacy and safety. As of April 28,
2025, treatment with LYT-200 has resulted
in one complete response (CR), three
partial responses (PRs) and more than 50%
of patients treated experienced stable
disease. When administered in
combination with venetoclax/HMA,
results as of April 28, 2025, demonstrate
that LYT-200 may enhance the efficacy of
standard-of-care therapies, resulting in
6 CRs, 1 morphological leukemia-free
state, and 50% of patients experiencing
stable disease. The average time on
combination therapy was four months as
of the data cutoff, which is meaningful in a
patient population whose time to
Letter from the
Chief Executive Officer
Letter from the Chief Executive Officer continued
lung function decline over 26 weeks. To
our knowledge, this is an achievement
unmatched by any other investigational
IPF therapeutic to date. Notably, this
higher dose also showed an effect size that
was 50% greater than that seen in our trial
with pirfenidone (80.9% vs. 54.1%,
respectively), further underscoring its
potential for superior efficacy. Importantly,
deupirfenidone was generally well-
tolerated at this higher dose, overcoming
the tolerability limitations that constrain
current standard-of-care therapies and
limit their effectiveness. Furthermore, I’m
pleased that we continue to see strong
preliminary data from our ongoing open
label extension (OLE) trial. As of March 14,
2025, 140 patients have continued in the
OLE, with 85 patients having received at
least 52 weeks of treatment with
deupirfenidone. Preliminary data from
those receiving deupirfenidone 825 mg
TID indicate that the significant slowing of
lung function decline observed in Part A of
the trial has been sustained through 52
weeks of treatment, supporting the
durability of the treatment effect with this
dose and its potential to stabilize lung
function decline over time. Detailed OLE
results will be presented at an upcoming
scientific forum. These results suggest the
potential for deupirfenidone to offer
improved efficacy without compromising
safety and position it as a potential new
standard-of-care, not only in IPF, but also
potentially in other underserved fibrotic
lung diseases. We intend to discuss these
results with the FDA before the end of the
third quarter of 2025 to align on a potential
registrational pathway, with the goal of
initiating a Phase 3 trial by the end of the
year. We anticipate providing further
guidance later this year following the
finalization of the trial design and FDA
interactions. We will also be presenting
details from the Phase 2b ELEVATE IPF trial
at the American Thoracic Society
International Conference in May 2025.
We are committed to advancing
deupirfenidone while maintaining capital
efficiency, in line with our proven strategy.
Subject to feedback from the FDA with
respect to trial design, as well as historical
data from other Phase 3 IPF studies, we
don’t believe our current cash balance
would be sufficient to fully fund a Phase 3
trial. We have therefore initiated
discussions to explore a range of funding
mechanisms—including a potential
spin-out of the program into a new
Founded Entity and accessing external
equity financing, similar to our approach
with Karuna and Seaport; project or
royalty- based financing; and strategic
partnerships—which may be used in
combination, to support the program’s
continued development as we don’t
intend to fully fund a Phase 3 trial on our
own. We will, however, continue to fund
the program in the interim to maintain
development momentum.
While deupirfenidone represents our next
wave of innovation, we also saw the full
potential of our model realized through
the FDA approval of Cobenfy™, formerly
KarXT, which became the first new
mechanism approved for schizophrenia in
over 50 years. Invented at PureTech and
advanced by our Founded Entity Karuna
Therapeutics, Cobenfy’s approval by the
FDA in 2024, following Karuna’s acquisition
by BMS for approximately $14 billion,
marked the culmination of years of
scientific, clinical, and strategic execution.
Through our equity and royalty interest in
Karuna, we not only delivered shareholder
returns, but also reinforced the self-
2024 was a defining year for PureTech—
one in which the programs we cultivated
through our R&D engine came to fruition
in ways that delivered meaningful
impact for patients and showcased the
strength of our innovation engine.
We saw the full arc of our strategy on
display: from unprecedented clinical
results with our wholly-owned program
that could reshape the standard of care in
a major disease area, to the FDA approval
of a first-in-class therapy for schizophrenia
that began with our team, to the launch
and successful financing of a new Founded
Entity in neuropsychiatry. These moments
weren’t isolated wins—they were
outcomes of a deliberate and disciplined
model that translates scientifically
validated biology into therapies for areas
of high unmet need.
Among the most significant milestones of
the year was the progress of our wholly-
owned program, deupirfenidone
(LYT-100), which delivered transformative
results in our Phase 2b ELEVATE IPF trial.
This randomized, double-blind, placebo-
and active-controlled study evaluated two
dose levels of deupirfenidone in patients
with idiopathic pulmonary fibrosis (IPF), a
progressive and fatal lung disease. The
trial met its primary and key secondary
endpoints, with the higher dose
demonstrating the potential to stabilize
Delivering on
Our Strategy
We remain deeply focused on executing a strategy that maximizes value for our
shareholders while advancing our mission to improve patients’ lives.
Bharatt Chowrira, Ph.D., J.D.
Chief Executive Officer and Member of the Board of Directors
Letter from the
Chief Executive Officer
Letter from the Chief Executive Officer
Note: Certain third-party trademarks are included here; PureTech does not claim any rights to any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing Information,
including Patient Information on COBENFY.com. Following the acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb and will be marketed as Cobenfy.
1 This amount represents PureTech level cash, cash equivalents and short-term investments and excludes cash and cash equivalents at non-wholly owned subsidiary of $0.5m.
PureTech level cash, cash equivalents and short-term investments is a non-IFRS measure. For more information in relation to the PureTech level cash, cash equivalents and short-
term investments and Consolidated cash, cash equivalents and short-term investments measures used in this Annual Report, please see page 69 of the Financial Review.
6 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 7
PureTech is at an important strategic juncture. Our priority in 2025 is to address the persistent value disconnect and deliver shareholder
returns through potential strategic initiatives and disciplined capital allocation.
Our hub-and-spoke model (see page 10) enables us to derive meaningful economics from our Founded Entities—via equity holdings,
milestones, and royalties—while supporting the continued development of our programs. This model has allowed us to self-fund our
operations for more than seven years without raising capital from public equity markets, preserving shareholder value and ownership.
It has also enabled us to return $150 million to shareholders, while continuing to fuel a highly productive and validated R&D engine –
one that consistently generates innovative programs with the potential for significant patient impact. At the core of this track record is
our ongoing commitment to scientific rigor, high ethical and quality standards, efficient execution, and disciplined capital allocation.
Founded Entities
Strategy
Consistent with our hub-and-spoke model, we plan to conduct additional sourcing activities and may launch new
Founded Entities to house select programs – balancing risk, cost, and potential reward. Initial expenditures
associated with any innovation and sourcing activities would be relatively low. In some cases, we may participate in
financing rounds to preserve or enhance our ownership position, when we believe it will generate long-term value.
Value impact
Our Founded Entities offer multiple advantages:
— Enabling the advancement of therapeutic candidates through capital-intensive development
— Reducing PureTech’s financial exposure
— Creating future monetization opportunities
— Driving shareholder returns while avoiding dilution at the PureTech level
— Providing a diversified portfolio that reduces binary risk and offers multiple shots on goal
This structure also attracts specialized management teams and external capital, allowing PureTech to maintain
upside potential with reduced operational burden. See page 16 for our Karuna Therapeutics case study.
Shareholder Returns
Strategy
The Board is committed to maximizing value for our shareholders, and – in 2024 alone – PureTech returned
$100 million to shareholders through a Tender Offer. The Board may evaluate additional capital return
opportunities —particularly in connection with monetization events—and will consider such actions as part
of its broader strategy to maximize shareholder value.
Value impact
While our primary focus remains on building long-term value through scientific and operational execution, we
recognize the importance of capital discipline and direct returns to shareholders when appropriate. Our strong
balance sheet, capital-efficient model, and potential monetization events provide us with multiple tools to deliver
value—both in the near term and over time.
Addressing the Value Disconnect
Strategy
PureTech’s core mission has always been - and continues to be - to deliver transformative treatments to patients
with serious diseases and to translate that patient impact into meaningful value for shareholders. Over the past
decade, we have achieved significant scientific, clinical, and financial milestones, underpinned by our capital-
efficient hub-and-spoke model. However, despite this progress, our market capitalization has not consistently
reflected the intrinsic value of our business.
We have taken a number of actions in light of this disconnect over time—including share buybacks, a Tender Offer,
attaining a dual listing on Nasdaq, engaging in significant investor outreach and capital market activities, and
strategic shifts in our R&D model. We continue to believe there is an opportunity to better align our valuation with
the underlying strength of our platform, pipeline, and track record of execution. This has been recognized by
external parties – as highlighted by the possible cash offer that was recently made public – and the Board actively
engages with such approaches as appropriate. At the same time, we remain focused on executing our business
plan, advancing our pipeline, and generating future monetization opportunities.
Value impact
We remain committed to delivering value in a way that reflects both the maturity of our business, the strength of
our assets and financial position, and the opportunity ahead. We will carefully consider any opportunity that arises
to create value for our shareholders. We will also continue to operate with capital discipline and strategic focus—
deploying resources toward our highest-impact programs and protecting our balance sheet, especially against
the current macroeconomic backdrop. Our model allows for ongoing progress across multiple fronts, and our
Board remains actively engaged in assessing how best to maximize long-term shareholder value.
Wholly-Owned Programs
Strategy
In December 2024, we announced robust Phase 2b data from our Wholly-Owned Program, deupirfenidone
(LYT-100), in idiopathic pulmonary fibrosis (IPF). See pages 11-13. These data have been met with enthusiasm from
key stakeholders, including key opinion leaders, based on both their clinical strength and the potential to
meaningfully improve the standard of care. Strong safety and efficacy data support meaningful differentiation
from current therapies and underscore the potential for significant patient impact of this program.
We are targeting a meeting with the FDA before the end of Q3 2025 to align on a potential registrational pathway,
with the goal of initiating a Phase 3 trial by the end of the year. We anticipate providing further guidance later this
year following the finalization of the trial design and FDA interactions. As we advance toward this next phase, we
are actively exploring a variety of strategic funding mechanisms—including a potential spin-out of the program
into a new Founded Entity and accessing external equity financing, similar to our approach with Karuna and
Seaport; project or royalty-based financing and strategic partnerships—which may be used in combination—to
support continued development in a capital-efficient manner. We do not intend to fully fund the Phase 3 trial
independently; moreover, we don’t believe our current cash reserves would be sufficient to fully fund a Phase 3
trial. We will, however, continue to fund the program in the interim to maintain development momentum.
We are also pursuing continued publication and presentation of the deupirfenidone Phase 2b trial data to support
external engagement with potential investors, partners, and collaborators.
In parallel, we are continuing to support the development of LYT-200 through our Founded Entity, Gallop
Oncology, which is currently led by PureTech’s Entrepreneur-In-Residence, Luba Greenwood, J.D. We anticipate
additional clinical data in Q3 2025 and are targeting to secure external funding later this year. PureTech is actively
pursuing third-party financing to support Gallop’s next phase of growth and will continue to fund the program in
the interim to maintain development momentum.
Value impact
Our R&D approach is designed to efficiently progress the most promising programs in a disciplined and efficient
manner. We apply rigorous internal de-risking, set a high threshold for advancement, and explore multiple paths
to value creation—including partnerships and external funding opportunities—to reduce risk and optimize capital
deployment. Our goal is to deliver high-impact therapies while maximizing shareholder value through thoughtful,
and disciplined program execution and capital deployment.
2025 Strategy to Deliver Shareholder Value
2025 Strategy
to Deliver Shareholder Value
2025 Strategy
to Deliver Shareholder Value
Conduct rigorous,
early de-risking
Change the lives of patients
with devastating diseases
Develop solution driven by
validated pharmacology
Identify significant
patient need
8 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 9
Our
Key Components of Value
Our Innovative R&D Approach
Our Key Components of Value
Maximizing stakeholder value
Note: Certain third-party trademarks are included here; PureTech does not claim any rights to any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing Information,
including Patient Information on COBENFY.com. Following the acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb and will be marketed as Cobenfy.
1 As of December 31, 2024. PureTech level cash, cash equivalents and short-term investments excludes cash and cash equivalents at non-wholly owned subsidiary of $0.5m.
PureTech level cash, cash equivalents and short-term investments is a non-IFRS measure.
2 This percentage includes number of successful trials out of all trials run for all therapeutic candidates advanced through at least Phase 1 by PureTech or its Founded Entities from
2009 onward.
$366.8M 2024YE1
1. Strong Balance Sheet
Deupirfenidone (LYT-100) for IPF (entering Phase 3 clinical development)
LYT-200 for AML (poised to enter mid-stage clinical development)
2. Wholly-Owned Programs
e.g., Seaport, Vedanta
3. Founded Entity Equity Value
e.g., Cobenfy™, Seaport progress
4. Royalties, milestone and sublicense income
$150M returned to date via Tender Offer & share buyback
(additional capital returns possible)
5. Capital Returns
3 FDA approvals and a strong track record of clinical success
(>80% of clinical trials successful2)
6. People/R&D Engine
Our Innovative R&D Approach
Accelerating Momentum & Delivering Results
Key milestones in recent years
Deupirfenidone ELEVATE IPF Study
PureTech completed successful
Phase 2b trial of deupirfenidone in IPF
Vedanta Biosciences
PureTech’s Founded Entity Vedanta
Biosciences iniated Phase 3 trial of VE303
Seaport Therapeutics
PureTech launched Founded Entity
Seaport Therapeutics; >$325m
raised in 2024
Cobenfy™ (formerly KarXT)
BMS/Karuna received FDA Approval
for Cobenfy™
Gallop Oncology
PureTech’s LYT-200 granted Orphan Drug
and Fast Track Designations
Royalty Pharma
PureTech and Royalty Pharma entered
into Cobenfy (KarXT) royalty transaction
for up to $500 million
Karuna Therapeutics and Bristol Myers Squibb
PureTech’s Founded Entity Karuna Therapeutics acquired by Bristol Myers Squibb
for $14 billion
Conduct rigorous,
early de-risking
Change the lives of patients
with devastating diseases
Develop solution driven by
validated pharmacology
Identify significant
patient need
10 PureTech Health plc Annual Report and Accounts 2024
Programs
PureTech Health plc Annual Report and Accounts 2024 11
Our Hub-and-Spoke Model
Relevant ownership interests were calculated on a partially diluted basis (as opposed to a voting basis) as of December 31, 2024, including outstanding shares, options and warrants,
but excluding unallocated shares authorized to be issued pursuant to equity incentive plans. PureTech controls Gallop Oncology, Inc. Vor Biopharma ownership was calculated on a
beneficial ownership basis in accordance with SEC rules as of March 13, 2025.
Our Diversified Hub-and-Spoke Model:
Robust pipeline of new medicines balances risk with
potential for tremendous growth
Gallop
Oncology
100% equity
AML
Deupirfenidone
(LYT-100)
100% equity
IPF
Seaport
Therapeutics
35.6% equity
Neuropsychiatric
conditions
Vedanta
35.8% equity
C. Difficile
Ulcerative colitis
Entrega
73.8% equity
Peptide therapeutics
VOR
(Nasdaq: VOR)
2.1% equity
AML
Karuna
Therapeutics
Acquired by Bristol
Myers Squibb for $14B
Sonde
34.8% equity
Voice-based
AI platform
PURETECH’S
EXPERIENCED
R&D TEAM
AND EXTENSIVE
NETWORK
P16
P11
P14
P17
P18
P20
P21
P19
— We acquired deupirfenidone in July 2019 based on insights gained internally and via unpublished
findings through our network of collaborators. Deupirfenidone was originally developed by
Auspex Pharmaceuticals, Inc. (Auspex), where our Chief Executive Officer, Bharatt Chowrira,
Ph.D., J.D., served as Chief Operating Officer. Auspex (now a wholly owned subsidiary of Teva
Pharmaceuticals) pioneered deuteration technology and successfully developed
deutetrabenazine (Austedo®), the first deuterated drug to ever receive FDA approval.4
— Deupirfenidone is a deuterated form of pirfenidone, one of the two FDA-approved SOC
treatments. The strategic replacement of three hydrogen atoms with deuterium at the site of
metabolism has been shown to enhance the beneficial pharmacology and clinically-validated
efficacy of pirfenidone while maintaining a favorable tolerability profile. This enhancement allows
greater levels of drug exposure to be achieved with deupirfenidone compared to the highest
approved dose of pirfenidone, without sacrificing tolerability.
Program discovery
process by the
PureTech team
Deupirfenidone (LYT-100)
Programs
— In December 2024, we announced positive topline results from the ELEVATE IPF Phase 2b clinical
trial evaluating deupirfenidone in patients with IPF.
–
ELEVATE IPF was a global, randomized, double-blind, active- and placebo-controlled,
dose-ranging trial that evaluated deupirfenidone at two dose levels (550 mg and 825 mg) three
times a day (TID) over 26 weeks in patients with IPF. (Figure 1).
–
The trial achieved its primary endpoint based on the prespecified Bayesian analysis, with a
98.5% posterior probability. This means there is a 98.5% probability that the pooled
deupirfenidone arms were superior to placebo in slowing the rate of lung function decline in
people with IPF at 26 weeks, as measured by forced vital capacity (FVC), a measurement of the
maximum amount of air a person can forcefully exhale from their lungs.
• Deupirfenidone 825 mg TID demonstrated the potential to stabilize lung function decline.
Patients treated with deupirfenidone 825 mg TID experienced an FVC decline of -21.5 mL
over 26 weeks, which is comparable to the expected natural lung function decline in healthy
adults aged 60 and older. (Figure 2).
• The deupirfenidone arms, 550mg TID and 825mg TID, exhibited dose-dependent efficacy
with an FVC reduction from baseline of -80.7mL and -21.5mL, respectively. The placebo and
pirfenidone arms responded as reported in previous studies with an FVC reduction from
baseline of -112.5mL and -51.6mL, respectively. The performance of these control arms and
the dose-dependent response of the deupirfenidone arms suggests that the efficacy of
deupirfenidone was not likely a chance observation. (Figure 3).
–
The deupirfenidone 825 mg TID arm had an effect size, compared to placebo, that was 50%
greater than that seen with pirfenidone (80.9% vs. 54.1%, respectively). Additionally,
preliminary pharmacokinetic results indicate that deupirfenidone 825 mg TID achieved ~50%
higher exposure than pirfenidone 801 mg TID, corresponding with the greater efficacy results
demonstrated with deupirfenidone 825 mg TID.
–
Deupirfenidone was generally well-tolerated with a favorable adverse event profile at both
doses studied. (Figure 4).
Key milestones
achieved and
development status
PureTech Ownership
100% equity
Deupirfenidone (LYT-100) is being developed at PureTech as a potential new standard of care
(SOC) for the treatment of idiopathic pulmonary fibrosis (IPF), a progressive and fatal lung
disease estimated to affect over 230,000 people across the U.S. and EU51. Only about 25%
of IPF patients have ever been treated with either FDA-approved therapeutic (pirfenidone
and nintedanib)2, yet combined sales of these medications in 2022 were more than $4 billion3,
representing a significant market opportunity in IPF and other fibrotic lung diseases.
Despite achieving blockbuster status, the current SOC treatments only modestly slow
lung function decline, as their effectiveness is limited by poor tolerability at higher doses.
This results in suboptimal efficacy, reduced patient uptake, and poor adherence—all due
to a tolerability ceiling that prevents dosing levels that could significantly improve patient
outcomes.
Our studies have shown that deupirfenidone may overcome these limitations and – to
our knowledge – is the only investigational therapeutic for IPF that has demonstrated the
potential to stabilize lung function decline over at least 26 weeks while maintaining safety
and tolerability. Beyond IPF, deupirfenidone could also address multiple underserved
fibrotic diseases, including progressive fibrosing interstitial lung diseases (ILDs) and
other fibrotic conditions.
8
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Programs
12 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 13
Programs continued
— As of December 31, 2024, the deupirfenidone patent portfolio includes 32 active patents acquired
from Auspex, which provide broad coverage of compositions of matter, formulations, and
methods of use for deuterated pirfenidone, including the deupirfenidone compound. This IP
estate comprises six issued US patents and 26 patents issued in 23 foreign jurisdictions, which are
expected to expire in 2028 and may be extended by up to five years. In addition, we also have one
US patent and one US patent application in-licensed from Auspex directed to formulations of
deuterated pirfenidone, both of which expire in 2035. The deupirfenidone IP portfolio further
comprises numerous US and foreign patent applications, which are solely owned by PureTech.
This IP includes 13 pending US patent applications and 39 foreign applications directed to the use
of deuterated pirfenidone, including deupirfenidone, for the treatment of a range of conditions.
Any issued patents claiming priority to these applications are expected to expire in 2039 through
2045, exclusive of possible patent term adjustments or extensions.
Intellectual property
Deupirfenidone is an investigational drug not approved by any regulatory authority.
Note: Certain third-party trademarks are mentioned; PureTech does not claim any rights to any third-party trademarks.
1 GlobalData Epidemiology and Market Size Search, EU5=United Kingdom, France, Germany, Italy and Spain.
2 Dempsey, T. M., Payne, S., Sangaralingham, L., Yao, X., Shah, N. D., & Limper, A. H. (2021). Adoption of the Antifibrotic Medications
Pirfenidone and Nintedanib for Patients with Idiopathic Pulmonary Fibrosis. Annals of the American Thoracic Society, 18(7), 1121-
1128. https://doi.org/10.1513/AnnalsATS.202007-901OC.
3 Roche 2022 Annual Report and Boehringer Ingelheim 2022 Financial Results.
4 Austedo was first approved by the FDA for the treatment of chorea associated with Huntington’s disease in adults in 2017.
Programs continued
— We will present additional details from the Phase 2b trial at the American Thoracic Society
International Conference in May 2025.
— We intend to discuss the results from the Phase 2b trial with the FDA and are targeting a meeting
before the end of Q3 2025, with the goal of initiating a Phase 3 clinical trial in IPF by the end of 2025.
We anticipate providing further guidance later this year following the finalization of the trial design
and FDA interactions.
Expected milestones
Key milestones
achieved and
development status
FIGURE 4: Deupirfenidone Had Favorable Tolerability in ELEVATE Trial
BOLD: Met our pre-defined safety threshold relative to pirfenidone 801 mg TID arm, per market research and KOL feedback (25% less
than the proportion of patients reporting in the pirfenidone arm)
* 25% of patients in pirfenidone pivotal trials and 15% in nintedanib pivotal trials reported abdominal pain; AE= adverse event;
TID = three times a day
Note: Differences between groups are determined by the difference between percentage of incidences observed.
— The Phase 2b open label extension (OLE) trial is ongoing. Patients administered deupirfenidone
in the blinded portion of the study continued their treatment and dose in the open label
extension. Patients administered pirfenidone or placebo in the blinded portion of the study
were re-randomized to one of the deupirfenidone doses in the OLE. 170 patients (90% of those
eligible) from the blinded portion of the study continued into the OLE. As of March 14, 2025, 140
patients have continued in the OLE, with 85 patients having received at least 52 weeks of
treatment with deupirfenidone. Preliminary data from those receiving deupirfenidone 825 mg
TID indicate that the significant slowing of lung function decline observed in Part A of the trial has
been sustained through 52 weeks of treatment, supporting the durability of the treatment effect
with this dose and its potential to stabilize lung function decline over time. Detailed OLE results
will be presented at an upcoming scientific forum.
— Based on robust Phase 2b data, we believe that deupirfenidone has multi-billion-dollar revenue
potential for several key reasons:
–
It has the potential to deliver best-in-class efficacy.
–
It may address significant unmet needs across stakeholders by offering meaningful FVC
improvement compared to pirfenidone.
–
Its profile may expand the IPF market by increasing patient uptake and adherence.
–
With its highly differentiated efficacy and safety profile, deupirfenidone has blockbuster
potential, with additional upside in other ILDs.
— In October 2024, we presented three pieces of research relating to our clinical and patient
engagement strategies for deupirfenidone at the CHEST 2024 Annual Meeting in Boston,
Massachusetts. A paucity of recent research specific to the IPF patient community informed our
decision to conduct a patient survey with both qualitative and quantitative components that
revealed new insights into disease burden and the patient experience. A clinical abstract also
reviewed the use of a Bayesian approach in the ELEVATE IPF Phase 2b trial. This approach had the
advantage of enhancing overall statistical power and improving decision-making while limiting
the number of patients required to be treated with placebo in a fatal disease. This approach had
been used previously in Phase 2 trials of novel IPF therapeutics.
Key milestones
achieved and
development status
FIGURE 1: ELEVATE: Global, Phase 2b, Multicenter, Randomized, Double-blind Clinical Trial
FIGURE 3: Deupirfenidone Demonstrated Potential to Serve as a New Standard-of-Care Treatment
for IPF
FIGURE 2: Deupirfenidone 825 mg TID Significantly Slowed and Stabilized Lung Function Decline
FVC decline for deupirfenidone 825 mg TID at 26 weeks in ELEVATE approached the level of natural
lung function decline expected in healthy adults aged 60 and older.
Note: Patients in all arms were permitted to decrease and re-increase their assigned dose as tolerated
Note: Data pulled from separate studies; outputs do not represent data from a head-to-head study
* Reflects outputs obtained via frequentist analysis.
** FVC decline at 6 months was estimated assuming linear decline over time. Valenzuela, C., Bonella, F., Moor, C., Weimann, G.,
Miede, C., Stowasser, S., & Maher, T. (2024). Decline in forced vital capacity (FVC) in subjects with idiopathic pulmonary fibrosis
(IPF) and progressive pulmonary fibrosis (PPF) compared with healthy references. Poster presented at the European Respiratory
Society International Congress, Vienna, Austria; and Luoto, J., Pihlsgård, M., Wollmer, P., & Elmståhl, S. (2019). Relative and absolute
lung function change in a general population aged 60-102 years. The European Respiratory Journal, 53(3), 1701812. https://doi.
org/10.1183/13993003.01812-2017.
Note: Change from baseline FVC is not adjusted for patient characteristics such as height, age, race, or sex.
Note: Efficacy analyses used a random coefficient regression model with absolute FVC or FVCpp including baseline as response
variable and week, treatment and interaction between week and treatment as fixed effect. The analyses were performed based on
the predefined Full Analysis Set. p values are two-sided and have not been corrected for multiplicity. Change from baseline FVC is not
adjusted for patient characteristics such as height, age, race, or sex.
FVC = Forced Vital Capacity; TID = three times a day
Key GI AEs were predefined prior to unblinding data, based on market research and KOL feedback
Key Predefined
Gastrointestinal AEs
from ELEVATE Study
Placebo TID
(N=65)
n (%)
Deupirfenidone
550 mg TID
(N=65)
n (%)
Deupirfenidone
825 mg TID
(N=64)
n (%)
Pirfenidone
801 mg TID
(N=63)
n (%)
Nausea
5 (7.7)
11 (16.9)
13 (20.3)
17 (27.0)
Dyspepsia
2 (3.1)
8 (12.3)
9 (14.1)
14 (22.2)
Diarrhea
6 (9.2)
7 (10.8)
5 (7.8)
7 (11.1)
Abdominal pain*
3 (4.6)
4 (6.2)
9 (14.1)
5 (7.9)
Constipation
1 (1.5)
1 (1.5)
3 (4.7)
4 (6.3)
Vomiting
0 (0)
5 (7.7)
1 (1.6)
2 (3.2)
Programs
Programs
14 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 15
AML
— The Phase 1b trial evaluating LYT-200 as a monotherapy and in combination with venetoclax/
HMA for AML and MDS is ongoing. LYT-200 has shown a favorable safety profile across both arms
and all dose levels with no dose limiting toxicities, as well as clinical efficacy, hematological
improvement, and sustained disease management.
–
As of April 28, 2025, patients have received LYT-200 at five dose levels (2.0 mg/kg to 16.0 mg/
kg) in the monotherapy arm. Across all dose levels, LYT-200 has demonstrated clinical benefit
and responses in heavily pre-treated, relapsed/refractory AML/MDS patients, even in those
with complex cytogenetics and mutations such as KRAS, NRAS, BRAF, as well as patients
previously fully refractory to standard of care. At dose levels of 7.5mg/kg and above, treatment
with LYT-200 has resulted in 1 complete response (CR), 3 partial responses (PRs), and more
than 50% of patients treated experienced stable disease. The average treatment duration
with the single agent was 3.5 months as of the data cutoff. This is meaningful in the heavily
pretreated patient population who have already exhausted all standard-of-care options.
–
When administered in combination with venetoclax/hypomethylating agents (HMA), results
as of April 28, 2025, demonstrate that LYT-200 may enhance the efficacy of standard-of-care
therapies, even in relapsed or refractory patients. In the combination arm, patients received
LYT-200 across three dose levels (4.0 mg/kg, 7.5 mg/kg, and 12.0 mg/kg) with venetoclax/
HMA, resulting in 6 CRs, 1 morphological leukemia-free state (MLFS), and 50% of patients
experienced stable disease. The average time on combination therapy is 4 months as of the
data cutoff, which is meaningful in a patient population whose time to progression tends to be
less than 1 month and whose overall survival averages 1.7-2.4 months with standard-of-
care therapy. Patients who benefit show hematological improvement as well as achieve
transfusion independence.
— In the January 2025 post-period, the FDA granted Fast Track designation to LYT-200 for the
treatment of AML. Fast Track designation is a process designed to streamline the development
and accelerate the assessment of drugs that target serious conditions with unmet medical need.
— In December 2024, we presented data from the dose escalation phase of the ongoing Phase 1b
trial evaluating LYT-200 as a monotherapy and in combination with venetoclax/HMA for AML and
MDS at the 2024 American Society of Hematology (ASH) Annual Meeting.
— In February 2024, the FDA granted orphan drug designation to LYT-200 for the treatment of AML.
This designation is given to novel products for the treatment of conditions affecting fewer than
200,000 persons in the U.S, and it qualifies the company for incentives including tax credits for
some clinical trials and eligibility for seven years of market exclusivity in the U.S., if the drug is
approved for AML.
Key milestones
achieved and
development status
Locally advanced/metastatic solid tumors
— The Phase 1b trial evaluating LYT-200 as a monotherapy and in combination with tislelizumab for the
treatment of locally advanced/metastatic, relapsed/refractory solid tumors, including head and
neck cancers, has successfully completed. LYT-200 demonstrated a favorable safety profile in all
cohorts and showed disease control and initial efficacy signals. The LYT-200 solid tumor study
enrolled 44 relapsed/refractory solid tumor patients across 13 sites in the United States.
–
The single agent (SA) cohorts dosed LYT-200 between 0.2 – 16 mg/kg every two weeks (Q2W)
or 10 mg/kg every week (QW). The combination cohorts dosed LYT-200 at 6.3mg/kg QW and
16mg/kg QW with an anti-PD-1 antibody, tislelizumab. The SA cohorts enrolled 20 all-comer
patients, while the combination cohorts enrolled 24 patients, including 19 with head and neck
cancer and five with urothelial cancer. The median number of prior lines of treatment was four
in the single agent cohorts and three in the combination cohorts. There were no dose limiting
toxicities in this study. There were no LYT-200 related serious adverse events in the SA cohorts.
Eight patients (40%) experienced grade 3 or higher adverse events, none of which were related
to LYT-200. In combination with tislelizumab, three patients (12.5%) experienced an immune
mediated adverse reaction (IMAR), all of which were related to tislelizumab (grade 2
hypothyroidism, grade 1 hyperthyroidism, and grade 3 cholangitis). There was one LYT-200-
related grade 3 serious adverse event, an asymptomatic elevation of the protein troponin, that
occurred with 16 mg/kg QW LYT-200 plus tislelizumab, led to treatment discontinuation, but
resolved fully on steroid treatment. 14 patients (58.3%) experienced grade 3 or higher adverse
events of which one (the elevated troponin) was related to LYT-200. In the SA cohorts, three
patients (16% of evaluable patients) achieved stable disease. Disease control has been noted
from dose levels of 6.3 mg/kg and above.
–
In the combination cohorts, two urothelial cancer patients (out of 4 evaluable patients) treated
with 6.3 mg/kg QW LYT-200 plus tislelizumab had stable disease. In head and neck patients
treated with 6.3 mg/kg QW LYT-200 plus tislelizumab, one patient experienced a complete
response lasting more than 2 years; two patients had a partial response; and two patients had
stable disease, resulting in an overall response rate of 33% and a disease control rate of 50%. At
16 mg/kg plus tislelizumab, three patients (out of seven evaluable) had stable disease, giving a
disease control rate of 43%. For patients achieving a response as per RECIST 1.1 criteria, the
six-month progression-free survival (PFS) is 67%, and the 12-month PFS is 33%.
— In March 2024, the FDA granted Fast Track designation for LYT-200 in combination with anti-PD1
therapy for the treatment of recurrent/metastatic head and neck cancers. Fast Track designation
is a process designed to streamline the development and accelerate the assessment of drugs that
target serious conditions with unmet need.
Key milestones
achieved and
development status
— With a focus on providing significant therapeutic benefit to cancer patients, we opportunistically
identified a foundational immunosuppressive/pro-tumor mechanism(s) involving galectin-9,
which was the basis of certain intellectual property that we licensed from New York University
prior to its publication in Nature Medicine. Galectin-9 promotes multiple immunosuppressive
pathways in the context of solid tumors and blocking galectin-9 results in tumor cell death in the
context of AML and other hematological malignancies. High levels of galectin-9 expression in
tumor tissue, on leukemia cells as well as in patients’ blood are linked to more advanced disease
and worse outcomes. LYT-200 is a fully human IgG4 monoclonal antibody designed to inhibit the
activity of galectin-9. We believe that LYT-200 is the most advanced clinical program against this
target. It has the potential to be used as a single agent and in combination with other anti-cancer
therapies, depending on the cancer type, treatment setting, and line of treatment. In pre-clinical
models, LYT-200 has also demonstrated direct cytotoxic, anti-leukemic effects through multiple
mechanisms, as well as synergy with standard of care.
Program discovery
process by the
PureTech team
Programs continued
Gallop Oncology / LYT-200
PureTech Ownership
100% equity
Gallop Oncology™ is advancing a first-in-class, mechanistically differentiated approach to
cancer treatment by targeting a novel, pro-tumor and immunosuppressive molecule. Gallop’s
LYT-200 is an anti-galectin-9 monoclonal antibody (mAb) being developed for the treatment
of hematological malignancies, including acute myeloid leukemia (AML) and high-risk
myelodysplastic syndromes (MDS), as well as solid tumors, including head and neck cancers,
with a focus on metastatic disease.
— The Phase 1b clinical trial evaluating LYT-200 in relapsed/refractory AML and MDS patients is
ongoing, as patients are responding well to and remaining on treatment. Topline results are
expected in Q3 2025, and patients can elect to remain on treatment.
Expected milestones
— The intellectual property portfolio for LYT-200 provides broad intellectual property coverage for
antibody-based immunotherapy technologies. As of December 31, 2024, there are 16 families of
intellectual property within this patent portfolio, including eight (8) families of patent filings that
are co-owned with and/or exclusively licensed from New York University which cover antibodies
that target galectin-9, including LYT-200, and methods of using these antibodies in various
immuno-oncology technologies and other therapeutic methods. In addition, the intellectual
property portfolio includes seven (7) families of company-owned patent applications covering
the use of anti-galectin-9 antibodies in the diagnosis and treatment of various cancers, including
solid tumors and hematological cancers, and one family of patent applications co-owned with
BeiGene directed to combination therapies for the treatment of solid tumors. This intellectual
property portfolio comprises four (4) issued U.S. patents which are expected to expire in 2038,
14 pending U.S. patent applications, which if issued, are expected to expire 2037 through 2045,
one (1) international PCT application, 82 pending foreign applications and 20 issued patents
in foreign jurisdictions.
Intellectual property
Programs continued
LYT-200 is an investigational drug not approved by any regulatory authority.
Programs
Programs
16 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 17
— In April 2024, we launched Seaport Therapeutics with a $100 million oversubscribed Series A
financing round to advance novel neuropsychiatric medicines. Daphne Zohar was appointed as
a Founder, Chief Executive Officer and a member of the Board, and Steven M. Paul, M.D., as a
Founder and Chair of the Board of Directors.
— In October 2024, Seaport raised a total of $226 million in its oversubscribed Series B financing
round. This financing brought the total capital raised by Seaport to $326 million since the
company’s launch in April 2024.
— In May 2024, Seaport presented two posters detailing the results from multiple clinical trials of
SPT-300 at the Society of Biological Psychiatry (SOBP) Annual Meeting in Austin, TX. Together,
these data summarize some of the evidence supporting the core mechanisms of SPT-300 as
Seaport advances to later-stage clinical studies.
–
The first poster provided data from the first-in-human, multi-part Phase 1 trial of SPT-300 from
which topline results were first reported in December 2022. Overall, the Phase 1 trial was well
tolerated and evaluated oral bioavailability, safety, tolerability, pharmacokinetics and GABAA
target engagement.
–
The second poster provided details from the Phase 2a trial of SPT-300 in the Trier Social Stress
Test (TSST), a validated clinical model of anxiety in healthy volunteers. Topline results from the
trial, demonstrating SPT-300 substantially reduced salivary cortisol at all post-TSST timepoints
compared to placebo, meeting the study’s primary endpoint and demonstrating regulation of
the hypothalamic-pituitary-adrenal axis reactivity to acute stress, were first reported in
November 2023.
— In December 2024, Seaport presented additional data from its first-in-human, multi-part Phase 1
study of SPT-300 in healthy volunteers at the American College of Neuropsychopharmacology
(ACNP) Annual Meeting, held in Phoenix, Arizona. New data presented at the conference include
further safety analyses and pharmacokinetic and pharmacodynamic data. In the Phase 1 study,
increases in EEG beta frequency power and reduction in saccadic eye velocity were observed at
approximately 4 hours post-dose. Somnolence peaked in this same timeframe and diminished by
6 to 8 hours post-dose, consistent with both pharmacodynamic markers and blood levels of
allopregnanolone. Based on these results, SPT-300 is suitable for chronic dosing and oral
administration at night in a planned Phase 2b placebo-controlled study in major depressive
disorder with or without anxious distress.
Key milestones
achieved and
development status
— With intersecting interests in enabling promising neuropsychiatric drugs to reach their full
potential and the emerging science around the lymphatic system, we identified a breakthrough
technology being developed at Monash University that had the potential to selectively transport
therapeutic molecules through the lymphatic system.
— Through the Glyph platform, drugs are absorbed like dietary fats through the intestinal
lymphatic system and transported into circulation. The Glyph technology has the potential to be
widely applied to many therapeutic molecules that have high first-pass metabolism leading to
low bioavailability and/or side effects, including hepatotoxicity. We prioritized areas of high
unmet patient need where the broad application of treatment options with validated efficacy was
untapped due to these issues. The Glyph platform was advanced initially at PureTech and now
exclusively licensed and assigned to Seaport and has been applied to efficiently generate
multiple therapeutic candidates within Seaport’s pipeline.
Program discovery
process by the
PureTech team
Programs continued
Seaport Therapeutics
PureTech Ownership
35.6% equity, milestone and sublicense payments, and 3-5% royalties
Seaport Therapeutics is a clinical-stage biopharmaceutical company advancing the
development of novel neuropsychiatric medicines in areas of high unmet patient needs. The
company has a proven strategy of advancing clinically validated mechanisms previously held
back by limitations that are overcome with its proprietary Glyph™ technology platform. All
the therapeutic candidates in its pipeline of first and best-in-class medicines are based on the
Glyph platform. Seaport is led by an experienced team that invented and advanced important
neuropsychiatric medicines and are guided by an extensive network of renowned scientists,
clinicians and key opinion leaders.
Seaport’s clinical-stage pipeline includes its most advanced therapeutic candidate, SPT-
300, an oral prodrug of allopregnanolone, which is being advanced for the treatment of
major depressive disorder (MDD) with or without anxious distress; SPT-320, a novel oral
prodrug of agomelatine, which is being advanced for the treatment of generalized anxiety
disorder (GAD); and SPT-348, a prodrug of a non-hallucinogenic neuroplastogen, which is in
development for the treatment of mood and other neuropsychiatric disorders.
Note: Certain third-party trademarks are included here; PureTech does not claim any rights to any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of schizophrenia in adults. For Important Safety
Information, see U.S. Full Prescribing Information, including Patient Information on COBENFY.com. Following the acquisition of
Karuna, KarXT is now under the stewardship of Bristol Myers Squibb and will be marketed as Cobenfy.
1 As of 22 March 2023, PureTech has sold its right to receive a 3 percent royalty from Karuna to Royalty Pharma on net sales up to
$2 billion annually, after which threshold PureTech will receive 67 percent of the royalty payments and Royalty Pharma will receive
33 percent. Additionally, under its license agreement with Karuna, PureTech retains the right to also receive certain sublicense
income. The acquisition of Karuna by Bristol Meyers Squibb (NYSE: BMY), had no impact on our rights or obligations under the
Exclusive Patent License Agreement with Karuna, which remains in full force and effect.
— In March 2024, Bristol Myers Squibb (NYSE: BMY) announced the completion of its acquisition
of Karuna for $330.00 per share, for a total equity value of approximately $14 billion. With the
acquisition’s completion, Karuna is now a wholly owned subsidiary of BMS. Through
monetization of equity holdings in Karuna, including gross proceeds from the BMS acquisition
and a strategic royalty agreement, PureTech has generated approximately $1.1 billion to date
from an initial allocation of $18.5 million in Karuna’s founding.
— In September 2024, BMS announced that Cobenfy (formerly known as KarXT) had received
U.S. Food and Drug Administration approval for the treatment of schizophrenia in adults. The
FDA approval triggered two separate milestone payments to PureTech totaling $29 million under
agreements with Royalty Pharma and PureTech’s Founded Entity, Karuna Therapeutics (now
BMS). Under these agreements, PureTech is also entitled to potential future payments related to
additional milestones as well as approximately 2% royalties on net annual sales over $2 billion.
— Phase 3 trials, ADEPT-2 and ADEPT-3, are ongoing and continue to evaluate Cobenfy for the
treatment of psychosis in Alzheimer’s disease.
Key milestones
achieved and
development status
— We and our collaborators, including leading schizophrenia experts, were excited about efficacy
data generated in schizophrenia and Alzheimer’s disease by Eli Lilly with xanomeline, which had
notable efficacy stemming from its activation of muscarinic receptors (M1 and M4) but had been
held back by gastrointestinal tolerability issues. To overcome this, we invented KarXT, an oral M1/
M4-preferring muscarinic agonist, by combining xanomeline (a muscarinic agonist) with
trospium (a peripherally acting muscarinic antagonist that doesn’t cross the blood brain barrier).
This enabled the beneficial effects of M1/M4 activation in the brain without the peripheral side
effects. We conducted key human tolerability proof-of-concept studies with KarXT that allowed
Karuna, and subsequently BMS to advance it further in schizophrenia patients. In September
2024, Cobenfy (formerly known as KarXT) received U.S. FDA approval for the treatment of
schizophrenia in adults.
Program discovery
process by the
PureTech team
— PureTech continues to hold rights to receive milestone and royalty payments upon the
achievements of certain regulatory approvals and Cobenfy sales milestones.1 These include the
up to $400 million in milestone payments under its agreement with Royalty Pharma and 2% of
Cobenfy sales above $2 billion annually.
Expected milestones
Programs continued
Karuna Therapeutics
A wholly owned subsidiary of Bristol Myers Squibb
PureTech Ownership
PureTech is entitled to milestone payments, royalties and up to $400 million in milestone payments
under its agreement with Royalty Pharma.
Karuna Therapeutics is a wholly owned subsidiary of Bristol Myers Squibb (BMS) driven
to create and deliver transformative medicines for people living with psychiatric and
neurological conditions. Cobenfy (formerly known as KarXT), is the first new drug with a novel
mechanism to treat schizophrenia in more than 50 years. Cobenfy was invented and initially
developed by PureTech. Consistent with its unique model of drug development, PureTech
advanced Cobenfy by founding Karuna Therapeutics, which progressed Cobenfy through
Phase 3 development before being acquired by BMS for $14 billion in March 2024.
— Seaport anticipates advancing SPT-300 into a Phase 2b study for MDD with or without anxious
distress that has the potential to be registration-enabling.
— Seaport anticipates advancing SPT-320 into Phase 1 studies for the treatment of GAD.
— Seaport anticipates advancing development of SPT-348 for the treatment of mood and other
neuropsychiatric disorders.
— Seaport also has multiple discovery and preclinical programs underway.
Expected milestones
Programs
Programs
18 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 19
— Vedanta anticipates topline results from its Phase 2b clinical trial of VE202 in ulcerative colitis
in 2025.
— Vedanta anticipates filing an Investigational New Drug Application for VE707 in 2025.
— Vedanta anticipates topline results from its Phase 3 pivotal RESTORATiVE303 trial in 2026.
Expected milestones
— In April 2024, Vedanta was awarded $3.9 million from the global nonprofit CARB-X to ready its
preclinical candidate VE707 for a first-in-human clinical study to examine its ability to reduce
colonization and prevent subsequent infections caused by multi-drug-resistant organisms.
The funding was triggered by Vedanta’s completion of certain milestones for VE707, which were
supported by previous CARB-X awards totaling $5.7 million.
— In May 2024, Vedanta enrolled the first patient in the pivotal Phase 3 RESTORATiVE303 study of
VE303 for the prevention of recurrent C. difficile infection. This study is intended to form the basis
for a Biologics License Application to be filed with the U.S. Food and Drug Administration.
— In July 2024, Vedanta announced it had expanded its leadership team, including appointing
a Head of Commercial in alignment with having initiated the pivotal clinical phase.
— In October 2024, Vedanta shared additional analyses from the CONSORTIUM trial at Infectious
Diseases Week (IDWeek) 2024. The analyses characterized the benefit of VE303 on antibiotic
resistant gene levels in patient microbiomes. Antibiotic resistance can lead to the development of
hard-to-treat infections throughout the body, and as VE303 administration appears to correlate
with reduced prevalence of organisms carrying these resistance genes, the result describes an
additional dimension of VE303’s therapeutic profile.
— In the January 2025 post-period, Vedanta published additional results from the VE303 Phase 2
CONSORTIUM clinical trial in Nature Medicine, providing a new level of profiling of the multiple
mechanisms by which VE303 may decrease the odds of rCDI. The CONSORTIUM trial showed that
the higher dose of VE303 studied was well tolerated and reduced the odds of CDI recurrence by
more than 80% compared with placebo. Clinical results from the trial were previously published in
the Journal of the American Medical Association (JAMA).
Key milestones
achieved and
development status
— We engaged with leading world-renowned experts in immunology and identified and in-
licensed intellectual property to pioneer the concept of therapeutically defined consortia of
microbes that could modulate the immune system or treat bacterial infections.
Program discovery
process by the
PureTech team
Programs continued
Vedanta Biosciences
PureTech Ownership
35.8% equity
Vedanta Biosciences is a clinical-stage biopharmaceutical company developing medicines
for the treatment of gastrointestinal diseases. The company’s lead assets are potential first-
in-class oral therapies – VE303, in a Phase 3 registrational trial for prevention of recurrent
C. difficile infection (rCDI), and VE202, in a Phase 2 trial for treatment of ulcerative colitis.
Vedanta’s pipeline has been built using the company’s industry-leading product engine for
the development of therapies based on defined consortia of bacteria grown from pure clonal
cell banks. The product engine, supported by broad foundational intellectual property,
includes one of the largest libraries of bacteria isolated from the human microbiome, vast
clinical datasets, proprietary capabilities in consortium design, and end-to-end CGMP
manufacturing capabilities at commercial launch scale.
— Vor anticipates a clinical update from Phase 1/2 VBP301 trial of VCAR33ALLO in the first half of 2025.
— Vor anticipates a clinical update from Phase 1/2a VBP101 trial of trem-cel in combination with
Mylotarg in the second half of 2025.
— Vor anticipates initiating the first trem-cel+VCAR33 Treatment System clinical trial in second half
of 2025.
Expected milestones
— In 2024, Vor expanded its ongoing Phase 1/2 VBP101 study to include patients diagnosed with
myelodysplastic syndrome (MDS) in addition to its original trial population of patients with AML.
During the trial, patients received trem-cel, a shielded stem cell transplant lacking CD33
manufactured by Vor, followed by Mylotarg™, a CD33-directed Antibody Drug Conjugate (ADC)
therapy. Preliminary data suggest improved relapse-free survival compared to published groups
of AML patients at high risk of relapse post-transplant. Trem-cel + MylotargTM also continued to
show engraftment, shielding, and a broadened therapeutic window. Vor received supportive
feedback from the FDA regarding a registrational clinical trial design.
— In 2024, Vor dosed the first patient in VBP301, its Phase 1/2, multicenter, open-label, first-in-
human study of VCAR33ALLO in patients with relapsed or refractory AML after standard-of-care
transplant or a trem-cel transplant and received both Fast Track designation and Orphan Drug
designation from the FDA. Patients treated with the lowest dose of VCAR33ALLO , a CAR-T cell
therapy manufactured by Vor from lymphocytes collected from the patient’s original transplant
donor, demonstrated promising biomarker data.
— In September 2024, Vor disclosed a new preclinical asset, VADC45, an ADC that targets the CD45
protein. CD45 is a well-validated target for a wide variety of blood cancers with clinical proof of
concept. Initial data suggest VADC45 has large potential opportunities across oncology, gene
therapy, and autoimmune disorders.
Key milestones
achieved and
development status
— We were interested in approaches to treat hematological malignancies that currently have
poor response rates or poor adverse event profiles despite recent advances in cell therapies
and targeted therapies. We worked with Vor Bio Scientific Advisory Board Chair, Siddhartha
Mukherjee, M.D., Ph.D., on key intellectual property, which Vor Bio exclusively in-licensed
from Columbia University, and on advancing this concept through critical proof-of-
concept experiments
Program discovery
process by the
PureTech team
Programs continued
Vor
PureTech Ownership
2.1% equity
Vor Bio is a clinical-stage cell and genome engineering company that aims to change the
standard of care for patients with blood cancers by engineering hematopoietic stem cells to
enable targeted therapies post-transplant.
Programs
Programs
20 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 21
Programs continued
— Sonde expects to continue development of the voice-based artificial intelligence platform to
detect changes in health and validate new products in the areas of fatigue and cognitive
impairment in 2025.
Expected milestones
— In the February 2025 post-period, Sonde began design and implementation of validation studies
with three organizations within the Department of the Air Force (DAF). Two organizations will be
studying the impact of shift work on soldiers’ performance beginning in March and the third
organization will study the impact of fatigue on soldiers operating in the field beginning in June.
— In the February 2025 post-period, Sonde successfully completed a large-scale trial with one of the
top oil and gas conglomerates in the world. Over 4,000 workers used Sonde’s Mental Fitness
tracking app and insight dashboard over 5 weeks at 60 different sites. Sonde was able to
effectively identify at-risk workers, enabling proactive intervention by flagging individuals with
high sensitivity and deliver significant positive predictive value for a healthy population, ensuring
most workers who needed support were identified.
— In the January 2025 post-period, Sonde successfully integrated its voice-based health monitoring
technology into Qualcomm’s Snapdragon® S7+ Gen 1 Sound Platform. Building on its longtime
partnership with Qualcomm, Sonde optimized its technology to operate within the strict power
and processing constraints of audio earbud and headset devices while maintaining its industry-
leading accuracy.
— In August 2024, Sonde announced that it has been selected by AFWERX, the innovation arm of
the Department of the Air Force (DAF), for a Small Business Innovation Research (SBIR) Phase II
contract in the amount of $1,215,606 focused on Sonde Mental Fitness. This contract builds on
work completed through a Phase 1 contract awarded in January 2024 that identified multiple use
cases for employing Sonde Mental Fitness vocal biomarker tracking to promote mental health
engagement and resource utilization and to enhance operational decision-making. The
customization and integration work planned for this SBIR Phase II effort will enable use and
validation of Sonde’s mental fitness tracking technology in DAF settings.
— In July 2024, Sonde launched Sonde Cognitive Fitness, which analyses eight vocal characteristics
from 30-second voice interactions to provide cognitive effort tracking and insight, helping
people manage their mental well-being and productivity effectively.
Key milestones
achieved and
development status
— We identified vocal features as a leading non-invasive source of health data, particularly given the
evolving technology landscape where voice interactions with devices are rapidly increasing. We
developed novel intellectual property around this concept and helped advance the technology
from an academic concept to a commercially focused technology.
Program discovery
by the PureTech team
Sonde
PureTech Ownership
34.8% equity
Programs continued
— Entrega continues to advance its platform for the oral administration of biologics, vaccines and
other drugs that are otherwise not efficiently absorbed when taken orally. Entrega has generated
preclinical proof-of-concept data demonstrating administration of therapeutic peptides into the
bloodstream of large animals and expects to conduct additional preclinical validation in 2025.
Key milestones
achieved and
development status
— We were interested in enabling the oral administration of biologics, which has been a long-
standing problem in drug development. We engaged with leading experts in drug
administration, including Robert Langer, Sc.D., screened over 100 technologies, and the initial
platform was licensed from Samir Mitragotri, Ph.D., when he was Professor of Chemical
Engineering at UC Santa Barbara (currently Hiller Professor of Bioengineering and Hansjorg Wyss
Professor of Biologically Inspired Engineering at Harvard University). We later enhanced this
platform with intellectual property developed by our team.
Program discovery
by the PureTech team
Entrega
PureTech Ownership
73.8% equity
Entrega is unlocking key areas of medicine by enabling oral administration of biologics,
vaccines and other drugs that are otherwise not efficiently absorbed when taken orally. The
vast majority of biologic drugs, including peptides, proteins and other macromolecules,
are currently administered by injection, which can present challenges for healthcare
administration and compliance with treatment regimes. For this growing class of therapies,
including newly developed treatments for diabetes and weight loss, oral administration may
be the ideal route of administration.
Entrega’s technology platform is an innovative approach to oral administration, which uses
a proprietary, customizable hydrogel dosage form to control local fluid microenvironments in
the GI tract to both enhance absorption and reduce the variability of drug exposure. Peptide
therapeutics (e.g., the emerging GLP-1 agonist class) are ideally suited to benefit from
Entrega’s approach and our platform has demonstrated increased oral peptide availability of
two- to three-fold over standard permeation enhancer formulations.
Sonde Health is the global leader in voice AI health tracking and data insights. Sonde’s vocal
biomarker platform serves apps and devices spanning consumer wellness to population
health. Leveraging a best-in-class voice data set and clinical research with over 1.2 million
samples from 85,000+ individuals on four continents, Sonde uses advanced audio signal
processing, speech science, and machine learning to sense and analyze subtle vocal changes
due to changes in a person’s physiology to provide key insights into health and well-being.
ESG report
ESG report
Building and maintaining
a sustainable business
ESG report
Patients
We are committed to giving life to new classes
of medicine to change the lives of patients with
devastating diseases.
People
Our dedicated and talented workforce is vital
to achieving success in all that we do.
Planet
We aim to deliver high standards of
environmental leadership to protect natural
and human capital.
Governance
Our work would not be possible without trust
– it is a core value on which our success
depends, and the foundation of our
relationship with our stakeholders.
ESG report
22 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 23
24 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 25
ESG report
The data provided in this report cover the
period from January 1, 2024, through
December 31, 2024, unless otherwise stated.
Ongoing initiatives as well as information
deemed significant from our previous reports
have also been included in this report to
provide context.
Our ESG Standards
This report has been prepared in accordance
with additional frameworks and
standards including:
— The Sustainability Accounting Standards
Board (SASB) standards for Biotechnology
& Pharmaceuticals, see pages 51-53.
— The United Nations Sustainable
Development Goals (SDGs),
see pages 28-29.
— The Task Force on Climate-related
Financial Disclosures (TCFD) framework,
see pages 54-58.
Our ESG strategy has been designed to ensure
that we operate our business sustainably and
ethically, while facilitating innovation through a
positive, collaborative culture and the
development of our people.
We integrate the views of our key stakeholders
– our employees and external partners – in the
continuous development of our ESG efforts.
This collaboration is central to driving progress
against our ESG objectives.
Our governance structure supports our ESG
program via our cross-functional ESG
Committee. The Committee provides guidance
and oversight, championing major initiatives
across environmental sustainability, social
responsibility, ethics and transparency.
Sustainability is integral to our purpose; through
collaboration and accountability, we create
shared, lasting value.
This is our fifth annual sustainability report
detailing our ESG strategy, performance and
ongoing progress. The report, in line with our
overarching approach to sustainability, was
developed based on business priorities and
feedback from our stakeholders. Throughout
the report, we outline our long-standing
commitment to Patients, People and Planet and
the actions we have taken in 2024 to embed
responsible business practices in all that we do.
“At PureTech, we recognize that social and environmental
sustainability are essential to delivering innovative
therapies that transform patients’ lives for the long term.
Our sustainability strategy reinforces our broader
mission—leveraging collaboration and accountability to
develop new classes of medicine for those facing
devastating diseases. A sustainable business is key to
driving scientific breakthroughs, and as we grow, we remain
committed to deepening our efforts. By considering
human health, business growth, and planetary well-being
together, we are creating the foundation for continued
innovation and impact.”
Kiran Mazumdar-Shaw: Chair of the ESG Committee
ESG report
At PureTech, our commitment to sustainability, through strong
Environmental, Social and Governance (ESG) practices, remains steadfast.
Our core priority is innovating to create new classes of medicine which
transform the lives of patients, and we recognize that ESG plays an
important role in supporting our achievement of this goal.
ESG report continued
ESG report
Our ESG assessment
Each year, we identify and address the ESG topics that are most important to our stakeholders and
that have the largest strategic impact on our business. This is led by our ESG Committee, which
helps set, and oversee, our ESG commitments and sustainability priorities. We ensure our strategy
reflects a balance between the most material ESG issues to our business and our stakeholders; and
the refinement of our approach matches the evolving ESG landscape. The process involves the
following six steps:
PureTech engages with various third party ESG
Risk Ratings bodies to evaluate our exposure to
material industry-specific ESG risks. While we
acknowledge these efforts are only one part of
enhancing our approach to ESG, the
assessment process and its results have served
to enhance our ESG program with a goal to
better understand ESG best practices each
year. In 2024, we participated in and received
positive ratings from Sustainalytics, ISS, CDP,
FTSE Russell, and S&P Global. This reflects our
commitment and continuous efforts to
contribute to a sustainable future.
In 2024, we continued to enhance our
disclosures and transparency by aligning our
reporting with best practice frameworks. Our
cross-functional ESG working group closely
monitored emerging regulations and engaged
with industry partners to stay ahead of evolving
stakeholder expectations. On the governance
front, we continued to engage an external ESG
expert to strengthen disclosures and ensure our
ESG reporting and implementation remains
best in class.
Our Approach
At PureTech, we remain committed to
developing transformative therapies for those
who need it most. We identify disease areas with
high unmet needs and leverage our expertise to
create potentially life-changing treatments.
As we continue on our scientific mission, we
must ensure our work reflects responsibility and
sustainability across ESG issues. To achieve this,
we challenge ourselves to elevate standards,
amplify underserved voices, and promote
conscientious progress. Our ESG approach will
continue to support our mission to create
potentially life-changing treatments for
patients, to build a healthier, more
equitable world.
1.
Engage with an external ESG stakeholder to guide our ESG next steps, including
shareholders, B corp certified ESG advisors, and sustainability rating providers
3.
Evaluate the current regulatory landscape
5.
Integrate findings into our business operations and strategy
2.
Review the latest ESG trends and key material topics relevant to our business
4.
Rank and prioritize issues and assess our reporting framework
6.
Report our progress on an ongoing basis, including through our annual
ESG reporting
26 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 27
Our ESG framework continued
ESG report
2024 Highlights
— Continued to strengthen ESG oversight, led by our ESG
Committee, which is chaired by Ms. Kiran Mazumdar-Shaw
and supported by one management member and a dedicated
internal ESG working group
— Conducted peer review and market analysis to identify
areas of improvement, including assessment of emission
target setting
— Monitored and assessed the evolving ESG regulatory
landscape to ensure we remained compliant with various ESG
frameworks we may be subject to, including the monitoring
of the European Sustainability Reporting Standards (ESRS),
Corporate Sustainability Reporting Directive (CSRD), EU
Sustainable Finance Framework, Corporate Sustainability
Due Diligence Directive (CSDDD) – all of which do not directly
impact PureTech at this stage
— Received positive ESG ratings from CDP, FTSE Russell, ISS,
Sustainalytics, and S&P Global
PATIENTS
We are committed to unlocking new classes of
medicines with proven efficacy to address areas of
significant unmet medical need.
Our goal is to achieve this through the innovative,
safe and ethical discovery, development and
commercialization of highly differentiated medicines.
See pages 30-33 for more.
80% of clinical trials have been successful1
3
therapeutics taken from inception at PureTech
to FDA approvals
Including the most recent landmark approval
of Cobenfy™2
Addressing millions
of patients across many therapeutic areas
(see pages 11-21)
PureTech’s ESG Framework is built around
three strategic areas of focus to achieve
a positive social impact: Patients, People
and Planet. Our approach is underpinned
by our robust governance framework
(see pages 46-50), which helps us to deliver
our mission, strategy and purpose in a
consistent and responsible way.
The UN SDGs
Our ESG Framework – Patients, People and Planet
44%
gender diversity on Leadership level
Continue to exceed FTSE Women Leaders
40% women in leadership recommendation3
43%
gender diversity on the Board level4
Continue to exceed FTSE Women Leaders
40% women on Board recommendation3
43%
ethnic diversity on the Board level4, 5
Continue to exceed Parker Review’s
“One by 2024” target
14%
less energy consumed at the Boston HQ
compared to the 2030 Challenge baseline
66%
fewer GHG emissions generated at the Boston
HQ compared to the 2030 Challenge baseline
ESG report
PLANET
We aim to deliver high standards of environmental
leadership to protect natural and human capital.
While our environmental footprint remains
comparatively small, we recognize our responsibility in
measuring and managing our impact to contribute to
effective climate solutions.
See pages 40-45 for more.
The UN SDGs
The UN SDGs
PEOPLE
Our dedicated and talented workforce is vital to
achieving success in all that we do. We believe that
diverse perspectives fuel bold ideas and lead to
transformative innovation. Our commitment to
diversity, equity, and inclusion (DEI) is not only a value
but also a strategic advantage that drives performance,
fosters collaboration, and accelerates growth.
See pages 34-39 for more.
1 The percentage includes number of successful trials out of all trials run for all
therapeutic candidates advanced through at least Phase 1 by PureTech or its
Founded Entities from 2009 onward.
2 Certain third-party trademarks are included. PureTech does not claim any rights to
any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of
schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing
Information, including Patient Information on COBENFY.com. Following the
acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb
and will be marketed as Cobenfy.
3 FTSE Women Leaders Review has set 40% women on both Board and in leadership
(defined as the Executive Committee and Direct Reports combined) target.
4 Board composition as of December 31, 2024.
5 Three out of seven directors were from an ethnic minority background on the Board
as of December 31, 2024.
Goal 12: Ensure sustainable
consumption and production patterns
We engage with an external sustainable
environmental solutions provider to
monitor and manage waste with a
particular focus on hazardous medical
waste management. The majority of our
biologically and chemically hazardous
waste is disposed of through conversion
to energy or for fuels blending
(see page 44).
Goal 3: Ensure healthy lives and
promote well-being for all ages
As a clinical stage biotherapeutics
company, contributing to good health
and well-being reflects our mission to
change the lives of patients with
devastating diseases (see pages 11-21).
We believe that delivering good health
requires equitable access to safe,
effective, quality and sustainable
medicines for all.
Goal 5: Achieve gender equality and
empower all women and girls
We are committed to improving the
diversity of our workforce by building
an inclusive culture (see pages 34-39).
We also demonstrate our commitment
to equality through the inclusion of
diverse patient population needs
through our unique approach to drug
development.
Goal 9: Build resilient infrastructure,
promote inclusive and sustainable
industrialization and foster
innovation
Innovation sits at the heart of what we
do at PureTech, and our success is a
result of our innovative and strong R&D
model (see page 9).
Goal 8: Promote sustained, inclusive
and sustainable economic growth,
full and productive employment and
decent work for all
We support our staff by ensuring
excellent working conditions and
offering a comprehensive benefits
package to all employees across our
business operations (see page 37). We
also drive economic growth and
productivity through our R&D and
business investments, as well as
partnering with local universities to
provide internship opportunities
(see page36).
Goal 10: Reduce inequality within and
among countries
We have implemented a series of
policies and practices to support equal
opportunity and treatment of all our
staff. We have a zero-tolerance policy
on discrimination in all its forms and
expect our value chain partners to do
the same (see page 35).
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Supporting the UN Sustainable Development Goals
The United Nations’ 17 SDGs, adopted by UN Member States in 2015,
provide a global blueprint for dignity, peace and prosperity for people
and planet. The goals are an urgent call to action for businesses to address
key global challenges by 2030.
The following are eight SDGs our ESG efforts are aligned with, and we
continue to be committed to delivering against each of the SDGs identified.
Supporting SDGs continued
Goal 13: Take urgent action to combat
climate change and its impacts
At PureTech, we monitor and report our
scope 1, 2 and 3 emissions and we
recognize that the ability to manage the
potential impacts of climate change on
our business and strategic plans are
among the factors that are integral to
the long-term success of our business.
To take this a step further, we
undertook a detailed analysis to
identify any climate-related risks with
the potential to have a strategic impact
on our business moving forward. The
analysis can be found in our Task Force
on Climate-Related Financial
Disclosures (TCFD) report (see
pages 54-58 for our 2024 TCFD
disclosures).
Goal 17: Strengthen the means of
implementation and revitalize the
global partnership for sustainable
development
At PureTech, we recognize the
importance of building partnerships
and collaborations to drive progress
on the SDGs.
For People: We partner with local
organizations in the world’s number 1
biotech hub to source a top tier
sustainable and diverse pipeline of
talent to deliver on our mission for
patients (see pages 34-39 for
more details).
For Patients: We collaborate with
patient resource groups, such as
Pulmonary Fibrosis Foundation (PFF)
to advance awareness, education and
clinical research initiatives for one of
the therapeutic areas in which we are
advancing medicines (see pages 30-33
for more details). By lending our
scientific expertise, we help broaden
the reach and impact of these groups in
building understanding and driving
funding for additional research.
As we look ahead, we remain committed to leveraging the power of partnerships across
the private, public and nonprofit sectors to deliver on our social mission and drive
progress on the SDGs most closely connected to our business.
PATIENTS
75%
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Patients
Patients
As pioneers in clinical stage biotherapeutics, our mission remains to address devastating diseases and improve patient health
worldwide through innovative medicines. In 2024, we continued to develop our programs through the expertise of our dedicated team
and in collaboration with our extensive network of scientists, clinicians and industry leaders. For details on our programs, please see
pages 11-21.To accomplish this goal consistently and ethically, we focus our sustainability efforts on three key areas that enable
patient support :
Commitment #1:
Addressing unmet
medical needs
Commitment #2:
Ensuring patient safety
Commitment #3:
Accelerating our
R&D engine to unlock
new medicines
IPF is a fatal disease with clear patient need; 75% in US
not on treatment primarily due to efficacy/tolerability
trade off with existing treatments
Despite the underserved patient population, IPF is
multi-billion-dollar market, with ~250,000 patients in
USA and EU52
PureTech’s deupirfenidone demonstrated strong,
consistent, & durable efficacy with favorable
tolerability; advancing into pivotal Phase 3
Deupirfenidone also has the potential to address multiple
underserved diseases, including progressive fibrosing interstitial
lung diseases (ILDs), a group of lung diseases closely related to
IPF, as well as other fibrotic conditions where there is human data
with pirfenidone suggestive of clinical benefit.
PureTech is committed to continuing the development of
deupirfenidone to improving the lives of those impacted by
IPF through research, advocacy, and innovation.
Our initiatives:
We undertake efforts to drive awareness of our investigational
treatments. Our initiative create inclusive resources to engage
both patients and caregivers in clinical trials.
Rare Disease Day
In February 2024, we celebrated Rare Disease Day in which
employees wore blue to show their support for pulmonary fibrosis
awareness. The purpose of this initiative is to help raise awareness
for the 6,000+ rare diseases that impact over 300 million people
globally, and to advocate for equitable access to diagnosis,
treatment, care and social opportunities.
Patient Advocacy Partnerships
PureTech is a sponsor of the Pulmonary Fibrosis Foundation’s
(PFF) Corporate Committee to fulfill a responsibility to the
pulmonary fibrosis community. Through this committee,
members work together towards solutions to issues that impact
patients, supporting the advancement of research, and
contributing to the education needs of the patient and
medical community.
In March 2024, we continued to sponsor PFF annual fundraiser,
Broadway Belts! The event raised over $550,000 in 2024 to
support the PFF’s programs and have raised over
$3 million to date.
Commitment #1:
Addressing unmet medical needs
Our team remains dedicated to providing therapeutics for unmet
medical needs. We leverage the substantial groundwork laid by
the biopharmaceutical industry, which has dedicated decades to
discovering novel modalities and proving efficacy in patients.
Despite these advancements, barriers have prevented important
new medicines from reaching their full potential. Our R&D
approach starts with a problem that has significant patient need
and we aim to unlock new classes of medicine by applying
innovative approaches and technologies to small molecules and
biologics that have demonstrated human efficacy but have fallen
short of meeting patients’ needs. With our cutting-edge R&D
efforts, we are targeting these gaps while creating long-term
value for both patients and shareholders see pages 9-10 for more
on our R&D model.
Demonstrated track record of inventing groundbreaking
treatments: Cobenfy™ 1
During 2024, the PureTech-invented therapeutic, Cobenfy™
(formerly KarXT), received U.S. Food and Drug Administration
(FDA) approval for the treatment of schizophrenia in adults.
(See page 16 for more on our case study with Cobenfy.)
Cobenfy was invented at PureTech to address a tolerability
challenge that had held back a potential new class of medicines
for the treatment of neuropsychiatric conditions, such as
schizophrenia.
The FDA approval of Cobenfy is a testament to our unique R&D
engine that creates and develops treatments to target unmet
patient needs. We apply this approach across our portfolio and
will continue to leverage this successful drug development model
as we enter our next phase of innovation to offer a positive impact
for patients.
Making progress in the fight against idiopathic pulmonary
fibrosis (IPF)
Our most advanced therapeutic candidate, deupirfenidone
(LYT-100), is being developed for the potential treatment of IPF.
We are excited for the potentially significant impact we can offer
patients in need with this program. In December 2024, we
announced positive Phase 2b trial data from this program, which
highlight its potential to become the new standard-of-care
treatment for IPF. (See pages 11-13 for details on PureTech’s
deupirfenidone program)
1 Note: Certain third-party trademarks are included here; PureTech does not claim any
rights to any third-party trademarks.
COBENFY™ (xanomeline and trospium chloride) is indicated for the treatment of
schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing
Information, including Patient Information on COBENFY.com. Following the
acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb
and will be marketed as Cobenfy.
2 GlobalData Epidemiology and Market Size Search, EU5=United Kingdom, France,
Germany, Italy and Spain.
32 PureTech Health plc Annual Report and Accounts 2024
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Patients
Patients
Patients
When sponsoring an Investigational New Drug (IND) application,
we acknowledge our responsibility to both participants and the
regulatory agencies who put their trust in us to act responsibly.
We have a robust governance framework in place to ensure
patient oversight which includes effective policies and protocols
such as our Safety Management Plans and Medical Monitoring
Plans, which helps us to monitor, review and act on any incidents.
All protocols are compliant with ICH E6 (R2) per FDA regulations
and most of our studies have Independent Data Safety
Monitoring Committees.
Clinical trial participants are made fully aware of all risks involved
prior to participating in a clinical trial. To confirm this, we ensure
that every patient has provided informed consent of their
willingness to participate through a signed voluntary
commitment. Our informed consent requirements are set out in
the PureTech Clinical Research Policy.
We also rely on the use of human biological specimens to develop
our innovative therapies through clinical trials, which require
informed consent. Our Human Biological Specimens Policy
specifies our commitment to respecting both donors and the
specimens they provide and that collecting, obtaining, storing
and using human biological samples must be obtained
through consent.
Our President is responsible for ensuring that PureTech follows all
US and applicable international regulatory requirements and
standards and applicable bioethics principles. In 2024, there were
no FDA sponsored inspections related to clinical trial
management and pharmacovigilance that resulted in PureTech
receiving Voluntary Action Indicated (VAI) and Official Action
Indicated (OAI) from the FDA.
Bioethics: R&D
Our ethical and quality management standards, allow for
continuous improvement through R&D, while helping us to
maintain high standards of product quality and safety in
compliance with relevant regulations at each phase. In 2024,
we spent $69 million on research and development projects
to develop new and innovative therapeutics (see page 73 for
details on R&D expenses).
As we enhance our R&D strategy, we continue to assess and
identify areas for improvement across our clinical trial safety,
quality and risk management processes. We have robust policies
relating to Good Manufacturing Practices (GMP) and regulatory
inspections to reinforce ethics into our processes.
Environmental factors remain integral in our R&D and further
information on our waste data can be found on page 44. We also
strive to implement green chemistry and eco-design principles.
For example, optimizing large-scale drug substance processes
to replace more hazardous solvents that negatively impact
the environment.
Our SVP of Medical Affairs, Camilla Graham, MD, MPH, plays a
vital role in advancing deupirfenidone, and collaborating with
advocacy groups to support the IPF community:
IPF Awareness Month
In September 2024, we continued our efforts to promote
Pulmonary Fibrosis Awareness Month to raise awareness of IPF
and to serve as inspiration for our employees. We participated in
an awareness walk, hosted a webinar, and made a donation of
$7,000 to the PFF. On PFF National Walk Day, our team came
together to raise awareness and funds for those affected by this
devastating disease. We are proud to support organizations like
PFF, which is dedicated to accelerating new treatment
development for people living with IPF.
Commitment #2:
Ensuring patient safety
Patient safety remains our top priority and informs all aspects of
our work. To ensure clinical trial and R&D integrity, our research
team works with external partners to adhere to strict procedures,
processes and guidelines. Responsible development practices
and diligent oversight guide our efforts to develop innovative
medicines that have the potential to transform patient lives.
Delivering Safe Clinical Trials
We conduct all clinical trials according to the highest standards of
ethics and safety. All our trials follow the standards of the
International Conference on Harmonization (ICH) Good Clinical
Practice guidelines and the World Medical Association (WMA)
Declaration of Helsinki on the Ethical Principles for Medical
Research Involving Human Subjects.
To ensure compliance and rigor in our approach, we seek
approval from Independent Ethics Committees and local
regulatory authorities on all investigative medicine trials. In
addition, our employees who are engaged with clinical trials,
either as clinical staff or their designees, are responsible for
ensuring full compliance with best clinical practice.
Bioethics: Animal Research
Animal research continues to play a vital and irreplaceable role in
progressing drug discovery, as it assists scientists in addressing
biological uncertainties.
PureTech conducts animal testing only when necessary to further
the development of therapeutics. This is mandated by regulatory
bodies before human trials of new medications can proceed to
ensure the safety of clinical trial participants.
We follow the guidelines outlined under the USDA Animal
Welfare Act and are dedicated to the humane and ethical
treatment of animals. Studies involving animals are evaluated and
approved by the Executive Team and are carried out at external
qualified and certified vendors that fulfil our standards and
anticipated practices for animal care, welfare and handling.
Whenever we contemplate animal testing, we are devoted to
applying the replacement, reduction and refinement of animal
studies (3Rs):
— Replace
We use alternative methods to animal testing
wherever possible.
— Reduce
We use the minimum number of animals in trials.
— Refine
We minimize pain, suffering and distress, and improve the
welfare of animals used in trials.
Bioethics: Quality Management
We have a robust Quality Management System (QMS) in place to
oversee our raw material suppliers. Our QMS consists of various
Standard Operating Procedures (SOPs) which describe our
controlled processes that result in consistent quality control as
per PureTech’s quality system. SOPs include, but are
not limited to:
— Clinical Quality Audit Management
— Clinical Quality Event Management
— GMP/GLP Vendor Selection and Qualification
— GMP/GLP Vendor Audit Procedure
— Clinical Operations Safety Monitoring & Management (via
Safety Vigilance Distribution tool)
— Nonconformance Procedure for GMP Activities
To ensure our QMS is robust and up to date, a risk assessment
protocol is built into our procedures for vendor audits, vendor
oversight, and data integrity for Chemistry, Manufacturing, and
Controls (CMC). This allows us to quickly determine vendor risks
and accelerate new vendor onboarding to meet
business demands.
Ensuring Drug Efficacy and Safety
None of PureTech’s wholly-owned programs are currently
on the market.
In 2024, PureTech received no FDA warning letters, no products
were delayed due to a lack of regulatory approval and no product
recalls took place.
As we continue to advance our therapeutic candidates towards
commercialization, we will continue to practice our clinical
protocols diligently to ensure ongoing safety and compliance
across our operations and clinical trials.
Commitment #3:
Accelerating our R&D engine to unlock new medicines
R&D has been the bedrock of progress in global health and a key
component in the successful and innovative discovery and
development of our therapeutic candidates.
Our strong R&D model - centered on three guiding principles -
has generated a robust pipeline to date, enabling us to continue
to fulfill our unyielding commitment to delivering potentially
life-changing new therapies for patients in need.
— Target areas with significant patient need to offer
transformative patient benefit
— Develop solutions driven by validated efficacy
— Advance therapeutics through rigorous and de-risked paths
to unlock new classes of medicine
We will continue to leverage this model, our scientific insight and
our network of scientists, clinicians and industry leaders to unlock
new medicines and deliver highly innovative therapeutics
for patients.
“Patient advocacy groups play a critical role in ensuring
that people living with pulmonary fibrosis are educated
about their disease, understand what to expect from
medical care, share tips to manage side effects of
medications, raise awareness about clinical trials, and
provide a space for caregivers to receive needed support.
There are fantastic local and national pulmonary fibrosis
advocacy organizations that do important work and it’s
imperative that we offer our support.”
PEOPLE
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People
“People are the key to our success. Our people
innovate to create life-changing medicines,
delivering a lasting positive impact for patients.
Our exceptional team is the foundation of our
corporate and ESG strategy and we believe that
creating an inclusive working environment is
fundamental to creating a collaborative space to
innovate, grow and excel. I am truly proud of
what we are accomplishing together and
inspired by my colleagues dedication to
improving the lives of patients.”
Bharatt Chowrira, CEO
Cultural Diversity
It is important to us that alongside our efforts to champion
gender equality, we promote and celebrate cultural diversity
within our firm and the communities we serve.
We are compliant with the US Equal Employment Opportunity
Commission’s requirement to file an annual EEO-1 Report,
disclosing employment data about job categories as well as the
ethnicity, race and gender of our employees. This process
ensures that we maintain transparency and accountability across
our business and allows us to identify target areas for further
improvement regarding diversity, equity and inclusion.
In 2024, our employee-led Cultural and Social Committee
continued its work to support the enhancement of cultural
diversity in our workplace. Established in 2021, this collaborative
committee dedicates itself to creating programs that celebrate
diversity, promote equality, and foster respect and inclusion.
Examples of the Committee’s initiatives in 2024 included:
Celebrating Black History Month
In February 2024, we celebrated Black History Month to honor
achievements by Black Americans and a time for recognizing their
central role in U.S. history. The 2024 theme, Black Health and
Wellness, honored the contributions of Black scholars and
medical practitioners in Western medicine, as well as traditional
healing practices across the African Diaspora. Throughout the
month, we highlighted influential Black scholars and medical
practitioners whose work has made a lasting impact on the
scientific community.
Marking International Women’s Day
In March 2024, we celebrated International Women’s Day,
a global day dedicated to recognizing the social, economic,
cultural, and political achievements of women while calling for
action to accelerate gender equality. The 2024 campaign aimed
to collectively forge a more inclusive world by challenging
stereotypes, calling out discrimination, and promoting inclusion.
To mark the occasion, we shared educational materials and event
resources companywide, highlighting the history of women’s
rights and their invaluable contributions to society, as well as
current ways in which colleagues can get involved in supporting
this mission. We are proud to play our part in this important global
initiative by commemorating women’s achievements, raising
awareness about discrimination, and encouraging action to drive
gender parity.
Commitment #1:
Building a diverse, equitable and inclusive workplace
Diversity, Equity and Inclusion
While our recruitment efforts and appointments are based on
merit, we believe that diverse perspectives fuel bold ideas and
lead to transformative innovation. Our commitment to diversity,
equity, and inclusion is not merely a value, but also a strategic
advantage that drives performance, fosters collaboration, and
accelerates growth. That is why we ensure our colleagues are
treated with utmost fairness, kindness, and respect.
Under PureTech’s Equal Employment Opportunity Policy, we
are strictly committed to treating all employees and qualified
applicants equally regardless of their race, color, religion, gender
or gender identity, sexual orientation, nationality, ancestry, age,
physical or mental disability, veteran or military service, or any
other status protected by law.
Gender Diversity
It is a deep source of pride that we champion gender diversity and
equality in the medical industry, as well as in our workplace.
We are strongly committed to promoting diverse teams across
both our leadership and employee level, to ensure an equitable
environment in the business. We consistently take steps forward
in integrating diversity at a leadership level, as we believe that a
diverse board and senior management team leads to stronger
performance, retention of exceptional talent and greater
shareholder value.
Gender
Total
employees
Senior
management
and their direct
reports3
Board
2023
2024
2023
2024
2023
2024
Total
90
56
31
21
7
7
Female
58%
54%
48%
38%
43%
43%
52
30
15
9
3
3
Male
42%
46%
52%
62%
57%
57%
38
26
16
15
4
4
Note: The 2024 gender diversity on Manager level was -17% compared to the year prior,
half of which was attributed to the Seaport Therapeutics transition. See Recruitment
and Retention on page 36 for details on Seaport spinout and team transition.
3 This references senior management who we deem to be our Management Team.
See page 85 of our 2024 Annual Report and Accounts for the current listing of
our Management Team.
The unwavering dedication and hard work of our people allows us to deliver cutting-edge, innovative therapeutics that benefit
patients’ lives and bring long-term value for our stakeholders.
It is our firm belief that an inclusive and supportive working environment is fundamental to creating a collaborative, safe space where
our colleagues can grow and excel to continue to fuel our innovations. To achieve this, we are committed to delivering on the following
four pillars.
Our employees are predominantly located near our headquarters in Boston, MA, with three individuals based in London. As of
December 31, 2024, we had a total of 56 employees. 41% of our employees work in R&D roles.
Commitment #1:
Building a diverse, equitable
and inclusive workplace
Commitment #2:
Promoting employee
development to attract
and retain the best talent
Commitment #3:
Maintaining a robust
Health & Safety (HS) and
Employee Health and
Safety (EHS) program
Commitment #4:
Strengthening engagement
and collaboration between
people, communities
and partners
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People
People
We source our talent through our outstanding network of world
leading scientists. We also source emerging talent from local top
tier universities in Boston – the heart of the world’s biotech hub –
as well as through partnerships with local university cooperative
education programs. Our engagement in cooperative education
programs offers students real-world experience aligned
with their academic pursuits. By welcoming undergraduate
co-op students for six-month paid internships in our research
department, we continue to fortify our talent acquisition pipeline.
Additionally, active participation in life science career fairs
enables us to identify and attract skilled candidates, ensuring
we have a strong dynamic team working towards our
innovative initiatives.
Beyond this, we are passionate about providing opportunities to
those hoping to pursue a career in life sciences. We continue to
be a participant of Project Onramp, which aims to bridge the
opportunity gap for promising underserved students via paid
summer internships. In 2024, we welcomed total of 3 interns
across institutions.
Training and Development
We uphold the value of human capital development at PureTech,
encouraging managers and employees to discuss job
performance and goals on an informal, day-to-day basis while
also conducting formal performance evaluations annually. We
encourage ongoing communication and feedback between
employees and their supervisors, with progress monitored
through an online portal. This enables employees and managers
to have clear visibility over their goals throughout the year, which
in turn facilitates ongoing constructive feedback and
development. In 2024, 100% of our employees received
performance appraisals.
For PureTech, career development goes beyond providing
opportunities for promotions. We believe an effective career
development program entails providing opportunities to
enhance employees’ competitive capabilities, broaden their
expertise and deepen their knowledge. Proactive support of
employee career development and training opportunities
supports our business goals and our ability to research and
develop promising therapeutic candidates. To achieve this, we
offer an extensive range of training and also fund participation
in development programs on a case-by-case basis. Some of the
development trainings include:
IT training:
— Mandatory annual cybersecurity training for all employees,
with follow- on assignment to be completed
HR training:
— Mandatory training at onboarding covering PureTech
practices and policies
— Special training based on job function; e.g., employees
who perform GxP work are assigned matrices by the Quality
Assurance department
— Leadership coaching for managers
Commemorating Juneteenth
In June 2024, we honoured Juneteenth, the day dedicated to
commemorating the emancipation of slavery in the US. To learn
more about the legacy of this historical event, we provided
resources to employees highlighting the context, events and
significance of Juneteenth. As part of this celebration, we invited
a local historian for a Lunch and Learn session, who shared the
inspiring story of Quock Walker and other heroes who played an
essential role in the American history of emancipation.
Commitment #2:
Promoting employee development to attract and retain the
best talent
Human capital is vital to a successful business operation to
support the identification of new opportunities, and innovations.
We depend on our people, their scientific knowledge, skills and
commitment to thrive. As such, the personal development,
retention and recruitment of industry-leading talent is one of
our top priorities at PureTech. This priority is linked to our core
business strategy by ensuring we have a strong workforce which
remains at the forefront of our industry in developing new
therapeutic candidates.
Recruitment and Retention
As our programs advance and our business rapidly evolves, the
PureTech team has evolved with it over the course of years. In
2024, we completed a successful launch of Seaport Therapeutics
to house our CNS pipeline, with an oversubscribed Series A (see
page 17 for details). As part of this, the team involved with the
CNS pipeline transitioned to Seaport Therapeutics to maintain
continuity, which is reflected in the figure below.
2022
2023
2024
Total number of employees
111
90
56
Year-over-year growth (%)
16.8%
(18%)
(37%)
Employee turnover (%)
30.62%
44.1%
28%
Note: The 2024 YoY growth was -37%, of which 20 percentage-point was attributed to the
Seaport Therapeutics transition.
While we are fundamentally aware of the importance of a
range of benefits and employee supports, we also believe this
must be accompanied by attractive remuneration. We provide
appropriate market-based compensation and incentives
in alignment with the goals of the organization and its
shareholders. Moreover, PureTech’s performance share
plan provides the majority of employees stock options
upon joining the organization.
As of 2024, our company has not had any employees who
are covered by collective bargaining agreements or are
affiliated with trade or labor unions. While we currently operate
without such arrangements, we respect the rights of our
employees and support their freedom of association and
collective bargaining.
Commitment #3:
Maintaining a robust Health and Safety (HS) and Employee
Health and Safety (EHS) program
It is our unyielding commitment to provide a healthy and safe
working environment for our employees that supports their
physical and mental wellbeing. We continue to prioritize the
health and safety of our team, alongside implementing
comprehensive and regularly updated action plans to ensure
business continuity. Our comprehensive employee safety
programs are two pronged: HS program and EHS program.
HS Governance
The HS program ensures workplace safety and health issues for
all employees through regular internal communication channels
such as manager-employee meetings, bulletin boards,
memoranda and other written communications. The topics
covered under the HS program includes workplace injuries,
communicable illness in the workplace, reasonable
accommodation for qualified individuals with disabilities,
security, workplace violence prevention, privacy expectations,
and emergency closings. Employee safety is of utmost
importance to the business and any violation of our safety
standards may result in disciplinary action.
Employee Benefits
The physical, financial, social and emotional well-being of our
employees is paramount to us at PureTech. To support this, we
provide a range of benefits for our employees.
An enrollment session is held annually with our benefits
administrator, Baystate Benefit Services, to help our employees
understand how they can make best use of the benefits available
to them. Our benefits models is US orientated, since this is where
the majority of our employees are based. We provide an
extensive benefits package, including:
— Premium health plan with an option to choose from
PPO or HMO plan
— Health Reimbursement Account (HRA)
— Pre-tax parking and transit benefits
— Dental plan
— Benefits continuation (COBRA)
— Gym membership in addition to an onsite gym facility
— Vision plan
— Paid parental leave (Up to 18 weeks)
— Entertainment discounts
— Short-term and long-term disability plan
— Onsite nursing and wellness room
— Employee led Social Committee
— 401(k) retirement plan with 3% non-elective contribution
by the company
— Employee led Cultural Committee
— Life insurance
— Performance share plan
— Onsite free snacks & drinks
— Medical FSA
— One-on-one financial coaching
— Flexible working plans
— Dependent Care FSA
— Technology reimbursement program
— 24/7 unlimited assistance by ComPsych on resources and
information on life’s challenges
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People
People
Commitment #4:
Strengthening engagement and collaboration between
people, communities and partners
Stakeholder engagement and collaboration is the foundation of
innovation and key to unlocking new solutions that profoundly
transform the lives of patients.
A positive and interconnected company culture supports this
essential engagement and collaboration which drives our
business. We are proud of our efforts to promote a cohesive
company culture among our stakeholders, while ensuring we
make a meaningful difference to the communities closest to us.
Employee Engagement
We are proud of our series of initiatives to promote employee
engagement, which are met with resounding enthusiasm and
appreciation from our colleagues:
Employee Intranet, a Connection Hub
— Our Employee Intranet features important company
information and employee resources in one easily accessible
portal, including company news, new hire highlights,
upcoming company events, employee directory, a social
gallery and an opportunity to provide feedback.
Employee Value Recognition
— Employees are encouraged to utilize the Employee Value
Recognition section of the Employee Intranet platform, where
employees can nominate their colleagues for their hard work
and recognize the ways in which they uphold PureTech’s core
values. All submitted value recognitions are then shared and
celebrated at the following companywide town hall.
Employee-led Cultural and Social Committee
— Our dedicated Cultural and Social Committee, run by our
employees, plan and host DEI-related programs and events,
with the aim of fostering engagement and cementing a sense
of community and belonging for our people.
Open-door Policy
— We have an open-door policy to encourage employee
feedback and to better understand our employees’
needs, concerns, and satisfaction rate. In 2024, we held a
series of employee value and cultural workshops during a
company retreat.
EHS Governance
The EHS program ensures adherence to all EHS-related activities
including employee safety training, lab safety protocols and
emergency action planning for all lab staff. While PureTech did
not have active lab activities in 2024, we continue to maintain a
robust program.
Our EHS activities are overseen by an Emergency Coordinator
and Safety Officer per the requirements of OSHA, with support
from an external EHS expert who is certified through the National
Registry of Certified Microbiologists (NRCM) and is a Certified
Biosafety Professional (CBSP) and Registered Biosafety
Professional (RBP) through the American Biological Safety
Association (ABSA).
As well as overseeing day-to-day activities, the EHS team reviews
EHS protocols on an annual basis, or when emerging reasons
demand a process review, such as a lab incident, new project, or
the introduction of a new piece of equipment.
We also provide a mandatory safety training program for all our
staff and conduct regular internal audits to maintain industry-
leading health and safety standards.
Reporting on Incidents
PureTech has not had any HS incidents in the last 3 years.
Community Engagement
As a longstanding member of Boston’s thriving biotech hub, we
are committed to giving back to our community in as many ways
as we can, to help make a difference. In 2024, we contributed to
several community initiatives and charitable events,
which included:
Annual Backpack Drive
— We once again partnered with Life Science Cares for our
annual Backpack Drive, this year supporting West End House.
This organization empowers youth from Boston’s most under-
resourced neighbourhoods, helping them reach their full
potential through academic support, arts exploration, healthy
living, and leadership development. PureTech provided all
necessary supplies, and employees came together to help fill
the backpacks, ensuring students have the tools they need for
a successful school year.
Life Science Cares Impact Breakfast
— In April 2024, we sponsored the Life Science Cares Impact
Breakfast, the organization’s largest annual fundraiser
focused on combating poverty in Boston. Our support
contributed to raising awareness, driving engagement, and
securing essential resources to advance this vital cause.
The Greater Boston Food Bank – Hunger Free Holidays
Campaign
— In November 2024, we participated in a fundraiser for the
Hunger Free Holidays campaign hosted by the Greater
Boston Food Bank, to raise awareness and funds during
the holiday season for the 1 in 3 people who are facing food
insecurity. We were proud to match employee donations for
a total of approximately $1,500 in support of this cause.
Promoting Employee Wellbeing
At PureTech, we believe that wellbeing is critical to developing a
sustainable and happy workplace. This includes ensuring
physical, emotional, financial, social factors as well as a sense of
community belonging, and purpose are prioritized. In 2024, we
continued to organize various initiatives and activities to promote
employee wellbeing:
PureTech Swag Stories
— In 2024, we launched a new internal campaign called
“Swag Stories”. This initiative aims to celebrate our amazing
community and the incredible adventures our staff embark on
as they proudly represent PureTech by wearing the Company
logo on t-shirts, jackets, and hats – across continents – from
Mount Everest, Iguazu falls, Gran Paradiso, Machu Picchu, St.
Lucia, the 2024 Olympics, and more. The campaign provides
a fantastic opportunity to connect with colleagues, celebrate
our shared experiences, and showcase the diverse and
dynamic spirit of our team.
Employee Retreat
— In 2024, we organized a companywide offsite retreat locally
in Massachusetts, bringing all employees together to foster
connection, collaboration, and camaraderie. Our goals were
clear—bridge the gap between hybrid and remote teams,
build trust, and create meaningful experiences that extend
beyond the workplace. The retreat was filled with impactful
moments—trusting teammates in challenging activities,
overcoming fears with each other’s support, and realizing
the power of teamwork. These experiences reinforced key
lessons: trust your colleagues, embrace challenges with
confidence, and recognize that our collective efforts can
exceed even the highest expectations. This offsite event
strengthened our team’s cohesion, encouraged knowledge-
sharing, and reinforced the trust essential to PureTech’s
continued success.
PLANET
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Planet
“We have taken significant steps to monitor
our environmental footprint, and we continue
to look for ways to reduce our environmental
impact. Our commitment to the planet remains
unchanged. The leadership team understands
our obligation to protect nature and the planet
for future generations. Through accountability
and transparency, we aim to drive meaningful
progress at our business and play a role in
wider efforts to minimize impacts on
the environment.”
David Carney, VP and Head of Operations
Mandatory emission sources “Other fuel used on site” and
“Company-owned vehicles” have been omitted from reporting
as they are not applicable to PureTech Health. While listed on the
London Stock Exchange, PureTech operates in the United States.
Therefore, all carbon dioxide emissions and energy consumption
figures pertain to the Company’s global operations and
occur offshore.
Methodology
The following methodology was applied by Verco in the
preparation of this report:
— All calculations were undertaken with reference to the
guidance given in The Greenhouse Gas Protocol (‘GHG
Protocol’) published by the WBCSD and the WRI, and the
Environmental Reporting Guidelines published by the
UK government.
— Appropriate emission factors, sourced from the UK
Department for Environment, Food and Rural Affairs (‘DEFRA
2024’), Emissions & Generation Resource Integration
Database (‘eGRID’, 2023), Green-e Residual Mix Emission
Rates (‘Green-e’, 2024), and United States Environmental
Protection Agency (‘US EPA’, 2024) were applied to data
provided by the Company to calculate GHG emissions,
expressed in tonnes of CO2 equivalent (tCO2e).
— As best practice, the emission factor sourced from USEPA
(2024) for Natural Gas is the average of “methane – fossil” and
“Nitrous Oxide” greenhouse gases to account for emissions
from fossil fuel sources.
— Both location and market-based Scope 2 emissions have been
calculated and are presented in this report.
— Appropriate energy conversion factors, sourced from DEFRA
(2024), were applied to data provided by the Company to
calculate energy usage, expressed in kilowatt-hours (kWh).
— Where data or information was unavailable reasonable
assumptions have been made.
– As supplier-specific generation mix information was
unavailable, eGRID (2023) and Green-e (2024) residual
fuel mix emissions factors have been used to calculate
market-based emissions for all electricity consumption not
evidenced as 100% renewable.
Commitment #1:
Transparent GHG emissions disclosures
The impact of climate change directly impacts human health.
We understand it is the responsibility of everyone, including
businesses, to mobilize and fight the worst impacts and keep the
world aligned with a 1.5°C pathway. As a clinical stage
biotherapeutics company with no approved therapeutics on the
market, our current day-to-day impact on the
environment is limited.
While our impact is limited, we are committed to transparently
reporting on our GHG emissions. We are also committed to
setting a climate-related target when the state of operations is
sufficiently advanced, such as entering commercial stage, to
ensure any such target is meaningful. At this stage, we believe
that our operations have minimal environmental impact (see
pages 54-58 for details of our TCFD report) but remain committed
to monitoring this impact over time.
Streamlined Energy & Carbon Reporting
The section below, prepared by Verco, includes our fifth year of
reporting under the Streamlined Energy & Carbon Reporting
(‘SECR’) requirements. Verco is a B Corp certified, leading
sustainability and carbon consultancy with a 30-year track record
supporting its clients to understand policy risks and delivering
compliance services. Verco draws upon its considerable
expertise and experience to ensure that the requirements of
the SECR regulation are met.
The reporting period covered in this SECR report is the
same as the Company’s financial year, January 1, 2024, to
December 31, 2024.
Reporting Boundary and Emissions Sources
We have reported on all emission sources required under The
Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018 (‘Regulations’).
An operational control approach has been used to define the
reporting boundary. This is the basis for determining the Scope 1,
2 and 3 emissions for which the Company is responsible.
The emissions sources reported for the year ending
December 31, 2024 are:
— Scope 1: Natural gas combustion on site;
— Scope 2: Purchased electricity for our own use;
— Scope 3: Business travel undertaken in employee-owned
cars/short term hire cars, waste, water, business travel
(flights, rail, hotel stays), electricity T&D and all well-to-tank
emissions associated with the relevant sources. Please
note that Scope 3 is voluntary disclosure going beyond the
Regulation requirements.
The growing pressures on our planet’s natural resources, biodiversity and environment require determined action from all corners of
society. While PureTech’s impact on the environment is small relative to many other companies, we do not ignore our responsibility to
future generations.
The deep interconnection between planetary and human health continues to reveal itself through trends like shifting disease vectors,
extreme weather events, changing pollen patterns, and disrupted access to clean air and water. As climate change progresses, we
have an increased understanding of how environmental factors directly impact public health outcomes. At PureTech, we recognize our
responsibility to account for and mitigate the detrimental effects our operations may have on communities already burdened by issues
like pollution, biodiversity loss, water scarcity, and the mounting health consequences of climate change. By comprehensively
analyzing our environmental footprint, we aim to benefit both people and planet.
While our impacts on the environment are limited as a result of the current scale of our operations and phase of our business, we
remain committed to monitoring and reducing the environmental footprint that results from our operations. This means continuing to
be aware of biodiversity and natural capital impacts and keeping up to speed with the latest regulations and reporting requirements.
In addition, we are taking action by addressing the following key areas:
Commitment #1:
Transparent GHG
emissions disclosures
Commitment #2:
Strengthen our waste
management process
Commitment #3:
Sustainable facility
operations
42 PureTech Health plc Annual Report and Accounts 2024
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Absolute Emissions
The total Scope 1, 2 and 3 GHG emissions from the Company’s operations ending in December 31, 2024 were:
— 138.9 tonnes of CO2 equivalent (tCO2e) when using a ‘location-based’ calculation methodology for Scope 2 emissions;
— 139.3 tonnes of CO2 equivalent (tCO2e) when using a ‘market-based’ calculation methodology for Scope 2 emissions.
Total Energy Use
Electricity/fuel
Mileage
Electricity
(kWh)
Gas
(kWh)
Petrol
(kWh)
Total Energy Use
(kWh)
2024
245,017
17,496
75,259
337,772
2023
222,667
21,272
138,784
382,723
2022
1,626,053
46,059
0
1,672,112
2021
519,694
85,577
73,856
679,127
2020
505,075
133,430
513
639,018
Note: Consistent with the Company’s consolidated financial statement, the portion of the FY2024 emissions report included our controlled Founded Entity, Seaport Therapeutics,
data. Seaport was deconsolidated in October 2024. FY2023 mileage data has been updated to exclude the building-owned equipment emissions PureTech did not use.
Intensity Ratios
As well as reporting absolute emissions, intensity ratios for the Company’s emissions have been calculated. The Company’s GHG
emissions intensity is expressed as tonnes of CO2 equivalent per m2 of floor area and tonnes of CO2 equivalent per full time equivalent
employee (‘FTE’). These were selected as the most appropriate metric for the Company. These metrics are also consistent with
previous years.
The intensity ratios considering all Scope 1, 2 and 3 emissions are as follows:
— 0.03 tCO2e per m2 of total floor area and 2.48 tCO2e per FTE (location-based method)
— 0.03 tCO2e per m2 of total floor area and 2.49 tCO2e per FTE (market-based method)
The intensity ratios for FY2024 have been calculated using a total floor area of 4,573 m2 and a total number of 56 full-time employees.
Baselines and Progress
The Company’s total emissions, both location-based and market-based, have decreased year on year by 16.5%. The Company’s
absolute electricity emissions have seen a 10.2% year-on-year increase using both the location-based method and the market-based
method for Scope 2. There has been a fall in absolute emissions across all other emissions sources, with the biggest decrease being
due to lower gas consumption across PureTech’s premises, such that Scope 1 emissions have decreased by 17.9%. Total energy use
(kWh) has decreased by 11.7% year-on-year.
A new emission source, Scope 3 Hotel Stays For Business Travel, has been included in reporting for FY2024. However, the overall Scope
3 emissions have decreased by 30.0% year-on-year.
Key figures
20244
2023
2022
2021
GHG emissions
tCO2e
tCO2e /
FTE
tCO2e /
m2
tCO2e
tCO2e /
FTE
tCO2e /
m2
tCO2e
tCO2e /
FTE
tCO2e /
m2
tCO2e
tCO2e /
FTE
tCO2e /
m2
Scope 15
3.2
0.06
0.00
3.9
0.04
0.00
10.6
0.05
0.001
17.7
0.08
0.002
Scope 2 (location-based)6
60.1
1.07
0.01
54.6
0.61
0.01
401.2
2.06
0.05
116.4
0.56
0.02
Scope 2 (market-based)7
60.5
1.08
0.01
54.9
0.61
0.01
402.6
2.06
0.05
116.9
0.64
0.02
Scope 38
75.6
1.35
0.02
108.0
1.20
0.02
251.9
–
–
329.6
–
–
Total GHG emissions
(using location-based
Scope 2)
138.9
2.48
0.03
166.4
1.85
0.03
663.7
–
–
463.7
–
–
Total GHG emissions
(using market-based
Scope 2)
139.3
2.49
0.03
166.7
1.85
0.03
665.0
–
–
464.2
–
–
Note: The FY2023 figures for Scope 2 and Scope 3 emissions have been updated to align the methodology used in previous and current year reporting: i) emissions from employee-
owned electric vehicles are classified as Scope 3 (rather than Scope 2) and ii) WTT and T&D emissions for electricity are counted only once (rather than for both location-based and
market-based electricity).
4 Total floor area: 4,573 m2 (FY2024) and 5,018 m2 (FY2023). Total number of full-time employees: 56 (FY2024) and 90 (FY2023).
5 Scope 1 being emissions from the Company’s combustion of natural gas.
6 Scope 2 (location-based) being emissions from electricity purchased for the Company’s own use.
7 Scope 2 (market-based) being emissions from electricity purchased for the Company’s own use.
8 Scope 3 being fuel and electricity used in personal/hire cars for business use, business travel, water, waste, well-to-tank emissions, and T&D emissions associated with electricity.
Understanding the Indirect Environmental Impacts of our Business Activities
While our direct environmental footprint as a clinical-stage biotherapeutics company is relatively modest, PureTech recognizes
the broader influence we can have through our strategic investment decisions. Guided by our comprehensive ESG framework,
we consider environmental and social impacts when assessing potential partner companies, in addition to governance and
ethical practices.
We prioritize business partners that demonstrate accountability through ambitious goals, transparent reporting and full compliance
with all applicable regulations related to topics from emissions to waste, energy usage to diversity, equity and inclusion.
While our own operations may have minimal ecological impact directly, the companies we choose to fund create ripples across
industries and communities worldwide. By selecting partners based on ESG initiatives, we amplify our positive influence. Our
investment decisions shape a rising tide that lifts environmental stewardship, social progress and ethical business practices.
44 PureTech Health plc Annual Report and Accounts 2024
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Commitment #2:
Strengthen our waste management process
At PureTech, we are committed to reducing our operational waste, recycling and reusing where possible and ensuring the safe disposal
of hazardous material. We partner with Veolia Environment for the management of our hazardous medical waste. Veolia’s Voluntary
Protection Programs (‘VPP’) are rated by OSHA and all staff are HAZWOPER certified. In 2024, PureTech produced 3,800lbs (1,724kg) of
biologically and chemically hazardous waste due to the closure of our lab operation, which initiated in 2023. The majority of this waste
is disposed of through incineration or for fuels blending. Full details of waste generated, and treatment methods are shown in the
tables below.
PureTech hazardous waste emissions (weight in lbs)
Hazardous
Non
Hazardous
Regulated Medical
Waste
Total
2024
1,813
735
1,252
3,800
2023
1,739
2,094
3,989
7,822
2022
780
334
3,343
4,457
2021
1,061
649
6,661
8,371
2020
834
115
5,966
6,915
PureTech hazardous waste treatment methods (weight in lbs)
Fuel
Blending
Incineration
Treatment/
Stabilization
Waste to
energy
Landfill
Recycle
Total
2024
1,126
1,282
–
1,380
–
12
3,800
2023
1,573
4,246
29
1,680
45
249
7,822
2022
360
217
–
3,830
–
50
4,457
2021
858
78
133
5,776
231
1,296
8,372
2020
666
48
160
5,567
75
400
6,915
Note: FY2023 figures have been updated to include all appropriate vendors.
PureTech will continue to monitor these output levels as part of a commitment to keep hazardous waste to a minimum.
Planet
Commitment #3:
Sustainable facility operations
PureTech’s headquarters at Innovation Square, 6 Tide Street in Boston, is a brownfield redevelopment site offering many
environmental benefits.
Innovation Square consolidates PureTech’s laboratory and business operation functions in one building, reducing the need for
employees to commute between multiple locations.
The building is in close proximity to public transportation and is equipped with ample bicycle storage – twice the amount required by
LEED for the building’s size – to encourage green commuting. The building also has on-site shower and changing facilities for
cleanliness and hygiene.
Drivers of electric vehicles (EVs) have access to four charging points in the parking area. Employees are also encouraged to take public
transportation to work via a travel subsidy, while an office shuttle bus runs to and from the major Boston train stations.
The building is certified LEED Silver. The fit-out incorporates a range of elements to encourage efficient resource use including:5
— A roof featuring reflective materials to reduce the building’s heat island effect.
— Water use reduction of up to 39% through features such as low-flow toilets.
— Water-efficient landscaping using hardy and drought tolerant plants to reduce irrigation by 50% over a midsummer baseline case.
— Design and model expected to use 35% less energy than the LEED baseline across heating, cooling, lighting, hot water production
and other operational functions.
— Designed to generate 47% fewer greenhouse gas (GHG) emissions than the AIA 2030 Challenge baseline, equivalent to an annual
reduction of 2,500 metric tonnes of CO2e.
— Use of low-emitting flooring, paints and sealants in the construction in compliance with the US SCAQMD Rule #1168 to reduce
VOC emissions.
— No chlorofluoro-carbon-based refrigerants (CFCs) were used in building heating, ventilation, air conditioning and
refrigeration systems.
— PureTech’s kitchen area is stocked with reusable utensils, plates, cups and glasses to minimize the use of disposable items. Every
conference room has recycling bins for paper and other waste, as do all kitchens.
Note: All data in this section is taken from the Article 37 Green Building Report and LEED checklist developed by WSP for the building’s landlords, Related Beal.
GOVERNANCE
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Governance
Governance
Our work would not be possible without trust – it is a core value on which our success depends, and the foundation of our relationship
with our stakeholders. We prioritize meeting our stakeholders’ expectations by being responsible corporate citizens and holding
ourselves to the highest ethical standards of compliance and transparency. PureTech’s governance framework is described in detail in
pages 59-120 of this report in line with the UK Corporate Governance Code. Our approach to Governance, which underpins our focus
on Patients, People and Planet, centers on the following key areas:
Commitment #1:
Establish and maintain
strong ESG governance
Commitment #2:
Uphold high business
ethics standard
Finally, our commitment to measuring, monitoring and improving
our climate-related performance remains in place as we continue
to track our climate-related risks according to the TCFD
guidelines (see pages 54-58 for the TCFD Report).
Board Diversity
The Board and Management continue to recognize the benefits
of diversity, and the requirements set out in the FCA Diversity
Policy, as well as the expectations set out in the FTSE Women’s
Leaders Review and the Parker Review. While PureTech is not
featured in FTSE Women’s Leaders Review or Parker Review for
2024 due to the index rebalance triggering the reclassification of
PureTech from FTSE 250 to FTSE SmallCap, we continue to
benchmark against the goals set forth by both Reviews. We take
pride in the diversity of our Board and are proud to continue to
benchmark against and exceed the targets set by FTSE Women’s
Leaders Review and Parker Review:
— 43% gender diversity at Board level9;
— 43% ethnic diversity at Board level9
Our commitment to championing diversity of gender and
ethnicity in particular has been longstanding. While the Parker
Review called for the appointment of at least one non-Executive
Director from an ethnic minority background by 2021 – “One by
2021” – we had already achieved this target in 2019. As of the end
of 2024, three out of our seven directors were from an ethnic
minority background, including our CEO and our Chairman.
For details on our gender diversity initiatives, please see page 35.
Commitment #2:
Uphold high business ethics standard
Business Ethics
For PureTech, being an ethical business means operating with
transparency to ensure just and inclusive behaviors throughout
our organization and across our day-to-day interactions.
We are committed to acting with transparency, integrity,
professionalism and excellence to uphold deep levels of trust
with our stakeholders. This requires careful observance of all
applicable laws and regulations, as well as regard for the highest
standards of conduct and personal integrity.
It is mandatory for all PureTech employees to abide by our Code
of Business Conduct and Ethics, which reminds and guides
employees through the principles and requirements that govern
our business and behavior.
Commitment #1:
Establish and maintain strong ESG governance
ESG Governance
PureTech recognizes the importance of good governance in
delivering positive ESG outcomes, in line with the long-term
objectives of the business. The Board maintains direct oversight
and is ultimately responsible for our performance. Our ESG
strategy is driven by the ESG Committee, which reports directly
to the Board, and guides our approach and provides the
important framework to deliver on this strategy in a consistent
manner. (See page 55 in our TCFD Report for the
governance diagram)
The ESG committee is composed of an independent non-
Executive Director and supported by at least one C-Suite Officer,
and reports directly to the Board. The work of the ESG Committee
is supported by a dedicated internal working group, that is
responsible for the implementation of strategy and welcomes
active engagement with shareholders and other stakeholders on
matters relating to ESG and corporate stewardship.
Our ESG Committee was founded in 2020 and is chaired by the
independent non-Executive Director, Kiran Mazumdar-Shaw.
The ESG committee is responsible for managing, reviewing and
advancing our ESG progress and enhancing disclosure and
transparency through our annual ESG reporting process. The
ESG Committee meets with the Board on a quarterly basis (or as
the need arises) to assess and monitor ESG risks and provide
updates on progress regarding the implementation of our
ESG strategy.
Our TCFD Report, on pages 54-58, provides extensive detail on
the role and responsibilities of the Board and our Management
Team in the oversight and implementation of our ESG and
climate-related strategy.
Sustainability-linked remuneration
As of 2024, we have not incorporated any sustainability target into
our remuneration policies. The incorporation of ESG metrics into
executive remuneration has grown significantly in recent years,
and it can constitute an important tool to improve the alignment
between executive pay and the strategic priorities of the
business. However, and in line with institutional investor and
market best practice guidance, non-financial and ESG-related
metrics, much like any performance metric, must be quantifiable,
stretching and clearly linked to the strategy of the business.
Given the size and nature of our business, the Remuneration
Committee continues to deem the introduction of ESG metrics in
executive remuneration to not be appropriate at this time. The
Committee will keep this topic under review. Regardless of the
inclusion of specific ESG metrics within the remuneration policy,
the Board is satisfied that our ESG performance will support
positive outcomes for the business across a number of measures,
so that progress on ESG initiatives will have an impact on
remuneration outcomes overall.
9 Board composition as of December 31, 2024.
Commitment #3:
Strengthen supply
chain standards
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Governance
Anti-Harassment and Grievance Mechanism
PureTech is committed to providing a work environment that is
free of harassment based on sex, race or any other personal
characteristic protected under federal or state law. PureTech
does not tolerate any forms of harassment or offensive conduct,
including sexual harassment or any other form of harassment, as
is clearly outlined in our Harassment Policy. The policy states our
position towards any behavior that impacts an individual’s
self-esteem at work and provides examples of
prohibited behavior.
All PureTech employees are required to complete mandatory
annual anti-harassment training to ensure that all employees are
able to recognize and identify behaviors that may cause harm to
their colleagues.
The training highlights the importance of creating an
environment that encourages respect for all people and also
provides an overview of our grievance reporting structure and
how inappropriate conduct is handled. To ensure continuous
compliance and awareness, we send periodic reminders to
encourage our employees to undertake refresher training
relating to anti-corruption. We also ensure that all new employees
complete training during onboarding.
PureTech is committed to maintaining its reputation for honesty,
fairness, respect, responsibility, integrity, trust and sound
business judgment. As part of this commitment to ethical and
legal conduct, we strongly encourage all employees to ask
questions and report any concerns.
PureTech’s Compliance HelpLine allows employees to report
suspected issues, allegations and concerns anonymously either
through our internal or external helplines. It is a violation of
PureTech’s policy to retaliate against anyone raising a question or
reporting a good faith concern.
Human Rights and Modern Slavery
We are committed to being a responsible corporate citizen by
supporting the protection and advancement of human rights for
our people, patients and the communities in which we operate.
We fully support the Children’s Rights and Business Principles set
out by the UN Declaration of the Rights of the Child and
their protection.
In light of the size of our business and the nature of our business,
PureTech is exempt from producing a Modern Slavery statement.
However, we do not have cause to believe that any breaches in
Modern Slavery are occurring within our business or supply chain.
Anti-Bribery and Corruption
PureTech has written policies and reporting procedures in place
on its zero-tolerance approach to bribery and corruption that
have been reviewed and approved by the Board of Directors.
These policies are detailed in our Code of Business Conduct and
Ethics, and our Anti-bribery Policy outlines the expectations we
have for all employees when it comes to anti-bribery
and corruption.
We take a zero-tolerance approach to bribery and corruption
in all its forms. Specific principles related to anti-bribery and
corruption are outlined in our Professional Practices Policy,
while third-party risk is governed by our Anti-Bribery Third-
Party Guidelines. PureTech is bound by UK laws, including
the Bribery Act 2010, and has implemented policies and
procedures accordingly.
Employees are required to review and consent to PureTech’s
corruption, anti-trust violations, and conflicts of interest policy
during the onboarding process and reinstate their commitment
on an annual basis.
The terms of our Whistleblowing Policy have been formally set
out in the Employee Handbook and published on our intranet. To
prevent bribery and corruption, our Whistleblowing Policy
encourages our staff to confidentially report any ethical concerns,
wrongdoings, breaches, or improper conduct by or on behalf of
the Company without fear of reprisal. This includes an external
hotline to allow employees to report suspected issues,
allegations and concerns anonymously. Appropriate individuals,
depending on the nature of the specific issue at hand, investigate
all allegations of misconduct and communicate findings to the
proper personnel inside the Company, which often includes the
CEO, to ensure that all concerns are addressed. The results of
these investigations are reported to the Audit Committee.
The Audit Committee is satisfied that the Policy has been
designed in a manner that encourages staff to report suspected
wrongdoing as soon as possible and provides guidance on how
to raise any concerns. In 2024, PureTech was not involved in and
suffered no monetary losses due to legal proceedings related to
corruption and bribery.
Code of Ethics for Healthcare Professionals
PureTech maintains a policy to ensure that interactions and
business relationships with healthcare professionals (HCPs) are
conducted in accordance with applicable regulations and ethical
standards. The policy states, among other things, that (a) HCPs
will be selected solely on the basis of their qualifications and (b)
payments will be made at fair market value taking into account
purchasing history or volume or prospective ability to drive sales.
The policy provides the roadmap for engagement of HCPs and
regulates interactions between PureTech and HCPs.
Business Continuity
Business continuity is essential to the ongoing success of our
business. It demonstrates the strength and resilience of our
organization, and our ability to adapt to any unexpected
challenges without delays in clinical trials or loss of vital
information.
We continue to progress the implementation of the Business
Continuity Plan (BCP) to provide for recovery of critical business
functions in case of any unplanned events. As we prepare our
BCP, and to ensure that we have identified any potential
weaknesses in our process, an external vulnerability and
verification analysis was carried out by an external third-party
which allows us to identify and improve any potential weaknesses
in our processes. We will continue to evaluate and prioritize risks
and uncertainties that may impact our operation and will
implement formal BCP in due course.
Some of the tools currently in place to enhance our cyber security
include, but are not limited to:
— VulScan: Identifies security vulnerabilities in our network to
ensure business continuity. The tool provides up-to-date
information on the degrees of risk for each vulnerability and
provides appropriate mitigation strategies.
— Crowdstrike: Used for endpoint protection and to secure the
most critical areas of enterprise risk.
We believe a robust IT infrastructure and the development of a
BCP are essential to secure and improve the resilience of the
business. In light of the accelerated digital transformation and
associated security risks that the pandemic and geopolitical
issues have brought about in recent years, cybersecurity remains
a key area of focus of our leadership. Given its material risks to the
business, it also represents a key component of our BCP.
Data Privacy and Security
PureTech is committed to upholding and protecting the privacy
of our business members and our stakeholders. Our Information
Security Acceptable Use Policy outlines the acceptable use of
computer equipment, systems, and software at PureTech, and
maintains a balance between our established culture of
openness, trust and integrity whilst ensuring the safety and
security of our stakeholders, systems, and information.
All employees are required to complete an annual cybersecurity
training to increase employees’ awareness and understanding of
cybersecurity risk.
Additionally, to ensure all clinical trial participant privacy and
confidentiality of Protected Health Information (PHI) are
protected during the conduct of a clinical trial sponsored by
PureTech, all employees who are involved in our clinical trial
operations are required to follow our PHI Standard Operating
Procedure (SOP). (See pages 32-33 for more on patient safety).
Following are our most material human rights impacts and their
relevance to the International Bill of Human Rights topics:
Patient
Patient safety
Right to health
Pg 32-33
Addressing unmet needs
Right to enjoy the benefits
of science
Pg 31-32
Accelerating our R&D engine to
unlock new medicines
Right to enjoy the benefits
of science
Pg 33
People
Diversity and inclusion
Right to equality between
men and women
Pg 35-36
Employee Development,
Retention and recruitment
Right to just and favorable
conditions at work
Pg 36-37
Health and safety
Right to health
Pg 37-38
Collaboration
and growth
Right to an adequate
standard of living
Pg 38-39
Planet
GHG emissions
Freedom to undertake
scientific research and
creative activity
Pg 41-43
Waste
management
Right to an adequate
standard of living
Pg 44
Sustainable facility operations
Right to just and favorable
conditions at work
Pg 45
50 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 51
Our ESG framework continued
Our ESG framework continued
ESG report
ESG report
Governance
Governance
Governance
Our Commitment to ESG
PureTech takes pride in its commitment to its community
(its people), the community it serves (its patients) and the
community that it participates within (the world at large).
Our team is dedicated to furthering our mission of changing
the lives of patients with devastating diseases, and we are aware
that this can only be achieved through a sustainable business.
We believe that our environmental, social, and governance
initiatives are crucial to achieving our goals, and we are
committed to making continuous advancements across
these areas.
By reporting our ESG metrics, we can better track our progress
and identify areas for improvement, helping us to further direct
PureTech towards a brighter future.
Stakeholder Stewardship
PureTech remains committed to being a good corporate citizen
and our ESG program is one way of delivering on this
commitment. Our stakeholders’ feedback is vital to us in order
to improve our sustainability performance and disclosure.
Accordingly, we welcome your comments, questions, or
suggestions on how we can enhance our ESG efforts in the future
by emailing us at: esg@puretechhealth.com.
Commitment #3:
Strengthen supply chain standards
Supply Chain
Given the nature of our business operations as a clinical stage
company, we have a small-scale supply chain, which is mainly
comprised of material suppliers for the development of our
Wholly-Owned Programs. As a result, our environmental and
social impacts are minimal at the current scale and phase of our
business. Nevertheless, we are committed to ensuring that all
aspects of our business operations, including relationships with
our suppliers, are sustainable, ethical and responsible.
To achieve this, we have a robust Quality Management System
(QMS) in place to oversee our material suppliers. This consists
of several key SOPs which describe the controlled processes we
follow regarding qualification, evaluation, change management,
and training, to name a few areas, and ensure consistent
conformance to our high standards. More details on our SOPs
are included in the Patients Section of this Report under Ethical
R&D (see pages 32-33).
To determine vendor risks and accelerate new vendor
onboarding, risk assessment processes are built into all our
procedures for vendor audits and data integrity for Chemistry,
Manufacturing, and Controls (CMC). In 2024, approximately 50%
of our Tier I suppliers who provide materials for our clinical
development participate in Rx-360 International Pharmaceutical
Supply Chain Consortium equivalent audit programs.
Appendix
PureTech continues to utilize the Sustainability Accounting Standards Board (SASB) sector guidance for our ESG disclosures this year.
At the same time, we are monitoring the International Sustainability Standards Board (ISSB) as it works to establish a global baseline
for sustainability reporting standards. We will also monitor the applicability of GRI, Taskforce on Nature-related Financial Disclosure
(TNFD) and Corporate Sustainability Reporting Directive (CSRD) standards as these frameworks mature.
SASB Index
We continually monitor updates to the Biotechnology & Pharmaceuticals Sustainability Accounting Standard published by the
Sustainability Accounting Standards Board (SASB). Below are our disclosures against the most recent updated version (amended
by the ISSB in December 2023).
Topic
Accounting Metric
Category
Unit of
measure
SASB
Code
Disclosure Location/
Rationale For Omission
Safety of
Clinical Trial
Participants
Discussion, by region, of
management process for ensuring
quality and patient safety during
clinical trials
Discussion
and Analysis
–
HC-BP- 210a.1
Deliver safe clinical trials, page 32
Number of Inspections related
to clinical trial management and
pharmacovigilance that resulted in:
(1) entity voluntary remediation and
(2) regulatory or administrative
actions taken against the entity
Quantitative
Number
HC-BP- 210a.2
Deliver safe clinical trials, page 32
Total amount of monetary losses
as a result of legal proceedings
associated with clinical trials in
developing countries
Quantitative
Reporting
currency
HC-BP- 210a.3
N/A
There have not been any
legal proceedings
Access to
Medicines
Description of actions and
initiatives to promote access to
health care products for priority
diseases and in priority countries as
defined by the Access to Medicine
Index
Discussion
and Analysis
N/A
HC-BP- 240a.1
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
List of products on the WHO List
of Prequalified Medicinal Products
as part of its Prequalification of
Medicines Programme (PQP)
Discussion
and Analysis
N/A
HC-BP- 240a.2
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Affordability
& Pricing
Percentage change in: (1) average
list price and (2) average net
price across US product portfolio
compared to previous year
Quantitative
Percentage
(%)
HC-BP- 240b.2
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Percentage change in: (1) list price
and (2) net price of product with
largest increase compared to
previous year
Quantitative
Percentage
(%)
HC-BP- 240b.3
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
52 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 53
Our ESG framework continued
Our ESG framework continued
ESG report
ESG report
Governance
Governance
Governance
Topic
Accounting Metric
Category
Unit of
measure
SASB
Code
Disclosure Location/
Rationale For Omission
Drug Safety
Products listed in public medical
product safety or adverse event
alert databases
Discussion
and Analysis
N/A
HC-BP- 250a.1
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Number of fatalities associated
with products
Quantitative
Number
HC-BP- 250a.2
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
(1) Number of recalls issued;
(2) total units recalled
Quantitative
Number
HC-BP- 250a.3
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Total amount of product accepted
for takeback, reuse, or disposal
Quantitative
Number
HC-BP- 250a.4
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Number of enforcement actions
taken in response to violations of
Good Manufacturing Practices
(CGMP) or equivalent standards,
by type
Quantitative
Metric tons
(t)
HC-BP- 250a.5
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Counterfeit
Drugs
Description of methods and
technologies used to maintain
traceability of products throughout
the supply chain and prevent
counterfeiting
Discussion
and Analysis
N/A
HC-BP- 260a.1
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Discussion of process for alerting
customers and business partners of
potential or known risks associated
with counterfeit products
Discussion
and Analysis
N/A
HC-BP- 260a.2
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Number of actions that led to
raids, seizure, arrests, and/or filing
of criminal charges related to
counterfeit products
Quantitative
Number
HC-BP- 260a.3
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Topic
Accounting Metric
Category
Unit of
measure
SASB
Code
Disclosure Location/
Rationale For Omission
Ethical
Marketing
Total amount of monetary
losses as a result of legal
proceedings associated with
false marketing claims
Quantitative
Reporting
currency
HC-BP- 270a.1
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Description of code of ethics
governing promotion of off-label
use of products
Discussion
and Analysis
N/A
HC-BP- 270a.2
N/A
PureTech is a clinical-stage
biotherapeutics company
and has no products on the
market from within our Wholly-
Owned Programs
Employee
Recruitment,
Development
& Retention
Discussion of talent recruitment
and retention efforts for scientists
and research and development
personnel
Discussion
and Analysis
N/A
HC-BP- 330a.1
Commitment 2: Promoting
employee development to attract
and retain the best talent, pages
36-37
(1) Voluntary and (2) involuntary
turnover rate for: (a) executives/
senior managers, (b) midlevel
managers, (c) professionals, and
(d) all others
Quantitative
Rate
HC-BP- 330a.2
Commitment 2: Promoting
employee development to
attract and retain the best talent,
pages 36-37
Supply Chain
Management
Percentage of (1) entity’s facilities
and (2) Tier I suppliers’ facilities
participating in the Rx-360
International Pharmaceutical
Supply Chain Consortium audit
program or equivalent third-party
audit programs for integrity of
supply chain and ingredients
Quantitative
Rate
HC-BP- 430a.1
Supply chain, page 50
Business
Ethics
Total amount of monetary losses
as a result of legal proceedings
associated with corruption
and bribery
Quantitative
Reporting
currency
HC-BP- 510a.1
Business Ethics, anti-bribery and
corruption, pages 47-48
Description of code of ethics
governing interactions with
health care professionals
Discussion
and Analysis
N/A
HC-BP- 510a.2
Code of ethics for healthcare
professionals, page 48
Business Foundation
Business Strategy
Our Mission
We discover, develop and aim to commercialize new therapies for devastating diseases where
limited or no treatment options currently exist for patients
Shareholder Value Creation
Board of
Directors
Management Team
ESG Committee; Sustainability Oversight
Day-to-day Sustainability Oversight
R&D Function
Operations Function
Nomination
Committee
Audit
Committee
Remuneration
Committee
54 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 55
Our ESG framework continued
Our ESG framework continued
ESG report
ESG report
TCFD Report
TCFD Report
TCFD REPORT
Overview
In this section, we present PureTech’s fourth formal climate
related financial disclosures that are partially consistent with all
four themes and eleven recommended disclosures from Section
C of the Annex entitled ‘Implementing the Recommendations of
the Task Force on Climate-related Financial Disclosures’,
published in October 2021 by the TCFD, outlining PureTech’s
continued efforts to adopt, measure, manage and mitigate its
climate and sustainability-related impacts. We believe that our
ability to manage any potential climate-related impacts on our
business and strategic direction is integral to our success.
As a clinical-stage biotherapeutics company, we operate in an
inherently high-risk environment. The overall aim of our risk
management effort is to achieve an effective balancing of risk and
reward. Risks are formally identified by the Board and appropriate
processes are put in place to monitor and mitigate them on an
ongoing basis (see details on risk management on pages 60-64
of the 2024 Annual Report and Accounts). Due to the size, scale
and nature of our operations (see “Strategy”), we have concluded
that PureTech is unlikely to face any material climate-related
physical or transition risks in the short to medium- term.
Materiality is defined by whether an event will have an adverse
effect on PureTech’s financial condition, development, or results
of operations. Where appropriate, we use short-, medium- and
long-term horizons to assess the climate related impact to our
operation. For short-term time horizon we use 2-4 years, for
medium-term time horizon 5-6 years, and for long-term time
horizon over 7 years.
While our impact on the environment is minimal, we are
committed to mitigating climate-related risks in line with
emerging climate science as our business continues to expand.
To achieve this, we focus on managing energy consumption
across our operations, optimizing employee commuting, and
managing third-party deliveries.
We also measure our ESG-related performance and have
embedded effective procedures and processes within our risk
management framework. Our risk management metrics are set
forth on pages 60-64 of our 2024 Annual Report and Accounts
and are reviewed by the Executive team and the Board to ensure
we are taking appropriate action.
Our process and the actions outlined below refer to PureTech’s
approach as of December 31, 2024.
Governance
Our Board of Directors is tasked with risk identification and with
implementing procedures and strategies for risk mitigation and
management, including climate-related risks. This is discussed
during periodic meetings to identify any key or emerging risks
facing PureTech.
The Board utilizes its risk management framework to guide our
overall strategy, business planning, corporate policies, actions,
and objectives. These are implemented by our management
team with oversight and advice from the Board. This process
includes monitoring any emerging or ongoing climate or
environmental-related risks, as recommended by the ESG
Committee. More information on the roles and responsibilities of
the Board, including detail on our risk management framework
can be found on pages 86-90 of our 2024 Annual Report
and Accounts.
PureTech’s ESG Committee is chaired by the independent
Non-Executive Director Kiran Mazumdar-Shaw with the
responsibility to effectively manage, review and advance ESG
issues on an ongoing basis. Ms. Mazumdar-Shaw is an avid
climate advocate and leads ESG initiatives across the companies
she serves. PureTech’s ESG Committee process includes
assessing and overseeing PureTech’s climate-related risks and
opportunities, as well as considering how these should inform
business planning and strategic focus into the future. The ESG
committee considers climate-related risks on at least an annual
basis or more often as the need arises. All findings are reported
to the Board.
The ESG Committee is composed of a non-Executive Director
and supported by at least one C-Suite Officer, and a dedicated
internal working group of cross-functional leaders to drive
internal action and implementation, reporting directly to the
Board. The ESG Committee is supported by several third- party
experts to guide our approach. The Committee periodically
reports its activities to the Board during scheduled meetings or
via updates throughout the year. The progress of our ESG
initiatives is reported in our 2024 Annual Report and Accounts,
see pages 22-53 for more.
Strategy
To identify physical and transitional climate-related risks and
opportunities that may impact our business, PureTech conducts
detailed analysis with third-party organizations, including an ESG
expert, to guide our strategic approach.
This analysis has led us to conclude that PureTech is unlikely to
face any material climate-related risk and opportunities in the
short, medium to long term, particularly due to the scope and
scale of our operations. Looking ahead, we will continue to
conduct broad-based risk assessments and monitor the following
climate-related risks and opportunities and their potential
financial impacts identified through our risk management on an
ongoing basis (for their short, medium and long-term risk):
— Transitional and Market risks: Associated with higher
operating costs due to the introduction of carbon pricing/
taxation schemes or other supply-chain cost increases
— Physical and Market risks: Associated with supply chain or
operational disruption leading to increased costs from the
increased severity of extreme weather events, or long-term
changes to weather patterns
— Transitional and Reputational risks: Associated with any
potential impacts to reputation if PureTech falls short
of stakeholder expectations regarding climate-related
performance or impact management
— Transitional and Legal and Reputational risks: Associated
with the increased cost of compliance/non-compliance with
new climate regulations and reporting
— Market opportunities: Associated with reducing operating
costs through energy-efficient improvements
— Transitional and Reputational opportunities: Associated with
being early-adopters of enhanced disclosure measures or
low-carbon technologies
56 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 57
Our ESG framework continued
Our ESG framework continued
ESG report
ESG report
TCFD Report
TCFD Report
TCFD Report
Mapping PureTech ESG Program Against the TCFD Disclosure Recommendations
TCFD Recommendations
PureTech Alignment
Disclosure Location/ Rationale For Omission
Governance
a. Describe the board’s oversight
of climate-related risks and
opportunities.
Consistent
Climate-related risks are monitored and assessed by the
ESG Committee. ESG Committee reports its findings
directly to the Board. See the Governance section (page
55) of the TCFD report for details.
b. Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
Consistent
Climate-related risks are monitored and assessed by the
ESG Committee. The ESG Committee is comprised of
one NED and supported by at least one C-Suite Officer.
See the Governance section (page 55) of the TCFD
report for details.
Strategy
a. Describe the climate-related
risks and opportunities the
organization has identified
over the short, medium, and
long term.
Consistent
PureTech conducts detailed analysis to identify physical
and transitional climate-related risks. This analysis have
led us to conclude that PureTech is unlikely to face any
material climate-related risk and opportunities in the
short, medium to long term, particularly due to the
scope and scale of our operations and hence no risk
and opportunities have been outlined. See the Strategy
section (page 55) of the TCFD report for details.
b. Describe the impact of climate-
related risks and opportunities
on the organization’s
businesses, strategy, and
financial planning.
Consistent
See above summary to Strategy (a).
c. Describe the resilience of
the organization’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
or lower scenario.
Consistent
As a clinical-stage biotherapeutics company with no
approved therapeutics on the market, our current
day- to-day impact on the environment is limited and
hence this recommended disclosure is not material to
our operation, but we will continue to keep this under
review. See Planet; Commitment 1 – Transparent GHG
emissions disclosures section (pages 41-43) of the ESG
report for details.
TCFD Recommendations
PureTech Alignment
Disclosure Location
Risk
management
a. Describe the organization’s
processes for identifying and
assessing climate-related risks.
Consistent
See the Governance section (page 55) of the TCFD
report for details on the function and responsibility of
the ESG Committee, and the Risk Management section
(page 56) of the TCFD report for details on the risk
assessment process.
b. Describe the organization’s
processes for managing
climate-related risks.
Consistent
Risks are formally identified by the Board and appropriate
processes are in place to monitor and mitigate them on
an ongoing basis. Climate-related risks are not currently
identified as a principal risk for PureTech. See Risk
Management section (page 56) for details.
c. Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organization’s overall risk
management.
Consistent
While climate-related risks are not currently identified
as a principal risk for PureTech, an overview of how risks
are managed, should they arise, are outlined in the Risk
Management section (page 56).
Metrics and Targets
PureTech employs the services of a B Corp certified specialist
adviser Verco, to quantify and verify the GHG emissions
associated with its operations. We report our Scope 1 and 2
emissions as required under The Companies (Directors’ Report)
and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018 (‘Regulations’) and the Streamlined Energy and
Carbon Reporting (SECR) guidelines. We also voluntarily report
our Scope 3 emissions categories that are relevant to
our business.
An operational control approach has been used to define the
reporting boundary. This is the basis for determining the Scope 1,
2 and 3 emissions for which the Company is responsible.
The emissions sources reported for the year ending
December 31, 2024 are:
— Scope 1: Natural gas combustion on site;
— Scope 2: Purchased electricity for our own use;
— Scope 3: Business travel undertaken in employee-owned
cars/short term hire cars, waste, water, business travel
(flights, rail, hotel stays), electricity T&D and all well-to-tank
emissions associated with the relevant sources. Please
note that Scope 3 is voluntary disclosure going beyond the
Regulation requirements.
Our current emissions profile, as well as other environmental-
related measures adopted, can be found in our 2024 ESG Report
(pages 40-45 of the 2024 Annual Report and Accounts). PureTech
considers whether additional environmental metrics should be
developed and reported on throughout the year.
Given (a) the nature of our industry, business operations and
therapeutic mission and (b) we have not identified any material
climate-related risks to our business, PureTech has not set any
emissions-related targets to date. We do plan on introducing
climate-related targets when our operations have sufficiently
advanced beyond clinical stage and deem this necessary.
Next steps
We remain committed to operating as a good corporate citizen,
and to managing the climate-related impacts of our operations
and environmental matters. We intend to continue to (1) enhance
climate-related risks and opportunities management, (2) identify
and address areas of improvement year-on-year, and (3) set GHG
emissions targets and measure performance and progress
annually in the medium-term time horizon.
As we continue our operation as a good corporate citizen, we
have taken steps to improve upon the managing risks, should
they arise. For example, we are making progressing in
implemeting a Business Continuity Plan (BCP) to ensure that our
physical operations and supply chains have effective measures in
place to mitigate any potential climate-related risks. As part of the
transitional planning, we intend to have a formal BCP in place in
the short-term horizon (see page 49 of the 2024 Annual Report
and Accounts for more information on our BCP). For further
information on the Company’s risk assessment, monitoring and
mitigation efforts, please see Risk Management section of the
2024 Annual Report and Accounts (see pages 60-64).
Risk Management
While climate-related risks are not currently identified as a
principal risk for PureTech, we will continue to monitor our
climate-related risk profile as internal and external
circumstances change.
Risks are formally identified by the Board and appropriate
processes are in place to monitor and mitigate them on an
ongoing basis (see “Governance”). On an annual basis, our
auditors perform a risk assessment to consider the potential
impacts of climate change on our business, financial statements
and the audit. This included making enquiries of management to
understand the extent of the potential material impact of climate
change risk on our financial statements (see page 123 of the 2024
Annual Report and Accounts for more). In addition, we are
committed to introducing climate risk tools and processes that
identify, manage and act on any material climate-related risks
should the needs arise. Our ESG committee, with the counsel of
third-party ESG experts, considers climate-related risks and
strategic priorities on an annual basis, or more regularly, as the
need arises.
As part of our climate-related monitoring program, PureTech
employs external consultants to audit and report on our climate-
related metrics, including the following assessments which are
more fully discussed in our 2024 ESG Report on pages 22-53:
— Streamlined Energy and Carbon Reporting (SECR)
prepared by Verco
— Green Building Report and LEED Checklist prepared by
WSP in conjunction with Related Beal, the landlord of our
headquarters facility
— Water Consumption Reporting prepared by Casella Waste
Systems (via Related Beal)
— Hazardous Waste Reporting prepared by Veolia
Environment S.A.
These findings inform the ESG Committee’s climate risk analysis
strategy to identify and act on any physical and transition risks
considered material to the Company.
58 PureTech Health plc Annual Report and Accounts 2024
Our ESG framework continued
ESG report
TCFD Report
TCFD Report
TCFD Report
TCFD Recommendations
PureTech Alignment
Disclosure Location
Metrics and
Targets
a. Disclose the metrics used by the
organization to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
Partially consistent
Climate-related risks and opportunities assessment is
conducted by the ESG Committee with metrics outlined
across the Governance, Risk Management, and Metrics
and Targets sections (pages 55-56) of the TCFD report.
The findings are reported directly to the Board. However,
the underlying metrics for climate-related assessment
are not fully aligned with the business strategy and risk
management as they are charged by different parties.
We will consider aligning these metrics in the long-term
time horizon.
b. Disclose Scope 1, Scope 2
and, if appropriate, Scope 3
greenhouse gas (GHG)
emissions and the related risks.
Consistent
See the Metrics and Targets section (pages 55-56) of the
TCFD report for the overview of our emissions disclosure
and the Planet section (pages 40-45) of our ESG report
for details.
c. Describe the targets used by
the organization to manage
climate-related risks and
opportunities and performance
against targets.
Consistent
Given (a) the nature of our industry, business operations
and therapeutic mission and (b) we have not identified
any material climate-related risks to our business,
PureTech has not set any climate-related targets to date.
We plan on continuing to assess this on an annual basis.
See Metrics and Targets section (pages 55-56) of the
TCFD report for details.
PureTech Health plc Annual Report and Accounts 2024 59
Governance
Governance
Our world class
Board of Directors provides
strong governance
60 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 61
Governance
Risk management continued
Risk
Impact*
Management Plans/Actions
2 Risks related to clinical trial failure
Clinical trials and other tests to assess the
commercial viability of a therapeutic candidate are
typically expensive, complex and time-consuming,
and have uncertain outcomes.
Conditions in which clinical trials are conducted
differ, and results achieved in one set of conditions
could be different from the results achieved in
different conditions or with different subject
populations. If our therapeutic candidates fail to
achieve successful outcomes in their respective
clinical trials, the therapeutics will not receive
regulatory approval and in such event cannot be
commercialized. In addition, if we fail to complete
or experience delays in completing clinical tests
for any of our therapeutic candidates, we may
not be able to obtain regulatory approval or
commercialize our therapeutic candidates on a
timely basis, or at all.
A critical failure of a clinical trial
may result in termination of
the program and a significant
decrease in our value. Significant
delays in a clinical trial to support
the appropriate regulatory
approvals could impact the
amount of capital required for
the business to become fully
sustainable on a cash flow basis.
We have a diversified model to limit the impact
of clinical trial outcomes on our ability to operate
as a going concern. We have dedicated internal
resources to establish and monitor each of the clinical
programs for the purpose of maximising successful
outcomes. We also engage outside experts to help
create well-designed clinical programs that provide
valuable information and mitigate the risk of failure.
Significant scientific due diligence and preclinical
experiments are conducted prior to a clinical trial
to evaluate the odds of the success of the trial. In
the event of the outsourcing of these trials, care
and attention are given to assure the quality of the
vendors used to perform the work.
3 Risks related to regulatory approval
The pharmaceutical industry is highly regulated.
Regulatory authorities across the world enforce
a range of laws and regulations governing the
testing, approval, manufacturing, labelling and
marketing of pharmaceutical therapeutics.
Stringent standards are imposed which relate
to the quality, safety and efficacy of these
therapeutics. These requirements are a major
determinant of the commercial viability of
developing a drug substance or medical device
given the time, expertise and expense which must
be invested.
We may not obtain regulatory approval for our
therapeutic candidates. Moreover, approval in
one territory offers no guarantee that regulatory
approval will be obtained in any other territory.
Even if therapeutics are approved, subsequent
regulatory difficulties may arise, or the conditions
relating to the approval may be more onerous or
restrictive than we anticipate.
The failure of one of our
therapeutics to obtain any
required regulatory approval, or
conditions imposed in connection
with any such approval, may
result in a significant decrease
in our value.
We manage our regulatory risk by employing highly
experienced clinical managers and regulatory
affairs professionals who, where appropriate, will
commission advice from external advisors and
consult with the regulatory authorities on the design
of our preclinical and clinical programs. These
experts ensure that high-quality protocols and other
documentation are submitted during the regulatory
process, and that well-reputed contract research
organizations with global capabilities are retained
to manage the trials. We also engage with experts,
including on our R&D Committee, to help design
clinical trials to help provide valuable information
and maximize the likelihood of regulatory approval.
Additionally, we have a diversified model with
numerous assets such that the failure to receive
regulatory approval or subsequent regulatory
difficulties with respect to any one therapeutic
would not adversely impact all of our therapeutics
and businesses.
The execution of the Group’s strategy is subject to a range of risks and uncertainties. As a clinical-stage biotherapeutics company, the
Group operates in an inherently high-risk environment. The Group’s strategic approach seeks to aid the Group’s risk management
efforts to achieve an effective balancing of risk and reward. Risk assessment, evaluation and mitigation are integral parts of the Group’s
management process. The Group, however, also recognizes that ultimately no strategy provides an assurance against loss, as for
example we saw in 2024 with founded-entity Akili Interactive Labs, Inc., which merged with privately-held Virtual Therapeutics and
ceased trading as a public company in July 2024.
Risks are formally identified by the Board and appropriate internal controls are put in place and tailored to the specific risks to monitor
and mitigate them on an ongoing basis. If multiple or an emerging risk event occurs, it is possible that the overall effect of such events
would compound the overall effect on the Group. The principal risks that the Board has identified as the key business risks facing the
Group are set out in the table below along with the impact and mitigation management plan with respect to each risk. These risks are
only a high-level summary of the principal risks affecting our business; any number of these or other risks could have a material adverse
effect on the Group or its financial condition, development, results of operations, subsidiary companies and/or future prospects.
Further information on the risks facing the Group can be found on pages 182 to 219 which also includes a description of circumstances
under which principal and other risks and uncertainties might arise in the course of our business and their potential impact.
Risk
Impact*
Management Plans/Actions
1 Risks related to science and
technology failure
The science and technology being developed or
commercialized by some of our businesses may fail
and/or our businesses may not be able to develop
their intellectual property into commercially viable
therapeutics or technologies.
There is also a risk that certain of the businesses
may fail or not succeed as anticipated, resulting in
significant decline of our value.
The failure of any of our
businesses could decrease
our value. A failure of one of
the major businesses could
also impact the reputation of
PureTech as a developer of high
value technologies and possibly
make additional fundraising by
PureTech or any Founded Entity
more difficult or unavailable on
acceptable terms at all.
Prior to additional steps in the development
of any technology, extensive due diligence is
carried out that covers all the major business risks,
including technological feasibility, competition and
technology advances, market size, strategy, adoption
and intellectual property protection.
A capital efficient approach is employed, which
requires the achievement of a level of proof of
concept prior to the commitment of substantial
capital is committed. Capital deployment is
generally tranched to ensure the funding of
programs only to their next value milestone.
Members of our Board or our management team
serve on the board of directors of several of the
businesses so as to continue to guide each business’s
strategy and to oversee proper execution thereof.
We use our extensive network of advisors to ensure
that each business has appropriate domain expertise
as it develops and executes on its strategy and the
R&D Committee of our Board reviews each program
at each stage of development and advises our Board
on further actions. Additionally, we have a diversified
model with numerous assets such that the failure of
any one of our businesses or therapeutic candidates
would not result in a failure of all of our businesses.
Risk management
Governance
62 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 63
Governance
Governance
Risk management continued
Risk
Impact*
Management Plans/Actions
6 Risks related to intellectual
property protection
We may not be able to obtain patent protection
for some of our therapeutics or maintain the
secrecy of their trade secrets and know-how.
If we are unsuccessful in doing so, others may
market competitive therapeutics at significantly
lower prices. Alternatively, we may be sued for
infringement of third-party patent rights. If these
actions are successful, then we would have to pay
substantial damages and potentially remove our
therapeutics from the market. We license certain
intellectual property rights from third parties.
If we fail to comply with our obligations under
these agreements, it may enable the other party
to terminate the agreement. This could impair
our freedom to operate and potentially lead to
third parties preventing us from selling certain of
our therapeutics.
The failure to obtain patent
protection and maintain the
secrecy of key information may
significantly decrease the amount
of revenue we may receive
from therapeutic sales. Any
infringement litigation against
us may result in the payment of
substantial damages by us and
result in a significant decrease in
our value.
We spend significant resources in the prosecution
of our patent applications and maintenance of our
patents, and we have in-house patent counsel and
patent group to help with these activities. We also
work with experienced external attorneys and law
firms to help with the protection, maintenance and
enforcement of our patents. Third party patent filings
are monitored to ensure the Group continues to have
freedom to operate. Confidential information (both
our own and information belonging to third parties)
is protected through use of confidential disclosure
agreements with third parties, and suitable
provisions relating to confidentiality and intellectual
property exist in our employment and advisory
contracts. Licenses are monitored for compliance
with their terms.
7 Risks related to enterprise profitability
We expect to continue to incur substantial
expenditure in further research and development
activities. There is no guarantee that we will
become operationally profitable, and, even
if we do so, we may be unable to sustain
operational profitability.
The strategic aim of the
business is to generate profits
for our shareholders through
the commercialization of
technologies through therapeutic
sales, strategic partnerships
and sales of businesses or parts
thereof. The timing and size
of these potential inflows are
uncertain. Should revenues from
our activities not be achieved, or
in the event that they are achieved
but at values significantly less than
the amount of capital invested,
then it would be difficult to sustain
our business.
We retain significant cash in order to support funding
of our Founded Entities and our Wholly-Owned
Programs. We have close relationships with a wide
group of investors and strategic partners to ensure
we can continue to access the capital markets
and additional monetization and funding for our
businesses. Additionally, our Founded Entities are
able to raise money directly from third party investors
and strategic partners.
8 Risks related to hiring and retaining
qualified employees and key personnel
We operate in complex and specialized
business domains and require highly qualified
and experienced management to implement
our strategy successfully. We and many of our
businesses are located in the United States which
is a very competitive employment market.
Moreover, the rapid development which is
envisaged by us may place unsupportable
demands on our current managers and
employees, particularly if we cannot attract
sufficient new employees. There is also the risk
that we may lose key personnel.
The failure to attract highly
effective personnel or the
loss of key personnel would
have an adverse impact on
our ability to continue to grow
and may negatively affect our
competitive advantage.
The Board regularly seeks external expertise to
assess the competitiveness of the compensation
packages of its senior management. Senior
management continually monitors and assesses
compensation levels to ensure we remain
competitive in the employment market. We maintain
an extensive recruiting network through our Board
members, advisors and scientific community
involvement. We also employ an executive as a full-
time in-house recruiter and retain outside recruiters
when necessary or advisable. Additionally, we
are proactive in our retention efforts and include
incentive-based compensation in the form of
equity awards and annual bonuses, as well as a
competitive benefits package. We have a number
of employee engagement efforts to strengthen
our PureTech community.
Risk management continued
Risk
Impact*
Management Plans/Actions
4 Risks related to therapeutic safety
There is a risk of adverse reactions with all drugs
and medical devices. If any of our therapeutics are
found to cause adverse reactions or unacceptable
side effects, then therapeutic development may
be delayed, additional expenses may be incurred
if further studies are required, and, in extreme
circumstances, it may prove necessary to suspend
or terminate development. This may occur even
after regulatory approval has been obtained,
in which case additional trials may be required,
the approval may be suspended or withdrawn
or require product labels to include additional
safety warnings. Adverse events or unforeseen
side effects may also potentially lead to product
liability claims against us as the developer of the
therapeutics and sponsor of the relevant clinical
trials. These risks are also applicable to our
Founded Entities and any trials they conduct or
therapeutic candidates they develop.
Adverse reactions or
unacceptable side effects
may result in a smaller market
for our therapeutics, or even
cause the therapeutics to fail to
meet regulatory requirements
necessary for sale of the
therapeutic. This, as well as any
claims for injury or harm resulting
from our therapeutics, may
result in a significant decrease
in our value.
Safety is our top priority in the design of our
therapeutics. We conduct extensive preclinical and
clinical trials which test for and identify any adverse
side effects. Despite these steps and precautions, we
cannot fully avoid the possibility of unforeseen side
effects. To mitigate the risk further we have insurance
in place to cover product liability claims which may
arise during the conduct of clinical trials.
5 Risks related to therapeutic profitability
and competition
We may be unable to sell our therapeutics
profitably if reimbursement from third-party
payers – such as private health insurers and
government health authorities – is restricted or not
available. If, for example, it proves difficult to build
a sufficiently strong economic case based on the
burden of illness and population impact.
Third-party payers are increasingly attempting
to curtail healthcare costs by challenging the
prices that are charged for pharmaceutical
therapeutics and denying or limiting coverage
and the level of reimbursement. Moreover, even
if the therapeutics can be sold profitably, they
may not be adopted by patients and the medical
community.
Alternatively, our competitors – many of whom
have considerably greater financial and human
resources – may develop safer or more effective
therapeutics or be able to compete more
effectively in the markets targeted by us. New
companies may enter these markets and novel
therapeutics and technologies may become
available which are more commercially successful
than those being developed by us. These risks are
also applicable to our Founded Entities and could
result in a decrease in their value.
The failure to obtain
reimbursement from third
party payers, and competition
from other therapeutics, could
significantly decrease the amount
of revenue we may receive from
therapeutic sales for certain
therapeutics. This may result in a
significant decrease in our value.
We engage reimbursement experts to conduct
pricing and reimbursement studies for our
therapeutics to ensure that a viable path to
reimbursement, or direct user payment, is available.
We also closely monitor the competitive landscape
for our therapeutics and therapeutic candidates
and adapt our business plans accordingly. Not
all therapeutics that we are developing will rely
on reimbursement. Also, while we cannot control
outcomes, we seek to design studies to generate
data that will help support potential reimbursement.
64 PureTech Health plc Annual Report and Accounts 2024
Governance
Risk management continued
Risk
Impact*
Management Plans/Actions
9 Risks related to business, economic or
public health disruptions
Business, economic, financial or geopolitical
disruptions or global health concerns could
seriously harm our development efforts and
increase our costs and expenses.
Broad-based business, economic,
financial or geopolitical
disruptions could adversely
affect our ongoing or planned
research and development
activities. Global health concerns,
such as a further pandemic, or
geopolitical events, like the
ongoing consequences of the
armed conflicts, could also result
in social, economic, and labor
instability in the countries in
which we operate or the third
parties with whom we engage. We
consider the risk to be increasing
since the prior year and note
further risks associated with
the banking system and global
financial stability. We cannot
presently predict the scope and
severity of any potential business
shutdowns or disruptions, but
if we or any of the third parties
with whom we engage, including
the suppliers, clinical trial sites,
regulators, providers of financial
services and other third parties
with whom we conduct business,
were to experience shutdowns
or other business disruptions,
our ability to conduct our
business in the manner and on
the timelines presently planned
could be materially and negatively
impacted. It is also possible
that global health concerns or
geopolitical events such as these
ones could disproportionately
impact the hospitals and clinical
sites in which we conduct any of
our current and/or future clinical
trials, which could have a material
adverse effect on our business
and our results of operation and
financial impact.
We regularly review the business, economic,
financial and geopolitical environment in which
we operate. It is possible that we may see further
impact as a result of current geopolitical tensions.
We monitor the position of our suppliers, clinical trial
sites, regulators, providers of financial services and
other third parties with whom we conduct business.
We develop and execute contingency plans to
address risks where appropriate.
Governance
PureTech Health plc Annual Report and Accounts 2024 65
Viability
PureTech Health plc Viability Statement
In accordance with the UK Corporate Governance Code
(Governance Code) published in July 2018, the Directors
have assessed the prospects of the Company with respect to
the December 31, 2024 financial position. Based on current
projections, the Directors believe that the Company has
sufficient available funding to extend operations into at least
2027. This period is deemed appropriate having assessed
the financial health as of December 31, 2024. We expect our
Wholly-Owned Programs3 to significantly progress during
this period and our key Controlled Founded Entities2 to reach
significant development milestones over the period of the
assessment. As we advance our Wholly-Owned Programs
and Controlled Founded Entities, our future decisions will
be driven by the data of our programs and access to capital
from external sources to fund these programs. Our current
projections are consistent with our disciplined R&D approach
to advance our Wholly-Owned Programs and Controlled
Founded Entities through the development process and not
commit resources to further development unless specific
thresholds for advancement are met, including access to
sources of external funding.
The Directors have evaluated our cash and cash equivalents
and short-term investment of $367.3 million as of December
31, 2024. The Directors have determined that these amounts
are sufficient for the advancement of our Wholly-Owned
Programs in the near term, to support our existing Founded
Entities1, should they require it, and our strategy around
creating and supporting new Founded Entities. Additionally,
the Directors have determined that these amounts are also
sufficient to provide reasonable returns for our shareholders
and to fund the Company’s operating costs into at least
2027. The Directors' review has considered all of the principal
and emerging risks identified and focused on the pathway
to regulatory approval of each therapeutic candidate being
developed within our Wholly-Owned Programs as well as those
of our Founded Entities. The Directors reviewed the near-term
liquidity and considered funding plans of our Wholly-Owned
Programs and Founded Entities in our assessment of long-term
cash flow projections. It should be noted that the majority of
funding has been allocated to support the Company’s strategy
around Founded Entities, alongside the advancement of
the Wholly-Owned Programs which could become Founded
Entities themselves.
The Directors confirm that they have a reasonable expectation
that we will continue to operate and meet our obligations as
they become due over the period of the assessment. In making
this statement, the Directors carried out a robust assessment
of the principal and emerging risks, including those that would
threaten our business model, future performance, solvency
or liquidity and evaluated plausible scenarios that included
these risks.
This assessment was made in consideration of our strong
financial position, current strategy, and management of
principal and emerging risks. The following facts support the
Directors’ view of the viability:
— We have a cash, cash equivalents and short-term investments
position of $367.3 million as of December 31, 2024.
— Our cash, cash equivalents and short-term investments are
highly liquid and readily available.
— We have control over the spending and strategic direction
of our Wholly-Owned Programs and Controlled Founded
Entities.
— We do not intend to fully fund our LYT-100 program's Phase
3 trial or LYT 200's Phase 2 trial on our own.
— Our business model is structured so that we are not reliant
on the successful outcomes of any one therapeutic or
technology within the Wholly-Owned Programs, or any
Founded Entities.
In addition, the fact that our Wholly-Owned Programs
and Founded Entities are currently in the research and
development stage means that these therapeutics,
technologies and entities are not reliant on cash inflows
from product sales or services during the period of this
assessment. This also means that we are not highly susceptible
to conditions in one or more market sectors in this time frame.
The utilization of existing cash, cash equivalents and short-
term investments to advance these therapeutics, technologies
and entities is within our control, and the spending and
investment decisions are largely discretionary. Therefore, there
is management control on reducing discretionary spending
if unforeseen liquidity risks arise. Although engaging with
collaboration partners is highly valuable from a validation and,
in some cases, funding perspective, we are not solely reliant on
cash flows from such sources over the period of assessment.
Further, the Directors have considered milestone and royalty
funding based on existing arrangements, milestone payments
from the Royalty Purchase Agreement with Royalty Pharma, the
ability of the Wholly-Owned Programs and each Controlled
Founded Entity to enter into new collaboration agreements, all
of which could be expected to generate cash in-flows but were
not included in the assessment.
Governance
Governance
66 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 67
The Directors note that our ownership stakes in the Founded
Entities are expected to be illiquid in nature, with the
exception of our ownership stakes in the entity which is
publicly traded on Nasdaq. While we anticipate holding these
ownership stakes through the achievement of significant
milestones or other events, we will continue to be diligent in
exploring monetization opportunities after key value accretion
has occurred similar to the execution of the sale of 1,750,000
common shares of Karuna for an aggregate proceeds of
$218.1 million in 2021, the sale of 602,100 common shares of
Karuna for an aggregate proceeds of $115.5 million in 2022,
the sale of 535,400 common shares of Vor for an aggregate
proceeds of $3.3 million in 2022, the sale of 167,579 common
shares of Karuna for an aggregate proceeds of $33.3 million
in 2023, the sale of 886,885 common shares of Karuna for an
aggregate proceeds of $292.7 million in 2024, and the sale of
12,527,476 common shares of Akili for an aggregate proceeds
of $5.4 million in 2024. We also expect that certain of these
Founded Entities may not be successful, and this could result in
a loss of the amounts previously invested. For example, Gelesis
was listed on the New York Stock Exchange as of December
31, 2022 and was delisted from the New York Stock Exchange
in April 2023. On October 30, 2023, Gelesis ceased operations
and filed a voluntary petition for relief under the United States
bankruptcy code. However, even if certain Founded Entities
are not successful, our liquidity is expected to remain sufficient
to achieve the remaining milestone events, fund operational
costs and provide returns for our shareholders over the period
of assessment.
The Directors have concluded, based on our strong financial
position and readily available cash, cash equivalents and short-
term investments, that we are highly likely to be able to fund
our infrastructure requirements, advance our Wholly-Owned
Programs in the near term, and contribute amounts necessary
for the Founded Entities to reach significant development
milestones over the period of the assessment. Therefore, there
is a reasonable expectation that we have adequate resources
and will continue to operate and meet our obligations over the
period of the assessment.
Viability continued
Note: Certain third-party trademarks are included here; PureTech does not claim any rights to any third-party trademarks.COBENFY™ (xanomeline and trospium chloride) is
indicated for the treatment of schizophrenia in adults. For Important Safety Information, see U.S. Full Prescribing Information, including Patient Information on COBENFY.com.
Following the acquisition of Karuna, KarXT is now under the stewardship of Bristol Myers Squibb and will be marketed as Cobenfy.
1 Funding figure includes private convertible notes and public offerings. Funding figure excludes future milestone considerations received in conjunction with partnerships
and collaborations.
2 Number represents figure for the relevant fiscal year only and is not cumulative.
1. Founded Entities are comprised of the entities which the Company incorporated and announced the incorporation as a Founded Entity externally. It includes certain of the Company’s
wholly-owned subsidiaries which have been announced by the Company as Founded Entities, Controlled Founded Entities2 and deconsolidated Founded Entities. As of December
31, 2024, deconsolidated Founded Entities included Vor Biopharma, Inc., Gelesis, Inc., Sonde Health, Inc., Vedanta Biosciences, Inc., and Seaport Therapeutics, Inc.
2. Controlled Founded Entities are comprised of the Company’s consolidated operational subsidiaries that currently have already raised third-party dilutive capital. As of December 31,
2024, Entrega was the only entity under this definition.
3. Wholly-Owned Programs are comprised of the Company’s current and future therapeutic candidates and technologies that are developed by the Company's wholly-owned
subsidiaries, whether they were announced as a Founded Entity or not, and will be advanced through with either the Company's funding or non-dilutive sources of financing. As of
December 31, 2024, Wholly-Owned Programs were developed by the wholly-owned subsidiaries including PureTech LYT, Inc., PureTech LYT 100, Inc., and Gallop Oncology, Inc., and
included primarily the programs deupirfenidone (LYT-100) and LYT-200.
Key Performance Indicators – 2024
The key performance indicators (KPIs) below measure our performance against our strategy. As PureTech’s strategy has evolved,
new KPIs have replaced older metrics that are no longer representative of our progress.
2023:
$578.4m
2022:
$1.28b
2021:
$731.9m
2020:
$247.8m
2019:
$666.8m
2018:
$274.0m
2017:
$102.9m
Progress
Seaport, Vedanta and Vor raised funds in the form of financings
in 2024, including $339.1 million by third party financial and
strategic investors.
$397.5m1,2
Amount of funding secured for Founded Entities
$351.1m (>88%) came from third parties
2023: $133.3m
2022: $115.4m
2021: $218.1m
2020: $350.6m
2019: $9.3m
Progress
A key component of our strategy is to derive value from the equity
growth of our Founded Entities. In 2024, we generated cash
proceeds of approximately $327 million from the acquisitions of
two of our Founded Entities (Karuna Therapeutics and Akili
Interactive) and milestone payments related to the FDA approval
of PureTech-invented CobenfyTM (formerly known as KarXT) under
agreements with Royalty Pharma and Karuna Therapeutics
(now a wholly-owned subsidiary of Bristol Myers Squibb).
$327.4m2
Proceeds generated from Founded Entity
monetization events
2023: 5
2022: 4
2021: 11
2020: 6
2019: 6
Progress
Vedanta initiated one clinical trial in 2024, and at least 5 additional
clinical trials continue to progress in 2025 across the Wholly-
Owned and Founded Entity pipelines.
12
Number of clinical trial initiations
2023: 1
2022: 1
2021: 2
2020: 3
2019: 1
2018: 1
2017: 1
Progress
In 2024, we advanced a new therapeutic candidate from our
GlyphTM platform. This candidate, now known as SPT-348, is a
non-hallucinogenic neuroplastogen in development at our
Founded Entity Seaport Therapeutics for the treatment of mood
and neuropsychiatric disorders.
12
Number of programs created by PureTech
2023: 1
2022: 1
2021: 1
2020: 3
2019: 0
Progress
In 2024, PureTech completed a multiyear Phase 2b clinical trial of
deupirfenidone (LYT-100) in patients with idiopathic pulmonary
fibrosis. PureTech intends to discuss these results with the FDA
before the end of the third quarter of 2025 to align on a potential
registrational pathway, with the goal of initiating a Phase 3 trial by
the end of the year. The Company anticipates providing further
guidance later this year following the finalization of the trial
design and FDA interactions.
02
Number of programs advanced internally through
clinical phases
2023: 5
2022: 6
2021: 6
2020: 5
2019: 5
Progress
PureTech completed the multiyear Phase 2b clinical trial of
deupirfenidone (LYT-100) in patients with idiopathic pulmonary
fibrosis (IPF) in 2024.
12
Number of clinical trial readouts
Governance
Governance
68 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 69
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 we believe participation in such
financings is in the best interests of our shareholders. The form
of any such participation may include investment in public or
private financings, collaboration, partnership arrangements,
and/or licensing arrangements, among others. Our
management and strategic decision makers consider the future
funding needs of our Founded Entities and evaluate rigorously
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 access to substantial additional
funding in the future at the PureTech level, following the period
described below in the Funding Requirements section, to
support our continuing operations and pursue our growth
strategy, including participating in financing activities at the
Founded Entity level. We expect to finance our operations
through a combination of monetization of our interests in our
Founded Entities, collaborations with third parties, or other
sources. We may be unable to access 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 our continuing
operations and pursuit of our growth strategy, including
participating in financing activities at the Founded Entity
level. Further, if we are unable to obtain external funding for
our LYT-100 and LYT-200 Wholly-Owned programs, we may
have to delay, scale back or discontinue the development and
commercialization of one or more of these Wholly-Owned
programs.
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 of current
period are compared with the results of the comparative
period in the prior 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, 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 financial information
and should not be considered superior to financial information
presented in accordance with IFRS.
Cash flow and liquidity
PureTech Level cash, cash
equivalents and short-term
investments
Measure type: Core performance
Definition: Cash and cash
equivalents and short-term
investments held at PureTech
Health plc and our wholly-owned
subsidiaries.
Why we use it: PureTech Level
cash, cash equivalents and short-
term investments is a measure
that provides valuable additional
information with respect to cash,
cash equivalents and short-term
investments available to fund
the Wholly-Owned Programs
and make certain investments in
Founded Entities.
Recent Developments (subsequent to December 31, 2024)
The Group has evaluated subsequent events after December
31, 2024 up to the date of issuance, April 30, 2025, of the
Consolidated Financial Statements, and has not identified any
recordable or disclosable events not otherwise reported in
these Consolidated Financial Statements or notes thereto.
Financial Highlights
The following is the reconciliation of the amounts appearing
in our Consolidated Statement of Financial Position to the
alternative performance measure described above:
(in thousands)
December 31,
2024
December 31,
2023
Cash and cash equivalents
280,641
191,081
Short-term investments
86,666
136,062
Consolidated cash, cash
equivalents and short-term
investments
367,307
327,143
Less: cash and cash equivalents
held at non-wholly owned
subsidiaries
(493)
(1,097)
PureTech Level cash, cash
equivalents and short-term
investments
$366,813
$326,046
Basis of Presentation and Consolidation
Our Consolidated Financial Information consolidates the
financial information of PureTech Health plc, as well as its
subsidiaries, and includes our interest in associates and
investments held at fair value and is reported in reportable
segments as described below.
Basis for Segmentation
Our Directors are our strategic decision-makers. Our operating
segments are determined based on the financial information
provided to our Directors periodically for the purposes of
allocating resources and assessing performance. We have
determined each of our Wholly-Owned Programs represents
an operating segment, and we have aggregated each of
these operating segments into one reportable segment, the
Wholly-Owned Programs segment. Each of our Controlled
Founded Entities represents an operating segment. We
aggregate each Controlled Founded Entity operating segment
into one reportable segment, the Controlled Founded
Entities segment. The aggregation is based on the high
level of operational and financial similarities of the operating
segments. For our entities that do not meet the definition
of an operating segment, we present this information in the
Parent Company and Other column in our segment footnote to
reconcile the information in this footnote to our Consolidated
Financial Statements. Substantially all of our revenue and profit
generating activities are generated within the United States
and, accordingly, no geographical disclosures are provided.
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 60 to 64 and in the
Additional Information section from pages 182 to 219, 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
December 31, 2024 and 2023, and for the years ended
December 31, 2024, 2023 and 2022, have been prepared in
accordance with UK-adopted International Financial Reporting
Standards ("IFRSs"). The Consolidated Financial Statements
also comply fully with IFRSs as issued by the International
Accounting Standards Board ("IASB").
The following discussion contains references to the
Consolidated Financial Statements of PureTech Health plc
(the "Parent") and its consolidated subsidiaries, together "the
Group". These financial statements consolidate PureTech
Health plc’s subsidiaries and include the Group’s interest in
associates by way of equity method, as well as investments
held at fair value. Subsidiaries are those entities over which
the Group maintains control. Associates are those entities in
which the Group does not have control for financial accounting
purposes but maintains significant influence over financial and
operating policies. Where the Group has neither control nor
significant influence for financial accounting purposes, or when
the investment in associates is not in instruments that would
be considered equity for accounting purposes, we recognize
our holdings in such entity as an investment at fair value with
changes in fair value being recorded in the Consolidated
Statement of Comprehensive Income/(Loss). For purposes of
our Consolidated Financial Statements, each of our Founded
Entities1 are considered to be either a “subsidiary", an
“associate” or an "investment held at fair value" depending on
whether the Group controls or maintains significant influence
over the financial and operating policies of the respective
entity at the respective period end date, and depending
on the form of the investment. For additional information
regarding the accounting treatment of these entities, see
Note 1. Material Accounting Policies to our Consolidated
Financial Statements included in this report. For additional
information regarding our operating structure, see “Basis of
Presentation and Consolidation” below.
Business Background and Results Overview
The business background is discussed above from pages 1 to
21, which describes the business development of our Wholly-
Owned Programs3 and Founded Entities.
Our ability to generate product revenue sufficient to achieve
profitability will depend on the successful development
and eventual commercialization of one or more therapeutic
candidates of our wholly-owned or Controlled Founded
Entities2, which may or may not occur. Historically, certain
of our Founded Entities' therapeutics received marketing
authorization from the FDA, but our Wholly-Owned Programs
have not generated revenue from product sales to date.
Furthermore, our ability to achieve profitability will largely rely
on successfully monetizing our investment in Founded Entities,
including the sale of rights to royalties, entering into strategic
partnerships, and other related business development
activities.
We deconsolidated a number of our Founded Entities,
specifically Seaport Therapeutics, Inc. ("Seaport") in October
2024, Vedanta Biosciences, Inc. ("Vedanta") in 2023, Sonde
Health Inc. ("Sonde") in 2022, Karuna Therapeutics, Inc.
("Karuna"), Vor Biopharma Inc. ("Vor") and Gelesis in 2019, and
Akili in 2018.
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 Financial Statements;
— we record our retained investment in the Founded Entity at
fair value; and
— the resulting amount of any gain or loss is recognized.
Whilst we do not plan to fully fund our LYT-100 or LYT-200
programs, we anticipate providing certain level of funding in
2025 while we seek external sources of funding. Consequently,
we anticipate our expenses to increase in the short term as we
continue to advance these Wholly-Owned Programs. However,
we anticipate a decrease in our expenses in the mid- and long-
term in connection with execution of our current strategy of
housing these Wholly-Owned Programs in Founded Entities
and accessing external sources of funding at the Founded
Entity level, which, over time, could lead to the deconsolidation
of the Founded Entities. The increase in our expenses and
capital requirements in the near term will involve:
— continued research and development efforts to advance our
clinical programs through development; and
— addition of clinical, scientific, operational, financial and
management information systems and maintaining
appropriate levels of personnel to execute on our strategic
initiatives.
Financial Review
Financial Review continued
1. Founded Entities are comprised of the entities which the Company incorporated and announced the incorporation as a Founded Entity externally. It includes certain of the Company’s
wholly-owned subsidiaries which have been announced by the Company as Founded Entities, Controlled Founded Entities2 and deconsolidated Founded Entities. As of December
31, 2024, deconsolidated Founded Entities included Vor Biopharma, Inc., Gelesis, Inc., Sonde Health, Inc., Vedanta Biosciences, Inc., and Seaport Therapeutics, Inc.
2. Controlled Founded Entities are comprised of the Company’s consolidated operational subsidiaries that currently have already raised third-party dilutive capital. As of December 31,
2024, Controlled Founded Entities included only Entrega. Inc.
3. Wholly-Owned Programs are comprised of the Company’s current and future therapeutic candidates and technologies that are developed by the Company's wholly-owned
subsidiaries, whether they were announced as a Founded Entity or not, and will be advanced through with either the Company's funding or non-dilutive sources of financing. As of
December 31 ,2024, Wholly-Owned Programs were developed by the wholly-owned subsidiaries including PureTech LYT, Inc., PureTech LYT 100, Inc. and Gallop Oncology, Inc. and
included primarily the programs deupirfenidone (LYT-100), and LYT-200.
Governance
Governance
70 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 71
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;
— 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.
Research and development activities are central to our
business model. Whilst we do not plan to fully fund our
LYT-100 or LYT-200 programs, we anticipate providing
certain level of funding in 2025 while we seek external
sources of funding. Consequently, we anticipate that our
research and development expenses will increase in the
short term as we continue to advance these Wholly-Owned
Programs. However, we anticipate a decrease in our research
and development expenses in the mid- and long-term in
connection with execution of our current strategy of housing
these Wholly-Owned Programs in Founded Entities and
accessing external sources of funding at the Founded Entity
level, which, over time, could lead to the deconsolidation of
the Founded Entities. The successful development of and
external funding for our wholly-owned and our Founded
Entities’ therapeutic candidates are 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 through our funding or in
conjunction with our external partners. We do not anticipate
fully-funding either the programs at the Founded Entities or
the Wholly-Owned Programs and in the absence of access to
adequate funding from external sources, we may have to delay,
scale back or discontinue one or more 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 Programs and Founded Entities and continuing
to progress our various technology platforms and other
potential therapeutic candidates based on previous human
efficacy and clinically validated biology within our Wholly-
Owned Programs and Founded Entities;
— establishing an appropriate safety profile with investigational
new drug application;
— the success of our Founded Entities and their need for
additional capital;
— identifying new therapeutic candidates to add to our
existing Wholly-Owned Programs or Founded Entities;
— successful enrollment in, and the initiation and completion
of, clinical trials;
— the timing, receipt and terms of any marketing approvals
from applicable regulatory authorities;
— 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.
Following is the description of our reportable segments:
Wholly-Owned Programs
The Wholly-Owned Programs segment is advancing Wholly-
Owned Programs which are focused on treatments for patients
with devastating diseases. The Wholly-Owned Programs
segment is comprised of the technologies that are wholly-
owned and will be advanced through with either the Group's
funding or non-dilutive sources of financing. The operational
management of the Wholly-Owned Programs segment is
conducted by the PureTech Health team, which is responsible
for the strategy, business development, and research and
development.
Controlled Founded Entities
The Controlled Founded Entities segment is comprised of the
Group’s consolidated operational subsidiaries as of December
31, 2024 that either have, or have plans to hire, independent
management teams and currently have already raised third-
party dilutive capital. These subsidiaries have active research
and development programs and have an equity or debt
investment partner, who will provide additional industry
knowledge and access to networks, as well as additional
funding to continue the pursued growth of the entity.
The Group’s entities that were determined not to meet
the definition of an operating segment are included in the
Parent Company and Other column to reconcile the segment
information to the Consolidated Financial Statements. This
column captures activities not directly attributable to the
Group’s operating segment and includes the activities of
the Parent, corporate support functions, certain research
and development support functions that are not directly
attributable to a strategic business segment as well as the
elimination of intercompany transactions. This column also
captures the operating results for our deconsolidated entities
through the date of deconsolidation (e.g. Seaport in 2024,
Vedanta in 2023, and Sonde in 2022), and accounting for
our holdings in Founded Entities for which control has been
lost, which primarily represent: the activity associated with
deconsolidating an entity we no longer control, the gain or
loss on our investments accounted for at fair value (e.g. our
ownership stakes in Seaport, Sonde, Vedanta, and Vor) and our
net income or loss of associates accounted for using the equity
method.
There was no change to the reportable segments in 2024,
except for the changes to the composition of the reportable
segments as described below.
In January 2024, we launched two new Founded Entities
(Seaport Therapeutics "Seaport" and Gallop Oncology
"Gallop") to advance certain programs from the Wholly-
Owned Programs segment. The financial results of these
programs were included in the Wholly-Owned Programs
segment as of and for the year ended December 31, 2023.
Seaport was deconsolidated on October 18, 2024 upon
completion of its Series B preferred share financing. The
financial results of Seaport through the date of deconsolidation
are included within the Parent Company and Other column as
of December 31, 2024.
As of December 31, 2024, Alivio, a wholly-owned subsidiary
of the Group, was dormant and did not meet the definition
of operating segment. The financial results of this entity
were removed from the Wholly-Owned Programs segment
and are included in the Parent Company and Other column.
The corresponding information for 2023 and 2022 has been
restated to include Alivio in the Parent Company and Other
column so that the segment disclosures are presented on a
comparable basis.
The table below summarizes the entities that comprised each
of our segments as of December 31, 2024:
Wholly-Owned Programs Segment
Ownership
Percentage
PureTech LYT
100.0%
PureTech LYT-100, Inc.
100.0%
Gallop Oncology, Inc. (Indirectly Held through
PureTech LYT)
100.0%
Controlled Founded Entities Segment
Entrega, Inc.
77.3%
Parent Company and Other1
Alivio Therapeutics, Inc.
100.0%
Follica, LLC
85.4%
Gelesis, Inc.2
—%
Seaport Therapeutics, Inc.3
42.9%
Sonde Health, Inc.4
40.2%
Vedanta Biosciences, Inc.5
46.9%
PureTech Health plc
100.0%
PureTech Health LLC
100.0%
PureTech Securities Corporation
100.0%
PureTech Securities II Corporation
100.0%
PureTech Management, Inc.
100.0%
1 Includes dormant, inactive and shell entities as well as Founded Entities that were
deconsolidated prior to 2024.
2 Gelesis filed for bankruptcy in October 2023.
3 Seaport Therapeutics, Inc. was deconsolidated on October 18, 2024.
4 Sonde Health, Inc was deconsolidated on May 25, 2022.
5 Vedanta Biosciences, Inc. was deconsolidated on March 1, 2023.
Components of Our Results of Operations
Revenue
To date, we have not generated any revenue from product
sales and we do not expect to generate any meaningful
revenue from product sales in the near 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 licensing agreements. 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 and non-profit
organizations as grant revenue 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.
Financial Review continued
Financial Review continued
Governance
Governance
72 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 73
Other Income (Expense)
Other income (expense) consists primarily of gains and losses
on financial instruments.
Finance Income/(Costs)
Finance costs consist of loan interest expense, interest
expense due to accretion of and adjustment to the sale of
future royalties liability as well as the changes in the fair value
of certain liabilities associated with financing transactions,
mainly subsidiary preferred share liability 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 U.S. treasuries.
Share of Net Income (Loss) of Associates Accounted for Using
the Equity Method, Gain on Dilution of Ownership Interest and
Impairment of Investment in Associates
Associates (or equity accounted investees) are accounted
for using the equity method 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/(loss) 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 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.
When our share in the equity of the investee changes as
a result of equity transactions in the investee (related to
financing events of the investee), we calculate a gain or loss on
such change in ownership and related share in the investee's
equity.
In 2023, we recorded our share of the net loss of Gelesis which
reduced the carrying amount of our investment in Gelesis to
zero. On October 30, 2023, Gelesis ceased operations and our
significant influence in Gelesis ceased. In 2024, we recorded
our share of the net losses of Sonde which reduced the
carrying amount of our investment in Sonde to zero.
Income Tax
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 or the
change in tax status.
We expect that our general and administrative expenses in
support of our research and development efforts will increase
in the short-term while we seek funding from external sources
for the Wholly-Owned Programs. However, we anticipate
a decrease in our general and administrative expenses in
the mid- and long-term in connection with execution of our
current strategy as we do not intend to fully fund our LYT-100
program’s Phase 3 trial or LYT-200’s Phase 2 trial on our own,
and as we seek to fund future development of the clinical
programs within our Wholly-Owned Programs with external
sources of funding at the Founded Entity level, which, over
time, could lead to the deconsolidation of the Founded
Entities that house these programs.
Total Other Income/(Expense)
Gain on Deconsolidation of Subsidiary
Upon losing control over 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
Statement 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 Seaport,
Vedanta, and other insignificant investments. We account for
investments in convertible preferred shares in accordance with
IFRS 9 as investments held at fair value when the preferred
shares do not provide their holders with access to returns
associated with a residual equity interest. Under IFRS 9,
the preferred share investments are categorized as debt
instruments that are presented at fair value through profit and
loss because the amounts receivable do not represent solely
payments of principal and interest.
Realized Gain/(Loss) on Sale of Investments
Realized gain/(loss) on sale of 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 realized loss in 2022
is attributable to the settlement of call options written by the
Group on Karuna stock. The amounts in 2023 and 2024 are not
significant.
Gain/(Loss) on Investments in Notes from Associates
Gain/(loss) on investments in notes from associates relates
to our investment in the notes from Gelesis and Vedanta.
We account for these notes in accordance with IFRS 9
as investments held at fair value, with changes in fair
value recognized through the Consolidated Statement of
Comprehensive Income/(Loss). The loss in 2023 is primarily
attributable to a decrease in the fair value of our notes from
Gelesis as Gelesis ceased operations and filed a voluntary
petition for relief under the provisions of Chapter 7 of Title
11 of the United States Bankruptcy Code in October 2023. In
2024, the Bankruptcy Court approved an executed agreement
for a third party to acquire the remaining net assets of
Gelesis for $15.0 million. As the only senior secured creditor,
we expect to receive a majority of the proceeds from the
sale after deduction of Bankruptcy Court related legal and
administrative costs. We recorded a gain of $11.4 million in
2024 for the changes in the fair value of these notes.
Results of Operations
The following table, which has been derived from our audited financial statements for the years ended December 31, 2024, 2023
and 2022, included herein, summarizes our results of operations for the periods indicated, together with the changes in those
items:
Year ended December 31,
(in thousands)
2024
2023
2022
Change
(2023 to 2024)
Change
(2022 to 2023)
Contract revenue
$4,315
$750
$2,090
$3,565
$(1,340)
Grant revenue
513
2,580
13,528
(2,067)
(10,948)
Total revenue
4,828
3,330
15,618
1,498
(12,288)
Operating expenses:
General and administrative expenses
(71,469)
(53,295)
(60,991)
(18,175)
7,696
Research and development expenses
(69,454)
(96,235)
(152,433)
26,781
56,199
Operating income/(loss)
(136,095)
(146,199)
(197,807)
10,104
51,607
Other income/(expense):
Gain/(loss) on deconsolidation of subsidiary
151,808
61,787
27,251
90,021
34,536
Gain/(loss) on investments held at fair value
(2,398)
77,945
(32,060)
(80,344)
110,006
Realized gain/(loss) on sale of investments
151
(122)
(29,303)
273
29,180
Gain/(loss) on investments in notes from associates
13,131
(27,630)
—
40,761
(27,630)
Other income/(expense)
961
(908)
8,131
1,869
(9,038)
Other income/(expense)
163,652
111,072
(25,981)
52,580
137,053
Net finance income/(costs)
4,773
5,078
138,924
(306)
(133,846)
Share of net income/(loss) of associates accounted for
using the equity method
(8,754)
(6,055)
(27,749)
(2,699)
21,695
Gain/(loss) on dilution of ownership interest in associate
199
—
28,220
199
(28,220)
Impairment of investment in associates
—
—
(8,390)
—
8,390
Income/(loss) before income taxes
23,774
(36,103)
(92,783)
59,878
56,680
Taxation
4,008
(30,525)
55,719
34,532
(86,243)
Net income/(loss) including non-controlling interest
27,782
(66,628)
(37,065)
94,410
(29,563)
Less income/(loss) attributable to non-controlling
interests
(25,728)
(931)
13,290
(24,797)
(14,221)
Net income/(loss) attributable to the Owners of the
Group
$53,510
$(65,697)
$(50,354)
$119,207
$(15,342)
Comparison of the Years Ended December 31, 2024 and 2023
Total Revenue
Year ended December 31,
(in thousands)
2024
2023
Change
Total Contract Revenue
4,315
750
3,565
Total Grant Revenue
513
2,580
(2,067)
Total Revenue
$4,828
$3,330
$1,498
Our total revenue was $4.8 million for the year ended December 31, 2024, an increase of $1.5 million, or 45.0% compared to
the year ended December 31, 2023. The increase in revenue is primarily due an increase in contract revenue driven by the
achievement of a $4.0 million milestone payment from Bristol Myers Squibb ("BMS"), the acquirer of Karuna, our deconsolidated
Founded Entity, upon the U.S. Food and Drug Administration's approval of KarXT which occurred in September 2024. We
also recognized $0.3 million in royalty revenue from sales of KarXT (Cobenfy) pursuant to a patent license agreement between
PureTech and Karuna. The increase is partially offset by the completion of a revenue agreement in 2023 for Entrega, our
Controlled Founded Entity, and a decrease in grant revenue of $2.1 million related to completed grants and the deconsolidation
of Vedanta in 2023.
Financial Review continued
Financial Review continued
Governance
Governance
74 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 75
Net Finance Income/(Costs)
Net finance income/costs) was $4.8 million for the year ended
December 31, 2024, compared to $5.1 million for the year
ended December 31, 2023, a decrease of $0.3 million or 6%.
The reduction in net finance income is primarily attributed
to an increase in the fair value of subsidiary preferred share
liability offset by various other changes.
Share of Net Income/(loss) of Associates Accounted for Using
the Equity Method
For the year ended December 31, 2024, the share in net
loss of associates reported under the equity method was
$8.8 million as compared to the share in net loss of associates
of $6.1 million for the year ended December 31, 2023, an
increase in loss of $2.7 million or 45%. The increase in loss was
primarily attributable to the increase in loss from Sonde and
Group's share of loss from Seaport accounted for under the
equity method upon deconsolidation in October, 2024.
Taxation
For the year ended December 31, 2024, the income tax
benefit was $4.0 million, compared to an income tax expense
of $30.5 million for the year ended December 31, 2023, a
decrease in income tax expense of $34.5 million or 113%.
This decrease in tax expense was primarily attributable to
the recognition of previously unrecognized deferred tax
assets and related tax benefits in 2024, compared to the
income tax expense recognized in 2023 due to an increase
in unrecognized deferred tax assets that were not expected
to be utilized in the future as well as certain discrete events
and transactions from 2023, such as the tax effects from the
sale of future royalties to Royalty Pharma. The income tax
benefits in 2024 were partially offset by an increase in pre-tax
income in the tax-consolidated U.S. group and an increase in
Massachusetts income tax expense.
Comparison of the Years Ended December 31, 2023 and 2022
For the comparison of 2023 to 2022, refer to Part I, Item 5
“Operating and Financial Review and Prospects” of our Annual
Report on Form 20-F for the year ended December 31, 2023.
Material 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
UK-adopted International Financial Reporting Standards
("IFRSs"). The Consolidated Financial Statements also comply
fully with IFRSs as issued by the International Accounting
Standards Board ("IASB"). In the preparation of these financial
statements, we are required to make judgments, estimates
and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be
relevant. Actual results may differ from these estimates under
different assumptions or conditions.
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. Material Accounting Policies to our Consolidated
Financial Statements for a further detailed description of our
material accounting policies.
General and Administrative Expenses
Our general and administrative expenses were $71.5 million for the year ended December 31, 2024, an increase of $18.2 million,
or 34% compared to the year ended December 31, 2023. The increase is primarily driven by a $18.8 million increase in stock
based compensation, $17.4 million of which resulted from new stock awards granted to employees, officers, founders and
directors of Seaport in 2024 prior to the deconsolidation of Seaport from our Consolidated Financial Statements, partially offset
with decrease in compensation and benefits expense, driven by an overall decrease in headcount in 2024 compared to 2023.
Research and Development Expenses
The following table shows the research and development expenses by program.
Year ended December 31,
(in thousands)
2024
2023
Change
LYT-100 Programs external costs
(29,942)
$(39,530)
9,588
LYT-200 Programs external costs
(10,464)
$(8,850)
(1,614)
LYT-300 Programs external costs
(1,157)
(8,843)
7,686
Wholly owned PureTech Platform and other non-clinical programs external costs
(6,514)
(8,210)
1,697
Controlled Founded Entities Programs
(3,904)
(1,974)
(1,930)
Other research program external costs
(355)
(2,032)
1,677
Payroll costs
(15,023)
(21,102)
6,079
Facilities and other expenses
(2,095)
(5,693)
3,598
Total Research and Development Expenses:
$(69,454)
$(96,235)
$26,781
Our research and development expenses were $69.5 million for the year ended December 31, 2024, a decrease of $26.8 million,
or 27.8% compared to the year ended December 31, 2023.
The decrease in research and development expenses in 2024 is driven by the following changes in program costs:
— Decrease in LYT-100 program costs of $9.6 million is due to the completion of phase II study and lower patient enrollment
activities in 2024 as compared to 2023.
— Decrease in LYT-300 program costs of $7.7 million is primarily due to the development of this program, now being driven by
Seaport, our Controlled Founded Entity which was deconsolidated in October, 2024.
— Decrease in wholly owned PureTech Platform and other non-clinical programs costs of $1.7 million is primarily attributed to the
deprioritization of the Alivio and certain Glyph platform assets.
— The Controlled Founded Entities program costs in 2024 pertain entirely to Seaport’s LYT-300 program during the period of
consolidation and until its deconsolidation. The balance in 2023 pertains primarily to Vedanta’s clinical programs during the
period of consolidation and until its deconsolidation.
— Decrease in other research program costs of $1.7 million is primarily attributed to the deconsolidation of Vedanta in
March 2023.
— Decrease in payroll costs of $6.1 million is driven by the deconsolidation of Vedanta in 2023, Seaport in 2024, and an overall
decrease in headcount in 2024 as compared to 2023.
— Decrease in facilities and other expenses of $3.6 million is primarily driven by lower depreciation expense resulting from the
lower fixed asset balance in 2024 and lower fixed asset impairment charge in 2024 compared to 2023.
This decrease in research and development expenses is partially offset by the increase in LYT-200 program costs of $1.6 million
due to the increased activity within the two clinical studies in the oncology therapy programs and increase in Controlled Founded
Entities programs of $1.9 million due to the timing of deconsolidation of the Controlled Founded Entities.
Total Other Income/(Expense)
Total other income was $163.7 million for the year ended December 31, 2024 compared to $111.1 million for the year ended
December 31, 2023, an increase of $52.6 million, or 47%. The increase in other income was primarily attributable to the following:
— A one time gain of $151.8 million recognized in 2024 as a result of the deconsolidation of Seaport in October 2024, compared
to a one time gain of $61.8 million recognized in 2023 as a result of the deconsolidation of Vedanta in March 2023, reflecting an
increase in other income of $90.0 million.
— A gain of $13.1 million in investments in notes from associates in 2024 attributed to the increase in the fair value of the Gelesis
notes. The loss of $27.6 million in 2023 is primarily attributable to a decrease in the fair value of our notes from Gelesis as
Gelesis ceased operations and filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11 of the United
States Bankruptcy Code in October 2023. In 2024, the Bankruptcy Court approved an executed agreement for a third party to
acquire the remaining net assets of Gelesis for $15.0 million. As the only senior secured creditor, we expect to receive a majority
of the proceeds from the sale after deduction of Bankruptcy Court related legal and administrative costs. This change resulted
in an increase in other income of $40.8 million.
— A loss on investment held at fair value of $2.4 million in 2024 primarily attributed to the decline in fair value of various
investments, compared to a gain of $77.9 million in 2023 primarily attributed to an increase in the fair value of Karuna shares.
The change resulted in a decrease in other income of $80.3 million.
Financial instruments
We account for our financial instruments according to IFRS
9. In accordance with IFRS 9, we carry certain financial assets
and financial liabilities at fair value, with changes in fair value
through profit and loss ("FVTPL"). Valuation of these financial
instruments includes determining the appropriate valuation
methodology and making certain estimates such as the future
expected returns on the financial instrument in different
scenarios, appropriate discount rate, volatility, and term to exit.
In accordance with IFRS 9, when issuing preferred shares in
our subsidiaries, we determine the classification of financial
instruments in terms of liability or equity. Such determination
involves 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.
Consolidation
The Consolidated Financial Statements include the financial
statements of the Group and the entities it controls. Based
on the applicable accounting rules, we control an investee
when we are exposed, or have rights, to variable returns
from our involvement with the investee and have the ability
to affect those returns through our power over the investee.
Therefore, an assessment is required to determine whether
we have (i) power over the investee; (ii) exposure, or rights, to
variable returns from our involvement with the investee; and
(iii) the ability to use our power over the investee to affect
the amount of our returns. Judgement is required to perform
such assessment, and it requires that we consider, among
others, activities that most significantly affect the returns of the
investee, our voting shares, representation on the board, rights
to appoint board members and management, shareholders
agreements, de facto power and other contributing factors.
Sale of Future Royalties Liability
We account for the sale of future royalties liability as a financial
liability, as we continue to hold the rights under the royalty
bearing licensing agreement and have a contractual obligation
to deliver cash to an investor for a portion of the royalty we
receive. This liability is tied to the future royalties we may
receive from product sales. We have no obligation to pay any
amounts to the counterparty if we do not receive any royalties
in the future. Interest on the sale of future royalties liability is
recognized using the effective interest rate over the life of the
related royalty stream.
The sale of future royalties liability and the related interest
expense are based on our current estimates of future royalties
expected to be paid over the life of the arrangement.
Forecasts are updated periodically as new data is obtained.
Any increases, decreases or a shift in timing of estimated
cash flows require us to re-calculate the amortized cost of
the sale of future royalties liability as the present value of the
estimated future contractual cash flows that are discounted at
the liability’s original effective interest rate. The adjustment is
recognized immediately in profit or loss as income or expense.
In determining the appropriate accounting treatment for
the Royalty Purchase Agreement during 2023, management
applied significant judgement.
Financial Review continued
Financial Review continued
Governance
Governance
76 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 77
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 % 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 or loss 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 investments considered to be long-term
interests ("LTI"), 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
us is accounted for in accordance with IFRS 9.
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 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 associates,
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 Group 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.
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 Note 2. New Standards and Interpretations to our
Consolidated Financial Statements.
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 Entities' therapeutic candidates;
— the revenue, if any, generated by wholly-owned and
Controlled-Founded Entities' therapeutic candidates;
— the revenue, if any, generated from licensing and royalty
agreements with Founded Entities;
— the financing requirements of the Wholly-Owned Programs
and our Founded Entities; and
— the investing activities including the monetization, through
sale, of shares held in our public Founded Entities.
As of December 31, 2024, we had cash and cash equivalents
of $280.6 million and short-term investments of $86.7 million.
As of December 31, 2024, we had PureTech Level cash, cash
equivalents and short-term investments of $366.8 million.
PureTech Level cash, cash equivalents and short-term
investments is a non-IFRS measure (for a definition of PureTech
Level cash, cash equivalents and short-term investments and a
reconciliation with the IFRS number, see the section Measuring
Performance earlier in this Financial Review). In March 2024, we
received total proceeds of $292.7 million before income tax in
exchange for our holding of 886,885 shares of Karuna common
stock as a result of the completion of Karuna acquisition by
Bristol Myers Squibb (“BMS”).
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
Year ended December 31,
(in thousands)
2024
2023
2022
Net cash used in operating activities
$(134,369)
$(105,917)
$(178,792)
Net cash provided by (used in) investing activities
240,888
68,991
(107,223)
Net cash provided by (used in) financing activities
(16,958)
78,141
(29,827)
Net increase (decrease) in cash and cash equivalents
$89,560
$41,215
$(315,842)
Operating Activities
Net cash used in operating activities was $134.4 million for the
year ended December 31, 2024, as compared to $105.9 million
for the year ended December 31, 2023, resulting in an increase
of $28.5 million in net cash used in operating activities. The
increase in cash outflows is primarily attributable to $37.8
million increase in tax payments related to the sale of the
Karuna shares, offset by a net increase in interest receipts and
decrease in interest payment of $9.5 million.
Net cash used in operating activities was $105.9 million for the
year ended December 31, 2023, as compared to $178.8 million
for the year ended December 31, 2022, resulting in a decrease
of $72.9 million in net cash used in operating activities. The
decrease in outflows is primarily attributable to our lower
operating loss mainly due to a decrease in research and
development activities in the Wholly-Owned Programs and
Controlled Founded Entities and a decrease of operating cash
flows as a result of the deconsolidation of Vedanta on March 1,
2023.
Investing Activities
Net cash provided by investing activities was $240.9 million for
the year ended December 31, 2024, as compared to net cash
provided by investing activities of $69.0 million for the year
ended December 31, 2023, resulting in an increase of $171.9
million in cash provided by investing activities. The increase
in net cash provided by investing activities was primarily
attributable to an increase in proceeds from the sale of
investments held at fair value of $264.8 million, partially offset
by an increase in cash outflow from short-term investment
activities (redemptions, net of purchases) amounting to $17.2
million, and the derecognition of cash balances of $91.6 million
upon deconsolidation of Seaport in 2024, compared to $13.8
million from the deconsolidation of Vedanta in 2023, a net
increase in cash outflow of $77.8 million.
Net cash provided by investing activities was $69.0 million
for the year ended December 31, 2023, as compared to net
cash outflow of $107.2 for the year ended December 31, 2022,
resulting in an increase of $176.2 million in net cash from
investing activities. The increase in net cash from investing
activities was primarily attributable to increased cash inflow
from short-term investment activities (redemptions, net of
purchases) amounting to $264.4 million, partially offset by a
reduction in proceeds from the sale of investments held at fair
value of $85.4 million.
Financing Activities
Net cash used in financing activities was $17.0 million for the
year ended December 31, 2024, as compared to net cash
provided by financing activities of $78.1 million for the year
ended December 31, 2023, resulting in an increase of $95.1
million in net cash used in financing activities. The increase in
net cash used in financing activities was primarily attributable
to a $87.9 million increase in share repurchase activities,
related primarily to the repurchase of $100.0 million of shares
in the June 2024 tender offer, and a $75.0 million decrease
in cash inflow from Royalty Pharma under Royalty Purchase
Agreement, partially offset by a $68.1 million proceeds from
issuance of subsidiary preferred shares in 2024 as compared to
2023.
Net cash provided by financing activities was $78.1 million for
the year ended December 31, 2023, as compared to net cash
used in financing activities of $29.8 million for the year ended
December 31, 2022, resulting in an increase of $108.0 million
in the net cash provided by financing activities. The increase
in the net cash provided by financing activities was primarily
attributable to the receipts of $100.0 million upfront payment
from Royalty Pharma upon execution of Royalty Purchase
Agreement in March 2023, and a $6.8 million decrease in
treasury stock purchase in 2023 as compared to 2022.
Funding Requirements
We have incurred operating losses since inception. Based on
our current plans, we believe our existing financial assets as of
December 31, 2024, will be sufficient to fund our operations
and capital expenditure requirements into at least 2027. We
expect to incur substantial additional expenditures in the
near term to support our ongoing and future activities. We
anticipate to continue to incur net operating losses for the
foreseeable future to support our existing Founded Entities
and our strategy around creating and supporting other
Founded Entities, should they require it, to reach significant
development milestones over the period of the assessment in
conjunction with our external partners. We also expect to incur
significant costs to advance our Wholly-Owned Programs,
although we do not intend to fully fund our LYT-100 program's
Phase 3 trial or LYT-200 program's Phase 2 trial, on our own,
to continue research and development efforts, to discover
and progress new therapeutic candidates and to fund the
Group’s operating costs into at least 2027. Our ability to fund
our therapeutic development and clinical operations as well
as ability to fund our existing and future Founded Entities
will depend on the amount and timing of cash received
from financings at the Founded Entity level, monetization
of shares of public Founded Entities and potential business
development activities. Our future capital requirements will
depend on many factors, including:
— the costs, timing and outcomes of clinical trials and
regulatory reviews associated with our wholly-owned
therapeutic candidates;
— 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”), the European Medicines Agency
(“EMA”) or other regulatory authorities;
— the number and types of future therapeutics we develop and
support with the goal of commercialization;
— The costs, timing and outcomes of identifying, evaluating,
and investing in technologies and drug candidates to
develop as Wholly-Owned Programs or as Founded Entities;
and
— the success of our Founded Entities and their need for
additional capital.
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 beyond
our existing financial assets. 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 Review continued
Financial Review continued
Governance
Governance
78 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 79
Financial Position
Summary Financial Position
As of December 31,
(in thousands)
2024
2023
Change
Investments held at fair value
$191,426
$317,841
$(126,415)
Other non-current assets
24,953
28,930
(3,976)
Non-current assets
216,379
346,771
(130,392)
Cash and cash equivalents, and short-term investments
367,307
327,143
40,164
Other current assets
18,949
20,059
(1,110)
Current assets
386,256
347,201
39,054
Total assets
602,635
693,973
(91,338)
Lease liability
14,671
18,250
(3,579)
Deferred tax liability
—
52,462
(52,462)
Sale of future royalties liability, non-current
136,782
110,159
26,623
Other non-current liabilities
1,861
3,501
(1,640)
Non-current liabilities
153,314
184,371
(31,058)
Trade and other payables
27,020
44,107
(17,088)
Notes payable
4,111
3,699
412
Preferred share liability
169
169
—
Sale of future royalties liability, current
6,435
—
6,435
Other current liabilities
3,654
3,394
259
Current liabilities
41,388
51,370
(9,982)
Total liabilities
194,702
235,741
(41,039)
Net assets
407,933
458,232
(50,298)
Total equity
$407,933
$458,232
$(50,298)
Investments Held at Fair Value
Investments held at fair value decreased by $126.4 million to $191.4 million as of December 31, 2024. As of December 31, 2024,
Investments held at fair value consist primarily of our preferred share investment in Seaport (from October, 2024), Vedanta, and
our common share investment in Vor. The decrease is attributed to a $287.1 million decrease due to the sale of Karuna and Akili
shares as a result of Karuna's acquisition by BMS in March 2024 and Akili's acquisition by Virtual Therapeutics in July 2024 as well
as decreases in fair value of various other investments. The decreases were partially offset by Group's recognizing its investment
in the convertible preferred shares of Seaport in the amount of $179.2 million subsequent to Seaport being deconsolidated from
the Group’s financial statements.
Cash, Cash Equivalents, and Short-Term Investments
Consolidated cash, cash equivalents and short-term investments increased by $40.2 million to $367.3 million as of December 31,
2024. The increase is primarily attributed to an aggregate of $298.1 million in proceeds from the disposition of Karuna and Akili
shares, $68.1 million in proceeds from the issuance of Seaport Series A-2 preferred shares and a $25.0 million milestone payment
from Royalty Pharma during the year ended December 31, 2024, partially offset by net cash used in operating activities of $134.4
million, purchases of treasury stock and repurchases in connection with the June 2024 tender offer of $107.6 million, investment
in Seaport Series B preferred shares of $14.4 million and cash derecognized upon loss of control over Seaport of $91.6 million.
Non-current liabilities
Non-current liabilities decreased by $31.1 million to $153.3 million as of December 31, 2024. The decrease is due to the reversal
of $52.5 million deferred tax liability in 2024 which was primarily related to the appreciation of Karuna shares as of December 31,
2023. The decrease is partially offset by an increase in the sale of future royalty liability driven by the receipt of a $25.0 million
milestone payment from BMS following the approval by the FDA to market KarXT as Cobenfy, and the accretion of non-cash
interest expense on the sale of future royalties liability.
Trade and Other Payables
Trade and other payables decreased by $17.1 million to $27.0 million as of December 31, 2024. The decrease reflected lower
operating expenses primarily from the reduced clinical trials related activities as well as the deconsolidation of Seaport for the
year ended December 31, 2024.
Quantitative and Qualitative Disclosures about Financial Risks
Interest Rate Sensitivity
As of December 31, 2024, we had cash and cash equivalents
of $280.6 million and short-term investments of $86.7 million,
while we had PureTech Level cash, cash equivalents and
short-term investments of $366.8 million. PureTech Level
cash, cash equivalents and short-term investments is a non-
IFRS measure (for a definition of PureTech Level cash, cash
equivalents and short-term investments and a reconciliation
with the IFRS number, see the section Measuring Performance
earlier in this Financial review). Our exposure to interest rate
sensitivity is impacted by changes in the underlying U.K. and
U.S. bank interest rates. We have not entered into investments
for trading or speculative purposes. Due to the conservative
nature of our investment portfolio, which is predicated on
capital preservation and investments in short duration, high-
quality U.S. Treasury Bills and related money market accounts,
we do not believe a change in interest rates would have a
material effect on the fair market value of our portfolio, and
therefore, we do not expect our operating results or cash flows
to be significantly affected by changes in market interest rates.
Foreign Currency Exchange Risk
We maintain our Consolidated Financial Statements in
our functional currency, which is the U.S. dollar. Monetary
assets and liabilities denominated in currencies other than
the functional currency are translated into the functional
currency at rates of exchange prevailing at the balance sheet
dates. Non-monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency
at the exchange rates prevailing at the date of the transaction.
Exchange gains or losses arising from foreign currency
transactions are included in the determination of net income
(loss) for the respective periods. Such foreign currency gains or
losses were not material for all reported periods.
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 exposed to a subsidiary 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 profit and loss. We view our
exposure to third-party subsidiary preferred share liability as
low as of December 31, 2024 as the liability is not significant.
Please refer to Note 17. Subsidiary Preferred Shares to our
Consolidated Financial Statements for further information
regarding our exposure to Controlled Founded Entity
investments.
Deconsolidated Founded Entity Investments
We maintain certain debt or equity holdings in Founded
Entities which have been deconsolidated. These holdings
are deemed either as investments carried at fair value under
IFRS 9 with changes in fair value recorded through profit and
loss or as associates accounted for under IAS 28 using the
equity method. Our exposure to investments held at fair value
and investments in notes from associates was $191.4 million
and $17.7 million, respectively, as of December 31, 2024,
and we may or may not be able to realize the value in the
future. Accordingly, we view the risk as high. Our exposure
to investments in associates is limited to the carrying amount
of the investment. We are not exposed to further contractual
obligations or contingent liabilities beyond the value of initial
investment. Accordingly, we do not view this risk as high.
Equity Price Risk
As of December 31, 2024, we held 2,671,800 common shares
of Vor with a fair value of $3.0 million. As of December 31,
2023, we held 886,885 common shares of Karuna, 2,671,800
common shares of Vor, and 12,527,476 common shares of Akili
with fair value of $280.7 million, $6.0 million, and $6.1 million,
respectively. The common shares of Karuna and Akili were
disposed of in 2024 as part of Karuna's acquisition by BMS in
March 2024 and Akili's acquisition by Virtual Therapeutics in
July 2024.
The investment in Vor is exposed to fluctuations in the market
price of Vor's common shares. We view the exposure to equity
price risk as low.
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 and short-term
investments 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.
Financial Review continued
Financial Review continued
80 PureTech Health plc Annual Report and Accounts 2024
Governance
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
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.
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 are 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
receivable base. However, our exposure to credit losses is
currently low due to the immateriality of the outstanding
receivable balance, a small number of counterparties and
the high credit quality or healthy financial conditions of these
counterparties.
Foreign Private Issuer Status
Owing to our U.S. listing on the Nasdaq Global Market,
we report under the Securities Exchange Act of 1934, as
amended, or the Exchange Act, as a non-U.S. company with
foreign private issuer status. As long as we qualify as a foreign
private issuer under the Exchange Act, we will be exempt from
certain provisions of the Exchange Act that are applicable to
U.S. domestic public companies, including:
— 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.
Financial Review continued
PureTech Health plc Annual Report and Accounts 2024 81
Governance
Since June 20, 2024, I am excited to now serve as Chair to
continue the strong governance practices at PureTech. Under
my leadership, the Board has been focused on exploring every
avenue for maximising shareholder value.
This year the Nomination Committee, with assistance from the
rest of the Board and the Company’s management, continued to
explore adding new non-executive directors to strengthen the
Board’s skillsets and reinforce the strong governance that has
been a hallmark of the Company’s Board and broader operations.
As a testament to these efforts, I am delighted to welcome Dr.
Michele Holcomb, Ph.D. to the Board. Dr. Holcomb joined the
Board in September 2024 and brings more than 30 years of
experience at leading global healthcare companies, and the
Board is excited to have her as we work to identify and develop
medicines with the potential to transform lives.
The Board looks forward to being able to discuss these matters
with our shareholders in connection with our AGM or indeed at
any other time during the year.
Dr. Raju Kucherlapati, Ph.D.
Chair
April 30, 2025
Dear Shareholder,
I am pleased to introduce our Corporate Governance Report. This
Report sets out our governance framework and the work of the
Board and its committees.
As a Board, we are responsible for ensuring there is an effective
governance framework in place. This includes setting the
Company’s strategic objectives, ensuring the right leadership
and resources are in place to achieve these objectives, monitoring
performance, ensuring that sufficient internal controls and
protections are in place and reporting to shareholders. An
effective governance framework is also designed to ensure
accountability, fairness and transparency in the Company’s
relationships with all of its stakeholders, whether shareholders,
employees, partners, the government or the wider patient
community. We believe that good corporate governance is
essential for building a successful and sustainable business.
The Board is committed to the highest standards of corporate
governance and undertakes to maintain a sound framework for
our control and management. In this Report, we provide details of
that framework.
The key constituents necessary to deliver a robust structure are in
place and, accordingly, this report includes a description of how
the Company has applied the principles and provisions of the
Governance Code and how it intends to apply those principles
in the future.
Chair’s overview
“We believe that good corporate
governance is essential for building a
successful and sustainable business.”
82 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 83
Governance
Governance
Board of Directors continued
Kiran Mazumdar-Shaw
Independent
Non-Executive Director
John LaMattina, Ph.D.
Senior Independent
Director, Transaction
Committee Member,
R&D Committee Member
Robert Langer, Sc.D.
Co-Founder and
Non-Executive Director,
R&D Committee Member
John LaMattina, Ph.D., has served as
a member of our Board since 2009,
and assumed the role of Senior
Independent Director in April 2025.
Dr. LaMattina previously worked at
Pfizer in different roles from 1977
to 2007, including vice president
of U.S. Discovery Operations in
1993, senior vice president of
worldwide discovery operations
in 1998, senior vice president of
worldwide development in 1999
and president of global research
and development from 2003 to
2007. Dr. LaMattina serves on
the board of directors of Ligand
Pharmaceuticals and Vedanta
Biosciences, Inc. Dr. LaMattina
previously served on the boards of
Immunome Inc. until October 2023
and Zafgen, Inc. until April 2020. He
is also a trustee associate of Boston
College. During Dr. LaMattina’s
leadership tenure, Pfizer discovered
and/or developed a number of
important new medicines including
Tarceva, Chantix, Zoloft, Selzentry
and Lyrica, along with a number of
other medicines currently in late
stage development for cancer,
rheumatoid arthritis and pain.
He is the author of numerous
scientific publications and U.S.
patents. Dr. LaMattina received
the 1998 Boston College Alumni
Award of Excellence in Science
and the 2004 American Diabetes
Association Award for Leadership
and Commitment in the Fight
Against Diabetes. He was awarded
an Honorary Doctor of Science
degree from the University of New
Hampshire in 2007. In 2010, he
was the recipient of the American
Chemical Society’s Earle B.
Barnes Award for Leadership in
Chemical Research Management.
He is the author of “Devalued
and Distrusted—Can the
Pharmaceutical Industry Restore
its Broken Image,” “Drug Truths:
Dispelling the Myths About
Pharma R&D,” “Pharma and Profits:
Balancing Innovation, Medicine,
and Drug Prices” and an author of
the Drug Truths blog at Forbes.
com. Dr. LaMattina received a B.S.
in Chemistry from Boston College
and received a Ph.D. in Organic
Chemistry from the University of
New Hampshire. He then moved on
to Princeton University as a National
Institutes of Health postdoctoral
fellow in the laboratory of
professor E. C. Taylor.
Robert S. Langer, Sc.D., is a co-
founder, member of PureTech’s
R&D Committee and has served as
a member of the board of directors
since our founding. Dr. Langer
has served as the David H. Koch
Institute professor at MIT since
2005. He served as a member of
the FDA’s science board from 1995
to 2002 and as its chairman from
1999 to 2002. Dr. Langer serves on
the board of directors of Seer Bio.
Dr. Langer previously served on
the boards of Moderna, Inc., which
he co-founded, until August 2024,
Abpro Korea until February 2024
and Frequency Therapeutics, Inc.
until November 2023. Dr. Langer
has received over 250 major awards,
including the 2006 U.S. National
Medal of Science, the Charles Stark
Draper Prize in 2002 and the 2012
Priestley Medal. He is also the first
engineer to receive the Gairdner
Foundation International Award.
Dr. Langer has received the Dickson
Prize for Science, Heinz Award,
Harvey Prize, John Fritz Award,
General Motors Kettering Prize for
Cancer Research, Dan David Prize
in Materials Science, Breakthough
Prize in Life Sciences, National
Medal of Science, National Medal
of Technology and Innovation,
Kyoto Prize, Wolf Prize, Albany
Medical Center Prize in Medicine
and Biomedical Research and the
Lemelson-MIT prize. In 2006, he
was inducted into the National
Inventors Hall of Fame. In January
2015, Dr. Langer was awarded
the 2015 Queen Elizabeth Prize
for Engineering. Dr. Langer
received his bachelor’s degree in
Chemical Engineering from Cornell
University and his Sc.D. in Chemical
Engineering from MIT.
Kiran Mazumdar-Shaw has served
as a member of our Board since
September 2020. Ms. Mazumdar-
Shaw has been the executive
chairperson of Biocon Limited,
which she founded in 1978, since
April 2020, and she served as
managing director of Biocon
Limited from 1995 to 2020.
Ms. Mazumdar-Shaw holds key
positions in various industry,
educational, government and
professional bodies globally. She
served as a full-term member of the
board of trustees of Massachusetts
Institute of Technology until
June 2023. She has been elected
as a member of the prestigious
U.S.-based National Academy of
Engineering. She also serves as
a director on the board of United
Breweries Limited, and non-
executive director on the board of
Narayana Health. Ms. Mazumdar-
Shaw previously served as the lead
independent member of the board
of Infosys Ltd until March 2023.
Ms. Mazumdar-Shaw has received
two of India’s highest civilian
honors, the Padma Shri in 1989 and
the Padma Bhushan in 2005. She
was also honored with the Order
of Australia, Australia’s highest
civilian honor in January 2020. In
2016, she was conferred with the
highest French distinction – Knight
of the Legion of Honour – and in
2014 received the Othmer Gold
Medal in 2014 from the U.S.-based
Chemical Heritage Foundation
for her pioneering efforts in
biotechnology. Ms. Mazumdar-
Shaw has been ranked as one of the
world’s top 20 inspirational leaders
in the field of biopharmaceuticals
by The Medicine Maker Power
List 2020, and she was the winner
of EY World Entrepreneur of the
Year™ 2020 Award. She was the
first woman business leader from
India to sign the Giving Pledge, an
initiative of the Gates Foundation,
committing to give the majority of
her wealth to philanthropic causes.
She received a bachelor’s degree
in science, Zoology Hons., from
Bangalore University and a master’s
degree in malting and brewing
from Ballarat College, Melbourne
University. She has been awarded
several honorary degrees from
other universities globally.
Raju Kucherlapati, Ph.D.
Chair of the Board, Transaction
Committee Member,
R&D Committee Member
Sharon Barber-Lui
Independent Non-Executive
Director, Transaction
Committee Member
Michele Holcomb, Ph.D.
Independent Non-Executive
Director , Transaction
Committee Member
Sharon Barber-Lui has served as a
member of our Board since March
2022 and became the Chair of the
Audit Committee in April 2022.
Ms. Barber-Lui has been the Chief
Financial Officer and Senior Vice
President, North America at Teva
Pharmaceutical Industries Ltd. since
July 2023. Prior to joining Teva,
Ms. Barber-Lui worked as Senior
Vice President of Global Finance
at EQRx and at Merck for over
twenty years in roles of advancing
responsibility, including most
recently as the Head of Portfolio
Market Strategy, Operations and
Business Analytics from 2019
through 2021 and Chief Financial
Officer from 2014 through 2018 for
Merck’s U.S. oncology business.
Prior to that Ms. Barber-Lui held
a number of other roles with
Merck including Treasurer of U.S.
Region, Head of U.S. Treasury
Operations, and Head of Legal
Entity Integration and Global
Treasury Services, among others.
Ms. Barber-Lui began her career
as an accountant for KPMG LLP,
and she received her bachelor’s
degree as well as her M.B.A. from
Lehigh University. Ms. Barber‑Lui is
a member of the American Institute
of Certified Public Accountants.
She is also the recipient of Merck &
Co. Inc.’s Top Talent Designation,
Women’s Leadership Recognition
and Oncology Women’s
Leader Recognition.
Michele Holcomb, Ph.D. has
served as a member of our Board
since September 2024 and is a
member of the Audit Committee
and Transaction Committee.
Dr. Holcomb is also a member of
the board of directors and chair of
the Nominating and ESG (NESG)
committee of Kimball Electronics
Inc (Nasdaq: KE). Dr. Holcomb
previously worked as Executive
Vice President, Chief Strategy
and Business Development
Officer at Cardinal Health from
January 2017 until September
2022. Prior to joining Cardinal
Health, Dr. Holcomb was the Chief
Operating Officer of Global R&D
and SVP of Strategy, Portfolio,
Search and Partnerships at Teva
Pharmaceuticals. She also spent
15 years at McKinsey & Company
and was a Partner of the Global
Pharmaceutical Practice. She also
serves on the board of the Abigail
Wexner Research Institute at
Nationwide Children’s Hospital
in Columbus, the BalletMet of
Columbus, where she chairs the
long-range planning committee
and the Liberty Science Center in
New Jersey. Dr. Holcomb received
a B.S. in chemistry from Stanford
University and a Ph.D. in chemistry
from the University of California,
Berkeley, and previously worked
as an R&D chemist at Ciba-Geigy
and Syntex Pharmaceuticals.
Dr. Holcomb is also a member of
the editorial advisory board of
Pharmaceutical Executive and has
lectured on healthcare strategy at
Kellogg (Northwestern), Columbia
and Fuqua (Duke) business schools.
Raju Kucherlapati, Ph.D., has served
as a member of our Board since 2014
and assumed the role of Chair on
June 20, 2024, after having served
as interim Chair since the June 2023.
Dr. Kucherlapati has also served
as chair of PureTech’s Nomination
Committee since December 31,
2022 and Senior Independent
Director from December 31, 2022
to April 2025. He has been the Paul
C. Cabot professor of Genetics
and a professor of medicine at
Harvard Medical School since 2001.
Dr. Kucherlapati currently serves
on the board of directors of KEW
Inc. Dr. Kucherlapati previously
served on the board of Gelesis
Holdings, Inc. until October 2023.
He was a founder and former board
member of Abgenix (acquired by
Amgen for $2.2 billion), Cell Genesys
and Millennium Pharmaceuticals
(acquired by Takeda for $8.8 billion).
He was the first scientific director
of the Harvard-Partners Center for
Genetics and Genomics. He is a
fellow of the American Association
for the Advancement of Science and
a member of the National Academy
of Medicine. Dr. Kucherlapati
received his Ph.D. from the University
of Illinois. He trained at Yale and has
held faculty positions at Princeton
University, University of Illinois
College of Medicine and the Albert
Einstein College of Medicine. He
served on the editorial board of the
New England Journal of Medicine
and was Editor in Chief of the journal
Genomics. He was a member of
the presidential commission for the
study of bioethical issues during
the Obama administration. His
laboratory at Harvard Medical
School is involved in cloning and
characterization of human disease
genes with a focus on human
syndromes with a significant
cardiovascular involvement, use
of genetic/genomic approaches
to understand the biology of
cancer and the generation and
characterization of genetically
modified mouse models for cancer
and other human disorders.
His laboratory was a part of the
Human Genome Program that
was responsible for mapping and
sequencing the human genome.
Dr. Kucherlapati developed methods
for modifying mammalian genes that
lead to gene targeting in mice. He
has developed many mouse models
for human disease, including a large
set of models for human colorectal
cancer. His laboratory was a part of
The Cancer Genome Atlas (TCGA)
program that uses genetic/genomic
approaches to understand the
biology of cancer. He is a promoter of
personalized/precision medicine.
PureTech Health is
led by a seasoned
and accomplished
Board of Directors and
management team with
extensive experience
in maximising
shareholder value,
discovering scientific
breakthroughs, and
delivering therapeutics
to market.
Board of Directors
(alphabetically)*
* The biography for executive director
Bharatt Chowrira can be found on
page 85.
84 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 85
Governance
Governance
Board of Directors continued
Eric Elenko, Ph.D.
Co-Founder and President
Bharatt Chowrira, Ph.D., J.D.
Chief Executive Officer,
Member of the Board
of Directors
Bharatt Chowrira, Ph.D., J.D., has been our chief executive officer since his appointment by the Board in April 2024.
He was formerly president and chief business, finance and operating officer since September 2022, president and
chief business, legal and operating officer from January 2022 through September 2022 and our president and
chief of business and strategy from March 2017 through December 2021. Dr. Chowrira has served as a member of
PureTech’s Board since February 2021 and also serves on the board of directors of Seaport Therapeutics. Inc. Prior
to joining PureTech, Dr. Chowrira was the president of Synlogic, Inc., a biopharmaceutical company focused on
developing synthetic microbiome-based therapeutics, from September 2015 to February 2017, where he oversaw
and managed corporate and business development, alliance management, financial, human resources, intellectual
property and legal operations. Prior to that, Dr. Chowrira was the chief operating officer of Auspex Pharmaceuticals,
Inc. from October 2013 to July 2015, which was acquired by Teva Pharmaceutical Industries Ltd. in the spring of 2015.
Previously, he was president and chief executive officer of Addex Therapeutics Ltd., a biotechnology company
publicly-traded on the SIX Swiss Exchange, from August 2011 to July 2013. Prior to that Dr. Chowrira held various
leadership and management positions at Nektar Therapeutics (chief operating officer), Merck & Co, or Merck (vice
president), Sirna Therapeutics (general counsel; acquired by Merck) and Ribozyme Pharmaceuticals (chief patent
counsel). Dr. Chowrira previously served on the board of directors of Vedanta Biosciences, Inc. from September 2018
to February 2023, Akili Interactive Labs, Inc. from November 2017 to September 2019 and June 2021 to October 2022,
Vor Biopharma from August 2018 to June 2020, and Karuna Therapeutics, Inc. from March 2017 to December 2019.
Dr. Chowrira received a J.D. from the University of Denver’s Sturm College of Law, a Ph.D. in Molecular Biology from
the University of Vermont College of Medicine, a M.S. in Molecular Biology from Illinois State University and a B.S. in
Microbiology from the UAS, Bangalore, India.
Eric Elenko, Ph.D., has served as our president since his appointment by the Board in April 2024. Prior to his current
role, Dr. Elenko served as chief innovation officer since June 2015 and held various other positions at PureTech prior
thereto. While at PureTech, Dr. Elenko has led the development of a number of programs, including Akili Interactive
Labs, Inc., Gelesis, Inc., Karuna Therapeutics, Inc. (acquired by Bristol Myers Squibb for $14.0 billion) and Sonde
Health, Inc. Dr. Elenko is a founder and serves on the board of directors of Seaport Therapeutics. Inc. and Sonde
Health, Inc. Prior to joining PureTech, Dr. Elenko was a consultant with McKinsey & Company from February 2002 to
September 2005, where he advised senior executives of both Fortune 500 and specialty pharmaceutical companies
on a range of issues such as product licensing, mergers and acquisitions, research and development strategy and
marketing. Dr. Elenko received a B.A. in Biology from Swarthmore College and his Ph.D. in Biomedical Sciences from
University of California, San Diego.
Management Team
(alphabetically)*
H. Robert Horvitz, Ph.D.**
Board Advisor,
R&D Committee Chair
Dennis Ausiello, M.D.**
Board Advisor,
R&D Committee Member
Dennis Ausiello, M.D., is a board
advisor and member of the
PureTech R&D Committee. He is the
Jackson Distinguished Professor
of Clinical Medicine and was
previously director, emeritus of
the M.D./Ph.D. Program at Harvard
Medical School. Dr. Ausiello is
chairman of medicine, emeritus
and director of the Center for
Assessment Technology and
Continuous Health (CATCH) at
Massachusetts General Hospital
(MGH). This center is a partnership
among MGH, MIT and Harvard
University with a mission to develop
real-time assessment of human
traits in wellness and disease. In
partnership with industry, it is
creating tools for measurements of
traditional and novel phenotypes.
Understanding the need for
partnerships between the academy
and industry, Dr. Ausiello served
on the board of directors of Pfizer
Pharmaceuticals, where he was their
former lead director. He currently
serves as a member of the board
of directors of Seres Therapeutics,
Inc. and Alnylam Pharmaceuticals,
Inc. Dr. Ausiello is also a member
of the board of directors of several
non-public biotech companies and
is a consultant to Verily (formerly
Google Life Sciences) and Pfizer
Pharmaceuticals. Dr. Ausiello is
a nationally recognized leader
in academic medicine who was
elected to the National Academy
of Medicine in 1999 and the
American Academy of Arts and
Sciences in 2003. He has published
numerous articles, book chapters
and textbooks and has served as
an editor of Cecil’s Textbook of
Medicine. Dr. Ausiello received
his BA from Harvard College
and an M.D. from the University
of Pennsylvania.
H. Robert Horvitz, Ph.D., is a
board observer and Chair of the
R&D Committee at PureTech.
He received the Nobel Prize in
Physiology or Medicine and is the
David H. Koch Professor of Biology
at Massachusetts Institute of
Technology, an investigator of the
Howard Hughes Medical Institute,
neurobiologist (Neurology) at
Massachusetts General Hospital,
a member of the MIT McGovern
Institute for Brain Research
and the MIT Koch Institute for
Integrative Cancer Research. He is
cofounder of multiple life science
companies, including Epizyme
(EPZM), Mitobridge (acquired by
Astellas) and Idun Pharmaceuticals
(acquired by Pfizer) and was a
member of the Scientific Advisory
Board of the Novartis Institutes for
BioMedical Research.
Dr. Horvitz was a member of
the board of trustees of the
Massachusetts General Hospital. He
also previously served as Chairman
of the Board of Trustees of the
Society for Science and the Public
and as President of the Genetics
Society of America. Dr. Horvitz
is a member of the U.S. National
Academy of Sciences, the U.S.
National Academy of Medicine and
the American Philosophical Society
and is a foreign member of the Royal
Society of London. He is a fellow
of the American Academy of Arts
and Sciences and of the American
Academy of Microbiology.
Dr. Horvitz received the U.S.
National Academies of Science
Award in Molecular Biology;
the Charles A. Dana Award for
Pioneering Achievements in
Health; the Ciba-Drew Award
for Biomedical Science; the
General Motors Cancer Research
Foundation Alfred P. Sloan, Jr.
Prize; the Gairdner Foundation
International Award; the March
of Dimes Prize in Developmental
Biology; the Genetics Society of
America Medal; the Bristol-Myers
Squibb Award for Distinguished
Achievement in Neuroscience;
the Wiley Prize in the Biomedical
Sciences; the Peter Gruber
Foundation Genetics Prize; the
American Cancer Society Medal
of Honor; the Alfred G. Knudson
Award of the National Cancer
Institute; and the UK Genetics
Society Mendel Medal. He has
received honorary doctoral
degrees from the University of
Rome, Cambridge University,
Pennsylvania State University and
the University of Miami.
Daphne Zohar**
Founder and Board Advisor
Daphne Zohar is a board observer
and senior advisor. A founder
of PureTech, Ms. Zohar served
as chief executive officer and a
member of the board of directors
since our formation and UK
main market listing in 2015 until
her departure in April 2024, to
become founder, chief executive
officer and a board member of
PureTech founded entity, Seaport
Therapeutics, Inc. A successful
entrepreneur, Ms. Zohar created
PureTech, assembling a leading
team to help implement her vision
for the company, and was a key
driver in fundraising, business
development and establishing the
underlying programs and platforms
that have resulted in PureTech’s
productive R & D engine, which
led to 29 new medicines being
advanced via its Wholly Owned
Pipeline and Founded Entities,
including Cobenfy (KarXT) that has
received US FDA approval. As the
founding CEO of PureTech, she also
co-founded PureTech’s entities,
including Karuna Therapeutics,
which was acquired by Bristol Myers
Squibb for $14 billion. Ms. Zohar has
been recognized as a top leader
and innovator in biotechnology
by a number of sources, including
EY, Fierce Pharma, BioWorld, MIT
Technology Review, The Boston
Globe and Scientific American
including recent recognition as one
of Goldman Sachs’ most influential
entrepreneurs in 2024 and being
named to STAT’s 2025 STATUS
list, the ultimate list of leaders in
life sciences. She serves on the
BIO (Biotechnology Innovation
Organization) Board Executive
Committee as well as the Health
Section Committee. Ms. Zohar is
a member of the Duke-Margolis
Center Policy Roundtable on the
Inflation Reduction Act (IRA) and
the Health Affairs IRA Observatory.
She is also a co-founder and host
of the Biotech Hangout podcast,
a weekly discussion of biotech
news with a group of industry
leaders and experts.
Michael Inbar, CPA, MBA
Chief Accounting Officer
Robert Lyne
Chief Portfolio Officer
Charles (Chip) Sherwood, J.D.
General Counsel and
Company Secretary
Michael Inbar, CPA, MBA, is the chief accounting officer at PureTech where he leads all aspects of accounting,
compliance, and finance operations. Prior to joining PureTech in 2023, Mr. Inbar was the chief financial officer of
Acronis Inc., a private multinational software company, and interim chief financial officer at Wallarm, Inc., a private
cyber-security company. He has held several leadership roles in other technology and biotechnology companies,
including Solid Biosciences, Inc., Syros Pharmaceuticals, Inc., and GlassHouse Technologies, Inc. Mr. Inbar started
his career in public accounting and spent 11 years in the audit and assurance practice, mostly with EY. Mr. Inbar has
over 20 years of experience in accounting and finance, with expertise in scaling up businesses to support organic
growth or acquisitions, debt and equity fundraising, and building high performing finance teams to support
companies’ objectives and success.
Robert Lyne is the chief portfolio officer at PureTech. Prior to joining PureTech, Mr. Lyne was the Chief Executive
Officer at Arix Bioscience plc, a transatlantic venture capital company focused on investing in innovative
biotechnology companies. He began his career as a lawyer at international law firm Bird & Bird LLP in London before
moving to Touchstone Innovations, a London listed biotech and technology investor, which was acquired in 2017.
He has worked on over 80 venture capital financings in Europe and North America as well as multiple trade exits and
IPOs. As an experienced UK plc executive, Mr. Lyne has broad experience formulating and implementing corporate
strategy. Mr. Lyne has a BA from the University of Oxford and an LLB from Oxford Brookes University.
Charles Sherwood, J.D., is the general counsel and company secretary at PureTech, where he leads the company’s
corporate legal function, including corporate governance and compliance. Mr. Sherwood also serves on the
board of directors of Vedanta Biosciences, Inc. Prior to joining PureTech in August 2021, he was the Vice President,
Corporate Legal Counsel at Anika Therapeutics, a small-cap NASDAQ-listed biotechnology company. During his
time at Anika, Charles built and led the legal department, where he served as a strategic advisor to management and
the Board and developed extensive subject matter expertise involving strategic transactions, intellectual property,
product and brand marketing, financing and other financial matters and securities compliance and other compliance
matters. Mr. Sherwood received a B.A. in economics from Middlebury College and a J.D. from Vanderbilt University
Law School. He is admitted to the Massachusetts Bar.
** Dr. Horvitz, Dr. Ausiello and Ms. Zohar are not members of the PureTech Board. As Board Observers, Dr. Horvitz, and Ms. Zohar
attend the majority of Board meetings. Dr. Horvitz and Dr. Ausiello are members of PureTech’s R&D Committee, of which Dr. Horvitz
is the Chair.
86 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 87
Governance
Governance
The Company’s schedule of matters reserved for the Board
includes the following matters:
— approval and monitoring of our strategic aims and objectives;
— approval of the annual operating and capital
expenditure budget;
— changes to our capital structure, the issue of any of our
securities and material borrowings;
— approval of the annual report and half-year results statement,
accounting policies and practices or any matter having a
material impact on our future financial performance;
— ensuring a sound system of internal control and
risk management;
— approving Board appointments and removals, and approving
policies relating to directors’ remuneration;
— strategic acquisitions;
— major disposals of our assets or subsidiaries;
— approval of all circulars, prospectuses and other documents
issued to shareholders governed by the Financial
Conduct Authority’s (FCA) Listing Rules, Disclosure
Guidance and Transparency Rules or the City Code on
Takeovers and Mergers;
— approval of terms of reference and membership of
Board committees;
— considering and, where appropriate, approving directors’
conflicts of interest; and
— approval, subject to shareholder approval, of the appointment
and remuneration of the auditors.
The schedule of matters reserved to the Board is available on
request from the Company Secretary or within the Investors
section of our website at www.puretechhealth.com.
The Board delegates specific responsibilities to certain
committees that assist the Board in carrying out its functions
and ensure independent oversight of internal control and risk
management. The three principal Board committees (Audit,
Remuneration and Nomination) play an essential role in
supporting the Board in fulfilling its responsibilities and ensuring
that we maintain the highest standards of corporate governance.
Each committee has its own terms of reference which set out the
specific matters for which delegated authority has been given
by the Board.
The terms of reference for each of the committees are fully
compliant with the provisions of the Governance Code. All of
these are available on request from the Company Secretary
or within the Investors section of our website at www.
puretechhealth.com.
Roles and responsibilities of the Board
The Board is responsible to shareholders for our overall
management as a whole. The main roles of the Board are:
— creating value for shareholders;
— providing business and scientific leadership;
— approving our strategic objectives;
— ensuring that the necessary financial and human resources are
in place to meet strategic objectives;
— overseeing our system of risk management; and
— setting the values and standards for both our business conduct
and governance matters.
The Directors are also responsible for ensuring that obligations
to shareholders and other stakeholders are understood and met
and that communication with shareholders is maintained. The
responsibility of the Directors is collective, taking into account
their respective roles as Executive Directors and Non-Executive
Directors. All Directors are equally accountable to the Company’s
shareholders for the proper stewardship of its affairs and our long-
term success.
The Board reviews strategic issues on a regular basis. During
the past year the Board has played an active role on a variety of
strategic initiatives of the Company. Members served as subject
matter experts, advised on asset evaluation strategy and reviewed
potential transactions. In addition, several members served on
an independent transactions committee, led by the interim Chair.
As a result, certain members have devoted substantial time and
effort to the Company, above and beyond what would typically be
expected of Non-Executive Directors.
The Board has also exercised control over our performance
by agreeing on budgetary and operational targets and
monitoring performance against those targets. The Board has
overall responsibility for our system of internal controls and risk
management. Any decisions made by the Board on policies and
strategy to be adopted by us or changes to current policies and
strategy are made following presentations by the Executive
Director and other members of management, and only after a
detailed process of review and challenge by the Board. Once
made, the Executive Director and other members of management
are fully empowered to implement those decisions.
Except for a formal schedule of matters which are reserved for
decision and approval by the Board, the Board has delegated our
day-to-day management to the Chief Executive Officer who is
supported by other members of the senior management team.
The schedule of matters reserved for Board decision and approval
are those significant to us as a whole due to their strategic,
financial or reputational implications.
The Board
The Board continued
Senior Independent Director
The Company’s Senior Independent Director is Dr. John
LaMattina, who was appointed to the role in April 2025. During
2024, Dr. Raju Kucherlapati served in the role. The Board has
considered the position of Senior Independent Director, following
Dr. Kucherlapati’s appointment as Chair, and has determined that
the functions of the role would be best fulfilled by Dr. LaMattina.
Following Dr. LaMattina’s appointment, a key responsibility of the
Senior Independent Director is to be available to shareholders
in the event that they may feel it inappropriate to relay views
through the Chair or Chief Executive Officer. In addition, the
Senior Independent Director is to serve as an intermediary
between the rest of the Board and the Chair where necessary.
Further, the Senior Independent Director will lead the Board in
its deliberations on any matters on which the Chair is conflicted.
The Board has considered the position of Senior Independent
Director, following Dr. Kucherlapati’s appointment as Chair,
and has determined that the functions of the role would be best
fulfilled by Dr. LaMattina.
The roles of Chair and Chief Executive Officer
The Company’s Chair is Dr. Raju Kucherlapati. He assumed the
role of Chair of the Board on June 20, 2024, after having served as
interim Chair since the June 2023. The Nomination Committee
carefully considered Dr. Kucherlapati’s skills, knowledge and
expertise, as well as his long-term involvement in the evolution
of PureTech and his exemplary leadership during his tenure as
interim Chair in their decision to appoint him to the role of Chair.
There is and will remain a clear division of responsibilities between
the Chair and the Chief Executive Officer.
The Chair is responsible for the leadership and conduct of
the Board and for ensuring effective communication with
shareholders.
The Chair facilitates the full and effective contribution of Non-
Executive Directors at Board and Committee meetings, ensures
that they are kept well informed and ensures a constructive
relationship between the Executive Directors and Non-Executive
Directors. The Chair also ensures that the Board committees carry
out their duties, including reporting back to the Board either orally
or in writing following their meetings at the next Board meeting.
In the role of the Chief Executive Officer, Dr. Bharatt Chowrira,
is to lead the execution of the Company’s strategy and the
executive management of PureTech. He is responsible, among
other things, for the development and implementation of strategy
and processes which enable us to meet the requirements of
shareholders, for delivering the operating plans and budgets for
our businesses, for monitoring business performance against key
performance indicators (KPIs) and reporting on these to the Board
and for providing the appropriate environment to recruit, engage,
retain and develop the high-quality personnel needed to deliver
our strategy.
Board size and composition
As of December 31, 2024, there were seven Directors on the
Board: the Non-Executive Chair, one Executive Director and five
Non-Executive Directors. The biographies of these Directors are
provided on pages 82 to 85. Raju Kucherlapati, Ph.D., assumed the
role of Chair of the Board on June 20, 2024, after having served as
interim Chair since the June 2023. Michele Holcomb, Ph.D. joined
the Board as a Non-Executive Director on September 23, 2024.
Additionally, former Executive Director Daphne Zohar departed
from the Board on April 8, 2024 to become chief executive officer
of PureTech founded entity, Seaport Therapeutics, Inc. There were
no other changes to the composition of the Board during 2024.
The Company’s policy relating to the terms of appointment
and the remuneration of both Executive and Non-Executive
Directors is detailed in the Directors’ Remuneration Report on
pages 102 to 122.
The size and composition of the Board is regularly reviewed by
the Nomination Committee to ensure there is an appropriate and
diverse mix of skills and experience on the Board.
The Board may appoint any person to serve as a Director, either to
fill a vacancy or as an addition to the existing Board. Any Director
so appointed by the Board shall hold office only until the following
AGM and then shall be eligible for election by the shareholders.
In accordance with the Governance Code, all of the Directors will
be offering themselves for election at the AGM to be held on June
4, 2025, full details of which are set out in the notice of meeting
accompanying this Annual Report.
Non-Executive Directors
The Company’s Non-Executive Directors are Dr. Raju Kucherlapati
(Chair), Ms. Sharon Barber-Lui, Dr. Michele Holcomb, Dr. John
LaMattina, Dr. Robert Langer, and Ms. Kiran Mazumdar-Shaw.
The Non-Executive Directors provide us with a wide range of skills
and experience. Each Non-Executive Director has significant
senior level experience as well as an extensive network in each
of their own fields, an innovative mindset and independent
judgement on issues of strategy, performance and risk, and
is well placed to constructively challenge and scrutinize the
performance of management. In addition, certain of our Non-
Executive Directors also serve as members of one or more boards
of directors of our Founded Entities and are key drivers for our
Wholly-Owned Programs.
88 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 89
Governance
Governance
The Board continued
Board meetings and decisions
The Board meets regularly during the year, as well as on an ad
hoc basis as required by business need. The Board had eight
scheduled meetings in 2024, and details on attendance are set
forth in the table below:
Director
Number of Board
Meetings Attended
Raju Kucherlapati
8/8
Sharon Barber-Lui
8/8
Michele Holcomb*
2/2
John LaMattina
8/8
Robert Langer
7/8
Kiran Mazumdar-Shaw
5/8
Bharatt Chowrira
8/8
Daphne Zohar**
3/3
* Dr. Holcomb joined the Company’s Board in September 2024.
** Ms. Zohar joined all three meetings as an Executive Director prior to her resignation
from the role on April 8, 2024.
While each current director was able to attend the vast majority
of meetings in 2024, in the event of any unavoidable absence, the
impacted Director would review with management the topics and
materials to be discussed at the meeting, and provide appropriate
feedback to be conveyed at such meeting, as was the case with
respect to the meetings any director was unable to attend.
The Board also acted by unanimous written consent eleven times
in 2024. On occasion it was more expedient for the Board to
approve matters, especially administrative matters, by unanimous
written consent rather than to convene a meeting for the purpose.
Directors were, however, provided with an opportunity to discuss
any concerns they had with the written resolution before its issue
for signature.
At each quarterly meeting of the Board, there was a closed
session held in which only the Chair and the other Non-Executive
Directors participated. In certain meetings held to discuss a
specific topic or topics, a closed session was not held due to
limited time allocated for such meeting or the nature of the topic
being considered.
The schedule of Board and Committee meetings each year is, so
far as is possible, determined before the commencement of that
year and all Directors or, if applicable, all Committee members,
are expected to attend each meeting.
Supplementary meetings of the Board and/or the Committees
are held as and when necessary. Each member of the Board
receives in advance of each scheduled meeting detailed Board
packages, which include an agenda based upon matters to
be addressed and appropriate presentation and background
materials. If a Director is unable to attend a meeting due to
exceptional circumstances, he or she will nonetheless receive
the meeting materials and discuss the materials with the Chief
Executive Officer.
Independence
The Governance Code requires that at least 50 percent of the
Board of a UK premium listed company, excluding the Chair,
consists of Non-Executive Directors determined by the Board
to be independent in character and judgement and free from
relationships or circumstances which may affect, or could appear
to affect, the Directors’ judgement. The Board regards Ms.
Barber-Lui, Dr. Holcomb, Dr. LaMattina and Ms. Mazumdar-Shaw
as Independent Non-Executive Directors for the purposes of the
Governance Code. In reaching this determination, the Board duly
considered (i) their directorships and links with other Directors
through their involvement in other subsidiary companies; (ii)
their equity interests in PureTech and/or the Founded Entities,
including equity grants of restricted stock units made to Non-
Executive Directors by the Company under its Performance
Share Plan; and (iii) in respect of Dr. LaMattina, the length of his
tenure as a Directors of the Company. The Board is satisfied
that the judgement, experience and challenging approach
adopted by each of these Directors should ensure that they each
make a significant contribution to the work of the Board and
its committees. Therefore, the Board has determined that Ms.
Barber-Lui, Dr. Holcomb, Dr. LaMattina, and Ms. Mazumdar-Shaw
are of independent character and judgement, notwithstanding
the circumstances described at (i), (ii) and (iii) above.
During 2024, the Nomination Committee, with assistance from
the rest of the Board and the Company’s management, welcomed
Dr. Holcomb to the Board. The Committee continues to evaluate
potentially adding additional independent non-executive
directors to strengthen the Board’s skillsets and reinforce the
strong governance that has been a hallmark of the Company’s
Board and broader operations. The Nomination Committee and
the Company intend to conduct a thorough and expeditious
process to identify the best candidates. Progress updates will be
provided in due course.
Board support, indemnity and insurance
The Company Secretary, Mr. Charles Sherwood, is responsible to
the Board for ensuring Board procedures are followed, applicable
rules and regulations are complied with and that the Board is
advised on governance and relevant regulatory matters. All
Directors have access to the impartial advice and services of the
Company Secretary.
There is also an agreed procedure for Directors to take
independent professional advice at the Company’s expense.
In accordance with the Company’s Articles of Association and a
contractual Deed of Indemnity, the Directors have been granted
an indemnity issued by the Company to the extent permitted
by law in respect of liabilities incurred to third parties as a result
of their office. The indemnity would not provide any coverage
where a Director is proved to have acted fraudulently or with
wilful misconduct. The Company has also arranged appropriate
insurance cover in respect of legal action against its Directors
and officers.
The Board continued
Induction, awareness and development
In preparation for the Company’s initial public offering (IPO),
and upon joining the Board subsequent to the IPO, Directors
received an induction briefing from the Company’s legal advisors
on their duties and responsibilities as Directors of a publicly
quoted company. The Directors also received presentations from
the Company’s corporate brokers prior to the IPO. In addition,
in order to ensure that the Directors continue to further their
understanding of the challenges facing our Founded Entities
and Wholly-Owned Programs, the Board periodically receives
the presentations and reports covering the business and
operations of each of our Founded Entities as well as its Wholly-
Owned Programs.
We have put in place a comprehensive induction plan for any
new Directors, including following the recent appointment of
Dr. Michele Holcomb to the Company’s Board in September
2024. This program is tailored to the needs of each individual
Director and agreed with him or her so that he or she can gain a
better understanding of us and our businesses. In addition, the
Company facilitates sessions as appropriate with our advisors, as
well as appropriate governance specialists, to ensure that any new
Directors are fully aware of, and understand, their responsibilities
and obligations of a publicly quoted company and of the
governance framework within which they must operate.
Board effectiveness and performance evaluation
The Board periodically reviews its effectiveness and performance.
The Board seeks the assistance of an independent third-party
provider at least once every three years in its evaluation in
compliance with the Governance Code, and will otherwise carry
out an internally facilitated Board evaluation led by the Senior
Independent Director, assisted by the Company Secretary,
covering the effectiveness of the Board as a whole, its individual
Directors and its Committees. For 2024, internal evaluations of
the Board demonstrated that the Board and its Committees fulfil
their responsibilities, operate effectively and demonstrate a clear
structure and division of responsibilities between the Board and
its Committees. The increased quality of Board materials and
presentations and advances in the process for evaluating strategic
transactions were favourably viewed. The Board will continue to
perform internal evaluations to ensure the effectiveness of the
Board and ensure alignment with the interests of stakeholders.
In addition to the above, the Non-Executive Directors, led by
the Senior Independent Director, will periodically appraise the
Chair’s performance, following which the Senior Independent
Director will provide any feedback to the Chair. The performance
of each of the Directors on the Board and the performance of the
committees of the Board will be reviewed by the Chair as deemed
necessary. The performance of Executive Directors will be
reviewed by the Board on an ongoing basis, as deemed necessary,
in the absence of the Executive Director under review.
The Chair, Chief Executive Officer and senior management
team work together to ensure that the Directors receive relevant
information to enable them to discharge their duties and that
such information is accurate, timely and clear. This information
includes quarterly management accounts containing analysis
of performance against budget as well as a summary of the
operational performance of each of our businesses against its
goals. Additional information is provided as appropriate for the
topics being addressed at the meeting. At each meeting, the
Board receives presentations from the Chief Executive Officer
and, by invitation, other members of senior management as
required. This ensures that all Directors are in a position to
effectively monitor our overall performance, and to contribute to
the development and implementation of its strategy.
Company Board meetings are held either in our offices in Boston,
Massachusetts, U.S., or by videoconference. This practice began
during the onset of the COVID-19 pandemic for the safety of the
Board and has continued in recent years. The venue of Board
meetings varies depending on the schedules and health of our
directors. The Board endeavours to hold at least two in-person
meetings during the year, as they give members of the Company’s
senior management team, as well as the senior management of
the Founded Entities, the opportunity to formally present to the
Board on new technology development and business strategies.
Certain Directors also serve on the boards of directors of our
Founded Entities. These Founded Entity boards of directors meet
regularly during the year, as well as on an ad hoc basis as required
by business need. This service enables the Directors to have deep
understanding of the businesses and contribute significantly to
the strategy and oversight of these businesses.
Directors’ conflicts of interest
Each Director has a statutory duty under the Companies Act 2006
(the CA 2006) to avoid a situation in which he or she has or can have
a direct or indirect interest that conflicts or may potentially conflict
with the interests of the Company. This duty is in addition to the
continuing duty that a Director owes to the Company to disclose
to the Board any transaction or arrangement under consideration
by the Company in which he or she is interested. The Company’s
Articles of Association permit the Board to authorize conflicts
or potential conflicts of interest. The Board has established
procedures for managing and, where appropriate, authorizing any
such conflicts or potential conflicts of interest. In deciding whether
to authorize any conflict, the Directors must have regard to their
general duties under the CA 2006 and their overriding obligation
to act in a way they consider, in good faith, will be most likely to
promote the Company’s success. In addition, the Directors are
able to impose limits or conditions when giving authorization
to a conflict or potential conflict of interest if they think this is
appropriate. The authorization of any conflict matter, and the
terms of any authorization, may be reviewed by the Board at any
time. The Board believes that the procedures established to deal
with conflicts of interest are operating effectively.
90 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 91
Governance
Governance
Identification and evaluation of risks
The Board actively identifies and evaluates the risks inherent in the
business and ensures that appropriate controls and procedures
are in place to manage these risks. The Board obtains an update
regarding our Wholly-Owned Programs and all Founded
Entities on a regular basis, and reviews our performance and
the performance of our Wholly-Owned Programs and Founded
Entities on a quarterly basis. However, the performance and
structuring of business units may be reviewed more frequently
if deemed appropriate.
The key risks and uncertainties we face, as well as the relevant
mitigations, are set out on pages 60-64 and in the Additional
Information section from pages 182 to 219.
Information and financial reporting systems
We evaluate and manage significant risks associated with the
process for preparing consolidated accounts by having in place
systems and internal controls that ensure adequate accounting
records are maintained and transactions are recorded accurately
and fairly to permit the preparation of financial statements in
accordance with IFRS. The Board approves the annual operating
budgets and regularly receives details of actual performance
measured against the budget.
Principal risks and uncertainties
Our operations and the implementation of our objectives and
strategy are subject to a number of key risks and uncertainties.
Principal and emerging risks are formally reviewed by the Board
at least annually and appropriate procedures are put in place to
monitor and, to the extent possible, mitigate these risks.
A summary of the key risks affecting us and the steps taken
to manage these risks are set out on pages 60-64 and in the
Additional Information section from pages 182 to 219.
Political expenditure
It is the Board’s policy not to incur political expenditure or
otherwise make cash contributions to political parties and it has no
intention of changing that policy.
2025 Annual General Meeting
The Notice of the AGM, which will be held at 11:00 am EDT
(4:00 pm BST) on June 16, 2025 at the Company’s corporate
headquarters at 6 Tide Street, in Boston, Massachusetts, U.S.,
is enclosed with this report. Details of the resolutions and the
explanatory notes thereto are included with the Notice. To ensure
compliance with the Governance Code, the Board proposes
separate resolutions for each issue and proxy forms allow
shareholders who are unable to attend the AGM to vote for or
against or to withhold their vote on each resolution. In addition, to
encourage shareholders to participate in the AGM process, the
Company proposes to offer electronic proxy voting through the
Registrar’s website and through the CREST service. The results of
all proxy voting will be published on our website after the AGM.
Our website at www.puretechhealth.com is the primary source
of information on us. The website includes an overview of our
activities, details of our businesses, and details of all of our
recent announcements.
Committees of the Board
The Board has three principal committees: the Nomination
Committee, the Audit Committee and the Remuneration
Committee. The composition of the three principal committees
of the Board and the attendance of the members throughout the
year is set out in the respective committee reports contained in
this Annual Report. In addition to the principal committees there
are two other committees, the Transaction and R&D Committees,
on which non-executive directors participate.
Transaction Committee
Since early 2023, the Board has maintained a standing
Transaction Committee. The committee meets ad hoc and
more formally when actively evaluating a transaction. During
2024, the Transaction Committee met formally twelve times, in
consideration of the Seaport asset transfer and financings and a
number of other matters the Board assessed and evaluated.
R&D Committee
The R&D Committee meets quarterly to discuss continued
progress of ongoing Wholly-Owned Programs and evaluate
opportunities for new programs. During 2024, the R&D
Committee met formally four times.
The terms of reference of each committee are available on request
from the Company Secretary and within the Investors section of
our website at www.puretechhealth.com.
Internal Control
The Board fully recognizes the importance of the guidance
contained in the Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting. Our internal
controls were in place during the whole of 2024 and we are
satisfied that we have adequate controls and that our internal
control over financial reporting was effective for the year ended
December 31, 2024.
The Board is responsible for establishing and monitoring internal
control systems and for reviewing the effectiveness of these
systems. The Board views the effective operation of a rigorous
system of internal control as critical to our success; however, it
recognizes that such systems are designed to manage rather than
eliminate risk of failure and can provide only reasonable and not
absolute assurance against material misstatement or loss. The key
elements of our internal control system, all of which have been in
place during the financial year and up to the date these financial
statements were approved, are as follows:
Control environment and procedures
We have a clear organizational structure with defined
responsibilities and accountabilities. It adopts the highest values
surrounding quality, integrity and ethics, and these values are
communicated clearly throughout the whole organization.
Detailed written policies and procedures have been established
covering key operating and compliance risk areas. These policies
and procedures are reviewed and the effectiveness of the systems
of internal control is assessed periodically by the Board.
The Board recognizes its duties under Section 172 of the Companies Act 2006 and continuously has regard to how the Company’s
activities and decisions will impact investors, employees, those with whom it has a business relationship, the community and
environment and its reputation for high standards of business conduct. In weighing all of the relevant factors, the Board, acting in good
faith and fairly between members, makes decisions and takes actions that it considers will best lead to the long- term success of the
Company. In accordance with Section 172, it is the responsibility of the Board as a whole to ensure that a satisfactory dialogue takes
place and that the Board considers the potential impact on the Company’s key stakeholders when making decisions.
The Board is committed to understanding and engaging with shareholders and other key stakeholder groups of the Company in order
to maximize value and promote long-term Company success in line with our strategic objectives, as well as to promote and ensure
fairness between our stakeholders. The Board believes that appropriate steps and considerations have been taken during the year so
that each Director has an understanding of the various key stakeholders of the Company. The Board recognizes its responsibility to
contemplate all such stakeholder needs and concerns as part of its discussions, decision-making, and in the course of taking actions and
will continue to make stakeholder engagement a top priority in the coming years.
During the year, the Board assessed its current activities between the Board and its stakeholders, which demonstrated that the Board
actively engages with its stakeholders and takes their various objectives into consideration when making decisions.
Stakeholder
How we engage
Key matters identified
Further information
Investors
– Our shareholders are the owners and
investors in our business. We make
significant efforts to engage with
our shareholders and understand
their objectives. We engage with our
shareholders through a number of
mechanisms to ensure that shareholder
views are brought into the boardroom and
considered in our decision-making.
– The Board’s primary shareholder contact
is through the Chief Executive Officer. The
Chair, the Senior Independent Director
and other Directors, as appropriate,
make themselves available for contact
with major shareholders and other
stakeholders in order to understand their
issues and concerns.
– Stakeholder engagement will often take
place by the Executive Directors and
senior management through investor
meetings and investor roadshows, including
participation at healthcare conferences
and participating in fireside chats at those
events, with the Board receiving regular
updates by way of analysis reports on
stakeholder views.
– Meetings were held throughout the year with
institutional shareholders. Key shareholder
publications including the annual report, the
full year and half year results announcements
and press releases and the information for
investors are available on the Company’s
website: www.puretechhealth.com.
– Our Board keeps its Strategy and Business Model
under regular review. During the past year, the
Board has engaged to carefully consider its
strategy for future growth and development,
in particular devoting attention to the future
prospects of its business model and its listing
venues and the risks and opportunities this would
give to the Company’s stakeholders.
– The company carefully manages its expenditure
and anticipates future capital needs through
careful capital management and capital allocation
to its Wholly-Owned Programs and clinical trials
as well as opportunities to secure financing
from third parties, for example we monetized
PureTech’s royalty in Bristol Myers Squibbs’
Cobenfy® for up to $500 million, with $100 million
in cash paid up front. Our Board also carefully
considers opportunities for disposal of shares in
our Founded Entities, which have generated over
$815 million in non-dilutive proceeds to advance
our pipeline and growth since 2020.
– The Board seeks to ensure appropriate board
structure and the Nomination Committee
continues to actively evaluate seasoned
candidates with extensive experience suitable for
a Company of PureTech’s size.
– The Board recognizes the importance of Diversity,
Equity and Inclusion and is delighted to have a
diverse group of leaders at both the Board and
Management levels.
– Governance Section of
ARA (Pages 59 to 101)
– ESG Report
(Pages 22 to 58)
– Remuneration Report
(Pages 102 to 120)
– Our Key Components
of Value (Page 8)
Relations with Stakeholders
– Section 172 Statement
The Board continued
92 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 93
Governance
Governance
Stakeholder
How we engage
Key matters identified
Further information
Our People
– Our employees are crucial to the success of
our business and many key decisions made
by our Board have an impact on them. It
is important to understand the employee
perspective and ensure that we maintain
an engaged workforce, as we believe that
this will lead to better business results. We
engage with our employees in various ways
to ensure that their voice is heard in the
management of our business including:
– The conduct of regular town hall
meetings, email briefings to employees
on key events as well as communication
through the company intranet site and an
engagement survey
– The implementation of regular appraisals
and personal development programs
– The Board recognizes the importance of an
incentivized and engaged workforce, especially
in the highly competitive biotechnology cluster
of the greater Boston area. While the Board
recognized the three methods suggested in
the Code for workforce engagement, the Board
opted for a more informal approach given the
Company’s number of employees. The Board
is responsive to the views of employees, and
regularly seeks feedback from the Executive
Directors on the overall culture of the Company
which is aligned to the purpose, values and
strategy of the organization. Executive Directors
provide insights based on the feedback from
routine employee engagement, such as through
surveys and Town Hall Meetings.
– The Board aims to attract and retain employees.
This is attained through a combination of
competitive remuneration and benefit packages
and an established personal management
and development program. This program is
implemented with a view to development of the
individual in an inclusive environment where
employees from diverse backgrounds can thrive.
– We are proud to be a company dedicated to
giving life to new classes of medicine to improve
the lives of patients with devastating diseases and
believe we have established a business where our
employees are proud to work.
– ESG Report
(Pages 22 to 58)
– Remuneration Report
(Pages 102 to 120)
– Strategic Report
(Pages 4 to 21)
Community
&
Environment
– We are committed to supporting the
communities in which we operate and
the wider public. To that end, we have
developed various mechanisms for
engagement including:
– Internships/partnerships with local
universities and programs
– Charitable giving
– Building Certifications
– Therapeutic Focus
– We are committed to improving our practices to
ensure our business operates on a sustainable
basis. In particular, we have created an ESG
committee chaired by one of our Non-Executive
Directors to guide our sustainability initiatives.
Our business operates with low carbon emissions,
and we are committed to delivering long-term
environmental sustainability.
– We partner with local universities and programs
to offer paid internship and externship
programs, generally within technical fields in our
development organization.
– The company engages with local community and
supports charitable causes. In particular, in 2024,
PureTech made charitable contributions to the
Pulmonary Fibrosis Foundation, Young Man with a
Plan and The Greater Boston Food Bank.
– ESG Report
(Pages 22 to 58)
Suppliers/
Business
Partners
– Our business model creates value through
partnerships and relationships with various
key collaborators, and we continually
evaluate how to strengthen relationships
and arrangements with these institutions
and individuals. Our engagement in
2024 included:
– Quality updates and quality audits
– Meetings with key surgeons to
understand/identify potential indications
and applications for therapeutics
– Partnerships – BeiGene
– We aim to build clear and reliable supply
arrangements with our contract manufacturers
for clinical product supply, in particular with an
emphasis on quality, especially in relation to a
clinical environment.
– We seek partnerships with other life sciences
organizations to secure non-dilutive funding,
access to development opportunities and access
to materials for our clinical trials.
– Our Diversified
Hub-and-Spoke
Model (Page 10)
– Gallop
Oncology (Page 14)
– Seaport
Therapeutics (Page 17)
– Vedanta
Biosciences (Page 18)
Relations with Stakeholders – Section 172 Statement continued
The Company’s issued ordinary share capital comprises
a single class of ordinary shares. Details on movements in
issued share capital can be found in Note 16 to the financial
statements, page 160.
Rights of ordinary shares
All of the Company’s issued ordinary shares are fully paid up
and rank pari passu in all respects and there are no special rights
with regard to control of the Company. There are no restrictions
on the transfer of ordinary shares or on the exercise of voting
rights attached to them, which are governed by the Articles of
Association and relevant UK legislation. The Directors are not
aware of any agreements between holders of the Company’s
shares that may result in restrictions on the transfer of securities or
in voting rights.
Substantial shareholders
As of March 31, 2025, the Company had been advised that the
shareholders listed below hold interests of 3 percent or more in its
ordinary share capital (other than interests of the Directors which
are detailed on page 116 of the Directors’ Remuneration Report).
Other than as shown, so far as the Company (and its Directors)
are aware, no other person holds or is beneficially interested in a
disclosable interest in the Company.
Shareholder
%
Invesco Asset Management Limited
17.07
Baillie Gifford & Co
6.30
Lansdowne Partners International Limited
6.01
Citigroup as principal
5.14
Recordati SPA Pharmaceutical Company
3.98
Vanguard Group
3.95
Fidelity International Limited
3.41
Daphne Zohar
3.22
Powers of the Directors
Subject to the Company’s Articles of Association, UK legislation
and any directions given by special resolution, the business of
the Company is managed by the Board of Directors. Details of
the matters reserved for the Board can be found in the Corporate
Governance Report on page 86.
The Directors present their report and the audited
consolidated financial statements for the financial year ended
December 31, 2024.
Certain disclosure requirements for inclusion in this report have
been incorporated by way of cross reference to the Strategic
Report, the Directors’ Remuneration Report and the ESG Report
which should be read in conjunction with this report.
The Company was incorporated on May 8, 2015 as a public
company limited by shares in the UK and has a registered office
situated at 13th Floor, One Angel Court, London, EC2R 7HJ,
United Kingdom. The Company was admitted to the premium
listing segment of the Official List of the UK Listing Authority and
to trading on the main market of the London Stock Exchange on
June 24, 2015. The Company’s American Depository Shares, each
representing 10 ordinary shares, began trading on the Nasdaq
Global Market on November 16, 2020.
Directors
The membership of the Board can be found below, and
biographical details of the directors can be found on pages 82 to
85 and are deemed to be incorporated into this report.
Descriptions of the terms of the directors’ service contracts are set
forth on page 110 and page 117 of this report.
All current directors shall retire from office and will offer
themselves for reappointment by the members at the Company’s
upcoming AGM.
Details of the interests of directors in the share capital of the
Company as of December 31, 2024 are set out in the Annual
Report on Remuneration on page 116 and Note 26 to the financial
statements, located on page 172. There have been no changes in
such interests from December 31, 2024 to March 31, 2025, except
as specifically set forth in those sections.
Results and dividends
We generated a gain for the year ended December 31, 2024 of
$27.8 million (2023: Loss of $66.6 million).
The Directors do not recommend the payment of a dividend for
the year ended December 31, 2024 (2023: nil).
Share capital
As of December 31, 2024, the ordinary issued share capital
of the Company stood at 257,927,489 shares of £0.01 each,
including shares issuable upon conversion of outstanding
ADSs, with 17,738,040 shares held in treasury by the Company.
Details on share capital are set out in Note 16 to the financial
statements, page 160.
Directors’ Report for the year
ended December 31, 2024
94 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 95
Governance
Governance
Articles of Association
The Articles of Association of the Company can only be amended by special resolution at a general meeting of the shareholders.
No amendments are proposed at the 2025 AGM.
The following have served as Directors of the Company during the 2024 financial year.
Name
Role
Age (as of December 31, 2024)
Dr. Raju Kucherlapati
Chair, Independent Non-Executive Director
81
Dr. Bharatt Chowrira
Chief Executive Officer
59
Dr. Michele Holcomb
Independent Non-Executive Director
56
Dr. Robert Langer
Non-Executive Director
76
Dr. John LaMattina
Senior Independent Non-Executive Director
74
Ms. Kiran Mazumdar-Shaw
Independent Non-Executive Director
71
Ms. Sharon Barber-Lui
Independent Non-Executive Director
51
Ms. Daphne Zohar
Former Chief Executive Officer (departed the Board in April 2024)
54
The Directors consider that the Company has, throughout the
year ended December 31, 2024, applied the main principles and
complied with the provisions set out in the Governance Code with
the following exceptions:
— Dr. Raju Kucherlapati, the Chair, is also Chair of the
Nomination Committee, which is not aligned with provision
17 of the Governance Code. In making the determination
for maintaining Dr. Kucherlapati as Chair of the Nomination
Committee the Board duly considered (i) his professional
background (ii) his tenure on the Board and experience. The
Board deemed this to be relevant experience making his role
as Chair of Committee in the best interest of the Company’s
shareholders.
— Dr. Raju Kucherlapati, served as Senior Independent Director
while acting as Chair which is not aligned with provision 12 of
the Governance Code. The Company has since remedied this
position by the appointment of Dr. John LaMattina the role of
Senior Independent Director in April 2025.
Further explanation as to how the provisions set out in the
Governance Code have been applied by the Company is provided
in this Report, the Report of the Nomination Committee and the
Report of the Audit Committee.
Financial instruments
The financial risk management and internal control processes
and policies, and exposure to the risks associated with financial
instruments can be found in Note 18 to the financial statements
and the Corporate Governance section of the Annual Report
on page 100.
Sustainable development and environmental matters
Details of the Company’s policies and performance, as well as
disclosures concerning GHG emissions, are provided in the ESG
Report on pages 22 to 58.
Directors’ liabilities (Directors’ indemnities)
As at the date of this report, the Company has granted qualifying
third party indemnities to each of its Directors against any liability
that attaches to them in defending proceedings brought against
them, to the extent permitted by the Companies Act. In addition,
Directors and officers of the Company and its controlled-Founded
Entities have been and continue to be covered by Directors’ and
officers’ liability insurance.
See further description of indemnity and insurance on page 88.
Political donations
No political contributions/donations for political purposes
were made by the Company or any of our affiliate companies to
any political party, politician, elected official or candidate for
public office during the financial year ended December 31, 2024
(2023: nil).
Significant agreements
There are no agreements between the Company or any of our
affiliate companies and any of its employees or any Director which
provide for compensation to be paid to an employee or a Director
for loss of office as a consequence of a takeover of the Company.
Compliance with the UK Corporate Governance Code
The Directors are committed to a high standard of corporate
governance and compliance with the best practice of the UK
Corporate Governance Code (Governance Code) published
in July 2018. The Governance Code is available at the Financial
Reporting Council website at www.frc.org.uk.
Directors’ Report for the year ended December 31, 2024 continued
were purchased by the company and held as treasury shares.
Such treasury shares do not receive dividend rights and may not
exercise voting rights.
Future business developments
Information on the Company and its Wholly-Owned Programs
and Founded Entities’ future developments can be found in the
Strategic Report on pages 11 to 21.
Risk and internal controls
The principal risks we face are set out on pages 60 to 64 and in the
Additional Information section from pages 182 to 216. The Audit
Committee’s assessment of internal controls is laid out on page 95.
Subsequent Events
Information related to events occurring after
December 31, 2024, can be found in footnote 28 to the
consolidated financial statements.
Research and Development
Information on our research and development activities can be
found in the Strategic Report on pages 11 to 13.
Going concern
As of December 31, 2024, the directors had a reasonable
expectation that we had adequate resources to continue in
operational existence into 2027.
Annual General Meeting
The Notice of the AGM, which will be held at 11:00 am EDT
(4:00 pm BST) on June 16, 2025, at the Company’s corporate
headquarters at 6 Tide Street, in Boston, Massachusetts, U.S.
is enclosed with this report. Details of the resolutions and the
explanatory notes thereto are included with the Notice. To ensure
compliance with the Governance Code, the Board proposes
separate resolutions for each issue and proxy forms allow
shareholders who are unable to attend the AGM to vote for or
against or to withhold their vote on each resolution. In addition,
to encourage shareholders to participate in the AGM process, the
Company proposes to offer electronic proxy voting through the
Registrar’s website and through the CREST service. The results of
all proxy voting will be published on our website after the AGM.
The Notice of the Meeting, together with an explanation of the
items of business, will be contained in a circular to shareholders
to be dated April 30, 2025.
Pension schemes
Information on the Company’s 401K Plan can be found in the
Annual Report on Remuneration on page 106.
Related party transactions
Details of related party transactions can be found in Note 26 of the
financial statements on pages 171 to 172.
Tender Offer
On May 20, 2024, the Company launched a proposed $100 million
Tender Offer, which was approved by shareholders on June 4,
2024, with 99.9% of the ordinary shares cast voting in favour of
the proposal. The Tender Offer was completed on June 24, 2024,
resulting in the delivery and cancellation of 31,540,670 ordinary
shares. The Company is pleased with the support shown for the
2024 tender offer, which illustrated the successful execution of
the Company’s business model to generate excess cash and our
commitment to ongoing evaluations of capital return activities for
our shareholders.
The Board carefully considered various options for returning cash
to shareholders and determined that the tender offer would be
the most appropriate means of returning cash to shareholders,
allowing return of cash in a quick and efficient manner, taking
account of the relative costs, complexity and timeframes of
the possible methods available. In particular, the Tender Offer
provided the shareholders participating in the tender opportunity
to sell ordinary shares (including ordinary shares represented
by ADSs) at a market-driven price with a premium as at the latest
practicable date while also enabling those shareholders who
did not wish to participate to maintain their full investment in the
Company. The Tender Offer was available to all shareholders
regardless of the size of their shareholdings and allowed the
Company to broaden the scope of the return of capital to include
ordinary shares held by those shareholders whose ordinary
shares (including ordinary shares represented by ADSs) may
not have been purchased by the Company through a share
purchase programme.
Share buyback
At the 2023 AGM and the 2024 AGM, shareholders gave the
Company authority to purchase shares from the market up to
an amount equal to 10% of the Company’s issued share capital
at that time. On May 9, 2022, the Company commenced a
$50 million Share Buyback Programme. The Company executed
the Programme in two equal tranches, the first of which was
completed on October 26, 2022, and the second which was
completed on February 7, 2024. Between May 9, 2022, and
February 7, 2024, the Company repurchased an aggregate of
20,182,863 ordinary shares under the Share Buyback Programme,
which represents approximately 7% of the Company’s issued
share capital at the time the programme commenced. The
authority granted from the 2023 AGM expired as of the end of
the 2024 AGM, and the authority from the 2024 AGM expires
as of the earlier of the end of the 2025 AGM or close of business
on 15 September 2025. During 2024, 1,903,990 ordinary shares
Directors’ Report for the year ended December 31, 2024 continued
96 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 97
Governance
Governance
Disclosure of information under Listing Rule 9.8.4R
For the purposes of LR 9.8.4R, the information required to be disclosed can be found in the sections of the Annual Report and Financial
Statements listed in the table below.
Listing Rule Requirement
Location in Annual Report
A statement of the amount of interest capitalized during the period
under review and details of any related tax relief.
N/A
Information required in relation to the publication of unaudited financial information.
N/A
Details of any long-term incentive schemes.
Directors’ Remuneration
Report, page 102
Details of any arrangements under which a Director has waived emoluments,
or agreed to waive any future emoluments, from the Company.
N/A
Details of any non-pre-emptive issues of equity for cash.
N/A
Details of any non-pre-emptive issues of equity for cash by any unlisted major subsidiary undertaking.
Directors’ Report, page 93
Details of parent participation in a placing by a listed subsidiary.
N/A
Details of any contract of significance in which a Director is or was materially interested.
N/A
Details of any contract of significance between the Company (or one of its subsidiaries)
and a controlling shareholder.
N/A
Details of any provision of services by a controlling shareholder.
N/A
Details of waiver of dividends or future dividends by a shareholder.
N/A
Where a shareholder has agreed to waive dividends, details of such waiver,
together with those relating to dividends which are payable during the period under review.
N/A
Board statements in respect of relationship agreement with the controlling shareholder.
N/A
Disclosure of information to auditor
The Directors who held office at the date of approval of this
Directors’ report confirm that:
— so far as the Director is aware, there is no relevant audit
information of which the Company’s Auditor is unaware; and
— the Director has taken all steps that he/she ought to have taken
as a Director in order to make himself/herself aware of any
relevant audit information and to establish that the Company’s
Auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the CA 2006.
Whistleblowing, anti-bribery and corruption
We seek at all times to conduct our business with the highest
standards of integrity and honesty. We also have an anti-
bribery and corruption policy which prohibits our employees
from engaging in bribery or any other form of corruption. In
addition, we have a whistleblowing policy under which staff
are encouraged to report to the Chief Executive Officer or the
President any alleged wrongdoing, breach of a legal obligation
or improper conduct by or on the part of us or any of our officers,
Directors, employees, consultants or advisors. In the event of a
communication to the Executive Directors or others, including via
the Company’s Whistleblower hotline, pursuant to these policies,
this information will be shared with the Audit Committee who will
evaluate the claims and in turn report to the rest of the Board.
Directors’ Report for the year ended December 31, 2024 continued
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
— the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
— the strategic report includes a fair review of the development
and performance of the business and the position of the issuer
and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
By Order of the Board
Bharatt Chowrira, Ph.D., J.D.
Chief Executive Officer and Director
April 30, 2025
Statement of Directors’ responsibilities in respect of the
Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with UK‑adopted international accounting standards
and applicable law and have elected to prepare the parent
Company financial statements on the same basis. In addition, the
Group financial statements are required under the UK Disclosure
Guidance and Transparency Rules to be prepared in accordance
with the UK-adopted international accounting standards.
Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and
of the Group’s profit or loss for that period. In preparing each
of the Group and parent Company financial statements, the
directors are required to:
— select suitable accounting policies and then apply them
consistently;
— make judgements and estimates that are reasonable, relevant
and reliable;
— state whether they have been prepared in accordance with the
UK-adopted international accounting standards;
— assess the Group and parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern; and
— use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent Company and
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities.
Directors’ Report for the year ended December 31, 2024 continued
98 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 99
Governance
Governance
After such consideration, the Board has determined Dr. Langer
and Ms. Mazumdar-Shaw to be independent in character and
judgement and free from relationships or circumstances which
might affect, or appear to affect, the Directors’ judgement in
their service on the Nomination Committee. While the Board
has not deemed Dr. Langer independent for the purposes of
overall Board composition, he is independent in the context
of his service on the Nomination Committee. The Board duly
considered (i) his involvement in other Founded Entities and (ii) the
exceptional circumstance that Dr. Langer is a founding Director of
the Company.
The Nomination Committee meets as required to initiate the
selection process of, and make recommendations to, the Board
with regard to the appointment of new Directors. During 2024, the
Nomination Committee met one time to review the structure, size
and composition of the Board in light of the requirements of the
Governance Code. Dr. Kucherlapati and Dr. Langer participated
in the meeting, and Ms. Mazumdar-Shaw was unable to attend.
The Chief Executive Officer and the President were invited to and
attended the meeting.
After conducting a thorough search and internal evaluation, the
Nomination Committee made two appointments during the year.
Dr. Kucherlapati assumed the role of Chair of the Board on June
20, 2024, after having served as interim Chair since the June 2023.
Additionally, Dr. Holcomb, joined the Board as a Non-Executive
Director on September 23, 2024. The Committee is pleased with
these appointments, and the Company will provide additional
updates in due course.
Diversity policy
Diversity within the Company’s Board and the Management
Team is essential in maximizing its effectiveness, as it enriches
debates, business planning and problem-solving. The Company
approaches diversity in its widest sense so as to recruit and
develop the best talent available, based on merit and assessed
against objective criteria of skills, knowledge, independence
and experience as well as other criteria such as gender, age and
ethnicity. This approach is also applied to ensuring diversity
within the Board and the Remuneration, Audit and Nomination
committees. The Company will adhere to a strategy of recruiting
individuals who meet these criteria as it searches for additional
independent Non-Executive Directors to the Board, as discussed
below. The Committee’s primary objective is to ensure that the
Company maintains the strongest possible leadership across both
the Board and the Management Team.
Information regarding the Company’s diversity efforts can be
found in the ESG Report on pages 22 to 58.
Board and Committee evaluation
Information regarding the evaluation of the Board and its
Committees can be found on page 90.
Committee responsibilities
The Nomination Committee assists the Board in discharging its
responsibilities relating to the composition and make-up of the
Board and any Committees of the Board. It is also responsible
for periodically reviewing the Board’s structure and identifying
potential candidates to be appointed as Directors or Committee
members as the need may arise. The Nomination Committee is
responsible for evaluating the balance of skills, knowledge and
experience and the size, structure and composition of the Board
and Committees of the Board, retirements and appointments
of additional and replacement Directors and Committee
members, and makes appropriate recommendations to the
Board on such matters. A full copy of the Committee’s Terms of
Reference is available on request from the Company Secretary
and within the Investor’s section on Company’s website at www.
puretechhealth.com.
Committee membership
The Nomination Committee consisted of Dr. Raju Kucherlapati,
who served as the committee’s Chair, Dr. Robert Langer, and
Ms. Kiran Mazumdar-Shaw during 2024. The biographies of the
Nomination Committee members can be found on pages 82 to 83.
The Governance Code requires that a majority of the members
of a nomination committee should be independent Non-
Executive Directors.
In making their determination for the year 2024, the Board
regarded Dr. Raju Kucherlapati, Dr. Langer and Ms. Mazumdar-
Shaw as meeting the independence criteria set out in the
Governance Code as it is applied to their service on the
Nomination Committee. In reaching this determination, the
Board duly considered (i) their directorships and links with other
Directors through their involvement in other Founded Entities;
(ii) their equity interests in PureTech Health and/or the Founded
Entities. The Board also duly considered the extent to which these
matters may impact their service on the Nomination Committee.
Report of the Nomination Committee
Raju Kucherlapati, Ph.D.
Chair, Nomination Committee
The Governance Code requires that the audit committee be
comprised of independent Non-Executive Directors, with the
chair of the Board refraining from serving on the Committee.
In making the independence determination for the Chair, Dr.
Kucherlapati prior to Dr. Holcomb joining the Board and the
Committeee, the Board considered his (i) his prior service on the
Board (ii) relevant leadership positions within the sector and (iii)
ongoing progress towards adding a new non-executive director
with relevant audit committee experience. The Board deemed
this to be recent and relevant financial experience, qualifying Dr.
Kucherlapati to serve on the Committee.
Ms. Barber-Lui has served as Chair of the Committee since
April 26, 2022. Ms. Barber-Lui has experience as a Chartered
Accountant and has held numerous senior executive positions in
her career. The Board has deemed this to be recent and relevant
financial experience, qualifying her to be Chair of the Committee.
Ms. Barber-Lui has accounting experience, is currently the Chief
Financial Officer and Senior Vice President, North America at Teva
Pharmaceutical Industries Ltd., a publicly-traded Israeli company
(NYSE and TASE: TEVA), and has held a number of senior finance
and executive leadership positions in her career. The Board
has deemed this to be recent and relevant financial experience
qualifying her to be Chair of the Committee.
Both Dr. LaMattina, and Dr. Kucherlapati prior to Dr. Holcomb
replacing him on the committee, have also been deemed to
have recent and relevant financial experience qualifying them to
serve on the Committee. The Board based this determination
based on (i) their numerous senior leadership positions and (ii)
their competence in the sector in which the company operates.
The biographies of the Committee members can be found on
pages 82 to 83.
The Committee met three times during the year, with Ms. Barber-
Lui and Dr. LaMattina each attending all three meetings, Dr.
Kucherlapati attending two meetings prior to his departure from
the Committee and Dr. Holcomb attending one meeting after
replacing Dr. Kucherlapati on the Committee. In 2024, the Chief
Executive Officer was invited to and attended all of the meetings,
and the President attended two of the meetings. The Auditor
was invited to and attended all three of the meetings. When
appropriate, the Committee met with the Auditor without any
members of the executive management team being present.
Activities during the year
During the year, the Committee also undertook the normal
recurring items, the most important of which are noted below.
Committee responsibilities
The Audit Committee monitors the integrity of our financial
statements and reviews all proposed annual and half-yearly results
announcements to be made by us with consideration being
given to any significant financial reporting judgements contained
in them. The Committee also advises the Board on whether it
believes the annual report and accounts, taken as a whole, are
fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy. The Committee also
considers internal controls and has complied with the provisions of
the Competition and Markets Authority Order. Additionally we are
in compliance with legal requirements, including the provisions of
the, FCA’s Listing Rules, Disclosure Guidance and Transparency
Rules, and reviews any recommendations from the Group’s
Auditor regarding improvements to internal controls and the
adequacy of resources within our finance function. A full copy of
the Committee’s Terms of Reference is available on request from
the Company Secretary and within the Investor’s section on the
Company’s website at www.puretechhealth.com.
Committee membership
The Committee consists of three independent Non-Executive
Directors, Ms. Sharon Barber-Lui, Dr. Michele Holcomb and Dr.
John LaMattina. During 2024, Dr. Kucherlapati also served as of
member of the Committee prior to Dr. Holcomb joining the Board
on September 23, 2024.
Report of the Audit Committee
Ms. Sharon Barber-Lui
Chair, Audit Committee
100 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 101
Governance
Governance
The main driver of the year-over-year change was activities
related to the deconsolidation and new investment in Seaport.
We considered the underlying economics of the valuations
and sought external expertise in determining the appropriate
valuation of the financial investments. These valuations rely, in
large part, on the capital structure, values of recent transactions
and market movement. These values also determine the amount
of gain (loss) on the financial instruments. The Committee believes
that we considered the pertinent terms and underlying economics
of each of the financial instruments, as well as the advice of
external experts, and as such concluded that the financial
Instruments were appropriately recorded.
Regulatory compliance
Ensuring compliance for FCA regulated businesses also
represents an important control risk from the perspective of the
Committee. We engage with outside counsel and other advisors
on a regular basis to ensure compliance with legal requirements.
Review of Annual Report and Accounts and Half-
yearly Report
The Committee carried out a thorough review of our 2024 Annual
Report and Accounts and our 2024 Half-yearly Report resulting in
the recommendation of both for approval by the Board. In carrying
out its review, the Committee gave particular consideration to
whether the Annual Report, taken as a whole, was fair, balanced
and understandable, concluding that it was. It did this primarily
through consideration of the reporting of our business model
and strategy, the competitive landscape in which it operates, the
significant risks it faces, the progress made against its strategic
objectives and the progress made by, and changes in fair value of,
its Founded Entities during the year.
Going concern
At least annually, the Committee considers the going concern
principle on which the financial statements are prepared. As a
business which seeks to fund the development of its Wholly-
Owned Programs, as well as support its Founded Entities
with further capital, the business model is currently inherently
cash consuming.
As of December 31, 2024, we had sufficient funding to extend
operations into 2027 based on the Company’s strategic
operating plan.
Therefore, while an inability of the Wholly-Owned Programs and
Founded Entities to raise funds through equity financings with
outside investors, strategic arrangements, licensing deals or debt
facilities may require us to modify our level of capital deployment
into our Wholly-Owned Programs and Founded Entities or to
more actively seek to monetize one or more Founded Entities,
it would not threaten our ability to continue as a going concern.
Significant issues considered in relation to the
financial statements
The Committee considered, in conjunction with management and
the external auditor, the significant areas of estimation, judgement
and possible error in preparing the financial statements and
disclosures, discussed how these were addressed and approved
the conclusions of this work. The principal areas of focus in this
regard were the deconsolidation of Seaport Therapeutics, and
valuation of Level 3 financial instruments, including those related
to Seaport Therapeutics, Vedanta Biosciences and Sonde Health,
as well as the valuation of the investement in the subsidiary
companies within the Parent Company financial statements.
Accounting treatment for the sale of future royalties
An area of judgment in our financial statements and, therefore
audit risk, relates to the determination of the appropriate
accounting treatment for the Royalty Agreement. In order to
determine the amortized cost of the sale of future royalties
liability, management is required to estimate the total amount of
future receipts from and payments to Royalty Pharma under the
Royalty Purchase Agreement over the life of the agreement. At
year end, this analysis resulted in a sale of future royalty liability of
$143.2 million (2023 – $110.2 million). We considered the pertinent
terms and underlying economics of the agreement in determining
the appropriate accounting treatment.
Valuation of investment in subsidiary companies
An area of judgement in our financial statements and, therefore
audit risk, relates to the valuation of investment in subsidiary
companies which at year end had a carrying value totaling
$462.7 million (2023 – $456.9 million). The main driver of the
year-over-year change in risk is a result of the carrying amount
of the net assets of the parent company exceeding the implied
market capitalisation at various points throughout the year that
constituted an impairment trigger. As of December 31, 2024,
an impairment assessment of the investment in subsidiaries
was conducted using the fair value less costs to sell method.
The carrying amount of the investment in subsidiaries was
approximately 1% lower than the implied market capitalization.
After applying an estimated control premium, it was determined
that the investment in subsidiaries was not impaired as of
December 31, 2024. The Committee believes that the application
of a control premium and the level of premium applied are
reasonable and thus concluded that the investment in subsidiaries
was appropriately recorded.
Valuation of financial instruments
An area of judgement in our financial statements and, therefore
audit risk, relates to the valuation of investments held at fair value
that do not have a quoted active market price which at year end
had a carrying value totaling $177 million (2023 – $25 million).
Report of the Audit Committee continued
External audit
We have engaged PricewaterhouseCoopers LLP (UK) as our
Auditor since 2023. The current audit partner is Sam Taylor who
has been our audit partner since June 2023.
The effectiveness of the external audit process is dependent on
appropriate risk identification. In November 2024, the Committee
discussed the Auditor’s audit plan for 2024. This included a
summary of the proposed audit scope and a summary of what the
Auditor considered to be the most significant financial reporting
risks facing us together with the Auditor’s proposed audit
approach to these significant risk areas. The main areas of audit
focus for the year were (a) Deconsolidation of Founded Entities
and (b) Valuation of financial instruments.
Appointment and independence
The Committee advises the Board on the appointment of the
external Auditor and on its remuneration both for audit and
non-audit work, and discusses the nature, scope and results
of the audit with the external Auditor. The Committee keeps
under review the cost-effectiveness and the independence and
objectivity of the external Auditor. Controls in place to ensure
this include monitoring the independence and effectiveness of
the audit, a policy on the engagement of the external Auditor to
supply non-audit services, and a review of the scope of the audit
and fee and performance of the external Auditor.
Non-audit work
The Committee approves all fees paid to the Auditor for
non-audit work.
Where appropriate, the Committee sanctions the use of
PricewaterhouseCoopers LLP for non-audit services in
accordance with our non-audit services policy. With the exception
of fees paid in connection with access to the firm’s accounting
research and disclosure database and fees in respect of the
auditors’ review of the Group’s interim financial statements, there
were no non-audit fees received by PwC in 2024. The non-audit
fees policy is compliant with ethical Standards for Auditors.
In 2024, PwC received total fees of $2.8 million (2023: $2.7 million).
Fees paid to PwC are set out in note 9 to the financial statements.
The Committee is satisfied with the independence of
PricewaterhouseCoopers.
Sharon Barber-Lui
Chair of Audit Committee
April 30, 2025
Compliance
The Committee has had a role in supporting our compliance
with the Governance Code, which applies to us for the 2024
financial year. The Board has included a statement regarding our
longer-term viability on page 65. The Committee worked with
management and assessed that there is a robust process in place
to support the statement made by the Board.
Similarly, the Committee worked with management to ensure
that the current processes underpinning its oversight of internal
controls provide appropriate support for the Board’s statement
on the effectiveness of risk management and internal controls.
Risk and internal controls
The principal risks we face are set out on pages 60 to 64 and in the
Additional Information section from pages 182 to 216.
The Committee has directed that management engage in a
continuous process to review internal controls around financial
reporting and safeguarding of assets. Management has engaged
external advisors to complete internal control testing on behalf
of management for the 2024 financial year and the results were
presented to the Committee.
Based on the above, we have satisfied ourselves that we have
adequate controls and that our internal control over financial
reporting is effective for the year ended December 31, 2024.
We have a formal whistleblowing policy. The Committee is
satisfied that the policy has been designed to encourage staff to
report suspected wrongdoing as soon as possible, to provide staff
with guidance on how to raise those concerns, and to ensure staff
that they should be able to raise genuine concerns without fear of
reprisals, even if they turn out to be mistaken.
Internal audit
We do not maintain a separate internal audit function. This is
principally due to our size, where close control over operations
is exercised by a small number of executives. In assessing the
need for an internal audit function, the Committee considered
the risk assessment performed by management to identify key
areas of assurance and the whole system of internal financial
and operational controls. The Company achieves internal
assurance by performing the risk assessment of the key areas of
assurance and maintaining related key internal controls, as well as
engaging external advisors to perform internal control testing, as
described above.
Report of the Audit Committee continued
102 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 103
Governance
Governance
Committee responsibilities
The Remuneration Committee’s primary purpose is to assist the
Board in determining the Company’s remuneration policies. The
Remuneration Committee has the responsibility for setting the
remuneration policy for all Executive Directors and the Chairman
of the Company, with the objective of attracting, retaining and
motivating executive management. In determining such policy,
the Remuneration Committee takes into account all factors
which it deems necessary including regulatory requirements,
the views of shareholders and stakeholders, the risk appetite
of the Company, and alignment to the Company’s long term
goals and strategic plan. The Remuneration Committee is also
responsible for determining the total individual remuneration
package of each Executive Director, including share awards, as
well as recommending and monitoring the level and structure of
remuneration for senior management, and reviewing the design
of all share incentive plans and determining awards under such
plans. In carrying out its duties, the Remuneration Committee
has regard to current information for remuneration in other
companies of comparable scale and complexity and can appoint
remuneration consultants to assist in such process. A full copy of
the Remuneration Committee’s Terms of Reference is available
on request from the Company Secretary and within the Investors
section of the Company’s website at www.puretechhealth.com.
Committee membership
The Remuneration Committee consists of Dr. LaMattina, Dr.
Kucherlapati and Ms. Mazumdar-Shaw, with Dr. LaMattina serving
as Chair of the Committee. The biographies of the Committee
members can be found on pages 82 to 83. The Committee met
five times during the year, with Dr. LaMattina and Dr. Kucherlapati
in attendance for all five meetings and Ms. Mazumdar-Shaw in
attendance for three of the five meetings. The Committee also
acted by unanimous written consent three times during the year.
During 2024, the Chief Executive Officer and the President were
invited to all of the meetings, with Ms. Zohar attending two of the
three meetings prior to her resignation from the CEO role, and Dr.
Chowrira attending all five meetings, first as President and then as
CEO following his appointment to the role in April 2024. However,
no Executive Director was permitted to participate in discussions
or decisions about their personal remuneration.
The Directors’ Remuneration Report is split into three
sections, namely:
— This Annual Statement: summarizing and explaining the major
decisions on Directors’ remuneration in the year;
— The Directors’ Remuneration Policy: setting out the framework
for remuneration for our Directors on pages 106 to 109; and
— The Annual Report on Remuneration: setting out the
implementation of the Remuneration Policy in the year ended
December 31, 2024 and the continued implementation for the
year ending December 31, 2025 on pages 110 to 120.
The current Directors’ Remuneration Policy was approved at the
June 2024 AGM, and such approval is effective for three years
from that date. The Directors’ Remuneration Report (excluding
that part of the report containing the Directors’ Remuneration
Policy on pages 106 to 109) is subject to a shareholder vote at this
year’s AGM. The vote to approve the Directors’ Remuneration
Report is advisory only and does not affect the actual historical
remuneration paid to any individual Director.
Directors’ Remuneration Report
for the year ended December 31, 2024
Dr. John LaMattina
Chair, Remuneration Committee
The Committee remains comfortable that our remuneration
packages are consistent with the principles of the UK Corporate
Governance Code and best practice. The key aims of our
Remuneration Policy and the Code principles to which they relate
are as follows:
— promote our long-term success (Code principle:
Proportionality);
— attract, retain and motivate high caliber senior management
and focus them on the delivery of our long-term strategic
and business objectives (Proportionality, alignment to
culture and risk);
— be simple and understandable, both externally and internally
(Clarity, simplicity, predictability and proportionality);
— achieve consistency of approach across senior management
to the extent appropriate and informed by relevant market
benchmarks (Clarity and alignment to culture); and
— encourage widespread equity ownership across the executive
team to ensure a long-term focus and alignment of interest
with shareholders (Alignment to culture, risk).
A summary of the 2024 Directors’ Remuneration Policy is set out
on pages 106 to 109.
Our Remuneration Policy
The success of PureTech depends on the motivation and retention
of our highly skilled workforce with significant expertise across
a range of science and technology disciplines, as well as our
highly-experienced management team and seasoned Directors.
PureTech’s Remuneration Policy is therefore an important part of
our business strategy. Our guiding principle is to provide market
competitive remuneration packages, including with respect to
cash compensation in the form of base salary, annual bonuses
and benefits as well as share-based compensation, benchmarked
against data generated from our local markets to enable us to put
together and retain a top tier team.
The Directors’ Remuneration Policy was approved by
shareholders at the 2024 AGM with 64.5% support, and the
Remuneration Report was approved by shareholders at the 2024
AGM with 56.0% support. As detailed in the Remuneration Policy
section of this Report, following these results, the Committee
engaged with shareholders to address investor concerns and
explain our approach of balancing UK standards on remuneration
with practices designed to ensure that PureTech can remain
competitive against U.S. peer companies. As part of this
shareholder engagement, our Board Chair and Remuneration
Committee member, Dr. Kucherlapati, traveled to the UK in 2024
to meet directly with several shareholders. Whilst the Committee
recognises that our hybrid approach of offering both performance
shares and restricted shares is still somewhat unusual in the
context of the UK environment, we believe it is key to enabling
us to effectively compete for talent with other companies in the
biotech cluster around Boston. We face increasing challenges to
retain key people in a market where competitor organisations are
offering large equity grants to senior employees without long-
term performance conditions, so it is crucial that our Policy allows
us to offer similar packages. Many of our larger shareholders
understand and recognise the commercial realities within which
we operate, although we do appreciate that some investors were
not supportive at last year’s AGM. We will continue to consult and
engage with shareholders going forward to understand specific
issues of concern.
Directors’ Remuneration Report continued
104 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 105
Governance
Governance
Directors’ Remuneration Report continued
In relation to the PSP, PureTech’s performance over the last three
financial years was very strong in terms of the achievement of
strategic objectives despite such performance not translating
to growth in the Company’s share price. Overall, the share price
declined from an average price of 324 pence during the last
three months of 2021 to an average price of 159 pence during
the last three months of 2024. Strong strategic performance
over the three-year performance period resulted in PSP awards
granted to the executive management team in 2022 vesting at a
level of 35.3 percent after the end of the 2024 financial year. The
Committee considered holistic business performance over the
period, as well as the individual contribution of the Executive
Director in that time, and determined that no discretion should
be exercised in respect of the vesting outcome. Full details of
payments to the Executive Director in 2024 can be found later
in this report.
The Committee believes the Remuneration Policy operated
as intended during the year and that remuneration outcomes
are appropriate, taking into account outcomes throughout
the business, company and individual performance and the
stakeholder experience.
The year ahead
For 2025, the following key decisions have been made in relation
to how the Policy will be implemented:
— Base salary for the Executive Director was increased by
5.5 percent, which is consistent with the midpoint of the
general range of increases for the workforce of between
4.0 and 7.0 percent. The Committee is comfortable that the
increase awarded to the Executive Director is appropriate,
taking into consideration a number of factors and with
particular regard to the retention of top talent as part of
the continued advancement of the Company’s Wholly-
Owned Programs.
— The annual bonus target and maximum will remain at
50 percent and 100 percent of base salary respectively for the
Chief Executive Officer.
— The grant of PSP awards in 2025 will remain at the level of
600 percent of base salary for the Chief Executive Officer, in
line with the limits as set out in the Policy, with half of the awards
granted as performance shares and half as time-vesting
restricted shares.
— For the performance share element, a mix of performance
measures linked to absolute TSR, relative TSR and key strategic
metrics which are tied to business progress over the three-year
performance period will be retained. For the 2025 award, the
weightings will be based 50 percent on TSR and 50 percent on
strategic metrics, the same approach as adopted in 2024.
Performance and reward in 2024
During 2024, PureTech delivered strong execution and
achievement of key strategic and financial goals, which has been
reflected in the annual bonus outcome. The Company delivered
substantial growth and generated momentum to support future
growth in the coming years as our balance sheet, Founded
Entities equity and royalty stakes, and Wholly-Owned Programs
position PureTech with the strength to build substantial value for
shareholders in the current environment. This growth is due in
large part to (i) significant development and advancement of our
Wholly-Owned Programs and activities initiated or progressed
to potentially bring these innovative therapies to market, (ii) key
support provided to the Founded Entities as their businesses
progress and, in certain cases, execution of key transactions or
financings, (iii) substantial development and expansion of the
Company’s intellectual property portfolio, and (iv) completion
of various strategic sourcing and strategic planning initiatives
with the forward looking goal to enhance shareholder value.
This increase in value, together with management’s operational
performance at PureTech and within Wholly-Owned Programs
and Founded Entities, resulted in the Remuneration Committee
approving an outcome of 128% of the target performance
goals based on pre-specified targets. In line with our standard
approach, the Committee then reviewed the overall performance
of the Company and the individual Executive Director before
determining the final bonus payout. The Committee considered
operational performance, the overall growth of the business
during the year, the extent to which the target performance
goals had in some cases been exceeded, and the individual
contribution of the Executive Director. The Committee focused
on the remarkable LYT-100 Phase 2B clinical trial data results as
an exceptional achievement, and also considered at length the
successful activities of certain Founded Entities and the value
created for PureTech, especially the successful spin-off and Series
A and Series B financing transactions for Seaport Therapeutics,
which raised over $325 million during the year. See further details
of our performance highlights in 2024 on pages 1 to 5. Following
this exercise, the Committee determined that no discretion
should be exercised and that a bonus equal to 64% of base
salary (representing 128% of target) was to be awarded to the
Executive Director.
Directors’ Remuneration Report continued
Remuneration for other Colleagues
In addition to matters relating to Executive Director remuneration,
the Committee also reviews the compensation policies for the
wider employee base, with a particular focus on the use of equity
compensation throughout the whole organization. PureTech
grants its employees awards of performance shares and restricted
shares as well as market-value stock options, helping to ensure
a degree of competitiveness against other U.S. companies
operating in the same sector. Following shareholder approval of
the new Performance Share Plan in 2023, we have greater flexibility
in operating the plan given the dilution limits agreed at the time.
Closing comments
The Committee is comfortable that the operation of the Policy
for 2024 has demonstrated a robust link between performance
and reward given the successes recorded during the year. The
Committee believes the Remuneration Policy, and the proposed
operation of the Policy for 2025, is appropriate and continues to
strike a suitable balance between UK investor expectations and
the realities of operating in a competitive U.S. market.
The Committee looks forward to shareholders’ support at the
2025 Annual General Meeting for the advisory resolution covering
this Annual Statement and the Annual Report on Remuneration.
Non-Executive Director compensation
Currently, Non-Executive Directors receive a mixture of cash
and ordinary shares in PureTech. The fee levels payable to date
have been significantly below the levels typically payable for
experienced Non-Executive Directors at U.S. companies in our
sector. During 2024, we reviewed the level of cash compensation
to ensure that it was consistent with the very significant
contributions made by the Non-Executive Directors. Based
on this review, we approved the award of annual payments of
$25,000 to Non-Executive Directors serving on the Transaction
and R&D Committees. These payments comply with the 2024
Remuneration Policy, and are appropriate in light of the significant
time commitment required to serve on these committees. Full
details of these payments are set out on page 112 of the Directors’
Remuneration Report.
For 2025, the equity portion of fees for Non-Executive Directors
remains at a maximum of $150,000. Levels of base salary cash
compensation for each Non-Executive Director will remain at
$75,000, with additional cash compensation tied to director
service on the principal committees, and the Transaction and
R&D Committees. A further review of the cash element will be
undertaken later this year in the interests of ensuring ongoing
competitiveness.
We retain the flexibility to grant a portion of the equity part of
the fees for Non-Executive Directors in the form of equity in
subsidiary entities in which PureTech has a controlling interest,
including Founded Entities. This provides a cash-efficient way for
Director pay to become competitive, while enabling Directors
to be directly aligned with the success of subsidiary companies
as well as with PureTech as a whole. As you will appreciate, in
some cases individual Directors have been instrumental in Board
deliberations on subsidiary company matters (including those
relating to our Founded Entities) and this is one way in which this
can be recognized.
106 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 107
Governance
Governance
This Directors’ Remuneration Policy was approved by a binding shareholder vote at the Company’s 2024 AGM, and such approval
is effective for three years from that date. A summary of the Policy is set out below. The full Policy is set out in our Annual Report and
Accounts 2023, which can be found on our website: https://news.puretechhealth.com/financials-filings/reports.
Policy table
Element
How component
supports corporate
strategy
Operation
Maximum
Performance targets and recovery
provisions
Base salary
To recognize the
market value of the
employee and the role.
Normally reviewed annually.
Salaries are benchmarked
periodically primarily against
biotech, pharmaceutical and
specialty finance companies
listed in the U.S. and UK. The
committee also considers
UK-listed general industry
companies of similar size to
PureTech as a secondary point of
reference.
There is no prescribed maximum
base salary or annual salary
increase.
The Committee is guided by the
general increase for the broader
employee population but may
decide to award a lower increase
for Executive Directors or
indeed exceed this to recognize,
for example, an increase in the
scale, scope or responsibility of
the role and/or to take account
relevant market movements.
Current salary levels are set
out in the Annual Report on
Remuneration.
Not applicable.
Pension
To provide a market
competitive level
of contribution to
pension.
The company operates a 401k
Plan for its U.S. Executive
Directors. The operation of the
Plan is in line with the operation
for all other employees.
Under the 401k Plan, Company
contributions are capped at the
lower of 3 percent of base salary
or the maximum permitted by
the U.S. IRS ($46,000 for 2024).
Not applicable.
Benefits
To provide a market
competitive level
of benefits.
Includes: housing allowance,
transportation allowance,
private medical and dental
cover, disability, life insurance.
Additional benefits may
also be provided in certain
circumstances, such as those
provided to all employees.
Cost paid by the company.
Not applicable.
Annual
Bonus Plan
(ABP)
To drive and reward
annual performance
of individuals, teams
and PureTech.
Based on performance during
the relevant financial year.
Paid in cash.
The Committee has discretion
to adjust payout levels if
it considers the formulaic
outcome inappropriate taking
into account the underlying
financial performance of
the Company, share price
performance, the investment
return to shareholders during
the year, and such other factors
as it considers appropriate.
Up to 100 percent of base salary.
The Performance period is
normally one year.
Payments are normally based on
a scorecard of strategic and/or
financial measures.
Up to 0 percent of salary payable
for threshold performance,
50 percent of base salary normally
payable for the achievement
of ’target’ performance and
100 percent of base salary
payable for the achievement of
stretch performance.
Recovery and withholding
provisions are in place.
Summary of the Directors’ Remuneration Policy
Element
How component
supports corporate
strategy
Operation
Maximum
Performance targets and recovery
provisions
Long-term
incentives
To drive and reward
our sustained
performance, promote
the retention of the
leaders of the business
and to align executive
interests with those of
shareholders.
The Company can make long-
term incentive awards of either
performance shares or time-
vesting restricted shares.
For performance shares, vesting
is dependent on the satisfaction
of performance targets and
continued service. Performance
and vesting periods are normally
three years.
For time-vesting restricted
shares, vesting is dependent
on continued service and
Remuneration Committee
confirmation that Company
and individual performance
has been satisfactory over the
vesting period. Vesting normally
takes place in three equal annual
tranches over a three-year
period following grant.
All awards will be subject to a
two-year post-vesting holding
period during which vested
shares cannot be sold other than
to settle tax. This post-vesting
period continues post-cessation
of employment.
The Committee also has the
discretion to adjust vesting
levels of performance-related
awards to override formulaic
outcomes, taking into account
similar factors as apply in
relation to annual bonus
awards, but by reference to the
performance period.
For the Chief Executive Officer,
600 percent of base salary. This
will normally be split 300 percent
of base salary in performance
shares and 300 percent of base
salary in time-vesting restricted
shares.
For other Executive Directors,
300 percent of base salary. This
will normally be split 150 percent
of salary in performance shares
and 150 percent in time-vesting
restricted shares.
Participants may benefit from
the value of dividends paid over
the vesting period to the extent
that awards vest. This benefit is
delivered in the form of cash or
additional shares at the time that
awards vest.
For performance shares, the
performance period is normally
three years.
Up to 25 percent of a performance
share award vests at threshold
performance (0 percent vests
below this), increasing to 100
percent pro-rata for maximum
performance. Normally at least
half of any performance share
award will be measured against
TSR targets with the remainder
measured against relevant
financial or strategic measures.
Performance conditions are
agreed by the Committee on an
annual basis.
For time-vesting restricted
shares, there are no performance
conditions other than the
requirement for the Remuneration
Committee to confirm a
satisfactory level of Company and
individual performance over the
vesting period.
Recovery and withholding
provisions are in place for both
performance and time-vesting
restricted shares.
Share
ownership/
Holding
Period
Further aligns
executives with
investors, while
encouraging employee
share ownership.
The Committee requires
that Executive Directors who
participate in a long-term
incentive plan operated by
the Company retain half of the
net shares vesting under any
long-term incentive plan until
a shareholding requirement
is met.
Minimum of 400 percent of base
salary for the Chief Executive
Officer and a minimum of 200
percent of base salary for the
other Executive Directors.
None.
Summary of the Directors’ Remuneration Policy continued
108 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 109
Governance
Governance
Element
How component
supports corporate
strategy
Operation
Maximum
Performance targets and recovery
provisions
Post-
cessation
holding
period
Aligns executives
with investors and
promotes long-term
decision making
Executive Directors must hold
shares for two years after the
date of termination of their
employment.
Lower of (i) 400 percent of base
salary for the Chief Executive
Officer and 200 percent of base
salary for the other Executive
Directors and (ii) the Executive
Director’s shareholding at the
date that notice is served.
None.
Non-
Executive
Directors
To provide fee levels
and structure reflecting
time commitments and
responsibilities of each
role, in line with those
provided by similarly-
sized companies and
companies operating
in our sector.
Remuneration provided to Non-
Executive Directors is operated
in line with the terms set out in
the Articles of Association.
Cash fees, normally paid on a
quarterly basis, are comprised of
the following elements:
– Base fee.
– Additional fees.
A portion of the compensation
to Non-Executive Directors is
in the form of PureTech Health
plc ordinary shares.Additional
remuneration is payable for
additional services to PureTech
such as the Chairship of a
Committee or membership
on a Committee. Additional
remuneration is also payable
for services provided beyond
those services traditionally
provided as a director , including
membership of the Transaction
and R&D Committees.
Taxable benefits may be
provided and may be grossed
up where appropriate.
Any remuneration provided to a
Non-Executive Director will be
in line with the limits set out in
the Articles of Association.
The fee levels of the Non-
Executive Directors are
reviewed on an annual basis.
Subject to the limits set out in
the Articles of Association, fees
may be increased to reflect
changes in responsibility or time
commitment, and/or to maintain
fees at appropriate levels
relative to other companies
operating in the sector.
None.
Notes:
1 In the event that the Company elects any non-U.S. Executive Directors, the 401k Plan may not be an appropriate pension arrangement. In such cases an alternative pension arrangement
may be offered. Any such arrangement would not be higher than the pension rate operated for the majority of employees in that jurisdiction.
2 For those below Board level, a lower annual bonus opportunity and equity award size may apply. In general, these differences arise from the development of remuneration arrangements
that are market competitive for the various categories of individuals, together with the fact that remuneration of the Executive Directors and senior executives places significant emphasis
on performance-related pay.
3 The choice of the performance metrics for the annual bonus scheme reflects the Committee’s belief that incentive compensation should be appropriately challenging and linked to the
delivery of the Company’s strategy. Further information on the choice of performance measures and targets is set out in the Annual Report on Remuneration.
4 The performance conditions applicable to the performance shares (see Annual Report on Remuneration) are selected by the Remuneration Committee on the basis that they reward
the delivery of long-term returns to shareholders and are consistent with the Company’s objective of delivering superior levels of long-term value to shareholders while providing the
Company with tools to successfully recruit and retain employees in the U.S.
5 For the avoidance of doubt, the Company reserves the right to honour any commitments entered into in the past with current or former Directors (such as the vesting/exercise of share
awards) notwithstanding that these may not be in line with this Remuneration Policy. Details of any payments to former Directors will be set out in the Annual Report on Remuneration as
they arise.
Recovery and withholding provisions
Recovery and withholding provisions (’’clawback and malus’’) may be operated at the discretion of the Remuneration Committee in
respect of awards granted under the Performance Share Plan and in certain circumstances under the Annual Bonus Plan (including
where there has been a material misstatement of accounts, or in the event of fraud, gross misconduct or conduct having a materially
detrimental effect on the Company’s reputation).
The issue giving rise to the recovery and withholding must be discovered within three years of vesting or payment and there is flexibility
to recover overpayments by withholding future incentive payments and recovering the amount directly from the employee.
In compliance with U.S. Securities and Exchange Commission reporting and Nasdaq listing standards, effective as of November 8,
2023, the Committee adopted a Policy for Recovery of Erroneously Awarded Compensation. This policy requires that the Remuneration
Committee clawback excess incentive compensation from executive officers following a required accounting restatement where, based
on the restated financials, executives would have missed the portion of the award tied to a specific financial performance metrics.
The policy covers restatements involving the financial measures within the Performance Share Plan and Annual Bonus Plan and is
intended to apply in addition to and in concert with the Company’s existing clawback and malus provisions.
Service contracts
Executive Directors’ service contracts do not provide for liquidated damages, longer periods of notice on a change of control of the
Company or additional compensation on an Executive Director’s cessation of employment with us, except as discussed below.
The Committee’s Policy is to offer service contracts for Executive Directors with notice periods of no more than 12 months, and typically
between 60 to 180 days.
Service contracts provide for severance pay following termination in the case that employment is terminated by the Company without
‘cause’, or by the employee for ‘good reason’. In this case severance pay as set out in the contract is no greater than 12-months’ base
salary and is aligned to the duration of any restrictive covenants placed on the employee. Service contracts may also provide for the
continuation of benefits but for no longer than a 12-month period post termination.
Service contracts also provide for the payment of international tax in non-U.S. jurisdictions if applicable to the Executive Director. They
also can provide for garden leave and, if required by applicable law, the recovery and withholding of incentive payments.
Service contracts are available for inspection at the company’s registered office.
Consideration of shareholder views following the 2024 AGM
In light of the voting outcome on the remuneration resolutions at the 2024 AGM, the Board has taken steps to understand the views of
shareholders. Specifically, the Company wrote to shareholders representing more than 70% of the Company’s issued share capital to
offer engagement with the Chair of the Board. Following that initial outreach, meetings were held with shareholders representing more
than 50% of issued share capital during the months of July and August 2024. As part of this shareholder engagement, our Board Chair
and Remuneration Committee member, Dr. Kucherlapati, traveled to the UK in 2024 to meet directly with several shareholders. While
there were a variety of topics discussed during these engagements, there was broad recognition from shareholders regarding the
rationale for the changes made to the Remuneration Policy and the implementation of the previous policy, particularly in relation to the
challenges the Company faces as a UK-listed business competing for talent in the U.S. where its operations are based.
The Board would like to thank the shareholders who have engaged with the Company during this process. The Board will continue to
engage openly and constructively with shareholders as it continues to develop the Company’s approach to governance, remuneration
and reporting in the periods ahead. The Company will seek to engage directly with major shareholders and their representative bodies
should any material changes be proposed to the Remuneration Policy or its implementation.
Summary of the Directors’ Remuneration Policy continued
Summary of the Directors’ Remuneration Policy continued
110 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 111
Governance
Governance
Implementation of the Remuneration Policy for the year ending December 31, 2025
Base salary
The Committee reviewed the base salary levels for the Executive Director in early 2025 and an increase of 5.5 percent was awarded.
This increase was in line with the midpoint of the general range of increases across the workforce of between 4.0 and 7.0 percent.
The Committee is comfortable that this level of increase is appropriate in the context of the need to retain top talent as part of the
continued advancement of the Company’s Wholly-Owned Programs.
2024
Base salary
2025
Base salary
Bharatt Chowrira* Chief Executive Officer
$850,000
$896,750
* Dr. Chowrira’s base salary for 2024 increased upon execution of his new employment agreement to reflect his appointment to Chief Executive Officer from President on
April 8, 2024. Due to the timing of his appointment during the year, in 2024 he received a blended base salary totaling $781,008.
Pension
We will continue to contribute under the 401k Plan subject to the maximum set out in the Policy table.
Benefits
Benefits provided will continue to include, as appropriate, housing allowance, transportation allowance, private medical, disability and
dental coverage. Benefits payments in 2025 to the Executive Director are expected to generally be in-line with those provided in 2024
and will not include amounts for housing allowance or transportation allowance.
Annual bonus
For 2025, the operation of the annual bonus plan will be similar to the plan’s operation in 2024. The maximum annual bonus will continue
to be 100 percent of base salary for the Executive Director with a target annual bonus to be 50 percent of base salary. The 2025 annual
bonus will be based on business development goals (including the strategic development of our Wholly-Owned Programs), as well
as financial and capital markets based goals. The performance metrics and targets will be disclosed in the FY2025 Annual Report and
Accounts given that they are considered commercially sensitive at the current time.
Long-term incentives
Awards under the PSP will be made to the Executive Director in 2025. The Chief Executive Officer will receive a performance share award
with a face value of 300 percent of base salary and a restricted share award with a face value of 300 percent of base salary.
The performance share awards will be subject to the performance conditions described below, measured over the three-year period
ended 31 December 2027. As a clinical-stage therapeutics company, the Company believes that TSR is an appropriate and objective
measure of the Company’s performance. In addition, measuring TSR on both an absolute and relative basis rewards our management
team for absolute value creation for our shareholders whilst also incentivizing outperformance of the market. To provide a balance to the
TSR performance conditions that is more directly based on Management’s long term strategic performance, TSR is complemented by
measures linked to strategic delivery. There will be a robust assessment of the achievement of the strategic targets over the three-year
period with full disclosure in the Directors’ Remuneration Report following the end of the performance period.
Further detail of the performance conditions is set out below:
— 30 percent based on the achievement of absolute TSR targets.
— 20 percent based on the achievement of a relative TSR performance condition, 10 percent each against two benchmarks
(explained below).
— 50 percent based on the achievement of strategic targets.
The minimum performance target for the absolute TSR portion of the performance share award will be TSR equal to 10 percent per
annum, whilst the maximum target will be TSR equal to 20 percent per annum.
Annual Report on Remuneration
Relative TSR will be measured against the constituent companies of the FTSE 250 Index (excluding Investment Trusts) and the MSCI
Europe Health Care Index (each benchmark applying to 10 percent of the performance share award, respectively). The minimum
performance target will be achievement of TSR equal to the median company in the Index and the maximum performance target will be
achievement of upper quartile TSR performance. 25 percent of each element of the TSR targets will vest for threshold performance.
Strategic measures will be based on the achievement of milestones and other qualitative measures of performance over the
performance period. Strategic targets will be set at the outset based on development of Wholly-Owned Programs, financial
achievements, including monetization of Founded Entities, product pipeline growth, operational excellence, strategic development or
transaction related goals and other shareholder value enhancing metrics in line with our strategic plan. Full disclosure of the measures,
weightings and strategic targets will be made retrospectively.
Any performance shares which vest will be subject to a two-year post-vesting holding period.
The restricted shares to be granted to the Executive Director will vest subject to continued employment and a Remuneration
Committee assessment that Company and individual performance has been satisfactory. In line with normal practice in the United
States, vesting will take place in three equal annual tranches over three years. For each tranche, there will be a two-year post-vesting
holding period.
Non-Executive Directors
Fees for our Board of Directors have been reviewed for 2025. The level of cash compensation is not being increased for 2025 although, as
noted in the Annual Statement from the Chair of the Remuneration Committee, a further review will be undertaken later this year in the
interests of ensuring ongoing competitiveness.
At the 2024 AGM, the Board increased the equity component of compensation from $50,000 to $150,000. At least $50,000 of this amount
will continue to be paid in PureTech Health ordinary shares. .
FY2025
Chair fee
$125,000
Basic fee
$75,000
Equity-based Component
$150,000
Additional fees:
Chair of a committee
$10,000
Membership of the Transaction Committee
$25,000
Membership of the R&D Committee
$25,000
Membership of the Nominating, Governance, and Audit Committees
$5,000
Membership of a subsidiary board
$0 to $10,000
As our Board of Directors consists of leading experts with the experience of successfully developing technologies and bringing
them to market, this gives rise to the possibility that the intellectual property we seek to acquire has been developed by one of our
Non-Executive Directors and/or that our Non-Executive Directors provide technical or otherwise specialized advisory services to
the Company above and beyond the services typically provided by a Non-Executive Director. In such exceptional circumstances, our
Remuneration Policy provides us with the flexibility to remunerate them with equity in the relevant subsidiary company as we would
any other inventor of the intellectual property or provider of technical advisory services. This practice is in line with other companies in
the life sciences sector. If the Company is unable to offer market-competitive remuneration in these circumstances, it risks forfeiting
opportunities to obtain intellectual property developed by our Non-Executive Directors and/or foregoing valuable advisory services.
The Company believes foregoing such intellectual property and/or advisory services would not be in the long-term interest of our
shareholders. Accordingly, subsidiary equity grants may be made to Non-Executive Directors upon the occurrence of the exceptional
circumstances set out above.
Annual Report on Remuneration continued
112 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 113
Governance
Governance
Remuneration for the year ended December 31, 2024
Single total figure of remuneration for each Director (audited)
The table below sets out remuneration paid in relation to the 2024 financial year. There was no exercise of share options by Executive
Directors or Non-Executive Directors in the 2024 financial year.
2024 Remuneration
Year
Basic
Salary/Fees
Benefits1
Annual
Bonus Plan
Performance
Share Plan
(Vested)
Pension
Time-based
Restricted
Share Award2
Total
Remuneration
Total
Variable
Total
Fixed
Executive Directors
Bharatt Chowrira
2024
$781,008
$31,031
$544,000
$395,1663
$10,350 $2,550,000
$4,311,555
$3,489,166
$822,839
Daphne Zohar4
2024
$200,665
$10,615
–
–
$6,020
–
$217,300
–
$217,300
Non-Executive Directors
Sharon Barber-Lui 2024
$260,0005
–
–
–
–
–
$260,000
–
$260,000
Michele Holcomb 2024
$123,6536
–
–
–
–
–
$123,653
–
$123,653
Raju Kucherlapati
2024
$343,6415
–
–
–
–
–
$343,641
–
$343,641
John LaMattina
2024
$290,0005
–
–
–
–
–
$290,000
–
$290,000
Robert Langer
2024
$270,0005
–
–
–
–
–
$270,000
–
$270,000
Kiran
Mazumdar‑Shaw
2024
$235,0005
–
–
–
–
–
$235,000
–
$235,000
TOTAL
2024
$2,503,967
$41,646
$544,000
$395,166
$16,370 $2,550,000
$6,051,149
$3,489,166
$2,561,983
1 Benefits comprises the following elements: private medical, disability and dental coverage and parking.
2 The shares underlying the unvested 2024 time-based restricted share award represent 300% of base salary, and were valued based on a closing price of 199.93 pence and an
exchange rate of GBP 1: USD 1.2673, the 3-day averages immediately prior to the grant of the award.
3 The shares underlying the vested 2022 Performance Share Plan awards were valued based on a share price of 144.67 pence and an exchange rate of GBP 1: USD 1.2634, the 3-day
average closing price and the 3-day average exchange rate immediately prior to the date of issuance of the vested award to Dr. Chowrira. The amount of these values attributable
to share price appreciation is $nil for the Executive Director.
4 Remuneration paid to Ms. Zohar in 2024 covers the period prior to her resignation from the CEO role and as a Director.
5 These amounts include the grants of share-based remuneration in June 2024 in the form of time-vesting restricted stock units with a face value of $150,000.
6 The 2024 grant of share based number of shares awarded to Dr. Holcomb was pro-rated following her appointment as of September 23, 2024, and is valued based on the closing
price of 157.27 pence and an exchange rate of GBP 1 : USD 1.2961, the 3-day averages immediately prior to the grant of the award on November 8, 2024.
The table below sets out remuneration paid in relation to the 2023 financial year. There was no exercise of share options by Executive
Directors or Non-Executive Directors in the 2023 financial year.
2023 Remuneration
Year
Basic
Salary/Fees
Benefits1
Annual
Bonus Plan
Performance
Share Plan
(Vested)
Pension
Total
Remuneration
Total
Variable
Total
Fixed
Executive Directors
Bharatt Chowrira
2023
$575,050
$1,030,972
$575,050
$299,453
$9,900
$2,490,425
$874,503
$1,615,922
Daphne Zohar
2023
$719,883
$2,539,391
$719,883
$749,970
$9,900
$4,739,027
$1,469,853
$3,269,174
Non-Executive Directors
Sharon Barber-Lui
2023
$135,0002
–
–
–
–
$135,000
–
$135,000
Michele Holcomb3
2023
–
–
–
–
–
–
–
–
Raju Kucherlapati
2023
$172,5002
–
–
–
–
$172,500
–
$172,500
John LaMattina
2023
$137,7502
–
–
–
–
$137,750
–
$137,750
Robert Langer
2023
$145,0002
–
–
–
–
$145,000
–
$145,000
Kiran Mazumdar-Shaw
2023
$135,0002
–
–
–
–
$135,000
–
$135,000
TOTAL
2023
$2,020,183
$3,570,363
$1,294,933
$1,049,423
$19,800
$7,954,702
$2,344,356
$5,610,346
1 Benefits comprises the following elements: housing allowance, transportation allowance, private medical, disability and dental coverage and parking. Benefits payments to the
Executive Directors in respect of 2023 included specific payments of $2.5 million to Ms. Zohar and $1.0 million to Dr. Chowrira The rationale for these payments was set out in the
2023 Directors’ Remuneration Report.
2 These amounts include the grants of share-based remuneration in June 2023 in the form of time-vesting restricted stock units with a face value of $50,000.
3 Dr. Holcomb joined the Board in September 2024.
Annual Report on Remuneration continued
Annual Report on Remuneration continued
114 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 115
Governance
Governance
Annual bonus outcome for 2024 (audited)
For the 2024 annual bonus, targets were set for a balanced scorecard at the beginning of the year. The 2024 targets were focused on
(i) development goals designed to incentivize the team to continue development of the Company’s Programs, generate valuable
clinical data in support of the Company’s Wholly-Owned Programs, create innovative Programs, publish key results and achieve
patent protection for the Company’s Wholly-Owned Programs; and (ii) strategic goals designed to incentivize the team to complete
important deals, execute strategic partnerships, monetize Founded Entity holdings or otherwise strengthen the Company’s balance
sheet, strengthen the Company’s investor base and provide support for Founded Entity transactions and financings. Both categories
contained pre-specified stetch goals for exceptional achievement within each performance category. The Remuneration Committee
did not account for the achievement of any previously un-specified goals or other achievements by the management team in
determining the final bonus payouts. The table below sets out the performance assessment and associated bonus outcomes:
Target Goals – Achievement (audited)
Performance Measures Category
Achievement
Percentage of
Target Attained
Program Development
(60%)
The Program Development Goals were 150 percent achieved in 2024. The management
team’s performance resulted in an achievement outcome of 90 percent which was equal to
the pre-specified target of 60 percent, along with 30% for additional stretch goals for this
category. A description of performance in 2024 is set out below:
The Company completed enrollment and announced topline data of the Phase 2b
multiple ascending dose studies for LYT-100 in healthy older adults to support proceeding
in IPF while additionally satisfying the stretch goals of achieving primary endpoint with a
favourable safety profile and superior efficacy at the higher dose of LYT-100. The Company
also completed enrollment of Phase 1b/2a study results with LYT-200 while additionally
satisfying the stretch goal of demonstrating proof of concept in AML cancer patients and
receiving orphan drug designation for LYT-200.
90%
Strategic Goals
(40%)
The Strategic Goals were 95 percent achieved in 2024. The management team’s
performance resulted in an achievement outcome of 38 percent out of a pre-specified
cap of 40 percent for this category of the goals. A description of performance in 2024 is
set out below:
The Company successfully spun out the CNS programs and Glyph platform into Seaport
Therapeutics, which raised over $325 million during the year, completed a $100 million
tender offer, completed various strategic sourcing initiatives for new programs,
and extensively evaluated certain strategic transactions and options to enhance
shareholder value.
38%
Total based on Pre-
Specified Targets
128%
Accordingly, the Committee determined a bonus payout of 64 percent of base salary representing Company achievement of 128
percent of its target goals for 2024. Each of the above target categories are subject to maximum percentage achievement limits that
aggregate to 100 percent of the target bonus (i.e. 50 percent of salary), provided that the Committee may pre-specify certain stretch
targets that would increase the ultimate bonus payout above 100 percent of target (i.e. 50 percent of base salary) if achieved. In this case,
the Committee determined that payouts at 64 percent of base salary (i.e. 128 percent of target) were appropriate taking into account the
overall performance of the Executive Director, the pre-specified goals and stretch targets, and the achievements of the business as set
forth above.
For 2024, the annual bonus payment percentage awarded to Executive Directors was substantially below the prior year, and no
discretion was exercised by the Committee related to the annual bonus or any other aspect of compensation.
Annual Report on Remuneration continued
Long-term incentive awards vesting in respect of the year (audited)
The 2022 PSP awards to Executive Directors granted on May 18, 2022 were subject to three-year performance conditions covering
the period from January 1, 2022 to December 31, 2024. Following an assessment of the performance conditions, the Remuneration
Committee determined that the awards will vest at 35.3 percent of the maximum. The 2023 awards of RSUs to Non-Executive Directors
granted on June 8, 2023, vested immediately prior to the 2024 AGM.
Scheme
Basis of award
granted
Shares
awarded
Shares
vested
Shares
lapsed
Value of vested
awards
Bharatt Chowrira
PSP 2022 250% of salary1
611,909
216,207
395,702
$395,1662
Sharon Barber-Lui
PSP 2023
$50,000
17,122
17,122
–
$39,6243
Raju Kucherlapati
PSP 2023
$50,000
17,122
17,122
–
$34,0314
John LaMattina
PSP 2023
$50,000
17,122
17,122
–
$40,6445
Robert Langer
PSP 2023
$50,000
17,122
17,122
–
$40,6445
Kiran Mazumdar-Shaw
PSP 2023
$50,000
17,122
17,122
–
$40,6445
1 The total grant level for the shares underlying the 2022 Performance Share Plan was 250% of salary rather than 600% of salary because the grant occurred prior to Dr. Chowrira’s
appointment as CEO.
2 The shares underlying the vested 2022 Performance Share Plan awards were valued based on a share price of 144.67 pence and an exchange rate of GBP 1: USD 1.2634, the 3-day
average closing price and the 3-day average exchange rate immediately prior to the date of issuance of the vested award to Dr. Chowrira.
3 Represents the value of the 17,122 shares on June 28, 2024, and an exchange rate of GBP 1 : USD 1.2646 at the date of issuance to the Non-executive Director.
4 Represents the value of the 17,122 shares on October 14, 2024, and an exchange rate of GBP 1 : USD 1.3059 at the date of issuance to the Non-executive Director.
5 Represents the value of the 17,122 shares on June 27, 2024, and an exchange rate of GBP 1 : USD 1.2640 at the date of issuance to the Non-executive Directors.
The outcome of the performance condition relating to the performance-based awards granted to the Executive Directors is set out
below (audited):
Measure and weighting
Threshold
Maximum
Achievement
Vesting
(% of each element)
Absolute TSR (40%)
7% p.a.
15% p.a.
(21%) p.a.
0%
Total return against FTSE 250 Index (10%)
At or above median
Upper quartile
9th percentile
0%
Total return against MSCI Euro Healthcare Index (10%)
At or above median
Upper quartile
11th percentile
0%
Strategic measures (40%)
See description below
35.3%
The strategic measures over the three-year period were focused on (i) financial goals (40 percent), (ii) clinical development goals
(50 percent), and (iii) other achievements (10 percent). The clinical development achievements resulting in satisfaction of 48 percent
of the vesting of the strategic measures included, among other things, the successful initiation, enrollment and completion of several
Phase 1 and Phase 2 clinical studies for LYT-100 and the completion and topline data readout of the LYT-100 IPF phase 2 study, with
the LYT-100 IPF phase 2 study additionally achieving its primary endpoint with a favourable safety profile and superior efficacy at the
higher dose of LYT-100, receiving orphan drug designation for LYT-200, and the advancement of other product candidates within our
Wholly-Owned Programs and at the Company’s Founded Entities. The financial achievements resulting in satisfaction of 35 percent of
the vesting of the strategic measures included, among other things, obtaining approximately $815 million for PureTech by monetizing
Founded Entity equity, most notably Karuna in light of its sale to Bristol Myers Squibb, the execution of several partnership agreements
which brought in non-dilutive funding and the completion of certain investor-related activities. The other achievements resulting in
satisfaction of 5 percent of the vesting of the strategic measures include the monetization of PureTech’s royalty in Karuna Therapeutics’
KarXT for up to $500 million, with $100 million in cash paid up front, operation of the Company’s Wholly-Owned Programs within
projected timelines and budgets, conducting significant and robust activities to strengthen the Company’s intellectual property
portfolio, building out a world-class development organization, the in-licensing and creation of new programs, and the publication of
validating data in top tier peer-reviewed academic journals.
The Remuneration Committee considered the outcome in the context of overall business performance over the three-year performance
period and is satisfied that the level of vesting is appropriate given the achievements over the period. While the achievement of certain
pre-specified stretch goals led to a 2024 annual bonus outcome of 128% of target, the portion of the three-year strategic measures
period tied to 2024 achievement was capped at 100% to determine the level of vesting for performance share awards. No discretion has
been exercised by the Committee in respect of the vesting outcome.
Annual Report on Remuneration continued
116 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 117
Governance
Governance
Long-term incentive awards granted during the year (audited)
The following long-term Incentive awards were granted to Executive Directors during 2024:
Scheme
Basis of award
granted
Shares awarded
(as conditional
award of shares)
Share price at
date of grant1
Face value
of award2
% of face
value vesting
at threshold
performance
Vesting determined by
performance over
Bharatt Chowrira
(performance share award)
PSP 2024
300% of salary
1,006,438 199.93 pence
$2,550,000
25%
Three financial years
to December 31, 2026
Bharatt Chowrira
(restricted share award)
PSP 2024
300% of salary
1,006,438 199.93 pence
$2,550,000
100%
n/a
1 The share price at the date of grant is based on the 3-day average closing price immediately prior to the grant of the award on June 26, 2024.
2 Share awards have been valued based on an exchange rate of GBP 1: USD 1.2673, which was the 3-day average exchange rate immediately prior to the grant of the award.
The PSP awards granted in 2024 are split between performance-based awards and restricted share awards. The performance-based
awards are subject to (i) achievement of absolute TSR targets (40 percent of the awards), (ii) achievement of TSR targets as compared to
TSR performance of the constituent companies in the FTSE 250 Index (excluding Investment Trusts) and the MSCI Europe Health Care
Index (20 percent of the awards, 10 percent against each benchmark) and (iii) achievement of targets based on strategic measures (40
percent of the awards), measured over the three year period to December 31, 2026.
The minimum performance target for the absolute TSR portion of the award is TSR equal to 7 percent per annum, whilst the maximum
target is TSR equal to 15 percent per annum. The minimum performance target for the relative TSR portion of the award is TSR equal to
the median of the index, whilst the maximum target will be TSR equal to the upper quartile of the index. Strategic measures are based
on the achievement of project milestones and other qualitative measures of performance. Strategic targets have been set based
on financial achievements, including monetization of Founded Entities, clinical development progress, product pipeline growth,
operational excellence and other shareholder value enhancing metrics in line with our strategic plan. The Committee believes that this
combination of measures and the agreed weightings are appropriate. TSR measures the success of our management team in identifying
and developing new therapeutics whilst strategic targets help incentivize our management team through the stages which ultimately
result in successful therapeutics.
Full disclosure of the strategic targets will be made retrospectively.
The vesting of the restricted share awards are dependent on continued service and Committee confirmation that Company and
individual performance has been satisfactory over the vesting period. Vesting takes place in three equal annual tranches over a three-
year period following grant.
In addition, each Non-Executive Director, with the exception of Dr. Holcomb who received an initial grant of share-based remuneration
on November 8, 2024, was granted share-based remuneration on June 26, 2024, in the form of 59,202 time-vesting restricted stock units.
The equity awards granted to our Non-Executive Directors vest in their entirety immediately prior to Company’s 2025 AGM, provided
that the Non-Executive Directors continue their service through such date. This share-based element is part of the annual fee for Non-
Executive Directors and is not subject to performance (audited).
Non-Executive Directors
Shares
awarded
Face value
of award
Vesting date
Sharon Barber-Lui
59,2021
$150,000
June 12, 2025
Michele Holcomb
50,0002
$101,914
June 12, 2025
Raju Kucherlapati
59,2021
$150,000
June 12, 2025
John LaMattina
59,2021
$150,000
June 12, 2025
Robert Langer
59,2021
$150,000
June 12, 2025
Kiran Mazumdar-Shaw
59,2021
$150,000
June 12, 2025
1 The number of shares awarded to directors then serving as of June 26, 2024 was based on the closing price of 199.93 pence and an exchange rate of GBP 1 : USD 1.2673, the 3-day
averages immediately prior to the grant of the award.
2 The number of shares awarded to Dr. Holcomb was pro-rated following her appointment as of September 23, 2024, and is valued based on the closing price of 157.27 pence and
an exchange rate of GBP 1 : USD 1.2961, the 3-day averages immediately prior to the grant of the award on November 8, 2024.
Annual Report on Remuneration continued
Payments for Loss of Office (audited)
There were no payments for Loss of Office during 2024.
Payments to past Directors (audited)
Daphne Zohar resigned from her roles as the Company’s Chief Executive Officer and a member of the Company’s Board of Directors
on April 9, 2024 in connection with the founding of Seaport Therapeutics, Inc. (Seaport). Ms. Zohar was paid base salary, benefits and
pension as Chief Executive Officer of the Company through April 8, 2024. Following Ms. Zohar’s resignation, her outstanding PSP
awards continue to vest for the duration of her service as senior advisor and observer to the Board. As of result of her continued service
during 2024, Ms. Zohar’s 2022 PSP award of 1,532,051 shares vested as of December 31, 2024. Based on performance during the period,
the Board determined that 35.3% of the award vested, and in February 2025 Ms. Zohar received 541,324 ordinary shares pursuant to
this award, valued at $989,388 based on the 3-day average share price and exchange rate (GBP 1: USD 1.2634) immediately prior to the
issuance of the award. These shares are subject to the applicable holding period. One additional PSPS award from 2023 of 1,678,971
shares will continue to vest while Ms. Zohar is providing services to the Company.
Ms. Zohar did not receive any payments for loss of office.
Ms. Zohar received payments totalling $100,000 for her service as a senior advisor and board observer from April 9, 2024 through April 8,
2025. The term of Ms. Zohar’s service as a senior advisor and board observer has been extended to April 8, 2026.
The post-employment shareholding policy will apply to Ms. Zohar, requiring a shareholding worth 400 percent of base salary to be
retained for two years following the cessation of her employment.
Directors’ shareholdings (audited)
Executive Directors are required to maintain share ownership equal to a minimum of 400 percent of base salary for the Chief Executive
Officer and a minimum of 200 percent of base salary for any other Executive Directors. Post-employment shareholding requirements
apply, requiring the retention of a minimum share ownership based on a multiple of their salary for a two year period.
The table below sets out current Directors’ shareholdings which are beneficially owned, subject to a performance condition, subject
to a service condition and interests of connected persons.
Director
Directors’ Share Interests
Shares Owned
Outright
Vested But
Unexercised
Options
Options
Subject To
Service
RSUs Subject
To Performance
Conditions
RSUs Subject
To Service
Conditions
Total
December 31, 2024
Bharatt Chowrira
1,000,0011
1,950,000
–
1,677,0282
1,006,4383
5,633,467
Sharon Barber-Lui
38,629
–
–
–
59,2024
97,831
Michele Holcomb5
–
–
–
–
50,0006
50,000
Raju Kucherlapati
2,509,650
–
–
–
59,2024
2,568,852
John LaMattina7
1,324,130
–
–
–
59,2024
1,383,332
Robert Langer8
2,760,854
–
–
–
59,2024
2,820,056
Kiran Mazumdar-Shaw
49,819
–
–
–
59,2024
109,021
1 Does not include 108,103 shares which were issued in February 2025 pursuant to the PSP award granted to Dr. Chowrira covering the financial years 2022, 2023 and 2024. The
performance conditions related to this award were measured as of the close of business on December 31, 2024. As of March 31, 2025, Dr. Chowrira owned 1,108,104 shares outright.
2 Includes the following PSP awards, which are subject to performance conditions: 670,590 (2023) and 1,006,438 (2024).
3 Includes the following PSP awards, which are subject to service conditions: 1,006,438 (2024).
4 Denotes RSUs, which are subject to continued service, that were granted in June 2024 and vest immediately prior to the 2025 Annual General Meeting.
5 Dr. Holcomb joined the Board in September 2024.
6 Denotes RSUs, which are subject to continued service, that were granted in November 2024 following Dr. Holcomb’s appointment to the Board, and vest immediately prior to the
2025 Annual General Meeting.
7 A portion of Dr. LaMattina’s shareholding in the Company is indirect. As of December 31, 2024, an aggregate of 1,324,130 ordinary shares are split between (i) 1,184,774 shares
held by the John L LaMattina Revocable Trust and (ii) 139,356 shares held by the LaMattina Charitable Trust. During 2024, Dr. LaMattina’s ownership decreased by an aggregate of
107,522 shares, with a decrease of 54,882 ordinary shares as a result of his participation in the Company’s 2024 tender offer, and a decrease of 52,640 ordinary shares as a result of
certain charitable donations.
8 A portion of Dr. Langer’s shareholding in the Company is indirect. As of December 31, 2024, an aggregate of 2,760,854 ordinary shares are split between (i) 2,332,578 shares held
by Dr. Langer directly, (ii) 419,867 shares held by the Langer Family 2020 Trust, and (iii) 8,409 shares held by Dr. Langer and Laura Langer jointly. During 2024, Dr. Langer’s ownership
decreased by 233,098 ordinary shares as a result of his participation in the Company’s 2024 tender offer.
Annual Report on Remuneration continued
260
240
220
200
180
160
140
120
100
80
60
40
20
0
24 Jun
2015
31 Dec
2016
31 Dec
2015
31 Dec
2017
31 Dec
2018
31 Dec
2019
31 Dec
2020
31 Dec
2021
31 Dec
2024
31 Dec
2023
31 Dec
2022
Value (£) (rebased)
Puretech S&P600 Biotechnology NASDAQ Biotechnology
118 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 119
Governance
Governance
Directors’ service contracts (unaudited)
Detail of the service contracts of current Directors is set out below:
Executive Directors
Notice period
Contract date
Maximum potential
termination payment
Potential payment on change
of control/liquidation
Bharatt Chowrira
90 days
April 8, 2024
12 months’ salary
Nil
Contracts for the above Executive Directors will continue until terminated by notice either by the Company or the Executive Director.
Non-Executive Directors
Notice period
Contract date
Contract expiration date
Sharon Barber-Lui
30 days
March 24, 2025
March 24, 2028
Michele Holcomb
30 days
September 23, 2024
September 23, 2027
Raju Kucherlapati
30 days
June 5, 2024
June 5, 2027
John LaMattina
30 days
June 5, 2024
June 5, 2027
Robert Langer
30 days
June 5, 2024
June 5, 2027
Kiran Mazumdar-Shaw
30 days
September 28, 2023
September 28, 2026
The Company and the Non-Executive Directors listed above intend to enter into new contracts prior to their expiration.
TSR performance graph (unaudited)
The graph below shows the value, by December 31, 2024, of £100 invested in PureTech on the date of Admission (June 24, 2015),
compared with the value of £100 invested in the Nasdaq Biotechnology and S&P600 Biotechnology indices on the same date. The
Committee considers these to be relevant indices for TSR comparison as they are broad-based measures of the performance of the
biotechnology industry to which the company belongs.
The other points plotted are the values at intervening financial year-ends.
Total shareholder return
Source: Datastream (Thomson Reuters)
Annual Report on Remuneration continued
Chief Executive Officer’s Remuneration History (unaudited)
Year
Incumbent
Role
Single figure
of total
remuneration
Annual bonus
pay-out against
maximum
PSP Vesting
against
maximum
opportunity
2015
Daphne Zohar
Chief Executive Officer
$955,599
100%
n/a
2016
Daphne Zohar
Chief Executive Officer
$747,634
38.75%
n/a
2017
Daphne Zohar
Chief Executive Officer
$821,898
50%
n/a
2018
Daphne Zohar
Chief Executive Officer
$2,139,870
65%
50%
2019
Daphne Zohar
Chief Executive Officer
$5,783,682
100%
100%
2020
Daphne Zohar
Chief Executive Officer
$7,194,841
100%
100%
2021
Daphne Zohar
Chief Executive Officer
$2,472,800
75%
95.8%
2022
Daphne Zohar
Chief Executive Officer
$1,487,964
45%
24.2%
2023
Daphne Zohar
Chief Executive Officer
$4,739,027
100%
35.3%
2024
Bharatt Chowrira
Chief Executive Officer
$4,311,5551
64%
35.3%
1 Dr. Chowrira’s single-figure remuneration for 2024 includes $2,550,000, or 300% of base salary, the value underlying the unvested 2024 time-based restricted share award. This
award was valued based on a closing price of 199.93 pence and an exchange rate of GBP 1: USD 1.2673, the 3-day averages immediately prior to the grant of the award.
Percentage change in remuneration of Directors and employees (unaudited)
The table below shows the change in the Directors’ remuneration compared to the change in remuneration of all of our full-time
employees who were employed throughout the same periods:
2023 to 2024
2022 to 2023
2021 to 2022
2020 to 2021
2019 to 2020
Base
salary/
fees1
Bene
fits2
Annual
bonus
Base
salary/
fees
Bene
fits
Annual
bonus
Base
salary/
fees
Bene
fits
Annual
bonus
Base
salary/
fees
Bene
fits
Annual
bonus
Base
salary/
fees
Bene
fits
Annual
bonus
Bharatt Chowrira
(CEO)3
35.8%
(97%)
(5.4%)
8.5% 3790%
141%
6%
(10%)
(36%)
N/A
N/A
N/A
3%
0%
3%
Sharon Barber-Lui4
92.6%
N/A
N/A
17.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Michele Holcomb5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Raju Kucherlapati
99.2%
N/A
N/A
27.8%
N/A
N/A
(7%)
N/A
N/A
38.1%
N/A
N/A
11%
N/A
N/A
John LaMattina
111%
N/A
N/A
(5%)
N/A
N/A
0%
N/A
N/A
16%
N/A
N/A
19%
N/A
N/A
Robert Langer
86.2%
N/A
N/A
0%
N/A
N/A
0%
N/A
N/A
16%
N/A
N/A
13%
N/A
N/A
Kiran
Mazumdar‑Shaw
74.1%
N/A
N/A
0%
N/A
N/A
0%
N/A
N/A
635%
N/A
N/A
N/A
N/A
N/A
Employees6
5%
2%
33%
9%
12%
77%
12%
6%
(22%)
9%
7%
1%
45%
N/A
N/A
1 Fee amounts for Non-Executive Directors in 2023 include grants of share based remuneration in the form of time-vesting restricted stock units with a face value of $50,000, while
2024 amounts include grants of share based remuneration in the form of time-vesting restricted stock units with a face value of $150,000.
2 This segment includes: housing allowance, transportation allowance, private medical and dental cover, disability and life insurance. Benefits payments in 2023 included a payment
of $1.0m to Bharatt Chowrira, as explained in last year’s Directors’ Remuneration Report.
3 Joined the Board effective February 2021.
4 Joined the Board effective March 2022.
5 Joined the Board effective September 2024.
6 Does not include employees of Founded Entities.
Annual Report on Remuneration continued
Financial statements
PureTech Health plc Annual Report and Accounts 2024 121
Report on the audit of the financial statements
Opinion
In our opinion:
— PureTech Health plc’s group financial statements and
company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of
the company’s affairs as at 31 December 2024 and of the
group’s loss and the group’s cash flows for the year then
ended;
— the group financial statements have been properly prepared
in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of
the Companies Act 2006;
— the company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure
Framework”, and applicable law); and
— the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the
Annual Report and Accounts (the “Annual Report”), which
comprise: the Consolidated and Parent Company Statement
of Financial Position as at 31 December 2024; Consolidated
Statement of Comprehensive Income/(Loss), Consolidated
and Parent Company Statement of Changes in Equity,
Consolidated Statement of Cash Flows for the year then
ended; and the notes to the financial statements, comprising
material accounting policy information and other explanatory
information.
Our opinion is consistent with our reporting to the Audit
Committee.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 1 to the financial statements, the group,
in addition to applying UK-adopted international accounting
standards, has also applied international financial reporting
standards (IFRSs) as issued by the International Accounting
Standards Board (IASB).
In our opinion, the group financial statements have been
properly prepared in accordance with IFRSs as issued by
the IASB.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we declare that non-
audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in Note 8 to the consolidated
financial statements, we have provided no non-audit services
to the company or its controlled undertakings in the period
under audit.
Our audit approach
Context
PureTech Health plc is a public limited company incorporated
under the laws of England and Wales, and is listed on the FTSE
Main Market. As such, the group and parent company financial
statements are subject to an audit in accordance with the
requirements of the UK Companies Act.
Overview
Audit scope
— We identified 25 entities, which when grouped together
represent one component, collectively and hereafter
referred to as PureTech Health. This component, in our
view, required a full scope audit based on its contribution
to adjusted loss before tax. In addition, we determined
that audit procedures over certain accounts or balances
were required at a further two components (Seaport
Therapeutics, Inc and Sonde Health Inc) to provide sufficient
overall group coverage of particular financial statement line
items. Further we performed a full scope audit under ISA
(UK) requirements for the PureTech Health plc entity.
— All work in relation to the components for the group audit
was performed by our PwC US (overseas supporting firm)
colleagues in Boston, under our direction and supervision.
The audit procedures over the parent company were
performed by PwC UK, in addition to incremental ISA (UK)
procedures as required for the group audit.
Key audit matters
— Valuation of the Company’s investment in convertible
preferred shares of Seaport (group)
— Valuation of the investment in subsidiary companies (parent)
Materiality
— Overall group materiality: $6,000,000 (FY23: $7,000,000)
based on professional judgement.
— Overall company materiality: $4,890,000 (FY23: $4,772,000)
based on 1% of total assets.
— Performance materiality: $4,500,000 (FY23: $5,250,000)
(group) and $3,667,500 (FY23: $3,579,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors,
including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our audit.
Independent auditors’ report to the members of
PureTech Health plc
120 PureTech Health plc Annual Report and Accounts 2024
Governance
Relative importance of spend on pay (unaudited)
The following table sets out the percentage change in overall spend on pay and distributions to shareholders in 2024 compared to 2023:
2024
2023
% change
Staff costs1
$32,522,471
$37,913,231
(14.2%)
Distributions to Shareholders
$104,703,4972
$19,067,6603
449.1%
1 Excludes Non-Controlled Founded Entities.
2 Represents the value of the 31,540,670 ordinary shares repurchased pursuant to the terms of the Company’s $100 million tender offer, and 1,903,990 ordinary shares repurchased
under the Company’s share repurchase programme during 2024.
3 Represents the value of the 7,683,526 ordinary shares repurchased under the Company’s share repurchase programme during 2023.
Details of the Remuneration Committee, advisors to the Committee and their fees
The Remuneration Committee consists of Dr. LaMattina, Ms. Mazumdar-Shaw and Dr. Kucherlapati, with Dr. LaMattina serving as the
Chair of the Committee. In 2024 the Committee received independent remuneration advice from Korn Ferry (UK) Limited, who was
appointed by and is accountable to the Committee. A separate practice within Korn Ferry provides certain other candidate placement
services to the Company. The terms of engagement between the Committee and Korn Ferry are available from the Company Secretary
on request. The Committee also consults with Executive Directors. However, no Director is permitted to participate in discussions or
decisions about their personal remuneration. During the year, fees in respect of remuneration advice from Korn Ferry amounted to
£22,200. Korn Ferry is a founder member of the Remuneration Consultants’ Group and complies with its Code of Conduct which sets
out guidelines to ensure that its advice is independent and free of undue influence.
Statement of voting at general meeting (unaudited)
The table below sets out the proxy results of the vote on our Remuneration Report at our 2024 AGM:
Resolutions
For
%
Against
%
Withheld
Total votes cast
To approve the Directors’ Remuneration Report
72,296,583
55.95%
56,922,574
44.05%
51,706,134
129,219,157
The table below sets out the proxy results of the vote on our Remuneration Policy at our 2024 AGM:
Resolutions
For
%
Against
%
Withheld
Total votes cast
To approve the Directors’ Remuneration Policy
83,722,702
64.46%
46,157,643
35.54%
51,044,946
129,880,345
2025 AGM
The Company’s AGM will be held at 11:00 am EDT (4:00 pm BST) on June 16, 2025 at the Company’s headquarters at 6 Tide Street,
Boston, Massachusetts. Information regarding the voting outcome will be disclosed in next year’s Annual Report on Remuneration.
This report has been prepared by the Remuneration Committee and has been approved by the Board. It complies with the UK
Companies Act 2006 and related regulations. This report will be put to shareholders for approval at the forthcoming AGM.
On behalf of the Board of Directors
Charles Sherwood, J.D.
Company Secretary
April 30, 2025
Annual Report on Remuneration continued
Financial statements
Financial statements
122 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 123
Valuation of the Company’s investment in convertible preferred shares of Seaport is a new key audit matter this year. Determination
of the Accounting Treatment for the Sale of Future Royalties Liability, which was a key audit matter last year, is no longer included
because of the fact that this KAM covered the initial accounting of the royalties arrangement, which is not applicable this year.
Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation of the Company's investment in convertible preferred
shares of Seaport (group)
As described in Notes 5, 8 and 19 to the consolidated
financial statements, the Company has an investment in
Seaport Therapeutics, Inc. (“Seaport”) through its ownership
of Seaport’s Series A-1, A-2 and B convertible preferred shares
(the “Preferred Shares”) measured at a fair value of $177 million
as of December 31, 2024. The fair value of the Preferred Shares
is determined by management using a valuation model that
utilizes both the market backsolve and probability-weighted
expected return method. The valuation of this investment is
categorized as Level 3 in the fair value hierarchy due to the
use of significant unobservable inputs, which have a significant
effect on the valuation. The significant assumptions used
by management in the valuation include the equity value of
Seaport, the probability of Seaport entering into an initial
public offering and achieving a certain clinical trial development
milestone and the time to liquidity. The principal considerations
for our determination that performing procedures relating to
the valuation of the Company’s investment in the Preferred
Shares of Seaport is a key audit matter are (i) the significant
judgment by management when developing the fair value
estimate of the Preferred Shares; (ii) a high degree of auditor
judgment, subjectivity and effort in performing procedures and
evaluating audit evidence related to management’s significant
assumptions related to the equity value of Seaport, the
probability of Seaport entering into an initial public offering and
achieving a certain clinical trial development milestone, and the
estimated time to liquidity; and (iii) the audit effort involved the
use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and
evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These
procedures included testing the effectiveness of controls
relating to the valuation of the Preferred Shares of Seaport,
including controls over the method, significant assumptions and
underlying data. These procedures also included, among others
(i) testing management’s process for determining the fair value
of the Preferred Shares; (ii) evaluating the appropriateness of the
valuation method, (iii) testing the completeness and accuracy
of the underlying data used in the valuation method; and (iv)
evaluating the reasonableness of the significant assumptions
used by management related to the equity value of Seaport,
the probability of Seaport entering into an initial public offering
and achieving a certain clinical trial development milestone,
and the estimated time to liquidity. Evaluating management’s
assumptions related to the probability of Seaport entering
into an initial public offering and achieving a certain clinical
trial development milestone, and the estimated time to
liquidity involved evaluating whether the assumptions used by
management were reasonable considering the consistency with
internal and external market data. PwC Valuation experts were
used to assist in evaluating (i) the appropriateness of the market
backsolve and probability-weighted expected return method and
(ii) the reasonableness of the equity value assumption.
Valuation of the investment in subsidiary companies (parent)
As described in Note 2 to the parent company financial
statements, the company holds an investment in its subsidiary
undertaking ($462.7m). The recoverability of the investment is
assessed as significant risk as it is subject to a significant level
of judgement. In accordance with IAS 36 Impairment of Assets,
the asset undergoes impairment testing when a triggering
event or change in circumstances indicates that the carrying
amount may not be recoverable. Management determined that
as the carrying amount of the net assets of the parent company
exceeded the implied market capitalisation at various points
throughout the year that this constituted an impairment trigger
and have therefore performed an impairment assessment.
The assessment was performed using the fair value less costs
to sell approach, which involved adjusting the implied market
capitalisation, based on the year end share price, for estimates
relating to a control premium and the expected costs to
sell. As a result of the impairment assessment management
determined that no impairment was required.
We evaluated management’s impairment trigger and impairment
assessments and confirmed that they were performed in
accordance with the requirements of IAS 36 Impairment of
Assets. We recalculated the implied market capitalisation
and independently agreed the year end share price used by
management. We assessed the control premium and expected
costs to sell applied by management for reasonableness in
comparison to other recent similar sized transactions in the
sector. We also engaged with our PwC Valuations experts for
assistance with assessing the reasonableness of the control
premium used by management, in light of these recent
transactions. Based on the results of the procedures described
above, we conclude that the carrying amount of the investment
in subsidiaries is appropriate. We have also assessed the related
disclosures in the company only financial statements and
consider them to be reasonable.
Independent auditors’ report to the members of PureTech Health plc continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of
the group and the company, the accounting processes and
controls, and the industry in which they operate.
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
group and the parent company, the accounting processes and
controls, and the industry in which they operate. The group’s
accounting process is structured around a group finance
function located in Boston, Massachusetts, who maintain
accounting records and controls for the group.
In establishing the overall group audit strategy and plan, we
determined whether for each component within the group
we required an audit of its complete financial information
(‘full scope audit’), or whether specific audit procedures to
address a certain risk characteristic or financial statement line
items would be sufficient. One component, PureTech Health,
has been considered to be individually financially significant
and therefore requiring a full scope audit. In addition, we
determined that audit procedures over certain accounts or
balances were required at a further two components (Seaport
Therapeutics Inc and Sonde Health Inc) to provide sufficient
overall group coverage of particular financial statement
line items. We performed a detailed review of the working
papers of our overseas supporting firm, and maintained
regular communications during the planning, execution and
completion phases of their audit. We directed the work of the
overseas supporting firm, engaged in site visits, reviewed their
approach and findings and participated in the closing meetings.
Further we performed a full scope audit under ISA (UK)
requirements for the PureTech Health plc entity.
The impact of climate risk on our audit
As part of our audit we made enquiries of management and
performed a risk assessment to consider the potential impacts
of climate change on the Group and parent company financial
statements. We remained alert when performing our audit
procedures for any indicators of the impact of climate risk. Our
procedures did not identify any material impact as a result of
climate risk on the group’s and company’s financial statements.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole as follows:
For each component in the scope of our group audit, we
allocated a materiality that is less than our overall group
materiality. The materiality allocated across components was
$5,700,000. Certain components were audited to a local
statutory audit materiality that was also less than our overall
group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing
of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance
materiality was 75% (FY23: 75%) of overall materiality,
amounting to $4,500,000 (FY23: $5,250,000) for the group
financial statements and $3,667,500 (FY23: $3,579,000) for the
company financial statements.
In determining the performance materiality, we considered
a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount in the middle of our
normal range was appropriate.
We agreed with the Audit Committee that we would report to
them misstatements identified during our audit above $300,000
(group audit) (FY23: $350,000) and $244,500 (company audit)
(FY23: $239,000) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and
the company’s ability to continue to adopt the going concern
basis of accounting included:
— Obtaining from management their assessment which
supports the Board’s conclusions with respect to going
concern basis of preparation of the financial statements;
— Testing the mathematical integrity of the cash flow
forecasts and the models and reconciled these to the Board
approved budgets;
— Identifying and assessing management’s alternate downside
scenarios, and considering whether the assumptions in the
downside scenario were reasonable and appropriate;
— Considering additional mitigating actions, in particular
assessing the reasonableness of potential mitigating actions
based on historical execution and feasibility;
— Assessing the completeness of the going concern
disclosures; and
— Assessing the reliability of cash flow forecasts by comparing
actual performance to forecasts, specifically performing look
back testing over the budgeted results of 2024.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the group’s and the company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Independent auditors’ report to the members of PureTech Health plc continued
Financial statements – group
Financial statements – company
Overall materiality
$6,000,000 (FY23: $7,000,000).
$4,890,000 (FY23: $4,772,000).
How we determined it
Overall materiality is based on professional judgement.
1% of total assets
Rationale for benchmark
applied
Based on the volatility of earnings experienced by the
company in recent years, due to material non-operating
items, we have concluded that pre-tax income or loss
for the current year alone is not the most meaningful
benchmark for determining overall materiality. Thus, we
have also considered adjusted income or loss before tax and
operating loss as alternative benchmarks. These benchmarks
yielded overall materiality levels ranging from $5.7 million
to $6.5 million. We then used our professional judgement
to determine an overall materiality level of $6 million.
As the primary value of the parent company
is the investments held, an asset based
metric is the most appropriate benchmark
for setting materiality.
Financial statements
Financial statements
124 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 125
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s
and the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’
statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the
other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or
material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we
also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic report and
Directors’ Report for the year ended 31 December 2024 is
consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements
in relation to going concern, longer-term viability and that
part of the corporate governance statement relating to the
company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional
responsibilities with respect to the corporate governance
statement as other information are described in the Reporting
on other information section of this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit,
and we have nothing material to add or draw attention to in
relation to:
— The directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
— The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
— The directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s
and company’s ability to continue to do so over a period
of at least twelve months from the date of approval of the
financial statements;
— The directors’ explanation as to their assessment of
the group’s and company’s prospects, the period this
assessment covers and why the period is appropriate; and
— The directors’ statement as to whether they have a
reasonable expectation that the company will be able to
continue in operation and meet its liabilities as they fall due
over the period of its assessment, including any related
disclosures drawing attention to any necessary qualifications
or assumptions.
Our review of the directors’ statement regarding the longer-
term viability of the group and company was substantially less
in scope than an audit and only consisted of making inquiries
and considering the directors’ process supporting their
statement; checking that the statement is in alignment with the
relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the
financial statements and our knowledge and understanding of
the group and company and their environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
— The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
the members to assess the group’s and company’s position,
performance, business model and strategy;
— The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and
— The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility to
report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a
departure from a relevant provision of the Code specified under
the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’
responsibilities in respect of the Annual Report and the financial
statements, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control
as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
Independent auditors’ report to the members of PureTech Health plc continued
In preparing the financial statements, the directors are
responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to direct laws and regulations
over financial reporting, specifically Companies Act 2006
and tax legislation, and we considered the extent to which
non-compliance might have a material effect on the financial
statements. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls),
and determined that the principal risks were related to
misappropriation of cash. The group engagement team shared
this risk assessment with the component auditors so that they
could include appropriate audit procedures in response to such
risks in their work. Audit procedures performed by the group
engagement team and/or component auditors included:
— Identifying and testing of journal entries based on our risk
assessment criteria, in particular any journals with unusual
account combinations which credit cash;
— Evaluation of controls designed to prevent and detect
irregularities;
— Reviewing board minutes throughout the financial year
and post year end to identify any unusual items such as
suspicious activity, non-compliance, breaches of laws or
potential litigation;
— Review of financial statements disclosures for compliance
with Companies Act 2006;
— Assessing compliance with the tax legislation through our
audit work over the payroll, VAT and corporation tax;
— Performing enquiries of the Directors, management and
legal counsel and inspection of regulatory and legal
correspondence and;
— Incorporating unpredictability into our audit plan.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.frc.
org.uk/auditorsresponsibilities. This description forms part of
our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in
writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
— we have not obtained all the information and explanations
we require for our audit; or
— adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
— certain disclosures of directors’ remuneration specified by
law are not made; or
— the company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the directors on 13 June 2023 to audit the
financial statements for the year ended 31 December 2023 and
subsequent financial periods. The period of total uninterrupted
engagement is two years, covering the years ended
31 December 2023 to 31 December 2024.
Other matter
The company is required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared
under the structured digital format required by DTR 4.1.15R -
4.1.18R and filed on the National Storage Mechanism of the
Financial Conduct Authority. This auditors’ report provides no
assurance over whether the structured digital format annual
financial report has been prepared in accordance with those
requirements.
Sam Taylor (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Reading
30 April 2025
Independent auditors’ report to the members of PureTech Health plc continued
Financial statements
Financial statements
126 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 127
Consolidated Statement of Comprehensive Income/(Loss)
For the years ended December 31
Note
2024
$000s
2023
$000s
2022
$000s
Contract revenue
3
4,315
750
2,090
Grant revenue
3
513
2,580
13,528
Total revenue
4,828
3,330
15,618
Operating expenses:
General and administrative expenses
9
(71,469)
(53,295)
(60,991)
Research and development expenses
9
(69,454)
(96,235)
(152,433)
Operating income/(loss)
(136,095)
(146,199)
(197,807)
Other income/(expense):
Gain/(loss) on deconsolidation of subsidiary
8
151,808
61,787
27,251
Gain/(loss) on investments held at fair value
5
(2,398)
77,945
(32,060)
Realized gain/(loss) on sale of investments
5
151
(122)
(29,303)
Gain/(loss) on investments in notes from associates
7
13,131
(27,630)
—
Other income/(expense)
961
(908)
8,131
Other income/(expense)
163,652
111,072
(25,981)
Finance income/(costs):
Finance income
11
22,669
16,012
5,799
Finance costs – contractual
11
(1,731)
(3,424)
(3,939)
Finance income/(costs) – fair value accounting
11
(8,108)
2,650
137,063
Finance costs – non cash interest expense related to sale of future
royalties
18
(8,058)
(10,159)
—
Net finance income/(costs)
4,773
5,078
138,924
Share of net income/(loss) of associates accounted for using the equity
method
6
(8,754)
(6,055)
(27,749)
Gain/(loss) on dilution of ownership interest in associates
6
199
—
28,220
Impairment of investment in associates
6
—
—
(8,390)
Income/(loss) before taxes
23,774
(36,103)
(92,783)
Tax benefit/(expense)
27
4,008
(30,525)
55,719
Income/(loss) for the year
27,782
(66,628)
(37,065)
Other comprehensive income/(loss):
Items that are or may be reclassified as profit or loss
Equity-accounted associate – share of other comprehensive income
(loss)
—
92
(166)
Reclassification of foreign currency differences on dilution of interest
—
—
(213)
Total other comprehensive income/(loss)
—
92
(379)
Total comprehensive income/(loss) for the year
27,782
(66,535)
(37,444)
Income/(loss) attributable to:
Owners of the Group
53,510
(65,697)
(50,354)
Non-controlling interests
(25,728)
(931)
13,290
27,782
(66,628)
(37,065)
Comprehensive income/(loss) attributable to:
Owners of the Group
53,510
(65,604)
(50,733)
Non-controlling interests
(25,728)
(931)
13,290
27,782
(66,535)
(37,444)
$
$
$
Earnings/(loss) per share:
Basic earnings/(loss) per share
12
0.21
(0.24)
(0.18)
Diluted earnings/(loss) per share
12
0.21
(0.24)
(0.18)
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Financial Position
As of December 31,
Note
2024
$000s
2023
$000s
Assets
Non-current assets
Property and equipment, net
13
7,069
9,536
Right of use asset, net
23
8,061
9,825
Intangible assets, net
14
601
906
Investments held at fair value
5
191,426
317,841
Investment in associates – equity method
6
2,397
3,185
Investments in notes from associates, non-current
7
6,350
4,600
Other non-current assets
475
878
Total non-current assets
216,379
346,771
Current assets
Trade and other receivables
24
1,522
2,376
Income tax receivable
—
11,746
Prepaid expenses
4,404
4,309
Other financial assets
15
1,642
1,628
Investment in notes from associate, current
7
11,381
—
Short-term investments
24
86,666
136,062
Cash and cash equivalents
24
280,641
191,081
Total current assets
386,256
347,201
Total assets
602,635
693,973
Equity and liabilities
Equity
Share capital
16
4,860
5,461
Share premium
16
290,262
290,262
Treasury stock
16
(46,864)
(44,626)
Merger reserve
16
138,506
138,506
Translation reserve
16
182
182
Other reserve
16
(4,726)
(9,538)
Retained earnings/(Accumulated deficit)
16
32,486
83,820
Equity attributable to the owners of the Group
414,707
464,066
Non-controlling interests
21
(6,774)
(5,835)
Total equity
407,933
458,232
Non-current liabilities
Sale of future royalties liability, non-current
18
136,782
110,159
Deferred tax liability
—
52,462
Lease liability, non-current
23
14,671
18,250
Liability for share-based awards
10
1,861
3,501
Total non-current liabilities
153,314
184,371
Current liabilities
Lease liability, current
23
3,579
3,394
Trade and other payables
22
27,020
44,107
Sale of future royalties liability, current
18
6,435
—
Taxes payable
75
—
Notes payable
20
4,111
3,699
Preferred share liability
17
169
169
Total current liabilities
41,388
51,370
Total liabilities
194,702
235,741
Total equity and liabilities
602,635
693,973
Please refer to the accompanying Notes to the consolidated financial information. Registered number: 09582467.
The Consolidated Financial Statements were approved by the Board of Directors and authorized for issuance on April 30, 2025
and signed on its behalf by:
Bharatt Chowrira
Chief Executive Officer
April 30, 2025
The accompanying notes are an integral part of these financial statements.
Financial statements
Financial statements
128 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 129
Consolidated Statement of Changes in Equity
For the years ended December 31
Share Capital
Treasury Shares
Note
Shares
Amount
$000s
Share
premium
$000s
Shares
Amount
$000s
Merger
reserve
$000s
Translation
reserve
$000s
Other
reserve
$000s
Retained
earnings/
(accumulated
deficit)
$000s
Total
Parent
equity
$000s
Non-
controlling
interests
$000s
Total
Equity
$000s
Balance January 1, 2022
287,796,585
5,444
289,303
—
—
138,506
469
(40,077)
199,871
593,515
(9,368)
584,147
Net income/(loss)
—
—
—
—
—
—
—
—
(50,354)
(50,354)
13,290
(37,065)
Other comprehensive
income/(loss), net
—
—
—
—
—
—
(379)
—
—
(379)
—
(379)
Total comprehensive
income/(loss)
for the year
—
—
—
—
—
—
(379)
—
(50,354)
(50,733)
13,290
(37,444)
Deconsolidation of
Subsidiary
—
—
—
—
—
—
—
—
—
—
11,904
11,904
Exercise of stock options
10
577,022
11
321
—
—
—
—
—
—
332
—
332
Purchase of Treasury
stock
16
—
—
—
(10,595,347)
(26,492)
—
—
—
—
(26,492)
—
(26,492)
Revaluation of deferred
tax assets related to
share-based awards
—
—
—
—
—
—
—
45
—
45
—
45
Equity-settled share-
based awards
10
—
—
—
—
—
—
—
8,856
—
8,856
4,711
13,567
Settlement of restricted
stock units
10
788,046
—
—
—
—
—
—
1,528
—
1,528
—
1,528
NCI exercise of share
options in subsidiaries
10
—
—
—
—
—
—
—
15,171
—
15,171
(15,164)
7
Other
—
—
—
—
—
—
—
—
—
—
(4)
(4)
Balance December 31,
2022
289,161,653
5,455
289,624
(10,595,347) (26,492)
138,506
89
(14,478)
149,516
542,220
5,369
547,589
Net income/(loss)
—
—
—
—
—
—
—
—
(65,697)
(65,697)
(931)
(66,628)
Other comprehensive
income/(loss) for the
year
—
—
—
—
—
—
92
—
—
92
—
92
Total comprehensive
income/(loss) for the
year
—
—
—
—
—
—
92
—
(65,697)
(65,604)
(931)
(66,535)
Deconsolidation of
Subsidiary
8
—
—
—
—
—
—
—
—
—
—
(9,085)
(9,085)
Exercise of stock options
10
306,506
6
638
239,226
530
—
—
(22)
—
1,153
—
1,153
Purchase of Treasury
stock
16
—
—
—
(7,683,526)
(19,650)
—
—
—
—
(19,650)
—
(19,650)
Equity-settled share-
based awards
10
—
—
—
—
—
—
—
3,348
—
3,348
277
3,625
Settlement of restricted
stock units
10
—
—
—
425,219
986
—
—
156
—
1,142
—
1,142
Expiration of share
options in subsidiary
—
—
—
—
—
—
—
1,458
—
1,458
(1,458)
—
Other
—
—
—
—
—
—
—
—
—
—
(6)
(6)
Balance December 31,
2023
289,468,159
5,461 290,262
(17,614,428) (44,626)
138,506
182
(9,538)
83,820
464,066
(5,835) 458,232
Balance January 1, 2024
289,468,159
5,461 290,262
(17,614,428) (44,626)
138,506
182
(9,538)
83,820
464,066
(5,835) 458,232
Net income/(loss)
—
—
—
—
—
—
—
—
53,510
53,510
(25,728)
27,782
Total comprehensive
income/(loss)
for the year
—
—
—
—
—
—
—
—
53,510
53,510
(25,728)
27,782
Deconsolidation of
Subsidiary
8
—
—
—
—
—
—
—
—
—
—
7,430
7,430
Exercise of stock options
10
—
—
—
412,729
1,041
—
—
(146)
—
895
—
895
Repurchase and
cancellation of ordinary
shares from Tender Offer
16
(31,540,670)
(600)
—
—
—
—
—
600
(104,844)
(104,844)
—
(104,844)
Purchase of Treasury
stock
16
—
—
—
(1,903,990)
(4,791)
—
—
—
—
(4,791)
—
(4,791)
Equity-settled share-
based awards expense
10
—
—
—
—
—
—
—
4,569
—
4,569
17,372
21,941
Settlement of restricted
stock units
10
—
—
—
599,512
1,512
—
—
(211)
—
1,301
—
1,301
Expiration of share
options in subsidiary
—
—
—
—
—
—
—
1
—
1
(1)
—
Other
—
—
—
—
—
—
—
—
—
—
(12)
(12)
Balance December 31,
2024
257,927,489
4,860 290,262
(18,506,177) (46,864)
138,506
182
(4,726)
32,486
414,707
(6,774) 407,933
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Cash Flows
For the years ended December 31
Note
2024
$000s
2023
$000s
2022
$000s
Cash flows from operating activities
Income/(loss) for the year
27,782
(66,628)
(37,065)
Adjustments to reconcile income/(loss) for the period to net cash used in operating activities:
Non-cash items:
Depreciation and amortization
3,571
4,933
8,893
Share-based compensation expense
10
22,850
4,415
14,698
(Gain)/loss on investment held at fair value
5
2,398
(77,945)
32,060
Realized (gain)/loss on sale of investments
5
(151)
265
29,303
Gain on dilution of ownership interest in associate
6
(199)
—
(28,220)
Impairment of investment in associates
6
—
—
8,390
Gain on deconsolidation of subsidiary
8
(151,808)
(61,787)
(27,251)
Share of net (gain)/ loss of associates accounted for using the equity method
6
8,754
6,055
27,749
(Gain)/loss on investments in notes from associates
7
(13,131)
27,630
—
Fair value gain on other financial instruments
19
—
—
(8,163)
(Gain)/loss on disposal of assets
14
318
138
Impairment of fixed assets
226
1,260
Income taxes expense (benefit)
27
(4,008)
30,525
(55,719)
Finance (income)/costs, net
11
(4,773)
(5,078)
(138,924)
Changes in operating assets and liabilities:
Trade and other receivables
629
9,750
(7,734)
Prepaid expenses and other financial assets
(1,262)
2,834
(862)
Deferred revenue
—
(283)
2,123
Trade and other payables
22
(9,695)
3,844
22,033
Other
92
1,374
359
Income taxes paid
(37,913)
(150)
(20,696)
Interest received
23,547
14,454
3,460
Interest paid
(1,295)
(1,701)
(3,366)
Net cash used in operating activities
(134,369)
(105,917)
(178,792)
Cash flows from investing activities:
Purchase of property and equipment
13
(11)
(70)
(2,176)
Proceeds from sale of property and equipment
255
865
—
Purchases of intangible assets
14
—
(175)
—
Investment in associates
17
(14,400)
—
(19,961)
Purchase of investments held at fair value
5
—
—
(5,000)
Sale of investments held at fair value
5
298,109
33,309
118,710
Short-term note to associate
(660)
—
—
Repayment of short-term note from associate
660
—
15,000
Purchase of convertible note from associate
—
(16,850)
(15,000)
Cash derecognized upon loss of control over subsidiary
8
(91,570)
(13,784)
(479)
Purchases of short-term investments
(308,942)
(178,860)
(248,733)
Proceeds from maturity of short-term investments
357,447
244,556
50,000
Receipt of payment of sublease
—
—
415
Net cash provided by (used in) investing activities
240,888
68,991
(107,223)
Cash flows from financing activities:
Receipts from Royalty Purchase Agreement
18
25,000
100,000
—
Issuance of subsidiary preferred Shares
17
68,100
—
—
Issuance of Subsidiary Convertible Note
—
—
393
Payment of lease liability
23
(3,394)
(3,338)
(4,025)
Exercise of stock options
895
1,153
332
NCI exercise of stock options in subsidiary
—
—
7
Repurchase of ordinary shares from Tender Offer
16
(102,768)
—
—
Purchase of treasury stock
16
(4,791)
(19,650)
(26,492)
Other
—
(23)
(41)
Net cash provided by (used in) financing activities
(16,958)
78,141
(29,827)
Net increase (decrease) in cash and cash equivalents
89,560
41,215
(315,842)
Cash and cash equivalents at beginning of year
191,081
149,866
465,708
Cash and cash equivalents at end of period
280,641
191,081
149,866
Supplemental disclosure of non-cash investment and financing activities:
Purchase of intangible assets not yet paid in cash
14
—
25
—
Cost associated with Tender Offer not yet paid in cash
2,076
—
—
Settlement of restricted stock units through issuance of equity
1,301
1,142
1,528
The accompanying notes are an integral part of these financial statements.
Financial statements
Financial statements
130 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 131
Notes to the Consolidated Financial Statements
(Amounts in thousands, except share and per share data, or exercise price and conversion price)
1. Material Accounting Policies
Description of Business
PureTech Health plc (the “Parent”) is a public company incorporated, domiciled and registered in the United Kingdom (“UK”). The
registered number is 09582467 and the registered address is 13th Floor, One Angel Court, London, EC2R 7HJ, United Kingdom.
The Parent and its subsidiaries are together referred to as the “Group”. The Parent company financial statements present financial
information about the Parent as a separate entity and not about its Group.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
group financial statements.
Basis of Presentation
The consolidated financial statements of the Group (the "Consolidated Financial Statements") are presented as of December 31,
2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022. The Consolidated Financial Statements have been
approved by the Directors on April 30, 2025, and are prepared in accordance with UK-adopted International Financial Reporting
Standards ("IFRSs"). The Consolidated Financial Statements also comply fully with IFRSs as issued by the International Accounting
Standards Board ("IASB"). UK-adopted IFRSs differs in certain respects from IFRSs as issued by the IASB. However, the differences
have no impact for the periods presented.
For presentation of the Consolidated Statement of Comprehensive Income/(Loss), the Group uses a classification based on the
function of expenses, rather than based on their nature, as it is more representative of the format used for internal reporting and
management purposes and is consistent with international practice.
Certain amounts in the Consolidated Financial Statements and accompanying notes may not add due to rounding. All percentages
have been calculated using unrounded amounts.
Basis of Measurement
The Consolidated Financial Statements are prepared on the historical cost basis except that the following assets and liabilities are
stated at their fair value: investments held at fair value, investments in notes from associates and liabilities classified as fair value
through the profit or loss.
Use of Judgments and Estimates
In preparing the Consolidated Financial Statements, management has made judgements, estimates and assumptions that affect
the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis.
Significant estimation is applied in determining the following:
— Financial instruments (see Note 19. Financial Instruments): In accordance with IFRS 9, Financial Instruments ("IFRS 9"), the
Group carries certain financial assets and financial liabilities at fair value, with changes in fair value through profit and loss
("FVTPL"). Valuation of the aforementioned financial instruments includes determining the appropriate valuation methodology
and making certain estimates such as the equity value of an entity, volatility, and term to liquidity.
Significant judgement is also applied in determining the following:
— Whether financial instruments should be classified as liability or equity (see Note 17. Subsidiary Preferred Shares.). The
judgement includes an assessment of whether the financial instruments include contractual obligations of the Group to deliver
cash or other financial assets or to exchange financial assets or financial liabilities with another party, and whether those
obligations could be settled by the Group exchanging a fixed amount of cash or other financial assets for a fixed number of its
own equity instruments. Further information about these critical judgements and estimates is included below under Financial
Instruments.
— Whether the power to control investees exists (see Note 5. Investments Held at Fair Value, Note 6. Investments in Associates
and Note 8. Gain/(loss) on Deconsolidation of Subsidiary and accounting policy with regard to Subsidiaries below). The
judgement includes an assessment of whether the Group 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 its
own returns. The Group considers among others its voting shares, shareholder agreements, ability to appoint board members,
representation on the board, rights to appoint management, de facto control, investee dependence on the Group, etc. If the
power to control the investee exists, it consolidates the financial statements of such investee in the Consolidated Financial
Statements of the Group. Upon issuance of new shares in an investee and/or a change in any shareholders or governance
agreements, the Group reassesses its ability to control the investee based on the revised voting interest, revised board
composition and revised subsidiary governance and management structure. When such new circumstances result in the Group
losing its power to control the investee, the investee is deconsolidated.
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
— Whether the Group has significant influence over financial and operating policies of investees in order to determine if the
Group should account for its investment as an associate based on IAS 28 Investments in Associates and Joint Ventures ("IAS
28") or a financial instrument based on IFRS 9 (refer to Note 5. Investments Held at Fair Value and Note 6. Investments in
Associates ). This judgement includes, among others, an assessment whether the Group has representation on the board of
directors of the investee, whether the Group participates 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 the Group and the investee.
— Upon determining that the Group does have significant influence over the financial and operating policies of an investee, if
the Group holds more than a single instrument issued by its equity-accounted investee, judgement is required to determine
whether the additional instrument forms part of the investment in the associate, which is accounted for under IAS 28 and
scoped out of IFRS 9, or it is a separate financial instrument that falls in the scope of IFRS 9. This judgement includes an
assessment of the characteristics of the financial instrument of the investee held by the Group and whether such financial
instrument provides access to returns underlying an ownership interest.
— When the Group 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 ("LTI") for the purposes of IAS 28. 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. After considering the individual
facts and circumstances of the Group’s investment in its associate's preferred stock in the manner described above, including
the long-term nature of such investment, the ability of the Group to convert its preferred stock investment to an investment in
common shares and the likelihood of such conversion, the Group concluded that such investment was considered a long-term
interest.
— In determining the appropriate accounting treatment for the Royalty Purchase Agreement during 2023, management applied
significant judgement (refer to Note 18. Sale of Future Royalties Liability).
As of December 31, 2024, the Group had cash and cash equivalents of $280,641 and short-term investments of $86,666.
Considering the Group’s financial position as of December 31, 2024, and its principal risks and opportunities, the Group prepared
a going concern analysis covering a period of at least the twelve-month period from the date of signing the Consolidated Financial
Statements ("the going concern period") utilizing realistic scenarios and applying a severe but plausible downside scenario.
Even under the downside scenario, the analysis demonstrates the Group continues to maintain sufficient liquidity headroom and
continues to comply with all financial obligations. The Board of Directors believe the Group and the Parent is adequately resourced
to continue in operational existence for at least the twelve-month period from the date of signing the Consolidated Financial
Statements. Accordingly, the Board of Directors considered it appropriate to adopt the going concern basis of accounting in
preparing the Consolidated Financial Statements and the PureTech Health plc Financial Statements.
Basis of consolidation
The Consolidated Financial Statements as of December 31, 2024 and 2023, and for each of the years ended December 31, 2024,
2023 and 2022, comprise PureTech Health plc and its consolidated subsidiaries. Intra-group balances and transactions, and any
unrealized income and expenses arising from intra-group transactions, are eliminated.
Subsidiaries
As used in these financial statements, the term subsidiaries refers to entities that are controlled by the Group. Under applicable
accounting rules, the Group controls an entity when it is exposed to, or has the rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group
takes into consideration potential voting rights, board representation, shareholders' agreements, ability to appoint board of
directors and management, de facto control and other related factors. The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date that control commences until the date that control ceases. Losses applicable to
the non-controlling interests ("NCI") in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-
controlling interests to have a deficit balance.
A list of all current and former subsidiaries organized with respect to classification as of December 31, 2024, and the Group’s
total voting percentage, based on outstanding voting common and preferred shares as of December 31, 2024, 2023 and 2022,
is outlined below. All current subsidiaries are domiciled within the United States and conduct business activities solely within the
United States.
Financial statements
Financial statements
132 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 133
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Voting percentage at December 31, through the holdings in
2024
2023
2022
Subsidiary
Common
Preferred
Common
Preferred
Common
Preferred
Subsidiary operating companies
Gallop Oncology, Inc. (Indirectly Held through PureTech
LYT) 2, 5
100.0
—
N/A
N/A
N/A
N/A
Entrega, Inc. (indirectly held through Enlight)2
—
77.3
—
77.3
—
77.3
PureTech LYT, Inc. (formerly Ariya Therapeutics, Inc.)2
—
100.0
—
100.0
—
100.0
PureTech LYT 100, Inc.2
—
100.0
—
100.0
—
100.0
PureTech Management, Inc.3
100.0
—
100.0
—
100.0
—
PureTech Health LLC3
100.0
—
100.0
—
100.0
—
Deconsolidated former subsidiary
operating companies
Sonde Health, Inc.2, 4, 6
—
40.2
—
40.2
—
40.2
Akili Interactive Labs, Inc.2, 6, 8
—
—
14.6
—
14.7
—
Gelesis, Inc.1,2
—
—
—
—
22.8
—
Seaport Therapeutics, Inc.2, 4, 5, 6
0.8
42.1
N/A
N/A
N/A
N/A
SPTX, Inc. (held Indirectly through Seaport)2, 4, 5, 6
0.8
42.1
N/A
N/A
N/A
N/A
Karuna Therapeutics, Inc.2,6, 8
—
—
2.3
—
3.1
—
Vedanta Biosciences, Inc.2, 4, 6
—
46.9
—
47.0
—
47.0
Vedanta Biosciences Securities Corp. (indirectly held
through Vedanta)2, 4, 6
—
46.9
—
47.0
—
47.0
Vor Biopharma Inc.2, 6
2.1
—
3.9
—
4.1
—
Nontrading holding companies
Endra Holdings, LLC (held indirectly through Enlight)2
86.0
—
86.0
—
86.0
—
Ensof Holdings, LLC (held indirectly through Enlight)2, 7
—
—
86.0
—
86.0
—
PureTech Securities Corp.2
100.0
—
100.0
—
100.0
—
PureTech Securities II Corp.2
100.0
—
100.0
—
100.0
—
Inactive subsidiaries
Alivio Therapeutics, Inc.2
—
100.0
—
100.0
—
100.0
Appeering, Inc.2, 7
—
—
—
100.0
—
100.0
Commense Inc.2, 7
—
—
—
99.1
—
99.1
Enlight Biosciences, LLC2
86.0
—
86.0
—
86.0
—
Ensof Biosystems, Inc. (held indirectly through Enlight)2, 7
—
—
57.7
28.3
57.7
28.3
Follica, LLC 2
28.7
56.7
28.7
56.7
28.7
56.7
Knode Inc. (indirectly held through Enlight)2, 7
—
—
—
86.0
—
86.0
Libra Biosciences, Inc.2, 7
—
—
—
100.0
—
100.0
Mandara Sciences, LLC2, 7
—
—
98.3
—
98.3
—
Tal Medical, LLC.2, 7
—
—
—
100.0
—
100.0
1
On October 30, 2023, Gelesis ceased operations and filed a voluntary petition for relief under the United States bankruptcy code. See Note 6. Investments in Associates for details.
2
Registered address is Corporation Trust Center, 1209 Orange St., Wilmington, DE 19801, USA.
3
Registered address is 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, USA.
4
On October 18, 2024, the Group lost control over Seaport. On March 1, 2023, the Group lost control over Vedanta. On May 25, 2022, the Group lost control over Sonde. Seaport,
Vedanta and Sonde were deconsolidated from the Group’s financial statements, resulting in only the profits and losses generated by these entities through the deconsolidation date
being included in the Group’s Consolidated Statement of Comprehensive Income/(Loss). See Notes 8. Gain/(loss) on Deconsolidation of Subsidiary, Notes 5. Investments Held at
Fair Value and 6. Investments in Associates for further details about the accounting for the investments in these entities subsequent to deconsolidation.
5
In January 2024, the Group launched two new Founded Entities (Seaport Therapeutics and Gallop Oncology) to advance certain programs from the Wholly-Owned Programs
segment.
6
See Notes 5. Investments Held at Fair Value for additional discussion on the Group's investment held in Seaport, Vedanta, Sonde, Akili, Karuna and Vor during 2024.
7
Inactive subsidiary dissolved in November 2024.
8
The Group's investments in Akili and Karuna were disposed of in 2024.
Change in Subsidiary Ownership and Loss of Control
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Where the Group loses control of a subsidiary, the assets and liabilities are derecognized along with any related non-controlling
interest. 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 Statement of Comprehensive Income/(Loss).
Associates
As used in the Consolidated Financial Statements, the term associates are those entities in which the Group has no control but
maintains significant influence over the financial and operating policies. Significant influence is presumed to exist when the Group
holds between 20 and 50 percent of the voting power of an entity, unless it can be clearly demonstrated that this is not the case.
The Group evaluates if it maintains significant influence over associates by assessing if the Group has the power to participate in
the financial and operating policy decisions of the associate.
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Application of the Equity Method to Associates
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 the Group’s share of the total comprehensive income or loss of equity accounted investees, from the
date that significant influence commences until the date that significant influence ceases.
To the extent the Group holds interests in associates that are not providing access to returns underlying ownership interests, the
instrument is accounted for in accordance with IFRS 9 as investments held at fair value.
When the Group’s share of losses exceeds its equity method investment in the investee, losses are applied against long-term
interests, which are investments accounted for under IFRS 9. Investments are determined to be long-term interests when they
are long-term in nature and in substance they form part of the Group's net investment in that associate. This determination is
impacted by many factors, among others, whether settlement by the investee through redemption or repayment is planned or
likely in the foreseeable future, whether the investment can be converted and/or is likely to be converted to common stock or
other equity instrument and other factors regarding the nature of the investment. Whilst this assessment is dependent on many
specific facts and circumstances of each investment, typically conversion features whereby the investment is likely to convert
to common stock or other equity instruments would point to the investment being a long-term interest. Similarly, where the
investment is not planned or likely to be settled through redemption or repayment in the foreseeable future, this would indicate
that the investment is a long-term interest. When the net investment in the associate, which includes the Group’s investments in
other long-term interests, is reduced to nil, recognition of further losses is discontinued except to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of an investee.
The Group has adopted the amendments to IAS 28 that addresses the dual application of IAS 28 and IFRS 9 when equity method
losses are applied against long-term interests. The amendments provide the annual sequence in which both standards are to
be applied in such a case. The Group has applied the equity method losses to the long-term interests presented as part of
Investments held at fair value subsequent to remeasuring such investments to their fair value at balance sheet date.
Sale of Future Royalties Liability
The Group accounts for the sale of future royalties liability as a financial liability, as it continues to hold the rights under the royalty
bearing licensing agreement and has a contractual obligation to deliver cash to an investor for a portion of the royalty it receives.
Interest on the sale of future royalties liability is recognized using the effective interest rate over the life of the related royalty
stream.
The sale of future royalties liability and the related interest expense are based on the Group’s current estimates of future royalties
expected to be paid over the life of the arrangement. Forecasts are updated periodically as new data is obtained. Any increases,
decreases or a shift in timing of estimated cash flows require the Group to re-calculate the amortized cost of the sale of future
royalties liability as the present value of the estimated future contractual cash flows that are discounted at the liability’s original
effective interest rate. The adjustment is recognized immediately in profit or loss as income or expense.
Financial Instruments
Classification
The Group classifies its financial assets in the following measurement categories:
— Those to be measured subsequently at fair value either through other comprehensive income "FVOCI", or through profit or loss
"FVTPL", and
— Those to be measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses are recorded in profit or loss.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL,
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets that are
carried at FVTPL are expensed.
Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized
cost. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses
to be recognized from initial recognition of the receivables.
Financial Assets
The Group’s financial assets consist of cash and cash equivalents, investments in debt securities, trade and other receivables,
investments in notes from associates, restricted cash deposits and investments in equity securities. The Group’s financial assets
are virtually all classified into the following categories: investments held at fair value, investments in notes from associates, trade
and other receivables, short-term investments and cash and cash equivalents. The Group determines the classification of financial
assets at initial recognition depending on the purpose for which the financial assets were acquired.
Investments held at fair value are investments in equity instruments. Such investments consist of the Group's minority interest
holdings where the Group has no significant influence or preferred share investments that are not providing access to returns
underlying ownership interests and are categorized as debt instruments that are presented at fair value through profit and loss
because the amounts receivable do not represent solely payments of principal and interest. These financial assets are initially
measured at fair value and subsequently re-measured at fair value at each reporting date. The Group has elected to record the
changes in fair values for the financial assets falling under this category through profit and loss. Please refer to Note 5. Investments
Held at Fair Value.
Financial statements
Financial statements
134 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 135
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Changes in the fair value of financial assets at FVTPL are recognized in other income/(expense) in the Consolidated Statement of
Comprehensive Income/(Loss) as applicable.
The investments in notes from associates, since their contractual terms do not consist solely of cash flow payments of principal
and interest on the principal amount outstanding, are initially and subsequently measured at fair value, with changes in fair value
recognized through profit and loss.
Cash and cash equivalents consist of demand deposits with banks and other financial institutions and highly liquid instruments
with original maturities of three months or less at the date of purchase. Cash and cash equivalents are carried at cost, which
approximates their fair value.
Short-term investments consist of short-term US treasury bills that are held to maturity. The contractual terms consist solely of
payment of the principal and interest and the Group's business model is to hold the treasury bills to maturity. As such, such short-
term investments are recorded at amortized cost. As of balance sheet date, amortized cost approximated the fair value of such
short-term investments.
Trade and other receivables are non-derivative financial assets with fixed and determinable payments that are not quoted on
active markets. These financial assets are carried at the amounts expected to be received less any expected lifetime losses. Such
losses are determined taking into account previous experience, credit rating and economic stability of counterparty and economic
conditions. When a trade receivable is determined to be uncollectible, it is written off against the available provision. As of balance
sheet date, the Group did not record any such expected lifetime losses related to the outstanding trade and other receivable
balances. Trade and other receivables are included in current assets, unless maturities are greater than 12 months after the end of
the reporting period.
Financial Liabilities
The Group’s financial liabilities primarily consist of trade and other payables, and preferred shares.
The majority of the Group’s subsidiaries have preferred shares and certain notes payable with embedded derivatives, which
are classified as current liabilities. When the Group has preferred shares and notes with embedded derivatives that qualify
for bifurcation, the Group has elected to account for the entire instrument as FVTPL after determining under IFRS 9 that the
instrument qualifies to be accounted for under such FVTPL method.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
Equity Instruments Issued by the Group
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions, in
accordance with IAS 32:
1. They include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets
or financial liabilities with another party under conditions that are potentially unfavorable to the Group; and
2. Where the instrument will or may be settled in the Group’s own equity instruments, it is either a non-derivative that includes no
obligation to deliver a variable number of the Group’s own equity instruments or is a derivative that will be settled by the Group
exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the financial instrument is classified as a financial liability. Where the instrument so
classified takes the legal form of the Group’s own shares, the amounts presented in the Group's shareholders' equity exclude
amounts in relation to those shares.
Changes in the fair value of liabilities at FVTPL are recognized in net finance income /(costs) in the Consolidated Statement of
Comprehensive Income/(Loss) as applicable.
IFRS 15, Revenue from Contracts with Customers
The standard establishes a five-step principle-based approach for revenue recognition and is based on the concept of recognizing
an amount that reflects the consideration for performance obligations only when they are satisfied, and the control of goods or
services is transferred.
The majority of the Group’s contract revenue is generated from licenses and services, some of which are part of collaboration
arrangements.
Management reviewed contracts where the Group received consideration in order to determine whether or not they should be
accounted for in accordance with IFRS 15. To date, the Group has entered into transactions that generate revenue and meet the
scope of either IFRS 15 or IAS 20 Accounting for Government Grants. Contract revenue is recognized at either a point-in-time or
over time, depending on the nature of the performance obligations.
The Group accounts for agreements that meet the definition of IFRS 15 by applying the following five step model:
— Identify the contract(s) with a customer – A contract with a customer exists when (i) the Group enters into an enforceable
contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the
payment terms related to those goods or services, (ii) the contract has commercial substance and, (iii) the Group determines
that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s
intent and ability to pay the promised consideration.
— Identify the performance obligations in the contract – Performance obligations promised in a contract are identified based on
the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can
benefit from the good or service either on its own or together with other resources that are readily available from third parties
or from the Group, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately
identifiable from other promises in the contract.
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
— Determine the transaction price – The transaction price is determined based on the consideration to which the Group will
be entitled in exchange for transferring goods or services to the customer. To the extent the transaction price includes
variable consideration, the Group estimates the amount of variable consideration that should be included in the transaction
price utilizing either the expected value method or the most likely amount method depending on the nature of the variable
consideration. Variable consideration is included in the transaction price if, in the Group’s judgement, it is probable that a
significant future reversal of cumulative revenue under the contract will not occur.
— Allocate the transaction price to the performance obligations in the contract – If the contract contains a single performance
obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple
performance obligations require an allocation of the transaction price to each performance obligation based on a relative
standalone selling price basis.
— Recognize revenue when (or as) the Group satisfies a performance obligation – The Group satisfies performance obligations
either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related
performance obligation is satisfied by transferring a promised good or service to a customer.
Revenue generated from services agreements (typically where licenses and related services were combined into one performance
obligation) is determined to be recognized over time when it can be determined that the services meet one of the following: (a)
the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs;
(b) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (c)
the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to
payment for performance completed to date.
It was determined that the Group has contracts that meet criteria (a), since the customer simultaneously receives and consumes
the benefits provided by the Group’s performance as the Group performs. Therefore, revenue is recognized over time using
the input method based on costs incurred to date as compared to total contract costs. The Group believes that in research
and development service type agreements using costs incurred to date represents the most faithful depiction of the entity’s
performance towards complete satisfaction of a performance obligation.
Revenue from licenses that are not part of a combined performance obligation are recognized at a point in time. Such licenses
relate to intellectual property that has significant stand-alone functionality and as such represent a right to use the entity's
intellectual property as it exists at the point in time at which the license is granted.
Royalty revenue received in respect of licensing agreements when the license of intellectual property is the predominant item in
the arrangement is recognized as the related third-party sales in the licensee occur.
Amounts that are receivable or have been received per contractual terms but have not been recognized as revenue since
performance has not yet occurred or has not yet been completed are recorded as deferred revenue. The Group classifies as non-
current deferred revenue amounts received for which performance is expected to occur beyond one year or one operating cycle.
Grant Revenue
The Group recognizes grants from governmental agencies as grant revenue 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 the
Group will comply with the conditions within the grant agreement and there is reasonable assurance that payments under the
grants will be received. The Group evaluates the conditions of each grant as of each reporting date to ensure that the Group has
reasonable assurance of meeting the conditions of each grant arrangement and that it is expected that the grant payment will be
received as a result of meeting the necessary conditions.
The Group submits qualifying expenses for reimbursement after the Group has incurred the research and development expense.
The Group records an unbilled receivable upon incurring such expenses. In cases in which the grant revenue is received prior
to the expenses being incurred or recognized, the amounts received are deferred until the related expense is incurred and/or
recognized. Grant revenue is recognized in the Consolidated Statement of Comprehensive Income/(Loss) at the time in which the
Group recognizes the related reimbursable expense for which the grant is intended to compensate.
Functional and Presentation Currency
The Consolidated Financial Statements are presented in United States dollars (“US dollars”). The functional currency of all
members of the Group is the U.S. dollar. The Group's share in foreign exchange differences in associates were reported in other
comprehensive income/(loss).
Foreign Currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange
rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences
arising on remeasurement are recognized in the Consolidated Statement of Comprehensive Income/(Loss). Non-monetary assets
and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
Share Capital
Ordinary shares are classified as equity. The Group's equity is comprised of share capital, share premium, merger reserve, other
reserve, translation reserve, and retained earnings/accumulated deficit.
Treasury Shares
Treasury shares acquired as a result of repurchasing shares are recognized at cost and are deducted from shareholders' equity. No
gain or loss is recognized in profit and loss for the purchase, sale, re-issue or cancellation of the Group's own equity shares. The
nominal value related to shares that are repurchased and cancelled are reduced from share capital and transferred to a capital
redemption reserve.
Financial statements
Financial statements
136 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 137
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset. Assets under construction represent leasehold
improvements and machinery and equipment to be used in operations or research and development activities. When parts of
an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of
property and equipment. Depreciation is calculated using the straight-line method over the estimated useful life of the related
asset:
Laboratory and manufacturing equipment
2-8 years
Furniture and fixtures
7 years
Computer equipment and software
1-5 years
Leasehold improvements
5-10 years, or the remaining term of the lease, if shorter
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.
Intangible Assets
Intangible assets, which include purchased patents and licenses with finite useful lives, are carried at historical cost less
accumulated amortization, if amortization has commenced. Intangible assets with finite lives are amortized from the time they
are available for their intended use. Amortization is calculated using the straight-line method to allocate the costs of patents and
licenses over their estimated useful lives.
Research and development intangible assets, which are still under development and have accordingly not yet obtained marketing
approval, are presented as In-Process Research and Development (IPR&D). The cost of IPR&D represents upfront payments as well
as additional contingent payments based on development, regulatory and sales milestones related to certain license agreement
where the Group licenses IP from a third party. These milestones are capitalized as the milestone is triggered. See Note 25.
Commitments and Contingencies. IPR&D is not amortized since it is not yet available for its intended use, but it is evaluated for
potential impairment on an annual basis or more frequently when facts and circumstances warrant.
Impairment of Non-Financial Assets
The Group reviews the carrying amounts of its property and equipment and intangible assets at each reporting date to determine
whether there are indicators of impairment. If any such indicators of impairment exist, then an asset’s recoverable amount is
estimated. The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use.
The Group’s IPR&D intangible assets are not yet available for their intended use. As such, they are tested for impairment at least
annually.
An impairment loss is recognized when an asset’s carrying amount exceeds its recoverable amount. For the purposes of
impairment testing, assets are grouped at the lowest levels for which there are largely independent cash flows. If a non-financial
asset instrument is impaired, an impairment loss is recognized in the Consolidated Statement of Comprehensive Income/(Loss).
Investments in associates are considered impaired if, and only if, objective evidence indicates that one or more events, which
occurred after the initial recognition, have had an impact on the future cash flows from the net investment and that impact can
be reliably estimated. If an impairment exists, the Group measures an impairment by comparing the carrying value of the net
investment in the associate to its recoverable amount and recording any excess as an impairment loss. See Note 6. Investments in
Associates for impairment recorded in respect of an investment in associate during the year ended December 31, 2022.
Employee Benefits
Short-Term Employee Benefits
Short-term employee benefit obligations are measured on an undiscounted basis and expensed as the related service is provided.
A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation due to past
service provided by the employee, and the obligation can be estimated reliably.
Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity
and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are
recognized as an employee benefit expense in the periods during which related services are rendered by employees.
Share-based Payments
Share-based payment arrangements, in which the Group receives goods or services as consideration for its own equity
instruments, are accounted for as equity-settled share-based payment transactions (except certain restricted stock units – see
below) in accordance with IFRS 2. The grant date fair value of employee share-based payment awards is recognized as an expense
with a corresponding increase in equity over the requisite service period related to the awards. The amount recognized as an
expense is adjusted to reflect the actual number of awards for which the related service and non-market performance conditions
are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do
meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with
market conditions, the grant date fair value is measured to reflect such conditions and there is no true-up for differences between
expected and actual outcomes.
Certain restricted stock units are treated as liability settled awards starting in 2021. Such awards are remeasured at every
reporting date until settlement date and are recognized as compensation expense over the requisite service period. Differences in
remeasurement are recognized in profit and loss. The cumulative cost that will ultimately be recognized in respect of these awards
will equal to the amount at settlement.
The fair value of the awards is measured using option pricing models and other appropriate models, which take into account the
terms and conditions of the awards granted.
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Development Costs
Expenditures on research activities are recognized as incurred in the Consolidated Statement of Comprehensive Income/(Loss).
In accordance with IAS 38, development costs are capitalized only if the expenditure can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are probable, the Group can demonstrate its ability
to use or sell the intangible asset, the Group intends to and has sufficient resources to complete development and to use or
sell the asset, and it is able to measure reliably the expenditure attributable to the intangible asset during its development. The
point at which technical feasibility is determined to have been reached is, generally, when regulatory approval has been received
where applicable. Management determines that commercial viability has been reached when a clear market and pricing point
have been identified, which may coincide with achieving meaningful recurring sales. Otherwise, the development expenditure is
recognized as incurred in the Consolidated Statement of Comprehensive Income/(Loss). As of balance sheet date, the Group has
not capitalized any development costs.
Provisions
A provision is recognized in the Consolidated Statement of Financial Position when the Group has a present legal or constructive
obligation due to a past event that can be reliably measured, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects risks specific to the liability.
Leases
The Group leases real estate for use in operations. These leases have lease terms of approximately 10 years. The Group includes
options that are reasonably certain to be exercised as part of the determination of the lease term. The group determines if an
arrangement is a lease at inception of the contract in accordance with guidance detailed in IFRS 16. Right-of-use ("ROU") assets
represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group's obligation to
make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement
date based on the present value of the lease payments over the lease term. As most of the Group's leases do not provide an
implicit rate, the Group used its estimated incremental borrowing rate, based on information available at commencement date, in
determining the present value of future payments.
The Group’s leases are virtually all leases of real estate.
The Group has elected to account for lease payments as an expense on a straight-line basis over the life of the lease for:
— Leases with a term of 12 months or less and containing no purchase options; and
— Leases where the underlying asset has a value of less than $5,000.
The right-of-use asset is depreciated on a straight-line basis and the related lease liability gives rise to an interest charge.
Finance Income and Finance Costs
Finance income consists of interest income on funds invested in money market funds and U.S. treasuries. Finance income is
recognized as it is earned. Finance costs consist mainly of loan, notes and lease liability interest expenses, interest expense due to
accretion of and adjustment to sale of future royalties liability as well as the changes in the fair value of financial liabilities carried at
FVTPL (such changes can consist of finance income when the fair value of such financial liabilities decrease).
Taxation
Tax on the profit or loss for the year comprises current and deferred income tax. In accordance with IAS 12, tax is recognized in the
Consolidated Statement of Comprehensive Income/(Loss) except to the extent that it relates to items recognized directly in equity.
Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized due to temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognized for unused tax losses, unused
tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against
which they can be used. Deferred tax assets with respect to investments in associates are recognized only to the extent that it
is probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be realized.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
Financial statements
Financial statements
138 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 139
1. Accounting policies continued
Notes to the Consolidated Financial Statements continued
Fair Value Measurements
The Group’s accounting policies require that certain financial assets and certain financial liabilities be measured at their fair value.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Fair values
are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
— Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
— Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
— Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.
The carrying amount of cash and cash equivalents, accounts receivable, restricted cash, deposits, accounts payable, accrued
expenses and other current liabilities in the Group’s Consolidated Statement of Financial Position approximates their fair value
because of the short maturities of these instruments.
Operating Segments
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating
decision maker (“CODM”). The CODM reviews discrete financial information for the operating segments in order to assess their
performance and is responsible for making decisions about resources allocated to the segments. The CODM has been identified
as the Group’s Board of Directors.
2. New Standards and Interpretations
The Group has applied Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-
Current for the first time for its reporting period ended December 31, 2024. This amendment did not have any impact on the
amounts recognized in prior and current periods.
In April 2024, IFRS 18, Presentation and Disclosure in Financial Statements was issued to achieve comparability of the financial
performance of similar entities. The standard, which replaces IAS 1 Presentation of Financial Statements, impacts the presentation
of primary financial statements and notes, including the statement of earnings where companies will be required to present
separate categories of income and expense for operating, investing, and financing activities with prescribed subtotals for each new
category. The standard will also require management-defined performance measures to be explained and included in a separate
note within the consolidated financial statements. The standard is effective for annual reporting periods beginning on or after
January 1, 2027, including interim financial statements, and requires retrospective application. The Group is currently assessing the
impact of the new standard.
In May 2024, Amendments to IFRS 9 and IFRS 7, Targeted Improvements to Financial Instruments Standards, was issued to clarify
the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities
settled through an electronic cash transfer system; clarify and add further guidance for assessing whether a financial asset meets
the solely payments of principal and interest (SPPI) criterion; add new disclosures for certain instruments with contractual terms that
can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance
(ESG) targets); and update the disclosures for equity instruments designated at fair value through other comprehensive income
(FVOCI). The standard is effective for annual reporting periods beginning on or after January 1, 2026, including interim financial
statements, and requires prospective application. The Group is currently assessing the impact of the new standard.
In July 2024, the International Accounting Standards Board published the IFRS Interpretations Committee ("Committee")'s agenda
decision clarifying certain requirements for disclosure of revenue and expenses for reporting segments under IFRS 8, Operating
Segments. Committee agenda decisions do not have an effective date as entities are afforded a sufficient amount of time to
implement them. The Group is currently assessing the impact of the Committee agenda decision and plans to apply the new
requirements in its annual financial statements for the year ending December 31, 2025.
Certain other new accounting standards, interpretations, and amendments to existing standards have been published that are
effective for annual periods commencing on or after January 1, 2025 and have not been early adopted by the Group in preparing
the Consolidated Financial Statements. These standards, amendments or interpretations are not expected to have a material
impact on the Group in the prior, current, or future periods.
Notes to the Consolidated Financial Statements continued
3. Revenue
Revenue recorded in the Consolidated Statement of Comprehensive Income/(Loss) consists of the following:
For the years ended December 31,
2024
$
2023
$
2022
$
Contract revenue
4,315
750
2,090
Grant revenue
513
2,580
13,528
Total revenue
4,828
3,330
15,618
All amounts recorded in contract revenue were generated in the United States.
During the year ended December 31, 2024, the Group achieved and received a $4,000 milestone payment from Bristol Myers
Squibb ("BMS"), the acquirer of Karuna Therapeutics, Inc. ("Karuna"), the Group's Founded Entity, following the approval by the
U.S. Food and Drug Administration ("FDA") to market KarXT as Cobenfy, pursuant to a license agreement between PureTech and
Karuna in 2011.
During the year ended December 31, 2024, the Group recognized $315 in royalty revenue pursuant to the license agreement
discussed above. Under the terms of the license agreement, BMS pays the Group a royalty that amounts to 3% of annual net sales
of Cobenfy. Both the milestone payment and the royalties were recognized as contract revenue during the year ended December
31, 2024.
Substantially all of the Group’s contracts related to contract revenue for the years ended December 31, 2023 and 2022 were
determined to have a single performance obligation which consists of a combined deliverable of license of intellectual property
and research and development services. Therefore, for such contracts, revenue is recognized over time based on the input method
which the Group believes is a faithful depiction of the transfer of goods and services. Progress is measured based on costs incurred
to date as compared to total projected costs. Payments for such contracts are primarily made up-front on a periodic basis. For the
Year ended December 31, 2022, contract revenue also includes royalties received from an associate in the amount of $509.
Disaggregated Revenue
The Group disaggregates contract revenue in a manner that depicts how the nature, amount, timing, and uncertainty of revenue
and cash flows are affected by economic factors. The Group disaggregates revenue based on contract revenue or grant revenue,
and further disaggregates contract revenue based on the transfer of control of the underlying performance obligations.
Timing of contract revenue recognition
for the years ended December 31,
2024
$
2023
$
2022
$
Transferred at a point in time – Licensing Income
4,315
—
527
Transferred over time
—
750
1,563
4,315
750
2,090
Customers over 10% of revenue
2024
$
2023
$
2022
$
Customer A
—
750
1,500
Customer B
—
—
509
Customer C
4,315
—
—
4,315
750
2,009
Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the
Group, when payment is unconditional and only the passage of time is required before payment is due. Accounts receivable do
not bear interest and are recorded at the invoiced amount. Accounts receivable are included within trade and other receivable on
the Consolidated Statement of Financial Position. The accounts receivable related to contract revenue were $868 and $555 as of
December 31, 2024 and 2023, respectively.
Financial statements
Financial statements
140 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 141
Notes to the Consolidated Financial Statements continued
4.
Segment Information
Basis for Segmentation
The Directors are the Group’s chief operating decision-makers. The Group’s operating segments are determined based on the
financial information provided to the Board of Directors periodically for the purposes of allocating resources and assessing
performance. The Group has determined each of its Wholly-Owned Programs represents an operating segment and the Group has
aggregated each of these operating segments into one reportable segment, the Wholly-Owned Programs segment. Each of the
Group’s Controlled Founded Entities represents an operating segment. The Group aggregates each Controlled Founded Entity
operating segment into one reportable segment, the Controlled Founded Entities segment. The aggregation is based on the high
level of operational and financial similarities of the operating segments. For the Group’s entities that do not meet the definition of
an operating segment, the Group presents this information in the Parent Company and Other column in its segment footnote to
reconcile the information in this footnote to the Consolidated Financial Statements. Substantially all of the Group’s revenue and
profit generating activities are generated within the United States and, accordingly, no geographical disclosures are provided.
Following is the description of the Group's reportable segments:
Wholly-Owned Programs
The Wholly-Owned Programs segment is advancing Wholly-Owned Programs which are focused on treatments for patients with
devastating diseases. The Wholly-Owned Programs segment is comprised of the technologies that are wholly-owned and will
be advanced through with either the Group's funding or non-dilutive sources of financing. The operational management of the
Wholly-Owned Programs segment is conducted by the PureTech Health team, which is responsible for the strategy, business
development, and research and development.
Controlled Founded Entities
The Controlled Founded Entities segment is comprised of the Group’s consolidated operational subsidiaries as of December 31,
2024 that either have, or have plans to hire, independent management teams and currently have already raised third-party dilutive
capital. These subsidiaries have active research and development programs and have an equity or debt investment partner, who
will provide additional industry knowledge and access to networks, as well as additional funding to continue the pursued growth of
the entity.
The Group’s entities that were determined not to meet the definition of an operating segment are included in the Parent Company
and Other column to reconcile the information in this footnote to the Consolidated Financial Statements. This column captures
activities not directly attributable to the Group's operating segments and includes the activities of the Parent, corporate support
functions, certain research and development support functions that are not directly attributable to a strategic business segment
as well as the elimination of intercompany transactions. This column also captures the operating results for the deconsolidated
entities through the date of deconsolidation (e.g. Seaport in 2024, Vedanta in 2023, and Sonde in 2022) and accounting for
the Group's holdings in Founded Entities for which control has been lost, which primarily represent: the activity associated with
deconsolidating an entity when the Group no longer controls the entity, the gain or loss on the Group's investments accounted
for at fair value (e.g. the Group's ownership stakes in Vor, Vedanta, Sonde and Seaport) and the Group's net income or loss of
associates accounted for using the equity method.
The term "Founded Entities" refers to entities which the Group incorporated and announced the incorporation as a Founded
Entity externally. It includes certain of the Group’s wholly-owned subsidiaries which have been announced by the Group as
Founded Entities, Controlled Founded Entities and deconsolidated Founded Entities.
In January 2024, the Group launched two new Founded Entities (Seaport Therapeutics "Seaport" and Gallop Oncology "Gallop")
to advance certain programs from the Wholly-Owned Programs segment. The financial results of these programs were included in
the Wholly-Owned Programs segment as of and for the year ended December 31, 2023.
Seaport was deconsolidated on October 18, 2024 upon the completion of its Series B preferred share financing. The financial
results of Seaport through the date of deconsolidation are included within the Parent Company and Other column as of December
31, 2024. It is impracticable for the Group to recast its segment results for the years ended December 31, 2023 and 2022 as the
cost to develop the information would be excessive. However, as Seaport is a pre-commercial, clinical-stage biopharmaceutical
company, it primarily performs research and development activities. Seaport incurred direct research and development expenses
of $8,843 for the year ended December 31, 2023, which are included in the Wholly-Owned Program segment. Seaport incurred
direct research and development expenses of $5,061 for the year ended December 31, 2024, prior to its deconsolidation from the
Group’s Consolidated Financial Statements.
As of December 31, 2024, Alivio was dormant and did not meet the definition of operating segment. Therefore, the financial
results of Alivio were removed from the Wholly-Owned Programs segment and are included in the Parent Company and Other
column. The corresponding information for 2023 and 2022 has been restated to include Alivio in the Parent Company and Other
column so that the segment disclosures are presented on a comparable basis.
4. Segment information continued
Notes to the Consolidated Financial Statements continued
The Group’s Board of Directors reviews segment performance and allocates resources based upon revenue, operating loss as well
as the funds available for each segment. The Board of Directors does not review any other information for purposes of assessing
segment performance or allocating resources.
2024
Wholly-Owned
Programs
$
Controlled
Founded
Entities
$
Parent
Company and
Other
$
Consolidated
$
Contract revenue
—
—
4,315
4,315
Grant revenue
513
—
—
513
Total revenue
513
—
4,315
4,828
General and administrative expenses
(8,888)
(173)
(62,408)
(71,469)
Research and development expenses
(56,849)
(672)
(11,933)
(69,454)
Total operating expense
(65,737)
(845)
(74,341)
(140,923)
Operating income/(loss)
(65,224)
(845)
(70,026)
(136,095)
Income/expenses not allocated to segments
Other income/(expense):
Gain on deconsolidation of subsidiary
151,808
Gain/(loss) on investment held at fair value
(2,398)
Realized gain on sale of investments
151
Gain/(loss) on investment in notes from associates
13,131
Other income/(expense)
961
Total other income/(expense)
163,652
Net finance income/(costs)
4,773
Share of net income/(loss) of associates accounted for using the equity
method
(8,754)
Gain on dilution of ownership interest in associate
199
Income/(loss) before taxes
23,774
As of December 31, 2024
Available Funds
Cash and cash equivalents
9,062
432
271,148
280,641
Short-term Investments
—
—
86,666
86,666
Consolidated cash, cash equivalents and short-term investments
9,062
432
357,814
367,307
Financial statements
Financial statements
142 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 143
4. Segment information continued
Notes to the Consolidated Financial Statements continued
2023
Wholly-Owned
Programs
$
Controlled
Founded
Entities
$
Parent
Company and
Other
$
Consolidated
$
Contract revenue
—
750
—
750
Grant revenue
270
—
2,310
2,580
Total revenue
270
750
2,310
3,330
General and administrative expenses
(13,203)
(562)
(39,530)
(53,295)
Research and development expenses
(87,069)
(672)
(8,494)
(96,235)
Total Operating expenses
(100,272)
(1,233)
(48,024)
(149,530)
Operating income/(loss)
(100,002)
(483)
(45,714)
(146,199)
Income/expenses not allocated to segments
Other income/(expense):
Gain on deconsolidation
61,787
Gain/(loss) on investment held at fair value
77,945
Realized loss on sale of investments
(122)
Gain/(loss) on investment in notes from associates
(27,630)
Other income/(expense)
(908)
Total other income/(expense)
111,072
Net finance income/(costs)
5,078
Share of net income/(loss) of associate accounted for using the equity
method
(6,055)
Income/(loss) before taxes
(36,103)
As of December 31, 2023
Available Funds
Cash and cash equivalents
1,895
675
188,511
191,081
Short-term Investments
—
—
136,062
136,062
Consolidated cash, cash equivalents and short-term investments
1,895
675
324,573
327,143
For the year ended December 31, 2022
Wholly-Owned
Programs
$
Controlled
Founded
Entities
$
Parent
Company &
Other
$
Consolidated
$
Contract revenue
—
1,500
590
2,090
Grant revenue
521
—
13,007
13,528
Total revenue
521
1,500
13,597
15,618
General and administrative expenses
(7,737)
(419)
(52,835)
(60,991)
Research and development expenses
(109,201)
(1,051)
(42,182)
(152,433)
Total operating expense
(116,938)
(1,470)
(95,018)
(213,425)
Operating income/(loss)
(116,417)
30
(81,420)
(197,807)
Income/expenses not allocated to segments
Other income/(expense):
Gain on deconsolidation
27,251
Gain/(loss) on investment held at fair value
(32,060)
Realized loss on sale of investments
(29,303)
Other income/(expense)
8,131
Total other income/(expense)
(25,981)
Net finance income/(costs)
138,924
Share of net income/(loss) of associate accounted for using the equity
method
(27,749)
Gain on dilution of ownership interest in associate
28,220
Impairment of investment in associate
(8,390)
Income/(loss) before taxes
(92,783)
Notes to the Consolidated Financial Statements continued
5. Investments Held at Fair Value
Investments held at fair value include both unlisted and listed securities held by the Group. These investments, which include
interests in Seaport, Vedanta, Vor and other insignificant investments as of December 31, 2024 are initially measured at fair value,
and are subsequently re-measured at fair value at each reporting date with changes in the fair value recorded through profit and
loss. See Note 19. Financial Instruments for information regarding the valuation of these instruments. Activities related to such
investments during the periods are shown below:
Investments held at fair value
$
Balance as of January 1, 2023
251,892
Investment in Vedanta preferred shares – Vedanta deconsolidation
20,456
Investment in Gelesis 2023 Warrants
1,121
Sale of Karuna shares
(33,309)
Loss realised on sale of investments
(265)
Gain – changes in fair value through profit and loss
77,945
Balance as of December 31, 2023 and January 1, 2024
317,841
Sale of Karuna shares
(292,672)
Investment in Seaport preferred shares - Seaport deconsolidation
179,248
Sale of Akili Shares
(5,437)
Gain realised on sale of Karuna shares
151
Loss – changes in fair value through profit and loss
(2,398)
Balance as of December 31, 2024 before allocation of equity method loss to long-term interest ("LTI")
196,733
Equity method loss recorded against LTI
(5,307)
Balance as of December 31, 2024
191,426
Vedanta
On March 1, 2023, Vedanta issued convertible debt to a syndicate of investors. The Group did not participate in this round of
financing. As part of the issuance of the debt, the convertible debt holders were granted representation on Vedanta's Board of
Directors and the Group lost control over the Vedanta Board of Directors and the power to direct the relevant Vedanta activities.
Consequently, Vedanta was deconsolidated on March 1, 2023 and its results of operations are included in the Consolidated
Financial Statements through the date of deconsolidation. See Note 8. Gain/(loss) on Deconsolidation of Subsidiary.
Following Vedanta's deconsolidation, the Group has significant influence over Vedanta through its voting interest in Vedanta
and its remaining representation on Vedanta's Board of Directors. However, the Group only holds convertible preferred shares
in Vedanta that do not provide their holders with access to returns associated with a residual equity interest, and as such are
accounted for under IFRS 9 as investments held at fair value with changes in fair value recorded in profit and loss. Under IFRS
9, the preferred share investments are categorized as debt instruments that are presented at fair value through profit and loss
because the amounts receivable do not represent solely payments of principal and interest.
During the years ended December 31, 2024 and December 31, 2023, the Group recognized losses of $2,990 and $6,303 for the
changes in the fair value of the investment in Vedanta that were included in gain/(loss) on investments held at fair value within the
Consolidated Statement of Comprehensive Income/(Loss). The fair value of the Group’s investment in Vedanta was $11,163 and
$14,153 as of December 31, 2024 and 2023, respectively.
Karuna
Karuna was deconsolidated in March 2019. During 2019, Karuna completed its IPO and the Group lost its significant influence in
Karuna. The shares held in Karuna were accounted for as an investment held at fair value under IFRS 9.
2022
On August 8, 2022, the Group sold 125,000 shares of Karuna common stock. In addition, the Group wrote a series of call options
entitling the holders thereof to purchase up to 477,100 Karuna common stock at a set price, which were exercised in full in August
and September 2022. Aggregate proceeds to the Group from all aforementioned transactions amounted to $115,457, net of
transaction fees. As a result of the aforementioned sales, the Group recognized a loss of $29,303, attributable to the exercise of
the aforementioned call options, in realized gain/(loss) on sale of investment within the Consolidated Statement of Comprehensive
Income/(Loss).
2023
During the twelve months ended December 31, 2023, the Group sold 167,579 shares of Karuna common stock with aggregate
proceeds of $33,309, net of transaction fees. As of December 31, 2023, the Group held 886,885 shares, or 2.3%, of the total
outstanding Karuna common stock with a fair value of $280,708.
2024
In March 2024, the Group's common shares in Karuna were acquired by Bristol Myers Squibb ("BMS") for $330 per share in
accordance with the terms of a definitive merger agreement signed in December 2023. As a result of this transaction, the Group
received total proceeds of $292,672 before income tax in exchange for its holding of 886,885 shares of Karuna common stock.
During the years ended December 31, 2024, 2023, and 2022 the Group recognized gains of $11,813, $107,079, and $134,952,
respectively, for the changes in the fair value of the Karuna investment that were included in gain/(loss) on investments held at fair
value within the Consolidated Statement of Comprehensive Income/(Loss).
Financial statements
Financial statements
144 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 145
5. Investments Held at Fair Value continued
Notes to the Consolidated Financial Statements continued
Vor
Vor was deconsolidated in February 2019. On February 9, 2021, Vor closed its initial public offering. Subsequent to the closing, the
Group held 3,207,200 shares of Vor common stock, representing 8.6% of Vor common stock.
In August and December 2022, the Group sold an aggregate of 535,400 shares of Vor common stock for aggregate proceeds of
$3,253.
During the years ended December 31, 2024, 2023 and 2022, the Group recognized losses of $3,046, $11,756, and $16,247,
respectively, for the changes in the fair value of the investment that were included in gain/(loss) on investments held at fair value
within the Consolidated Statement of Comprehensive Income/(Loss). The fair value of the Group’s investment in Vor was $2,966
and $6,012 as of December 31, 2024 and 2023, respectively.
Gelesis
Gelesis was deconsolidated in July 2019. The common stock held in Gelesis was accounted for under the equity method, while
the preferred shares and warrants held by the Group fell under the guidance of IFRS 9 and were treated as financial assets held
at fair value, with changes to the fair value of the instruments recorded through the Consolidated Statement of Comprehensive
Income/(Loss). Please refer to Note 6. Investments in Associates for information regarding the Group's investment in Gelesis as an
associate.
2022
On January 13, 2022, Gelesis completed its business combination with Capstar Special Purpose Acquisition Corp ("Capstar").
As part of the business combination, all shares in Gelesis, common and preferred, including the shares held by the Group, were
exchanged for common shares of the merged entity and unvested common shares that will vest upon the stock price of the new
combined entity reaching certain target prices (hereinafter "Gelesis Earn-out Shares"). In addition, the Group invested $15,000
in the class A common shares of Capstar as part of the Private Investment in Public Equity ("PIPE") transaction that took place
immediately prior to the closing of the business combination and an additional $4,961, as part of the Backstop Agreement signed
with Capstar on December 30, 2021 (See Note 6. Investments in Associates). Pursuant to the business combination, Gelesis
became a wholly-owned subsidiary of Capstar and Capstar changed its name to Gelesis Holdings, Inc., which began trading on
the New York Stock Exchange under the ticker symbol "GLS" on January 14, 2022. The exchange of the preferred stock (including
warrants) for common stock (including common stock warrants) represents an additional investment in Gelesis equity investment.
The Group recorded the changes in fair value of the preferred stock and warrants through the date of the exchange upon which
the preferred shares and warrants were derecognized and recorded as an additional investment in Gelesis equity interest.
As part of the aforementioned exchange, the Group received 4,526,622 Gelesis Earn-out Shares, which were valued on the date
of the exchange at $14,214. The Group accounted for such Gelesis Earn-out Shares under IFRS 9 as investments held at fair value
with changes in fair value recorded through profit and loss.
2023
In February and May 2023, as part of Gelesis' issuance of senior secured promissory notes to the Group, Gelesis also issued to the
Group (i) warrants to purchase 23,688,047 shares of Gelesis common stock with an exercise price of $0.2744 per share (ii) warrants
to purchase 192,307,692 shares of Gelesis common stock at an exercise price of $0.0182 per share and (iii) warrants to purchase
43,133,803 shares of Gelesis common stock at an exercise price of $0.0142 per share. These warrants expire five years after
issuance and are collectively referred to as the Gelesis 2023 Warrants.
The Gelesis 2023 Warrants were recorded at their initial fair value of $1,121 and then subsequently re-measured to fair value
through the profit and loss.
As Gelesis ceased operations in October 2023, the fair value of the Gelesis 2023 Warrants was $0 as of December 31, 2024
and 2023, respectively, and no gain or loss was recognized in 2024. During the years ended December 31, 2023 and 2022, the
Group recognized losses of $1,264 and $18,476, respectively, related to the change in the fair value of these instruments that was
included in gain/(loss) on investments held at fair value within the Consolidated Statement of Comprehensive Income/(Loss).
Sonde
On May 25, 2022, Sonde completed a Series B preferred share financing, which resulted in the Group losing control over Sonde
and the deconsolidation of Sonde. Therefore, the results of operations of Sonde are included in the Consolidated Financial
Statements through the date of deconsolidation. See 8. Gain/(loss) on Deconsolidation of Subsidiary.
Following deconsolidation, the Group had significant influence in Sonde through its 48.2% voting interest in Sonde and its
remaining representation on Sonde's Board of Directors. The Group holds Preferred A-1, A-2 and B shares. The Preferred A-1
shares have the same terms as common stock and provide their shareholders with access to returns associated with a residual
equity ownership in Sonde. Consequently, the investment in Preferred A-1 shares is accounted for under the equity method. The
convertible Preferred A-2 and B shares do not provide their shareholders with access to returns associated with a residual equity
interest and as such, are accounted for under IFRS 9 as investments held at fair value with changes in fair value recorded in profit
and loss. Under IFRS 9, the A-2 and B preferred share investments are categorized as debt instruments that are presented at fair
value through profit and loss because the amounts receivable do not represent solely payments of principal and interest.
5. Investments Held at Fair Value continued
Notes to the Consolidated Financial Statements continued
During the years ended December 31, 2024, 2023 and 2022, the Group recognized a loss of $5,102, a loss of $994, and a gain
of $235, respectively, for the changes in the fair value of the investment in Sonde that were included in gain/(loss) on investments
held at fair value within the Consolidated Statement of Comprehensive Income/(Loss). For the year ended December 31, 2024,
the Group’s recognized an additional loss of $5,307 on its investment in Sonde’s Preferred A-2 and B shares. The recognition of
the additional loss occurs because the Group’s share of equity method losses, from applying the equity method of accounting to
its investment in Sonde’s Preferred A-1 shares, was greater than its equity method investment balance and because the Group’s
investment in Sonde’s Preferred A-2 and B shares represents a long-term interest. The additional loss of $5,307 is included in share
of net income / (loss) of associates accounted for using the equity method within the Consolidated Statement of Comprehensive
Income/(Loss). The fair value of the Group’s investment in Sonde's Preferred A-2 and B shares was $0 and $10,408 as of December
31, 2024 and 2023, respectively.
Akili
Akili was deconsolidated in 2018. At time of deconsolidation, the Group did not hold common shares in Akili and the preferred
shares it held did not have equity-like features. Therefore, the preferred shares held by the Group fell under the guidance of IFRS 9
and were treated as a financial asset held at fair value and changes to the fair value of the preferred shares were recorded through
the Consolidated Statement of Comprehensive Income/(Loss), in accordance with IFRS 9.
2022
On August 19, 2022, Akili Interactive merged with Social Capital Suvretta Holdings Corp. I, a special purpose acquisition
company. The combined company's securities began trading on August 22, 2022 on the Nasdaq Stock Market under the ticker
symbol "AKLI". As part of this transaction, the Akili Interactive shares held by the Group were exchanged for the common stock
of the combined company's securities as well as unvested common stock ("Akili Earnout Shares") that will vest when the share
price exceeds certain thresholds. In addition, as part of a PIPE transaction that took place concurrently with the closing of the
transaction, the Group purchased 500,000 shares for a total consideration of $5,000. Following the closing of the aforementioned
transactions, the Group held 12,527,476 shares of the combined entity and 1,433,914 Akili Earn-out Shares, with a total fair value
of $15,102 as of December 31, 2022.
2024
On July 2, 2024, Akili was acquired by Virtual Therapeutics, and the Group received total proceeds of $5,437 before income taxes
in exchange for its holding of 12,527,476 shares of Akili common stock. As a result, the Group no longer holds any ownership
interests in Akili.
During the years ended December 31, 2024, 2023 and 2022, the Group recognized losses of $985, $8,681, and $131,419,
respectively, for the changes in the fair value of the investment in Akili that were included in gain/(loss) on investments held at fair
value within the Consolidated Statement of Comprehensive Income/(Loss).
Seaport
On October 18, 2024, Seaport Therapeutics, Inc. ("Seaport") completed a Series B preferred share financing, which resulted in
the Group’s voting interest being below 50% and the Group losing control over Seaport Board of Directors. Consequently, the
Group no longer had the power to direct the relevant Seaport activities. As a result, Seaport was deconsolidated on this date and
its results of operations are included in the Consolidated Financial Statements through the date of deconsolidation. See Note
8. Gain/(loss) on Deconsolidation of Subsidiary. Following deconsolidation, the Group still has significant influence in Seaport
through its voting interest in Seaport and its remaining representation on Seaport's Board of Directors. The Group also has an
investment held at fair value in Seaport through its ownership of Seaport's Series A-1, A-2 and B convertible preferred shares. The
Group's preferred shares do not provide their shareholders with access to returns associated with a residual equity interest and as
such, are accounted for under IFRS 9 as investments held at fair value with changes in fair value recorded in profit and loss. Under
IFRS 9, the preferred share investments are categorized as debt instruments that are presented at fair value through profit and loss
because the amounts receivable do not represent solely payments of principal and interest.
As of October 18, 2024, the closing date of the Series B preferred share financing, the Group owns 3,031,578 of Series B preferred
stock, 8,421,052 of Series A-2 preferred stock, and 40,000,000 of Series A-1 preferred stock. These preferred shares had a fair
value of $179,248 and $177,288 as of October 18, 2024 and December 31, 2024, respectively.
The fair value of the preferred shares is determined by management using a valuation model that utilizes both the market
backsolve and probability-weighted expected return methods. The valuation of the investment is categorized as Level 3 in the fair
value hierarchy due to the use of significant unobservable inputs, which have a significant effect on the valuation. The significant
assumptions in the valuation include the estimated equity value of Seaport, the probability of Seaport entering into an initial public
offering and achieving a certain clinical trial development milestone, and the estimated time to liquidity.
During the year ended December 31, 2024, the Group recognized a loss of $1,960 for the changes in the fair value of the
investment in Seaport that were included in gain/(loss) on investments held at fair value within the Consolidated Statement of
Comprehensive Income/(Loss).
Financial statements
Financial statements
146 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 147
Notes to the Consolidated Financial Statements continued
6. Investments in Associates
Gelesis (Boston, MA)
Gelesis was founded by the Group and raised funding through preferred shares financings as well as issuances of warrants and
loans. As of July 1, 2019, Gelesis was deconsolidated from the Group’s financial statements. Upon deconsolidation, the preferred
shares and warrants held by the Group fell under the guidance of IFRS 9 Financial Instruments and were treated as financial assets
held at fair value and the investment in common shares of Gelesis was subject to IAS 28 Investment in Associates as the Group had
significant influence over Gelesis.
Backstop agreement – 2022 and 2021
On December 30, 2021, the Group signed an agreement (the "Backstop Agreement") with Capstar and had committed to acquire
Capstar class A common shares at $10 per share immediately prior to the closing of the business combination between Gelesis
and Capstar, in case, the Available Funds, as defined in the agreement, were less than $15,000. According to the Backstop
Agreement, if the Group had to acquire any shares under the agreement, the Group would receive an additional 1,322,500 class A
common shares of Capstar at no additional consideration.
The Group determined that such agreement meets the definition of a derivative under IFRS 9 and as such, should be recorded at
fair value with changes in fair value recorded through profit and loss. The derivative was initially recorded at fair value adjusted to
defer the day 1 gain equal to the difference between the fair value of $11,200 and transaction price of zero on the effective date
of the Backstop Agreement and as such, was initially recorded at zero. The deferred gain was amortized over the period from
the effective date until the settlement date, January 13, 2022. During the years ended December 31, 2022 and 2021, the Group
recognized income of $10,400 and $800, respectively, for the amortization of the deferred gain. During the year ended December
31, 2022, the Group recognized a loss of $2,776 in respect of the decrease in the fair value of the derivative until the settlement
date, resulting in a net gain of $7,624 recorded during the year ended December 31, 2022 in respect of the Backstop Agreement.
The gain was included in other Income/(expense) in the Consolidated Statement of Comprehensive Income/(Loss). The fair value
of the derivative on the settlement date in the amount of $8,424 represents an additional investment in Gelesis as part of the SPAC
transaction described below.
On January 13, 2022, as part of the conclusion of the aforementioned Backstop Agreement, the Group acquired 496,145 class A
common shares of Capstar for $4,961 and received an additional 1,322,500 class A common shares of Capstar for no additional
consideration.
2022
Share exchange – Capstar
On January 13, 2022, Gelesis completed its business combination with Capstar. As part of the business combination, all shares
in Gelesis, common and preferred, including the shares held by the Group, were exchanged for common shares of the merged
entity and unvested common shares that will vest upon the stock price of the new combined entity reaching certain target prices
(the "Gelesis Earn-out Shares"). In addition, the Group invested $15,000 in the class A common shares of Capstar as part of the
PIPE transaction that took place immediately prior to the closing of the business combination and an additional $4,961, as part of
the Backstop Agreement described above. Pursuant to the business combination, Gelesis became a wholly-owned subsidiary of
Capstar and Capstar changed its name to Gelesis Holdings, Inc., which began trading on the New York Stock Exchange under the
ticker symbol "GLS" on January 14, 2022. Following the closing of the business combination, the PIPE transaction, the settlement
of the aforementioned Backstop Agreement with Capstar, and the exchange of all preferred shares in Gelesis to common shares in
the new combined entity, the Group holds 16,727,582 common shares of Gelesis Holdings Inc., which was equal to approximately
23.2% of Gelesis Holdings Inc's outstanding common shares at the time of the exchange. Due to the Group's significant equity
holding and voting interest in Gelesis, the Group continued to maintain significant influence in Gelesis and as such, continued to
account for its Gelesis equity investment under the equity method.
Gelesis was deemed to be the acquirer in Gelesis Holdings Inc. and the financial assets and financial liabilities in Capstar were
deemed to be acquired by Gelesis in consideration for the shares held by Capstar legacy shareholders. As such, the Group did not
revalue the retained investment in Gelesis but rather treated the exchange as a dilution of its equity interest in Gelesis from 42.0%
as of December 31, 2021 to 22.8% as of January 13, 2022 (including warrants that provide its holders access to returns associated
with equity holders). After considering the aforementioned additional investments, the exchange of the preferred stock, previously
accounted for as an investment held at fair value, to common stock (and representing an additional equity investment in Gelesis),
the earn-out shares received in Gelesis (see Note 5. Investments Held at Fair Value) and the offset of previously unrecognized
equity method losses, the net gain recorded on the dilution of interest amounted to $28,255.
Impairment
Following Gelesis’ decline in its market price in 2022 and its lack of liquidity, the Group recorded an impairment loss of $8,390
as of December 31, 2022 in respect of its investment in Gelesis. The recoverable amount of the investment in Gelesis was $4,910
as of December 31, 2022, which was determined based on fair value less costs to sell (which were estimated to be insignificant).
Fair value was determined based on level 1 of the fair value hierarchy as Gelesis shares were traded on an active market as of
December 31, 2022.
The impairment loss was presented separately in the Consolidated Statement of Comprehensive Income/(loss) for the year ended
December 31, 2022 in the line item impairment of investment in associates.
6. Investments in Associates continued
Notes to the Consolidated Financial Statements continued
2023
During the year ended December 31, 2023, the Group entered into agreements with Gelesis to purchase senior secured
convertible promissory notes and warrants for shares of Gelesis common stock (see Note 7. Investment in Notes from Associates).
The warrants to purchase shares of Gelesis common stock represented potential voting rights to the Group and it was therefore
necessary to consider whether they were substantive. If these potential voting rights were substantive and the Group had the
practical ability to exercise the rights and take control of greater than 50% of Gelesis common stock, the Group would be required
to consolidate Gelesis under the accounting standards.
In February 2023, the Group obtained warrants to purchase 23,688,047 shares of Gelesis common stock (the “February Warrants”)
at an exercise price of $0.2744 per share. The exercise of the February Warrants was subject to the approval of the Gelesis
stockholders until May 1, 2023. On May 1, 2023, stockholder approval was no longer required for the Group to exercise the
February Warrants. The potential voting rights associated with the February Warrants were not substantive as the exercise price of
the February Warrants was at a significant premium to the fair value of the Gelesis common stock.
In May 2023, the Group obtained warrants to purchase 235,441,495 shares of Gelesis common stock (the “May Warrants”). The
May Warrants were exercisable at the option of the Group and had an exercise price of either $0.0182 or $0.0142. The May
Warrants were substantive as the Group would have benefited from exercising such warrants since their exercise price was at the
money or at an insignificant premium over the fair value of the Gelesis common stock. However, that benefit from exercising the
May Warrants only existed for a short period of time because in June 2023, the potential voting rights associated with the May
Warrants were impacted by the terms and conditions of a merger agreement that the Group signed with Gelesis on June 12, 2023
(the "Merger Agreement") and were no longer substantive.
On October 12, 2023, the Group terminated the Merger Agreement with Gelesis as certain closing conditions were not satisfied.
In October 2023, Gelesis ceased operations and filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11
of the United States Bankruptcy Code. A Chapter 7 trustee has been appointed by the Bankruptcy Court who has control over
the assets and liabilities of Gelesis, effectively eliminating the authority and powers of the Board of Directors of Gelesis and its
executive officers to act on behalf of Gelesis. The assets of Gelesis are in liquidation and Gelesis no longer has any officers or
employees. The Group ceased accounting for Gelesis as an equity method investment as it no longer has significant influence in
Gelesis.
During the year ended December 31, 2023, the Group recorded $4,910 as its share in the losses of Gelesis and the Group’s
balance in this equity method investment was zero as of December 31, 2024 and 2023, respectively.
Sonde (Boston, MA)
On May 25, 2022, Sonde completed a Series B preferred share financing. As a result of the aforementioned financing, the Group's
voting interest was reduced below 50% and the Group lost its control over Sonde, and as such, ceased to consolidate Sonde on
the date the round of financing was completed. See Note 8. Gain/(loss) on Deconsolidation of Subsidiary.
Following deconsolidation, the Group has significant influence in Sonde through its voting interest in Sonde and its remaining
representation on Sonde's Board of Directors. The Group's voting interest at the date of deconsolidation was 48.2% and remained
at 40.2% subsequently. The Group holds Preferred A-1, A-2 and B shares. The Preferred A-1 shares, in substance, have the same
terms as common stock and as such, provide their shareholders with access to returns associated with a residual equity ownership
in Sonde. Consequently, the investment in Preferred A-1 shares is accounted for under the equity method. The Preferred A-2 and
B shares, however, do not provide their shareholders with access to returns associated with a residual equity interest and as such,
are accounted for under IFRS 9, as investments held at fair value.
The fair value of the Preferred A-1 shares on the date of deconsolidation amounted to $7,716, which is the initial value of the
equity method investment in Sonde.
During the years ended December 31, 2024, 2023, and 2022, the Group recorded a loss of $8,492, $1,052 and $3,443,
respectively, related to Sonde's equity method of accounting.
As of December 31, 2023, the equity method investment in Sonde had a balance of $3,185. The Group’s share in Sonde’s losses
in 2024 exceeded the Group’s equity method investment in Sonde. As a result, the Group's equity method investment in Sonde is
reduced to $0 as of December 31, 2024. Since the Group’s investment in Sonde’s Preferred A-2 and B shares represents a long-
term interest, the Group recognized additional equity method loses, totaling $5,307, against its investment in Sonde's Preferred
A-2 and B shares (See Note 5. Investments Held at Fair Value), reducing the balance of the preferred share investment to $0 as
of December 31, 2024. Since the Group did not incur legal or constructive obligations or made payments on behalf of Sonde,
the Group stopped recognizing additional equity method losses in 2024. As of December 31, 2024, unrecognized equity method
losses amounted to $14,447.
Seaport (Boston, MA)
On October 18, 2024, Seaport completed a Series B preferred share financing. As a result of this financing, the Group's voting
interest was reduced below 50%, and the Group no longer controls Seaport's Board of Directors. Consequently, the Group lost
control over Seaport, and as such, ceased to consolidate Seaport on the date the round of financing was completed. See Note 8.
Gain/(loss) on Deconsolidation of Subsidiary.
Following deconsolidation, the Group still has significant influence in Seaport through its voting interest in Seaport and its
remaining representation on Seaport's Board of Directors. The Group's voting interest as of the date of deconsolidation and as of
December 31, 2024 was 43.0% and 42.9%, respectively. The Group holds both common shares and preferred shares in Seaport.
The common shares are subject to IAS 28 Investment in Associates and Joint Ventures due to the Group's retained significant
influence and are accounted for under the equity method. The preferred shares do not provide their shareholders with access to
returns associated with a residual equity interest and as such, are accounted for under IFRS 9 as investments held at fair value.
Financial statements
Financial statements
148 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 149
6. Investments in Associates continued
Notes to the Consolidated Financial Statements continued
The fair value of the common shares on the date of deconsolidation amounted to $2,461, which is the initial value of the equity
method investment in Seaport. When applying the equity method, the Group records its share of the losses in Seaport based on
its common share equity interest in Seaport, which was 13.1% as of December 31, 2024. During the year ended December 31,
2024, the Group recorded a loss of $262 related to Seaport’s equity method of accounting and a gain of $199 for the dilution of
ownership interest. As of December 31, 2024, the Seaport equity method investment had a balance of $2,397.
The following table provides summarized financial information for Seaport, the Group’s material associate for the year ended
December 31, 2024. The information disclosed reflects the amounts presented in the financial statements of Seaport and not the
Group’s share of those amounts. The amounts have been amended to reflect adjustments made by the Group when using the
equity method, including fair value adjustments and modifications for differences in accounting policies.
As of December
31, 2024
Summarized statement of financial position
$
Current assets
310,151
Non-current assets
5,632
Current liabilities
(11,149)
Non-current liabilities
(460,996)
Equity awards issued to third parties
(2,042)
Net assets / (liabilities)
(158,405)
Reconciliation to carrying amounts:
Opening net assets/(liabilities)
(156,414)
Profit/(loss) for the period
(1,991)
Other comprehensive income / (loss)
—
Dividends paid
—
Closing net assets / (liabilities)
(158,405)
Group's share in %
13.1%
Group's share of net assets (net deficit)
(20,764)
Unrecognized goodwill and intangibles
23,162
Carrying amount of Investment in associates
2,397
2024
Statement of comprehensive income/(loss)
Revenue
—
Profit /(loss) from continuing operations (100%)
(1,991)
Profit /(loss) for the year
(1,991)
Other comprehensive income / (loss)
—
Total comprehensive income/ (loss)
(1,991)
Dividends received from associate
—
Group's share in gain (net losses)
(262)
The following table summarizes the activities related to the investment in associates balance for the years ended December 31,
2024 and 2023.
Investment in Associates
$
Balance as of January 1, 2023
9,147
Share in net loss of associates
(6,055)
Share in other comprehensive loss of associates
92
Balance as of December 31, 2023 and January 1, 2024
3,185
Investment in Seaport - deconsolidation
2,461
Gain on dilution of interest in associate
199
Share in gain/(loss) of associates
(8,754)
Share of losses recorded against long-term Interests (LTIs)
5,307
Balance as of December 31, 2024
2,397
Notes to the Consolidated Financial Statements continued
7. Investment in Notes from Associates
Gelesis
On July 27, 2022, the Group, as a lender, entered into an unsecured promissory note (the "Junior Note") with Gelesis, as a
borrower, in the amount of $15,000. The Junior Note bears an annual interest rate of 15% per annum. The maturity date of the
Junior Note is the earlier of December 31, 2023 or five business days following the consummation of a qualified financing by
Gelesis. Based on the terms of the Junior Note, due to the option to convert to a variable amount of shares at the time of default,
the Junior Note is required to be measured at fair value with changes in fair value recorded through profit and loss.
During the year ended December 31, 2023, the Group entered into multiple agreements with Gelesis to purchase senior secured
convertible promissory notes (the "Senior Notes") and warrants for share of Gelesis common stock for a total consideration of
$11,850. The Senior Notes are secured by a first-priority lien on substantially all assets of Gelesis and the guarantors (other than
the equity interests in, and assets held by Gelesis s.r.l., a subsidiary of Gelesis, and certain other exceptions). The initial fair value
of the Senior Notes and warrants was determined to be $10,729 and $1,121, respectively. The Senior Notes represent debt
instruments that are presented at fair value through profit and loss as the amounts receivable do not solely represent payments of
principal and interest as the Senior Notes are convertible into Gelesis common stock.
In October 2023, Gelesis ceased operations and filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11 of
the United States Bankruptcy Code. Therefore, the Group determined that the fair value of the Junior Note and the Senior Notes
with the warrants was $0 as of December 31, 2023.
In June 2024, the Bankruptcy Court approved an executed agreement for a third party to acquire the remaining net assets of
Gelesis for $15,000. As the only senior secured creditor, the Group is expected to receive a majority of the proceeds from this sale
after deduction of Bankruptcy Court related legal and administrative costs in 2025. As of December 31, 2024, these notes were
determined to have a fair value of $11,381.
For the years ended December 31, 2024 and 2023, the Group recorded a gain of $11,381 and a loss of $27,230, respectively,
for the changes in the fair value of these notes, which were included in gain/(loss) on investments in notes from associates in the
Consolidated Statement of Comprehensive Income/(Loss).
Vedanta
On April 24, 2023, Vedanta closed the second tranche of its convertible debt for additional proceeds of $18,000, of which $5,000
were invested by the Group. The convertible debt carries an interest rate of 9% per annum. The debt has various conversion
triggers, and the conversion price is established at the lower of 80% of the equity price of the last financing round, or a certain pre-
money valuation cap established in the agreement. If the convertible debt is not earlier converted or repaid, the entire outstanding
amount of the convertible debt shall be due and payable upon the earliest to occur of (a) the later of (x) November 1, 2025 and
(y) the date which is sixty (60) days after all amounts owed under, or in connection with, the loan Vedanta received from a certain
investor have been paid in full, or (b) the consummation of a Deemed Liquidation Event (as defined in Vedanta’s Amended and
Restated Certificate of Incorporation).
Due to the terms of the convertible debt, the investment in such convertible debt is measured at fair value with changes in the
fair value recorded through profit and loss. As of December 31, 2024 and 2023, the Vedanta convertible debt was determined to
have a fair value of $6,350 and $4,600, respectively. During the year ended December 31, 2024 and December 31, 2023 Group
recorded a gain of $1,750 and a loss of $400, respectively, for the changes in the fair value of the Vedanta convertible debt, which
were included in gain/(loss) on investments in notes from associates in the Consolidated Statement of Comprehensive Income/
(Loss).
The following is the activity in respect of investments in notes from associates during the period. The fair value of the notes from
associates of $17,731 and $4,600 as of December 31, 2024 and 2023, respectively, is determined using unobservable Level 3
inputs. See Note 19. Financial Instruments for additional information.
Investment in notes from associates
$
Balance as of January 1, 2023
16,501
Investment In Gelesis Notes
10,729
Investment in Vedanta convertible debt
5,000
Changes in the fair value of the notes
(27,630)
Balance as of December 31, 2023 and January 1, 2024
4,600
Changes in the fair value of the notes
13,131
Balance as of December 31, 2024
17,731
Financial statements
Financial statements
150 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 151
Notes to the Consolidated Financial Statements continued
8. Gain/(loss) on Deconsolidation of Subsidiary
Upon the Group losing control over a subsidiary, the assets and liabilities of the subsidiary are derecognized along with any
related non-controlling interest. Any interest that the Group retains in the former subsidiary is measured at fair value when control
is lost. Any resulting gain or loss is included in gain/(loss) on deconsolidation of subsidiary in the Consolidated Statement of
Comprehensive Income/(Loss).
Sonde
On May 25, 2022, Sonde completed a Series B preferred share financing and amended its Voting Agreement to grant the Series
B preferred stockholders representation on Sonde’s Board of Directors. As a result of the Series B preferred share financing
and the amendment to the Voting Agreement, the Group's voting interest was reduced below 50%, and the Group no longer
controls Sonde's Board of Directors, which is the governance body that has the power to direct the relevant activities of Sonde.
Consequently, the Group concluded that it lost control over Sonde, and therefore, Sonde was deconsolidated on May 25, 2022
from the Group’s Consolidated Financial Statements. The results of Sonde’s operations are included in the Group’s Consolidated
Financial Statements through the date of deconsolidation.
Following deconsolidation, the Group has significant influence over Sonde through its voting interest in Sonde and its remaining
representation on Sonde's Board of Directors. The Group holds Preferred A-1, A-2 and B shares. The Preferred A-1 shares have the
same terms as common stock and provide their shareholders with access to returns associated with a residual equity ownership in
Sonde. Consequently, the investment in Preferred A-1 shares is accounted for under the equity method. The convertible Preferred
A-2 and B shares do not provide their shareholders with access to returns associated with a residual equity interest, and, as such,
are accounted for under IFRS 9, as investments held at fair value with changes in fair value recorded in profit and loss. Under IFRS
9, the investments in Preferred A-2 and B shares are categorized as debt instruments that are presented at fair value through profit
and loss because the amounts receivable do not represent solely payments of principal and interest.
Upon deconsolidation, the Group derecognized the assets, liabilities and non-controlling interest in respect of Sonde and
recorded its aforementioned investment in Sonde at fair value. The deconsolidation resulted in a gain of $27,251. As of the date of
deconsolidation, the investment in Sonde convertible preferred shares amounted to $18,848.
As of December 31, 2024 and 2023, the Group’s investment in Sonde’s convertible preferred shares held at fair value was $0 and
$10,408, respectively, and categorized as Level 3 in the fair value hierarchy.
Vedanta
On March 1, 2023, Vedanta issued convertible debt to a syndicate of investors. The Group did not participate in this round of
financing. As part of the issuance of the debt, the convertible debt holders were granted representation on Vedanta's Board
of Directors, and the Group lost control over the Vedanta Board of Directors, which is the governance body that has the power
to direct the relevant activities of Vedanta. Consequently, Vedanta was deconsolidated on March 1, 2023 from the Group’s
Consolidated Financial Statements. The results of Vedanta’s operations are included in the Group’s Consolidated Financial
Statements through the date of deconsolidation.
Following deconsolidation, the Group has significant influence over Vedanta through its voting interest in Vedanta and its
remaining representation on Vedanta's Board of Directors. The Group only holds convertible preferred shares in Vedanta that do
not provide their holders with access to returns associated with a residual equity interest, and as such, are accounted for under
IFRS 9, Financial Instruments, as investments held at fair value with changes in fair value recorded in profit and loss. Under IFRS 9,
the Group’s preferred share investment is categorized as a debt instrument that is presented at fair value through profit and loss
because the amounts receivable does not represent solely payments of principal and interest.
Upon deconsolidation, the Group derecognized the assets, liabilities and non-controlling interest in respect of Vedanta and
recorded its aforementioned investment in Vedanta at fair value. The deconsolidation resulted in a gain of $61,787. As of the date
of deconsolidation, the investment in Vedanta convertible preferred shares held at fair value amounted to $20,456.
As of December 31, 2024 and 2023, the Group’s investment in Vedanta convertible preferred shares is held at fair value of $11,163
and $14,153, respectively, and categorized as Level 3 in the fair value hierarchy. The significant unobservable inputs used in the
fair value measurement of the Group’s investment in the convertible preferred shares of Vedanta and the sensitivity of the fair value
measurement to changes in these significant unobservable inputs are disclosed in Note 19. Financial Instruments.
Notes to the Consolidated Financial Statements continued
Seaport
On October 18, 2024, Seaport completed a Series B preferred share financing and amended its Voting Agreement to grant
the Series B preferred stockholders’ representation on Seaport’s Board of Directors. As a result of the Series B preferred share
financing and the amendments to the Voting Agreement, the Group's voting interest was reduced below 50%, and the Group no
longer controls Seaport’s Board of Directors, which is the governance body that has the power to direct the relevant activities of
Seaport. Therefore, the Group concluded that it lost control over Seaport, and Seaport was deconsolidated on October 18, 2024
from the Group’s Consolidated Financial Statements. The results of Seaport’s operations are included in the Group’s Consolidated
Financial Statements through the date of deconsolidation.
Following deconsolidation, the Group has significant influence over Seaport through its voting interest in Seaport and its remaining
representation on Seaport’s Board of Directors. The Group holds Preferred A-1, A-2 and B shares in addition to common shares.
The common shares are accounted for under the equity method as prescribed by IAS 28, Investments in Associates and Joint
Ventures. The Preferred A-1, A-2 and B shares do not provide their shareholders with access to returns associated with a residual
equity interest, and, as such, are accounted for under IFRS 9, Financial Instruments, as investments held at fair value with changes
in fair value recorded in profit and loss. Under IFRS 9, the A-1, A-2 and B preferred share investments are categorized as debt
instruments that are presented at fair value through profit and loss because the amounts receivable do not represent solely
payments of principal and interest.
Upon deconsolidation, the Group derecognized the assets, liabilities and non-controlling interest in respect of Seaport and
recorded its aforementioned investment in Seaport at fair value. The deconsolidation resulted in a gain of $151,808.
As of December 31, 2024, the Group’s investment in Seaport’s convertible preferred shares is held at fair value of $177,288 and
is categorized as Level 3 in the fair value hierarchy. The significant unobservable inputs used in the fair value measurement of the
Group’s investment in the convertible preferred shares of Seaport and the sensitivity of the fair value measurement to changes to
these significant unobservable inputs are disclosed in Note 19. Financial Instruments.
The following table summarizes the assets, liabilities and non-controlling interest of Seaport, Vedanta and Sonde derecognized
from the Group in the years ended December 31, 2024, 2023 and 2022, respectively.
2024
$
2023
$
2022
$
Assets, Liabilities and non-controlling interests in deconsolidated subsidiary
Seaport
Vedanta
Sonde
Cash and cash equivalents
(91,570)
(13,784)
(479)
Trade and other receivables
(220)
(702)
—
Prepaid assets
(1,309)
(3,516)
—
Property and equipment, net
(175)
(8,092)
—
Right of use asset, net
—
(2,477)
—
Trade and other payables
6,102
15,078
1,407
Trade and other payables due to PureTech
3,370
139
—
Deferred revenue
—
1,902
—
Lease liabilities (including current portion)
—
4,146
—
Long-term loan (including current portion)
—
15,446
—
Subsidiary notes payable
—
—
3,403
Subsidiary preferred shares and warrants
76,208
24,568
15,853
Other assets and liabilities, net
(475)
(462)
123
Sub-total (net assets)/liabilities
(8,070)
32,246
20,307
Derecognize carrying value of non-controlling interest
(7,430)
9,085
(11,904)
Recognize investment retained in deconsolidated subsidiary at fair value*
167,308
20,456
18,848
Calculated gain on deconsolidation
151,808
61,787
27,251
* Recognized investment in 2024 includes preferred shares held at fair value of $164,848 and common stock accounted for under the equity method with a fair value of $2,461.
8. Loss of Control of Subsidiary continued
Financial statements
Financial statements
152 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 153
Notes to the Consolidated Financial Statements continued
9. Operating Expenses
Total operating expenses were as follows:
For the years ended December 31,
2024
$
2023
$
2022
$
General and administrative
71,469
53,295
60,991
Research and development
69,454
96,235
152,433
Total operating expenses
140,923
149,530
213,425
The average number of persons employed by the Group during the year, analyzed by category, was as follows:
For the years ended December 31,
2024
2023
2022
General and administrative
39
40
57
Research and development
41
56
144
Total
80
96
201
The aggregate payroll costs of these persons were as follows:
2024
$
2023
$
2022
$
For the years ended December 31,
General and administrative
40,559
24,586
25,322
Research and development
15,023
21,102
36,321
Total
55,581
45,688
61,643
Detailed operating expenses were as follows:
2024
$
2023
$
2022
$
For the years ended December 31,
Salaries and wages
29,032
37,084
41,750
Healthcare and other benefits
2,203
2,599
2,908
Payroll taxes
1,496
1,590
2,286
Share-based payments
22,850
4,415
14,699
Total payroll costs
55,581
45,688
61,643
Amortization
1,764
1,979
3,048
Depreciation
1,807
2,955
5,845
Total amortization and depreciation expenses
3,571
4,933
8,893
Other general and administrative expenses
27,491
25,180
31,600
Other research and development expenses
54,280
73,729
111,288
Total other operating expenses
81,771
98,909
142,888
Total operating expenses
140,923
149,530
213,425
Please refer to Note 10. Share-based Payments for further disclosures related to share-based payments and Note 26. Related
Parties Transactions for management’s remuneration disclosures.
Auditor's remuneration:
For the years ended December 31,
2024
$
2023
$
2022
$
Audit of these financial statements
2,377
2,241
1,716
Audit of the financial statements of subsidiaries
—
—
132
Audit of the financial statements of associate**
150
—
814
Audit-related assurance services*
316
445
1,157
Non-audit related services
6
9
—
Total
2,848
2,695
3,819
*
2024 and 2023 – this amount represents assurance service relating to SOX controls work for purposes of the ICFR audit of Form 20-F
** The amounts include audit fees of $150 in respect of financial statements of Seaport for the stub period after deconsolidation in 2024 and audit fees of $720 in respect of financial
statements of Gelesis for the year ended December 31, 2022. The 2022 fees are not included within the Consolidated Financial Statements. These fees are disclosed as they went
towards supporting the audit opinion on the Group accounts.
Notes to the Consolidated Financial Statements continued
10. Share-based Payments
Share-based payments includes stock options and restricted stock units (“RSUs”). Expense for stock options and time-based RSUs
is recognized based on the grant date fair value of these awards. Performance-based RSUs to executives are treated as liability
awards and the related expense is recognized based on reporting date fair value up until settlement date.
Share-based Payment Expense
The Group's share-based payment expense for the years ended December 31, 2024, 2023 and 2022, was $22,850, $4,415, and
$14,699, respectively. The following table provides the classification of the Group’s consolidated share-based payment expense as
reflected in the Consolidated Statement of Income/(Loss):
Year ended December 31,
2024
$
2023
$
2022
$
General and administrative
21,993
3,185
8,862
Research and development
857
1,230
5,837
Total
22,850
4,415
14,699
The Performance Share Plan
In June 2015, the Group adopted the Performance Stock Plan (the “2015 PSP”). Under the 2015 PSP and subsequent
amendments, awards of ordinary shares may be made to the Directors, senior managers and employees, and other individuals
providing services to the Group up to a maximum authorized amount of 10% of the total ordinary shares outstanding.
In June 2023 the Group adopted a new Performance Stock Plan (the "2023 PSP") that has the same terms as the 2015 PSP but
instituted for all new awards a limit of 10% of the total ordinary shares outstanding over a five-year period.
The awards granted under these plans have various vesting terms over a period of service between one and four years, provided
the recipient remains continuously engaged as a service provider. The options awards expire 10 years from the grant date.
The share-based awards granted under these plans are generally equity-settled (see cash settlements below). As of December 31,
2024, the Group had issued 29,940,832 units of share-based awards under these plans.
RSUs
During the twelve months ended December 31, 2024 and 2023, the Group granted the following RSUs to certain non-executive
Directors, executives and employees:
Twelve months ended December 31,
2024
2023
Time based RSUs
4,388,116
102,732
Performance based RSUs
1,822,151
3,576,937
Total RSUs
6,210,267
3,679,669
RSU activity for the years ended December 31, 2024, 2023 and 2022 is detailed as follows:
Number of
Shares/Units
Weighted
Average Grant
Date Fair Value
(GBP) (*)
Outstanding (Non-vested) at January 1, 2022
3,632,715
1.91
RSUs Granted in Period
4,309,883
1.76
Vested
(696,398)
2.80
Forfeited
(1,155,420)
2.67
Outstanding (Non-vested) at December 31, 2022 and January 1, 2023
6,090,780
1.74
RSUs Granted in Period
3,679,669
1.28
Vested
(716,029)
2.00
Forfeited
(1,880,274)
1.94
Outstanding (Non-vested) at December 31, 2023 and January 1, 2024
7,174,146
1.10
RSUs Granted in Period
6,210,267
1.63
Vested
(1,347,729)
1.71
Forfeited
(3,057,962)
1.75
Outstanding (Non-vested) at December 31, 2024
8,978,722
1.29
*
For liability awards - based on fair value at reporting date or settlement date.
Each RSU entitles the holder to one ordinary share on vesting and the RSU awards are generally based on a vesting schedule over
a one to three-year requisite service period in which the Group recognizes compensation expense for the RSUs. Following vesting,
each recipient will be required to make a payment of one pence per ordinary share on settlement of the RSUs.
RSUs granted to the non-executive directors and employees are time-based and equity-settled. The grant date fair value on such
RSUs is recognized over the vesting term.
RSUs granted to executives are performance-based and vesting of such RSUs is subject to the satisfaction of both performance
and market conditions. The performance condition is based on the achievement of the Group's strategic targets. The market
conditions are based on the achievement of the absolute total shareholder return (“TSR”), TSR as compared to the FTSE 250
Index, and TSR as compared to the MSCI Europe Health Care Index. The RSU award performance criteria have changed over time
as the criteria are continually evaluated by the Group’s Remuneration Committee.
Financial statements
Financial statements
154 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 155
10. Share-based Payments continued
Notes to the Consolidated Financial Statements continued
The Group recognizes the estimated fair value of performance-based awards with non-market conditions as share-based
compensation expense over the performance period based upon its determination of whether it is probable that the performance
targets will be achieved. The Group assesses the probability of achieving the performance targets at each reporting period.
Cumulative adjustments, if any, are recorded to reflect subsequent changes in the estimated outcome of performance-related
conditions.
The fair value of the performance-based awards with market conditions is based on the Monte Carlo simulation analysis utilizing
a Geometric Brownian Motion process with 100,000 simulations to value those shares. The model considers share price volatility,
risk-free rate and other covariance of comparable public companies and other market data to predict distribution of relative share
performance.
The RSUs to executives are treated as liability awards as the Group has a historical practice of settling these awards in cash, and as
such adjusted to fair value at every reporting date until settlement with changes in fair value recorded in earnings as stock based
compensation expense.
The Group recorded $4,388, $827, and $1,637, respectively, for the years ended December 31, 2024, 2023 and 2022 in respect of
all restricted stock units, of which $909, $402, and $1,131, respectively, were in respect of liability settled share-based awards.
As of December 31, 2024, the carrying amount of the RSU liability awards was $3,736 with $1,875 current and $1,861 non current,
out of which $1,875 related to awards that have met all their performance and market conditions and were settled in February,
2025. As of December 31, 2023, the carrying amount of the RSU liability awards was $4,782 with $1,281 current and $3,501 non-
current, out of which $1,281 related to awards that met all their performance and market conditions and were settled in March and
May of 2024.
Stock Options
Stock option activity for the years ended December 31, 2024, 2023 and 2022, is detailed as follows:
Number of
Options
Wtd Average
Exercise Price
(GBP)
Wtd Average of
remaining
contractual
term (in years)
Wtd Average
Stock Price at
Exercise (GBP)
Outstanding at January 1, 2022
13,414,118
2.58
8.29
Granted
8,881,000
2.04
Exercised
(577,022)
0.50
2.43
Forfeited and expired
(3,924,215)
2.89
Options Exercisable at December 31, 2022 and January 1, 2023
6,185,216
2.03
6.21
Outstanding at December 31, 2022 and January 1, 2023
17,793,881
2.31
8.03
Granted
3,120,975
2.22
Exercised
(534,034)
1.71
2.46
Forfeited and expired
(3,424,232)
2.40
Options Exercisable at December 31, 2023 and January 1, 2024
9,065,830
2.19
6.01
Outstanding at December 31, 2023 and January 1, 2024
16,956,590
2.29
7.20
Granted
2,665,875
1.87
Exercised
(412,729)
1.73
2.2
Forfeited and expired
(4,725,746)
2.24
Options Exercisable at December 31, 2024
9,534,400
2.33
4.45
Outstanding at December 31, 2024
14,483,990
2.25
5.87
The fair value of the stock options awarded by the Group was estimated on the grant date using the Black-Scholes option
valuation model, considering the terms and conditions upon which options were granted, with the following weighted-average
assumptions:
At December 31,
2024
2023
2022
Expected volatility
44.76%
43.69%
41.70%
Expected terms (in years)
6.16
6.16
6.11
Risk-free interest rate
4.31%
4.04%
2.13%
Expected dividend yield
—
—
—
Exercise price (GBP)
1.87
2.22
2.04
Underlying stock price (GBP)
1.87
2.22
2.04
Expected volatility is based the Group’s historical volatility results.
These assumptions resulted in an estimated weighted-average grant-date fair value per share of stock options granted during the
years ended December 31, 2024, 2023 and 2022 of $1.18, $1.37 and $1.15, respectively.
10. Share-based Payments continued
Notes to the Consolidated Financial Statements continued
The Group incurred share-based payment expense for the stock options of $1,092, $3,310 and $8,351 for the years ended
December 31, 2024, 2023 and 2022, respectively.
For shares outstanding as of December 31, 2024, the range of exercise prices is detailed as follows:
Range of Exercise Prices (GBP)
Options
Outstanding
Wtd
Average
Exercise
Price (GBP)
Wtd Average of
remaining
contractual
term (in years)
0.01
89,845
—
4.75
1.00 to 2.00
6,133,522
1.63
6.03
2.00 to 3.00
4,823,373
2.25
6.39
3.00 to 4.00
3,437,250
3.41
4.87
Total
14,483,990
2.25
5.87
Subsidiary Plans
For the years ended December 31, 2024, 2023 and 2022, the subsidiaries incurred share-based payment expense of $17,372,
$277 and $4,711, respectively.
The share-based payment expense for the year ended December 31, 2024, is primarily related to awards granted under
the Seaport 2024 Equity Incentive Plan (the "Seaport Plan") approved by the Seaport Board of Directors in 2024. Seaport
is deconsolidated from the Group's Consolidated Financial Statements as of October 18, 2024. See Note 8. Gain/(loss) on
Deconsolidation of Subsidiary.
The options granted under the Seaport Plan are equity settled and expire 10 years from the grant date. Typically, the awards vest
in four years but vesting conditions can vary based on the discretion of Seaport’s Board of Directors. The estimated grant date fair
value of the equity awards is recognized as an expense over the awards’ vesting periods. See tables below for Seaport option-
related activities.
Before its deconsolidation on October 18, 2024, Seaport granted 7,200,000 shares of restricted stock awards and restricted stock
units to certain officers and directors, of which 6,227,778 shares were fully vested as of the deconsolidation date. The fair value
of these awards was measured on the date of grant at the estimated fair value of the Seaport common stock using the market
backsolve and probability adjusted expected return model. See Note 19. Financial Instruments. The weighted average fair value of
these awards was $0.97. As the substantial majority of these awards were fully vested as of the deconsolidation date, the stock-
based compensation expense for these awards was recognized in the Group’s Consolidated Statement of Comprehensive Income/
(Loss) for the year ended December 31, 2024.
Seaport also granted options to its employees, officers and directors in 2024. The fair value of the stock options awarded by
Seaport was estimated on the grant date using the Black-Scholes option valuation model. The weighted average fair value of these
awards was $0.92.
A summary of stock option activity by number of shares in these subsidiaries is presented in the following table:
Outstanding as
of January 1,
2024
Granted During
the Year
Exercised
During the Year
Expired During
the Year
Forfeited
During the Year
Deconsolidation
During the Year
Outstanding as
of December
31, 2024
Entrega
344,500
—
—
(5,000)
(5,000)
—
334,500
Seaport
—
22,429,780
—
—
(29,018)
(22,400,762)
—
Outstanding as
of January 1,
2023
Granted During
the Year
Exercised
During the Year
Expired During
the Year
Forfeited During
the Year
Deconsolidation
During the Year
Outstanding as
of December 31,
2023
Entrega
344,500
—
—
—
—
—
344,500
Follica
2,776,120
—
—
(2,170,547)
(605,573)
—
—
Vedanta
1,824,576
—
—
(1,313)
(29,607)
(1,793,656)
—
Outstanding as
of January 1,
2022
Granted During
the Year
Exercised
During the Year
Expired During
the Year
Forfeited During
the Year
Deconsolidation
During the Year
Outstanding as
of December 31,
2022
Entrega
349,500
45,000
—
(50,000)
—
—
344,500
Follica
2,686,120
90,000
—
—
—
—
2,776,120
Sonde
2,049,004
—
—
—
—
(2,049,004)
—
Vedanta
1,991,637
490,506
(400,000)
(65,235)
(192,332)
—
1,824,576
Financial statements
Financial statements
156 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 157
10. Share-based Payments continued
Notes to the Consolidated Financial Statements continued
The weighted-average exercise prices and remaining contractual life for the options outstanding as of December 31, 2024, were
as follows:
Outstanding at December 31, 2024
Number of
options
Weighted-
average
exercise price
$
Weighted-
average
contractual life
outstanding
Entrega
334,500
1.96
2.78
There were no grants in 2023 under any of the subsidiary option plans. The weighted average exercise prices for the options
granted for the years ended December 31, 2024 and 2022, were as follows:
For the years ended December 31,
2024
$
2023
$
2022
$
Seaport
1.28
—
—
Entrega
—
—
0.02
Follica
—
—
1.86
Vedanta
—
—
14.94
The weighted average exercise prices for options forfeited during the year ended December 31, 2024, were as follows:
Forfeited during the year ended December 31, 2024
Number of
options
Weighted-
average exercise
price
$
Entrega
5,000
0.02
Seaport
29,018
0.97
The weighted average exercise prices for options exercisable as of December 31, 2024, were as follows:
Exercisable at December 31, 2024
Number of
Options
Weighted-
average
exercise price
$
Exercise Price
Range
$
Entrega
334,500
1.96
0.02-2.36
There were no subsidiary options exercised during the year ended December 31, 2024.
11. Finance Income/(Costs), net
The following table shows the breakdown of finance income and costs:
2024
$
2023
$
2022
$
For the years ended December 31,
Finance income
Interest income from financial assets
22,669
16,012
5,799
Total finance income
22,669
16,012
5,799
Finance costs
Contractual interest expense on notes payable
(684)
(1,422)
(212)
Interest expense on other borrowings
—
(363)
(1,759)
Interest expense on lease liability
(1,295)
(1,544)
(1,982)
Gain on forgiveness of debt
273
—
—
Gain/(loss) on foreign currency exchange
(25)
(94)
14
Total finance costs – contractual
(1,731)
(3,424)
(3,939)
Gain/(loss) from changes in fair value of warrant liability
—
33
6,740
Gain/(loss) from changes in fair value of preferred shares
(8,108)
2,617
130,825
Gain/(loss) from changes in fair value of convertible debt
—
—
(502)
Total finance income/(costs) – fair value accounting
(8,108)
2,650
137,063
Total finance costs - non cash interest expense related to sale of future royalties
(8,058)
(10,159)
—
Finance income/(costs), net
4,773
5,078
138,924
Notes to the Consolidated Financial Statements continued
12. Earnings/(Loss) per Share
Basic earnings/(loss) per share is calculated by dividing the Group's net income or loss for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding, net of treasury shares.
Diluted earnings/(loss) per share is calculated by dividing the Group's net income or loss for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding, net of treasury shares, plus the weighted average
number of ordinary shares that would be issued at conversion of all the dilutive potential ordinary shares into ordinary shares.
Dilutive effects arise from equity-settled shares from the Group's share-based plans.
For the years ended December 31, 2023 and 2022, the Group incurred a net loss, and therefore, all outstanding potential
securities were considered anti-dilutive. The amount of potential securities that were excluded from the diluted calculation
amounted to 1,509,900 and 3,134,131 shares, respectively.
Earnings/(Loss) Attributable to Owners of the Group:
2024
2023
2022
Basic $
Diluted $
Basic $
Diluted $
Basic $
Diluted $
Income/(loss) for the year, attributable
to the owners of the Group
53,510
53,510
(65,697)
(65,697)
(50,354)
(50,354)
Weighted-Average Number of Ordinary Shares:
2024
2023
2022
Basic
Diluted
Basic
Diluted
Basic
Diluted
Issued ordinary shares at January 1,
271,853,731
271,853,731
278,566,306
278,566,306
287,796,585
287,796,585
Effect of shares issued & treasury
shares purchased
(17,397,423)
(17,397,423)
(2,263,773)
(2,263,773)
(3,037,150)
(3,037,150)
Effect of dilutive shares
—
1,571,612
—
—
—
—
Weighted average number of ordinary
shares at December 31,
254,456,308
256,027,920
276,302,533
276,302,533
284,759,435
284,759,435
Earnings/(Loss) per Share:
2024
2023
2022
Basic $
Diluted $
Basic $
Diluted $
Basic $
Diluted $
Basic and diluted earnings/(loss) per
share
0.21
0.21
(0.24)
(0.24)
(0.18)
(0.18)
Financial statements
Financial statements
158 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 159
Notes to the Consolidated Financial Statements continued
13. Property and Equipment
Cost
Laboratory and
Manufacturing
Equipment
$
Furniture and
Fixtures
$
Computer
Equipment and
Software
$
Leasehold
Improvements
$
Construction in
process
$
Total
$
Balance as of January 1, 2023
13,341
1,510
1,419
23,964
2,803
43,037
Additions, net of transfers
—
—
—
—
87
87
Disposals
(2,886)
—
(137)
—
—
(3,023)
Deconsolidation of subsidiaries
(5,092)
(438)
(365)
(8,799)
(2,871)
(17,565)
Reclassifications
—
—
—
—
(18)
(18)
Balance as of December 31, 2023
5,363
1,072
917
15,165
1
22,518
Additions, net of transfers
246
—
11
—
—
256
Disposals/Impairment
(2,215)
—
(387)
—
(1)
(2,602)
Deconsolidation of subsidiaries
(246)
—
(11)
—
—
(256)
Reclassifications
—
—
—
—
—
—
Balance as of December 31, 2024
3,148
1,072
530
15,165
—
19,916
Accumulated depreciation and impairment loss
Laboratory and
Manufacturing
Equipment
$
Furniture and
Fixtures
$
Computer
Equipment and
Software
$
Leasehold
Improvements
$
Construction in
process
$
Total
$
Balance as of January 1, 2023
(7,711)
(875)
(1,244)
(10,250)
—
(20,080)
Depreciation
(892)
(162)
(45)
(1,856)
—
(2,955)
Disposals
543
—
38
—
—
581
Deconsolidation of subsidiaries
3,917
339
357
4,858
—
9,472
Balance as of December 31, 2023
(4,142)
(698)
(894)
(7,248)
—
(12,982)
Depreciation
(139)
(153)
(13)
(1,503)
—
(1,807)
Disposals
1,485
—
376
—
—
1,861
Deconsolidation of subsidiaries
81
—
—
—
—
81
Balance as of December 31, 2024
(2,715)
(851)
(530)
(8,751)
—
(12,847)
Property and Equipment, net
Laboratory and
Manufacturing
Equipment
$
Furniture and
Fixtures
$
Computer
Equipment and
Software
$
Leasehold
Improvements
$
Construction in
process
$
Total
$
Balance as of December 31, 2023
1,221
375
23
7,917
1
9,536
Balance as of December 31, 2024
433
221
—
6,414
—
7,069
Depreciation of property and equipment is included in the general and administrative expenses and research and development
expenses in the Consolidated Statement of Comprehensive Income/(Loss). The Group recorded depreciation expense of $1,807,
$2,955 and $5,845 for the years ended December 31, 2024, 2023 and 2022, respectively.
Notes to the Consolidated Financial Statements continued
14. Intangible Assets
Intangible assets consist of licenses of intellectual property acquired by the Group through various agreements with third parties
and are recorded at the value of the consideration transferred. Information regarding the cost and accumulated amortization of
intangible assets is as follows:
Cost
Licenses
$
Balance as of January 1, 2023
831
Additions
200
Write-off
(105)
Deconsolidation of subsidiary
(19)
Balance as of December 31, 2023
906
Write-off
(80)
Deconsolidation of subsidiary
(225)
Balance as of December 31, 2024
601
All the intangible asset licenses represent in-process-research-and-development assets that are currently still being developed and
not ready for their intended use. As such, these assets are not amortized but tested for impairment annually.
During the year ended December 31, 2024, the Group wrote off one of its research intangible assets for which research was
ceased in the amount of $80.
During the year ended December 31, 2024, Seaport Therapeutics, Inc. was deconsolidated and as such, $225 in net intangible
assets were derecognized.
During the year ended December 31, 2023, the Group wrote off two of its research intangible assets for which research was ceased
in the amount of $105.
During the year ended December 31, 2023, Vedanta, Inc. was deconsolidated and as such, $19 in net intangible assets were
derecognized.
The Group tested all intangible assets for impairment as of the balance sheet date and concluded that none of such assets were
impaired.
15. Other Financial Assets
Other financial assets consist primarily of restricted cash reserved as collateral against a letter of credit with a bank that is issued
for the benefit of a landlord in lieu of a security deposit for office space leased by the Group. The restricted cash was $1,642 and
$1,628 as of December 31, 2024 and 2023, respectively.
Financial statements
Financial statements
160 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 161
Notes to the Consolidated Financial Statements continued
16. Equity
Total equity for the Group as of December 31, 2024, and 2023, was as follows:
December 31,
2024
$
December 31,
2023
$
Equity
Share capital, £0.01 par value, issued and paid 257,927,489 and 289,468,159 as of December 31,
2024 and 2023, respectively
4,860
5,461
Share premium
290,262
290,262
Treasury shares, 18,506,177 and 17,614,428 as of December 31, 2024 and 2023, respectively
(46,864)
(44,626)
Merger Reserve
138,506
138,506
Translation reserve
182
182
Other reserves
(4,726)
(9,538)
Retained earnings/(accumulated deficit)
32,486
83,820
Equity attributable to owners of the Group
414,707
464,066
Non-controlling interests
(6,774)
(5,835)
Total equity
407,933
458,232
Shareholders are entitled to vote on all matters submitted to shareholders for a vote. Each ordinary share is entitled to one vote
and is entitled to receive dividends when and if declared by the Group’s Directors.
On June 18, 2015, the Group acquired the entire issued share capital of PureTech LLC in return for 159,648,387 ordinary shares.
This was accounted for as a common control transaction at cost. It was deemed that the share capital was issued in line with
movements in share capital as shown prior to the transaction taking place. In addition, the merger reserve records amounts
previously recorded as share premium.
Other reserves comprise the cumulative credit to share-based payment reserves corresponding to share-based payment expenses
recognized through Consolidated Statement of Comprehensive Income/(Loss), settlements of vested stock awards as well as other
additions that flow directly through equity such as the excess or deficit from changes in ownership of subsidiaries while control is
maintained by the Group.
On May 9, 2022, the Group announced the commencement of a $50,000 share repurchase program (the "Program") of its ordinary
shares of one pence each. The Group executed the Program in two equal tranches. It entered into an irrevocable non-discretionary
instruction with Jefferies International Limited (“Jefferies”) in relation to the purchase by Jefferies of the ordinary shares for an
aggregate consideration (excluding expenses) of no greater than $25,000 for each tranche and the simultaneous on-sale of such
ordinary shares by Jefferies to the Group, subject to certain volume and price restrictions.
In February 2024, the Group completed the Program and has repurchased an aggregate of 20,182,863 ordinary shares under
the Program. These shares have been held as treasury shares and are being used to settle the vesting of restricted stock units or
exercise of stock options.
In March 2024, the Group announced a proposed capital return of $100,000 to its shareholders by way of a tender offer (the
"Tender Offer"). The proposed Tender Offer was approved by shareholders at the Annual General Meeting of Stockholders held
on June 6, 2024, to acquire a maximum number of 33,500,000 ordinary shares (including ordinary shares represented by American
Depository Shares (''ADSs'')) for a fixed price of 250 pence per ordinary share (equivalent to £25.00 per ADS) for a maximum
aggregate amount of $100,000 excluding expenses.
The Tender Offer was completed on June 24, 2024. The Group repurchased 31,540,670 ordinary shares under the Tender Offer.
Following such repurchase, the Group cancelled these shares repurchased. As a result of the cancellation, the nominal value of
$600 related to the cancelled shares was reduced from share capital and transferred to a capital redemption reserve, increasing the
capital redemption reserve balance to $600 which was included within other reserves in the Consolidated Statement of Changes in
Equity.
As of December 31, 2024 and December 31, 2023, the Group’s issued share capital was 257,927,489 shares and 289,468,159
shares, respectively, including 18,506,177 shares and 17,614,428 shares repurchased under the share repurchase program, and
were held by the Group in treasury, respectively. The Group does not have a limited amount of authorized share capital.
Notes to the Consolidated Financial Statements continued
17. Subsidiary Preferred Shares
Preferred shares issued by subsidiaries often contain redemption and conversion features that are assessed under IFRS 9 in
conjunction with the host preferred share instrument. This balance represents subsidiary preferred shares issued to third parties.
The subsidiary preferred shares are redeemable upon the occurrence of a contingent event, other than full liquidation of the
subsidiaries, that is not considered to be within the control of the subsidiaries. Therefore, these subsidiary preferred shares are
classified as liabilities. These liabilities are measured at fair value through profit and loss. The preferred shares are convertible into
ordinary shares of the subsidiaries at the option of the holders and are mandatorily convertible into ordinary shares under certain
circumstances. Under certain scenarios, the number of ordinary shares receivable on conversion will change and therefore, the
number of shares that will be issued is not fixed. As such, the conversion feature is considered to be an embedded derivative that
normally would require bifurcation. However, since the subsidiary preferred share liability is measured at fair value through profit
and loss, as mentioned above, no bifurcation is required.
The preferred shares are entitled to vote with holders of common shares on an as converted basis.
In April 2024, Seaport closed a Series A-2 preferred share financing with aggregate proceeds of $100,100 of which $68,100 was
from outside investors and $32,000 was from the Group. The $68,100 received from the outside investors was recorded as a
subsidiary preferred share liability within the Group’s balance sheet. In October 2024, Seaport closed a Series B preferred share
financing with aggregate proceeds of $226,000 of which $211,600 was from outside investors and $14,400 was from the Group.
As a result of the Series B preferred share financing, the Group lost control of Seaport, and the Group derecognized the assets,
liabilities and non-controlling interest in respect of Seaport from its Consolidated Financial Statements. See Note 8. Gain/(loss)
on Deconsolidation of Subsidiary. As such, the balance of subsidiary preferred share liability in Seaport is reduced to $0 upon
deconsolidation.
The fair value of all subsidiary preferred shares as of December 31, 2024 and December 31, 2023, is as follows:
2024
$
2023
$
Balance as of December 31, 2024 and December 31, 2023
Entrega
169
169
Total subsidiary preferred share balance
169
169
As is customary, in the event of any voluntary or involuntary liquidation, dissolution or winding up of a subsidiary, the holders of
outstanding subsidiary preferred shares shall be entitled to be paid out of the assets of the subsidiary available for distribution to
shareholders and before any payment shall be made to holders of ordinary shares. A merger, acquisition, sale of voting control
or other transaction of a subsidiary in which the shareholders of the subsidiary immediately before the transaction do not own a
majority of the outstanding shares of the surviving company shall be deemed to be a liquidation event. Additionally, a sale, lease,
transfer or other disposition of all or substantially all of the assets of the subsidiary shall also be deemed a liquidation event.
As of December 31, 2024 and December 31, 2023, the minimum liquidation preference reflecting the amounts that would be
payable to the subsidiary preferred holders upon a liquidation event of the subsidiaries, is as follows:
2024
$
2023
$
Balance as of December 31, 2024 and December 31, 2023
Entrega
2,216
2,216
Follica
6,405
6,405
Total minimum liquidation preference
8,621
8,621
For the years ended December 31, 2024 and 2023, the Group recognized the following changes in the value of subsidiary
preferred shares:
$
Balance as of January 1, 2023
27,339
Decrease in value of preferred shares measured at fair value – finance costs (income)
(2,617)
Deconsolidation of subsidiary - (Vedanta)
(24,554)
Balance as of December 31, 2023 and January 1, 2024
169
Issuance of Seaport A-2 preferred shares - financing cash flow
68,100
Increase in value of preferred shares measured at fair value – finance costs (income)
8,108
Deconsolidation of subsidiary – (Seaport)
(76,208)
Balance as of December 31, 2024
169
Financial statements
Financial statements
162 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 163
Notes to the Consolidated Financial Statements continued
18. Sale of Future Royalties Liability
On March 4, 2011, the Group entered into a license agreement (the “License Agreement”) with Karuna, according to which the
Group granted Karuna an exclusive license to research, develop and sell KarXT in exchange for a royalty on annual net sales,
development and regulatory milestones and a fixed portion of sublicensing income, if any.
On March 22, 2023, the Group signed an agreement with Royalty Pharma (the "Royalty Purchase Agreement"), according to which
the Group sold Royalty Pharma a partial right to receive royalty payments made by Karuna in respect of net sales of KarXT, if and
when received. According to the Royalty Purchase Agreement, all royalties due to the Group under the License Agreement will be
paid to Royalty Pharma up to an annual royalties threshold of $60,000, while all royalties above such annual threshold in a given
year will be split 33% to Royalty Pharma and 67% to the Group. Under the terms of the Royalty Purchase Agreement, the Group
received a non-refundable initial payment of $100,000 at the execution of the Royalty Purchase Agreement and is eligible to
receive additional payments in the aggregate of up to an additional $400,000 based on the achievement of certain regulatory and
commercial milestones.
The Group continues to hold the rights under the License Agreement and has a contractual obligation to deliver cash to Royalty
Pharma for a portion of the royalties it receives. Therefore, the Group will continue to account for any royalties and milestones due
to the Group under the License Agreement as revenue in its Consolidated Statement of Comprehensive Income/(Loss) and record
the proceeds from the Royalty Purchase Agreement as a financial liability on its Consolidated Statement of Financial Position.
In determining the appropriate accounting treatment for the Royalty Purchase Agreement, management applied significant
judgement.
The acquisition of Karuna by Bristol Myers Squibb ("BMS"), which closed on March 18, 2024, had no impact on the Group's rights
or obligations under the License Agreement or the Royalty Purchase Agreement, each of which remains in full force and effect.
In order to determine the amortized cost of the sale of future royalties liability, management is required to estimate the total
amount of future receipts from and payments to Royalty Pharma under the Royalty Purchase Agreement over the life of the
agreement. The $100,000 liability, recorded at execution of the Royalty Purchase Agreement, is accreted to the total of these
receipts and payments as interest expense over the life of the Royalty Purchase Agreement. These estimates contain assumptions
that impact both the amortized cost of the liability and the interest expense that are recognized in each reporting period.
Additional proceeds received from Royalty Pharma increase the Group’s financial liability. As royalty payments are made to Royalty
Pharma, the balance of the liability is effectively repaid over the life of the Royalty Purchase Agreement. The estimated timing
and amount of royalty payments to and proceeds from Royalty Pharma are likely to change over the life of the Royalty Purchase
Agreement. A significant increase or decrease in estimated royalty payments, or a significant shift in the timing of cash flows, will
materially impact the sale of future royalties liability, interest expense and the time period for repayment. The Group periodically
assesses the expected payments to, or proceeds from, Royalty Pharma. Any such changes in amount or timing of cash flows
requires the Group to re-calculate the amortized cost of the sale of future royalties liability as the present value of the estimated
future cash flows from the Royalty Purchase Agreement that are discounted at the liability’s original effective interest rate. The
adjustment is recognized immediately in profit or loss as income or expense.
On October 1, 2024, the Group received $25,000 from Royalty Pharma upon the FDA's approval for BMS to market KarXT as
Cobenfy. The Group paid Royalty Pharma $315 in the first quarter of 2025 for the royalties received from BMS for the sale of
Cobenfy in the fourth quarter of 2024.
The following shows the activity in respect of the sale of future royalties liability:
Sale of future
royalties liability
$
Balance as of January 1, 2023
—
Amounts received at closing
100,000
Non cash interest expense recognized
10,159
Balance as of December 31, 2023 and January 1, 2024
110,159
Payment from Royalty Pharma – regulatory milestone
25,000
Non cash interest expense recognized
8,058
Balance as of December 31, 2024
143,217
Sale of future royalties liability, current
6,435
Sale of future royalties liability, non-current
136,782
Notes to the Consolidated Financial Statements continued
19. Financial Instruments
The Group’s financial instruments consist of financial assets in the form of notes, convertible notes and investment in shares, and
financial liabilities, including preferred shares. Many of these financial instruments are presented at fair value, with changes in fair
value recorded through profit and loss.
Fair Value Process
For financial instruments measured at fair value under IFRS 9, the change in the fair value is reflected through profit and loss. Using
the guidance in IFRS 13, the total business enterprise value and allocable equity of each entity being valued can be determined
using a market backsolve approach through a recent arm’s length financing round (or a future probable arm's length transaction),
market/asset probability-weighted expected return method ("PWERM") approach, discounted cash flow approach, or hybrid
approaches. The approaches, in order of strongest fair value evidence, are detailed as follows:
Valuation Method
Description
Market – Backsolve
The market backsolve approach benchmarks the original issue price (OIP) of the company’s latest
funding transaction as current value.
Market/Asset – PWERM
Under a PWERM, the company value is based upon the probability-weighted present value of
expected future investment returns, considering each of the possible future outcomes available to the
enterprise. Possible future outcomes can include IPO scenarios, potential SPAC transactions, merger
and acquisition transactions as well as other similar exit transactions of the investee.
Income Based – DCF
The income approach is used to estimate fair value based on the income streams, such as cash flows
or earnings, that an asset or business can be expected to generate.
At each measurement date, investments held at fair value (that are not publicly traded) as well as the fair value of subsidiary
preferred share liability, including embedded conversion rights that are not bifurcated, were determined using the following
allocation methods: option pricing model (“OPM”), PWERM, or hybrid allocation framework. The methods are detailed as follows:
Allocation Method
Description
OPM
The OPM model treats preferred stock as call options on the enterprise’s equity value, with exercise
prices based on the liquidation preferences of the preferred stock.
PWERM
Under a PWERM, share value is based upon the probability-weighted present value of expected
future investment returns, considering each of the possible future outcomes available to the
enterprise, as well as the rights of each share class.
Hybrid
The hybrid method is a combination of the PWERM and OPM. Under the hybrid method, multiple
liquidity scenarios are weighted based on the probability of the scenario's occurrence, similar to
the PWERM, while also utilizing the OPM to estimate the allocation of value in one or more of the
scenarios.
Valuation policies and procedures are regularly monitored by the Group. Fair value measurements, including those categorized
within Level 3, are prepared and reviewed for reasonableness and compliance with the fair value measurements guidance under
IFRS accounting standards. The Group measures fair value using the following fair value hierarchy that reflects the significance of
the inputs used in making the measurements:
Fair Value
Hierarchy Level
Description
Level 1
Inputs that are quoted market prices (unadjusted) in active markets for identical instruments.
Level 2
Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3
Inputs that are unobservable. This category includes all instruments for which the valuation technique
includes inputs not based on observable data and the unobservable inputs have a significant effect
on the instruments' valuation.
Whilst the Group considers the methodologies and assumptions adopted in fair value measurements as supportable and
reasonable, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that
would have been used had a ready market for the investment existed.
Subsidiary Preferred Share Liability
As of December 31, 2024 and 2023, the fair value of subsidiary preferred share liability was $169 and $169, respectively. See Note
17. Subsidiary Preferred Shares for the changes in the Group’s subsidiary preferred share liability measured at fair value, which are
categorized as Level 3 in the fair value hierarchy.
The changes in fair value of subsidiary preferred share liability is recorded in finance income/(costs) – fair value accounting in the
Consolidated Statement of Comprehensive Income/(Loss).
Financial statements
Financial statements
164 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 165
19. Financial Instruments continued
Notes to the Consolidated Financial Statements continued
Investments Held at Fair Value
Vor Valuation
Vor (Nasdaq: VOR) and additional immaterial investments are listed entities on an active exchange, and as such, the fair value as
of December 31, 2024 was calculated utilizing the quoted common share price which is categorized as Level 1 in the fair value
hierarchy.
Seaport, Vedanta and Sonde
As of December 31, 2024, the Group accounts for the following investments under IFRS 9 as investments held at fair value
with changes in fair value through profit and loss: Seaport preferred A-1, A-2, and B shares, Vedanta preferred A-1, B, C, and D
shares, Sonde preferred A-2 and B shares and other immaterial investment. The valuations of the aforementioned investments
are categorized as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs to value such assets. During
the year ended December 31, 2024, the Group recorded such investments at fair value and recognized a loss of $10,361 for the
changes in fair value of the investments.
The following table summarizes the changes in all the Group’s investments held at fair value categorized as Level 3 in the fair value
hierarchy:
Balance as of January 1, 2023
12,593
Deconsolidation of Vedanta - new investment in Vedanta preferred shares
20,456
Investment in Gelesis 2023 Warrants
1,121
Gain/(loss) on changes in fair value
(9,299)
Balance as of December 31, 2023 and January 1, 2024
24,872
Deconsolidation of Seaport - new investment in Seaport preferred shares
179,248
Gain/(loss) on changes in fair value
(10,361)
Balance as of December 31, 2024
193,758
Equity method loss recorded against LTI
(5,307)
Balance as of December 31, 2024 after allocation of equity method loss to LTI
188,452
The changes in fair value of investments held at fair value is recorded in gain/(loss) on investments held at fair value in the
Consolidated Statement of Comprehensive Income/(Loss).
As of December 31, 2024, the Group’s material investments held at fair value categorized as Level 3 in the fair value hierarchy
include the preferred shares of Seaport, and Vedanta, with fair value of $177,288, and $11,163, respectively. The significant
unobservable inputs used at December 31, 2024 in the fair value measurement of these investments and the sensitivity of the fair
value measurements for these investments to changes of these significant unobservable inputs are summarized in the tables below.
As of December 31, 2024
Investment (Seaport) Measured through
Market Backsolve & PWERM
Unobservable Inputs (Seaport)
Input Value
Sensitivity Range
Fair Value Increase/
(Decrease) $
Equity Value
538,635
-10%
(22,099)
+10%
21,716
Time to Liquidity
0.5
-3 months
5,753
+3 months
(4,247)
Probability of achieving a certain clinical trial development
milestone
80%
-10%
(7,871)
+10%
7,871
Probability of entering into an initial public offering
25% and 20%
-10%
(4,754)
+10%
4,754
The unobservable inputs outlined within the table above were used to determine the fair value of our investment in the convertible
preferred shares of a private company as of December 31, 2024. Whilst the Group considers the methodologies and assumptions
used in the fair value measurement to be supportable and reasonable, because of the inherent uncertainties associated with
the valuation, the estimated value may differ significantly from the values that would have been used had a ready market for the
investment existed. The fair value measurement of our investment in the convertible preferred shares will be updated at each
reporting date.
As of December 31, 2024
Investment (Vedanta) Measured through Market Backsolve that Leverages a
Monte Carlo Simulation
Unobservable Inputs (Vedanta)
Input Value
Sensitivity Range
Fair Value Increase/
(Decrease) $
Equity Value
30,845
-5%
(1,617)
+5%
1,515
Time to Liquidity
0.27
-3 Months
n.a.
+3 Months
5,238
Volatility
155%
-10%
(2,976)
+10%
518
19. Financial Instruments continued
Notes to the Consolidated Financial Statements continued
The unobservable inputs outlined within the table above were used to determine the fair value of our investment in the convertible
preferred shares of a private company as of December 31, 2024. Whilst the Group considers the methodologies and assumptions
used in the fair value measurement to be supportable and reasonable, because of the inherent uncertainties associated with
the valuation, the estimated value may differ significantly from the values that would have been used had a ready market for the
investment existed. The fair value measurement of our investment in the convertible preferred shares will be updated at each
reporting date.
Investments in Notes from Associates
As of December 31, 2024 and 2023, the investment in notes from associates was $17,731 and $4,600, respectively. The balance
represents the fair value of convertible promissory notes with a principal value of $26,850 issued by Gelesis and convertible debt
with a principal value of $5,000 issued by Vedanta.
During the year-ended December 31, 2024, the Group recorded a gain of $13,131 for the changes in fair value of the notes from
associates in the gain/(loss) on investments in notes from associates within the Consolidated Statement of Comprehensive Income/
Loss. The gain was driven by an increase of $11,381 in the fair value of the Gelesis convertible promissory notes and an increase of
$1,750 in the fair value of the Vedanta convertible note.
In October 2023, Gelesis ceased operations and filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11
of the United States Bankruptcy Code. Therefore, the Group determined the fair value of the convertible promissory notes issued
by Gelesis to be $0 at December 31, 2023. In June 2024, the Bankruptcy Court approved an executed agreement for a third party
to acquire the remaining net assets of Gelesis for $15,000. As the only senior secured creditor, the Group is expected to receive a
majority of the proceeds from this sale after deduction of legal and administrative costs incurred by the Bankruptcy Court in 2025.
As of December 31, 2024, these notes were determined to have a fair value of $11,381.
The convertible debt issued by Vedanta was valued using a market backsolve approach that leverages a Monte Carlo simulation.
The significant unobservable inputs categorized as Level 3 in the fair value hierarchy used at December 31, 2024, in the fair value
measurement of the convertible debt are the same as the inputs disclosed above for Vedanta preferred shares.
Fair Value Measurement and Classification
The fair value of financial instruments by category as of December 31, 2024 and 2023:
2024
Carrying Amount
Fair Value
Financial Assets
$
Financial
Liabilities
$
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets1:
Money Markets2
181,716
—
181,716
—
—
181,716
Investment in notes from associates
17,731
—
—
—
17,731
17,731
Investments held at fair value
191,426
—
2,974
—
188,452
191,426
Total financial assets
390,873
—
184,690
—
206,183
390,873
Financial liabilities:
Subsidiary preferred shares
—
169
—
—
169
169
Share-based liability awards
—
3,736
—
—
3,736
3,736
Total financial liabilities
—
3,905
—
—
3,905
3,905
1. Excluded from the table above are short-term investments of $86,666 and cash equivalent of $62,179 that are classified at amortized cost as of December 31, 2024. The cost of
these short-term investments and cash equivalent approximates current fair value.
2. Included within cash and cash equivalents.
2023
Carrying Amount
Fair Value
Financial Assets
$
Financial
Liabilities
$
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets1:
Money Markets2
156,705
—
156,705
—
—
156,705
Note from associate
4,600
—
—
—
4,600
4,600
Investments held at fair value
317,841
—
292,970
—
24,872
317,841
Total financial assets
479,146
—
449,675
—
29,472
479,146
Financial liabilities:
Subsidiary preferred shares
—
169
—
—
169
169
Share-based liability awards
—
4,782
—
—
4,782
4,782
Total financial liabilities
—
4,951
—
—
4,951
4,951
1
Excluded from the table above are short-term investments of $136,062 that are classified at amortized cost as of December 31, 2023. The cost of these short-term investments
approximates current fair value.
2
Included within cash and cash equivalents.
Financial statements
Financial statements
166 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 167
Notes to the Consolidated Financial Statements continued
20. Subsidiary Notes Payable
The subsidiary notes payable is comprised of loans and convertible notes. These instruments do not contain embedded
derivatives, and therefore, are held at amortized cost. As of December 31, 2024 and December 31, 2023, the balance of notes
payable consists of the following:
2024
$
2023
$
Balance as of December 31,
Loans
4,111
3,439
Convertible notes
—
260
Total subsidiary notes payable
4,111
3,699
Loans
In October 2010, Follica entered into a loan and security agreement with Lighthouse Capital Partners VI, L.P. The loan is secured
by Follica’s assets, including Follica’s intellectual property and bears interest at a rate of 5.0% in the interest only period and 12.0%
in the repayment period.
Convertible Notes
The activities of the convertible notes were as follows:
Knode
$
Appeering
$
Sonde
$
Total
$
January 1, 2022
94
141
2,461
2,696
Gross principal - issuance of notes - financing activity
—
—
393
393
Accrued interest on convertible notes - finance costs
5
8
48
60
Changes in fair value - finance costs
—
—
502
502
Deconsolidation
—
—
(3,403)
(3,403)
Balance as of January 1, 2023
99
149
—
248
Accrued interest on convertible notes - finance costs
5
8
—
13
Balance as of December 31, 2023 and January 1, 2024
104
156
—
260
Accrued interest on convertible notes - finance costs
5
7
—
12
Forgiveness of debt – entity dissolution – finance income
(109)
(164)
—
(273)
Balance as of December 31, 2024
—
—
—
—
In November 2024, the Group dissolved Knode and Appeering as they were no longer operational entities. As a result, the
principal and interest on these notes outstanding were written off in full as of the dissolution date.
21. Non-Controlling Interest
As of December 31, 2024 and 2023, non-controlling interests included Entrega and Follica. Ownership interests of the non-
controlling interests in these entities as of December 31, 2024 were 11.7%, and 19.9%, respectively. There was no change from
December 31, 2023 in the ownership interests of the non-controlling interests in these two entities. As of December 31, 2022, non-
controlling interests included Entrega, Follica, and Vedanta. Ownership interests of the non-controlling interests in these entities
were 11.7%, 19.9%, and 12.2%, respectively. Non-controlling interests include the amounts recorded for subsidiary stock awards.
See Note 10. Share-based Payments.
For the year ended December 31, 2024, Seaport issued 950,000 shares of fully vested common stock to the Group and
3,450,000 shares of common stock to certain officers and directors, of which 2,455,555 shares were fully vested before Seaport's
deconsolidation from the Group's Consolidated Financial Statements on October 18, 2024. Ownership interest of non-controlling
interests was 61.3% immediately before Seaport's deconsolidation.
During the year ended December 31, 2023, Vedanta Biosciences, Inc was deconsolidated. During the year ended December 31,
2022, Sonde Health, Inc was deconsolidated. See Note 8. Gain/(loss) on Deconsolidation of Subsidiary.
On February 15, 2022, option holders in Vedanta exercised options into shares of common stock, increasing the NCI interest
held from 3.7% to 12.2%. The exercise of the options resulted in an increase in the NCI share in Vedanta shareholder's deficit of
$15,164.
Notes to the Consolidated Financial Statements continued
The following table summarizes the changes in the non-controlling ownership interest in subsidiaries:
Non-Controlling
Interest
$
Balance as of January 1, 2022
(9,368)
Share of comprehensive income (loss)
13,290
Deconsolidation of subsidiary (Sonde)
11,904
NCI exercise of share-based awards in subsidiaries - change in NCI interest
(15,164)
Equity settled share-based payments
4,711
Other
(4)
Balance as of December 31, 2022 and January 1, 2023
5,369
Share of comprehensive income (loss)
(931)
Deconsolidation of subsidiary (Vedanta)
(9,085)
Equity settled share-based payments
277
Expiration of share options in subsidiary
(1,458)
Other
(6)
Balance as of December 31, 2023 and January 1, 2024
(5,835)
Share of comprehensive income (loss)
(25,728)
Equity settled share-based payments - See Note 10. Share-based Payments
17,372
Deconsolidation of subsidiary (Seaport)
7,430
Other
(13)
Balance as of December 31, 2024
(6,774)
22. Trade and Other Payables
Information regarding Trade and other payables was as follows:
Balance as of December 31,
2024
$
2023
$
Trade payables
5,522
14,637
Accrued expenses
18,705
28,187
Liability for share-based awards- short term
1,875
1,281
Other
917
3
Total trade and other payables
27,020
44,107
Trade and other payables decreased by $17,088 to $27,020 as of December 31, 2024. The decrease reflected lower operating
expenses primarily from the reduced clinical trials related activities as well as the deconsolidation of Seaport for the year ended
December 31, 2024.
23. Leases and subleases
The activity related to the Group’s right of use asset and lease liability for the years ended December 31, 2024 and 2023 is as
follows:
Right of use asset, net
2024
$
2023
$
Balance as of January 1,
9,825
14,281
Additions
—
—
Depreciation
(1,764)
(1,979)
Deconsolidated
—
(2,477)
Balance as of December 31,
8,061
9,825
21. Non-Controlling Interest continued
Financial statements
Financial statements
168 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 169
Notes to the Consolidated Financial Statements continued
Total lease liability
2024
$
2023
$
Balance as of January 1,
21,644
29,128
Additions
—
—
Cash paid for rent - principal - financing cash flow
(3,394)
(3,338)
Cash paid for rent - interest
(1,295)
(1,544)
Interest expense
1,295
1,544
Deconsolidated
—
(4,146)
Balance as of December 31,
18,250
21,644
Depreciation of the right-of-use assets, which virtually all consist of leased real estate, is included in the general and administrative
expenses and research and development expenses line items in the Statement of Comprehensive Income/(Loss). The Group
recorded depreciation expense of $1,764, $1,979 and $3,047 for the years ended December 31, 2024, 2023 and 2022,
respectively.
The following table details the short-term and long-term portion of the lease liability as of December 31, 2024 and 2023:
Total lease liability
2024
$
2023
$
Short-term portion of lease liability
3,579
3,394
Long-term portion of lease liability
14,671
18,250
Total lease liability
18,250
21,644
The following table details the future maturities of the lease liability, showing the undiscounted lease payments to be paid after
the reporting date:
2024
$
Less than one year
4,644
One to two years
4,419
Two to three years
4,551
Three to four years
4,687
Four to five years
2,796
More than five years
—
Total undiscounted lease maturities
21,096
Interest
2,846
Total lease liability
18,250
During the year ended December 31, 2019, the Group entered into a lease agreement for certain premises consisting of 50,858
rentable square feet of space located at 6 Tide Street, Boston, Massachusetts. The lease commenced on April 26, 2019 for an
initial term consisting of ten years and three months, and there is an option to extend the lease for two consecutive periods of
five years each. The Group assessed at the lease commencement date whether it was reasonably certain to exercise the extension
options, and deemed such options were not reasonably certain to be exercised. The Group will reassess whether it is reasonably
certain to exercise the options only if there is a significant event or significant change in circumstances within its control.
On June 26, 2019, the Group executed a sublease agreement with Gelesis. The lease is for 9,446 rentable square feet located
on the sixth floor of the Group’s former office at 501 Boylston Street, Boston, Massachusetts. The sublease was set to expire on
August 31, 2025, and was determined to be a finance lease. Gelesis ceased operations and filed for bankruptcy on October 30,
2023. As a result, the Group wrote off its receivable in the lease of $1,266 in 2023.
On January 23, 2023, the Group executed a sublease agreement with Allonnia, LLC (“Allonnia”). The sublease is for approximately
11,000 rentable square feet located on the third floor of the 6 Tide Street building where the Group’s offices are currently located.
Allonnia obtained possession of the premises on February 17, 2023 with a rent commencement date of May 17, 2023. The lease
term is two years from the rent commencement date, and Allonnia has the option to extend the sublease for an additional year at
the same terms. The annual lease fee is $1,111 per year. The sublease was determined to be an operating lease, and as such, the
total lease payments under the sublease agreement are recognized over the lease term on a straight-line basis. In February 2024,
Allonnia exercised the option and extended the lease term through May 31, 2026. The annual lease fee increased to $1,279 per
year.
Rental income recognized by the Group during the year ended December 31, 2024 and 2023 was $1,053 and $781, respectively,
which was included in the other income/(expense) line item in the Consolidated Statement of Comprehensive Income/(Loss).
23. Leases and subleases continued
Notes to the Consolidated Financial Statements continued
24. Capital and Financial Risk Management
Capital Risk Management
The Group's capital and financial risk management policy is to maintain a strong capital base to support its strategic priorities,
maintain investor, creditor and market confidence as well as sustain the future development of the business. The Group’s
objectives when managing capital are to safeguard its ability to continue as a going concern, to provide returns for shareholders
and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust
the capital structure, the Group may issue new shares or incur new debt. The Group has no material externally imposed capital
requirements. The Group’s share capital is set out in Note 16. Equity.
Management continuously monitors the level of capital deployed and available for deployment in the Wholly-Owned Programs
segment and at Founded Entities. The Directors seek to maintain a balance between the higher returns that might be possible with
higher levels of deployed capital and the advantages and security afforded by a sound capital position.
The Group’s Directors have overall responsibility for the establishment and oversight of the Group's capital and risk management
framework. The Group is exposed to certain risks through its normal course of operations. The Group’s main objective in using
financial instruments is to promote the development and commercialization of intellectual property through the raising and
investing of funds for this purpose. The nature, amount and timing of investments are determined by planned future investment
activity. Due to the nature of activities and with the aim to maintain the investors’ funds as secure and protected, the Group’s
policy is to hold any excess funds in highly liquid and readily available financial instruments and maintain minimal exposure to
other financial risks.
The Group has exposure to the following risks arising from financial instruments:
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Financial instruments that potentially subject the Group to concentrations of credit risk consist principally
of cash and cash equivalents, short-term investments, and trade and other receivables. The Group held the following balances:
2024
$
2023
$
Balance as of December 31
Cash and cash equivalents
280,641
191,081
Short-term investments
86,666
136,062
Trade and other receivables
1,522
2,376
Total
368,828
329,518
The Group invests its excess cash in U.S. Treasury Bills (presented as short-term investments), and money market accounts, which
the Group believes are of high credit quality. Further, the Group's cash and cash equivalents and short-term investments are held
at diverse, investment-grade financial institutions.
The Group assesses the credit quality of customers on an ongoing basis. The credit quality of financial assets is assessed by
historical and recent payment history, counterparty financial position, and reference to credit ratings (if available) or to historical
information about counterparty default rates. The Group does not have expected credit losses due to the high credit quality or
healthy financial conditions of these counterparties. As of December 31, 2024 and 2023, none of the trade and other receivables
were impaired.
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group actively manages its liquidity risk by closely monitoring the
maturity of its financial assets and liabilities and projected cash flows from operations, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation. Due to the nature of these financial liabilities,
the funds are available on demand to provide optimal financial flexibility.
The table below summarizes the maturity profile of the Group’s financial liabilities, including subsidiary preferred shares that have
customary liquidation preferences, as of December 31, 2024 and 2023, based on contractual undiscounted payments:
Balance as of December 31
2024
Carrying
Amount
$
Within Three
Months
$
Three to Twelve
Months
$
One to Five
Years
$
Total
$ (*)
Subsidiary notes payable
4,111
4,111
—
—
4,111
Trade and other payables
27,020
27,020
—
—
27,020
Taxes Payable
75
75
—
—
75
Subsidiary preferred shares (Note 17)1
169
169
—
—
169
Total
31,375
31,375
—
—
31,375
Balance as of December 31
2023
Carrying
Amount
$
Within Three
Months
$
Three to Twelve
Months
$
One to Five
Years
$
Total
$ (*)
Subsidiary notes payable
3,699
3,699
—
—
3,699
Trade and other payables
44,107
44,107
—
—
44,107
Subsidiary preferred shares (Note 17)1
169
169
—
—
169
Total
47,975
47,975
—
—
47,975
1
Redeemable only upon a liquidation or deemed liquidation event, as defined in the applicable shareholder documents.
*
Does not include payments in respect of lease obligations nor payments on sale of future royalties liability. For the contractual future payments related to lease obligations, see Note
23. Leases and subleases. For contractual future payments related to sale of future royalties, see Note 18. Sale of Future Royalties Liability
Financial statements
Financial statements
170 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 171
Notes to the Consolidated Financial Statements continued
Interest Rate Sensitivity
As of December 31, 2024, the Group had cash and cash equivalents of $280,641, and short-term investments of $86,666. The
Group's exposure to interest rate sensitivity is impacted by changes in the underlying U.K. and U.S. bank interest rates. The Group
has not entered into investments for trading or speculative purposes. Due to the conservative nature of the Group's investment
portfolio, which is predicated on capital preservation and investments in short duration, high-quality U.S. Treasury Bills and
related money market accounts, a change in interest rates would not have a material effect on the fair market value of the Group's
portfolio, and therefore, the Group does not expect operating results or cash flows to be significantly affected by changes in
market interest rates.
Controlled Founded Entity Investments
The Group maintains investments in certain Controlled Founded Entities. The Group’s investments in Controlled Founded
Entities are eliminated as intercompany transactions upon financial consolidation. The Group is, however, exposed to a subsidiary
preferred share liability owing to the terms of existing preferred shares and the ownership of Controlled Founded Entities preferred
shares by third parties. As discussed in Note 17. Subsidiary Preferred Shares, certain of the Group’s subsidiaries have issued
preferred shares that include the right to receive a payment in the event of any voluntary or involuntary liquidation, dissolution
or winding up of a subsidiary, including in the event of "deemed liquidation" as defined in the incorporation documents of the
entities, which shall be paid out of the assets of the subsidiary available for distribution to shareholders, and before any payment
shall be made to holders of ordinary shares. The liability of preferred shares is maintained at fair value through profit and loss and
was insignificant as of December 31, 2024. The Group’s cash position supports the business activities of the Controlled Founded
Entities. Accordingly, the Group views exposure to the third party subsidiary preferred share liability as low.
Deconsolidated Founded Entity Investments
The Group maintains certain debt or equity holdings in Founded Entities that are deconsolidated. These holdings are deemed
either as investments carried at fair value under IFRS 9 with changes in fair value recorded through profit and loss or as associates
accounted for under IAS 28 using the equity method. The Group's exposure to investments held at fair value and investments in
notes from associates was $191,426 and $17,731, respectively, as of December 31, 2024, and the Group may or may not be able
to realize the value in the future. Accordingly, the Group views the risk as high. The Group’s exposure to investments in associates
is limited to the carrying amount of the investment in an associate. The Group is not exposed to further contractual obligations or
contingent liabilities beyond the value of the initial investments. As of December 31, 2024, the investments in associates include
Sonde and Seaport, and the carrying amounts of the investments under the equity method were $0 and $2,397, respectively.
Accordingly, the Group does not view this risk as high.
Equity Price Risk
As of December 31, 2024, the Group held 2,671,800 common shares of Vor with a fair value of $2,966. As of December 31, 2023,
the Group held 886,885 common shares of Karuna, 2,671,800 common shares of Vor, and 12,527,476 common shares of Akili with
fair value of $280,708, $6,012, and $6,112, respectively. The common shares of Karuna and Akili were disposed of in 2024 as part
of the Karuna's acquisition by BMS in March 2024 and Akili's acquisition by Virtual Therapeutics in July 2024.
The investment in Vor is exposed to fluctuations in the market price of Vor's common shares. The Group views the exposure to
equity price risk as low.
Foreign Exchange Risk
The Group maintains Consolidated Financial Statements in the Group's functional currency, which is the U.S. dollar. Monetary
assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at
exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses
arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. Such
foreign currency gains or losses were not material for all reported periods.
The Group does not currently engage in currency hedging activities since its foreign currency risk is limited, but the Group may
begin to do so in the future if and when its foreign currency risk exposure changes.
24. Capital and Financial Risk Management continued
Notes to the Consolidated Financial Statements continued
25. Commitments and Contingencies
The Group is a party to certain licensing agreements where the Group is licensing IP from third parties. In consideration for
such licenses, the Group has made upfront payments and may be required to make additional contingent payments based on
developmental and sales milestones and/or royalty on future sales. As of December 31, 2024, certain milestone events have not
yet occurred, and therefore, the Group does not have a present obligation to make the related payments in respect of the licenses.
Such milestones are dependent on events that are outside of the control of the Group, and many of these milestone events are
remote of occurring. Payments in respect of developmental milestones that are dependent on events that are outside the control
of the Group but are reasonably possible to occur amounted to approximately $7,121 and $7,371, respectively, as of December
31, 2024 and December 31, 2023. These milestone amounts represent an aggregate of multiple milestone payments depending
on different milestone events in multiple agreements. The probability that all such milestone events will occur in the aggregate is
remote. Payments made to license IP represent the acquisition cost of intangible assets.
The Group is a party to arrangements with contract manufacturing and contract research organizations, whereby the counterparty
provides the Group with research and/or manufacturing services. As of December 31, 2024 and December 31, 2023, the
noncancellable commitments in respect of such contracts amounted to approximately $8,395 and $16,422, respectively.
In March 2024, a complaint was filed in Massachusetts District Court against the Group alleging breach of contract with respect
to certain payments alleged to be owed to a previous employee of a Group's subsidiary based on purported terms of a contract
between such individual and the Group. As of December 31, 2024, the Group recognized a provision of $900, which represents
management's best estimate of the expected settlement related to the financial obligation associated with the lawsuit, considering
the likelihood of settlement. The final settlement amount could vary depending on the outcome of the ongoing negotiations or
litigation. The timing for resolution remains uncertain.
The Group is involved from time-to-time in various legal proceedings arising in the normal course of business. Although the
outcomes of these legal proceedings are inherently difficult to predict, the Group does not expect the resolution of such legal
proceedings to have a material adverse effect on its financial position or results of operations. The Group did not book any
provisions and did not identify any contingent liabilities requiring disclosure for any legal proceedings other than already included
above for the years ended December 31, 2024 and 2023.
26. Related Parties Transactions
Related Party Subleases
During 2019, the Group executed a sublease agreement with a related party, Gelesis. During 2023, the sublease receivable was
written down to zero as Gelesis ceased operations and filed for bankruptcy.
The Group recorded $0, $23 and $89 of interest income with respect to the sublease during the years ended December 31, 2024,
2023, and 2022 respectively, which is presented within finance income in the Consolidated Statement of Comprehensive Income/
(Loss).
Related Party Royalties
The Group received $509 in royalties from Gelesis on its product sales for the year ended December 31, 2022 and recorded
such royalty receipt as royalty revenue which was included in contract revenue in the Consolidated Statement of Comprehensive
Income/(Loss) for the year ended December 31, 2022. The Group did not record any royalty revenue from Gelesis for the years
ended December 31, 2024, and 2023.
Key Management Personnel Compensation
Key management includes executive directors and members of the executive management team of the Group (not including non-
executive directors and not including subsidiary directors). The key management personnel compensation of the Group was as
follows for the years ended December 31:
2024
$
2023
$
2022
$
As of December 31
Short-term employee benefits
5,166
9,714
4,162
Post-employment benefits
61
41
55
Termination benefits
395
417
152
Share-based payment expense
2,540
599
2,741
Total
8,161
10,772
7,109
Short-term employee benefits include salaries, health care and other non-cash benefits. Post-employment benefits include 401K
contributions from the Group. Termination benefits include severance pay. Share-based payments are generally subject to vesting
terms over future periods. See Note 10. Share-based Payments. As of December 31, 2024, and 2023 the payable due to the key
management employees was $1,509, and $4,732, respectively.
In addition the Group paid remuneration to non-executive directors in the amounts of $670, $475, and $655 for the years ended
December 31, 2024, 2023 and 2022, respectively. Also, the Group incurred $501, $373 and $365, of stock based compensation
expense for such non-executive directors for the years ended December 31, 2024, 2023, and 2022 respectively.
During the years ended December 31, 2024, 2023 and 2022, the Group incurred $34, $46 and $51, respectively, of expenses paid
to related parties.
Financial statements
Financial statements
172 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 173
Notes to the Consolidated Financial Statements continued
Convertible Notes Issued to Directors
During the year ended December 31, 2024, the Group dissolved an inactive subsidiary, which held a convertible note issued to
a related party. As a result of the entity's dissolution, the convertible note's outstanding balance on the day of dissolution was
written down to $0 and a gain of $108 was recorded and included in finance income/ (costs) within the Consolidated Statement
of Comprehensive Income/(Loss). As of December 31, 2023, the outstanding related party notes payable was $104, including
principal and interest.
Directors’ and Senior Managers’ Shareholdings and Share Incentive Awards
The Directors and senior managers hold beneficial interests in shares in the following businesses as of December 31, 2024:
Business name (share class)
Number of
shares held as
of December
31, 2024
Number of
options held as
of December 31,
2024
Number of
RSUs held as of
December 31,
2024
Ownership
interest¹
Directors:
Dr Robert Langer
Entrega (Common)
250,000
82,500
—
4.29%
Dr Raju Kucherlapati
Enlight (Class B Common)
—
30,000
—
3.00%
Seaport Therapeutics (Preferred B)
21,052
—
—
0.01%
Dr John LaMattina
Vedanta Biosciences (Common)
25,000
15,000
—
0.25%
Seaport Therapeutics (Preferred B)2
21,052
—
—
0.01%
Michele Holcomb
Seaport Therapeutics (Preferred B)
21,052
—
—
0.01%
Sharon Barber-Lui
Seaport Therapeutics (Preferred B)
21,052
—
—
0.01%
Senior Managers:
Eric Elenko
Seaport Therapeutics (Common)
950,000
—
—
0.64%
1
Ownership interests as of December 31, 2024 are calculated on a diluted basis, including issued and outstanding shares, warrants and options (and written commitments to issue
options) but excluding unallocated shares authorized to be issued pursuant to equity incentive plans and any shares issuable upon conversion of outstanding convertible promissory
notes.
2
Dr. John and Ms. Mary LaMattina hold 21,052 Series B preferred shares of Seaport Therapeutics.
Directors and senior managers hold 10,294,322 ordinary shares and 4.3% voting rights of the Group as of December 31, 2024. This
amount excludes options to purchase 2,155,915 ordinary shares. This amount also excludes 3,517,248 shares, which are issuable
based on the terms of performance based RSU awards granted to certain senior managers covering the financial years 2024,
2023 and 2022, 1,822,151 shares of time based RSUs to senior managers, which vest over 3 years, and 346,010 shares, which are
issuable to directors immediately prior to the Group's 2025 Annual General Meeting of Stockholders, based on the terms of the
RSU awards granted to non-executive directors in 2024. Such shares will be issued to such senior managers and non-executive
directors in future periods provided that performance and/or service conditions are met, and certain of the shares will be withheld
for payment of customary withholding taxes.
During the year ended December 31, 2024, certain officers and directors participated in the Tender Offer. See Note 16. Equity for
details on the program. Consequently, the Group repurchased a total of 767,533 ordinary shares at 250 pence per ordinary share
from these related parties.
Other
See Note 7. Investment in Notes from Associates for details on the notes issued by Gelesis and Vedanta to the Group.
As of December 31, 2024, the Group has a receivable from Seaport in the amount of $408.
See Note 6. Investments in Associates for details on the execution and termination of the Merger Agreement with Gelesis in 2023.
26. Related Parties Transactions continued
Notes to the Consolidated Financial Statements continued
27. Taxation
Tax on the profit or loss for the year comprises current and deferred income tax. Tax is recognized in the Consolidated Statement
of Comprehensive Income/(Loss) except to the extent that it relates to items recognized directly in equity.
For the years ended December 31, 2024, 2023 and 2022, the Group filed a consolidated U.S. federal income tax return which
included all subsidiaries in which the Group owned greater than 80% of the vote and value. For the years ended December 31,
2024, 2023 and 2022, the Group filed certain consolidated state income tax returns which included all subsidiaries in which the
Group owned greater than 50% of the vote and value. The remaining subsidiaries file separate U.S. tax returns.
Amounts recognized in Consolidated Statement of Comprehensive Income/(Loss):
2024
$
2023
$
2022
$
For the year ended December 31
Income/(loss) for the year
27,782
(66,628)
(37,065)
Income tax expense/(benefit)
(4,008)
30,525
(55,719)
Income/(loss) before taxes
23,774
(36,103)
(92,783)
Recognized Income Tax Expense/(Benefit):
2024
$
2023
$
2022
$
For the year ended December 31
Federal - current
35,310
(2,246)
13,065
State - current
13,144
(46)
1,336
Total current income tax expense/(benefit)
48,454
(2,292)
14,401
Federal - deferred
(46,442)
29,294
(48,240)
State - deferred
(6,020)
3,523
(21,880)
Total deferred income tax expense/(benefit)
(52,462)
32,817
(70,120)
Total income tax expense/(benefit), recognized
(4,008)
30,525
(55,719)
The income tax expense/(benefit) was $(4,008), $30,525 and $(55,719) for the tax years ended December 31, 2024, 2023 and
2022, respectively. The income tax benefit recognized in 2024 was primarily attributable to the recognition of a deferred tax
asset, generated in 2024 from the sale of the Group’s investment in Akili common stock that was used to offset income generated
from the sale of the Group’s investment in Karuna common shares, partially offset with state income tax expense. The income tax
expense recognized in 2023 was primarily due to income from the sale of future royalties to Royalty Pharma and the recognition of
deferred tax liabilities.
Reconciliation of Effective Tax Rate
The Group is primarily subject to taxation in the U.S. A reconciliation of the U.S. federal statutory tax rate to the effective tax rate is
as follows:
2024
2023
2022
For the year ended December 31
$
%
$
%
$
%
US federal statutory rate
4,994
21.00
(7,573)
21.00
(19,486)
21.00
State taxes, net of federal effect
1,026
4.32
(3,974)
11.01
(8,043)
8.67
Tax credits
(2,517)
(10.59)
(9,167)
25.39
(6,876)
7.41
Stock-based compensation
2,123
8.93
589
(1.63)
788
(0.85)
Finance income/(costs) – fair value
accounting
1,640
6.90
(556)
1.54
(28,783)
31.02
Loss with respect to associate
for which no deferred tax asset is
recognized
210
0.88
249
(0.69)
1,413
(1.52)
Revaluation of deferred due to rate
change
(3,419)
(14.38)
—
—
(8,856)
9.54
Nondeductible compensation
1,534
6.45
872
(2.42)
300
(0.32)
Recognition of deferred tax assets and
tax benefits not previously recognized
(12,396)
(52.14)
(433)
1.20
(184)
0.20
Unrecognized deferred tax asset
—
—
83,984
(232.63)
17,287
(18.63)
Deconsolidation of subsidiary
3,863
16.25
(17,506)
48.49
(3,572)
3.85
Cancellation of Debt Income
(987)
(4.15)
—
—
—
—
Other
755
3.16
1,321
(3.65)
293
(0.32)
Worthless stock deduction
(833)
(3.50)
(17,281)
47.87
—
—
(4,008)
(16.86)
30,525
(84.52)
(55,719)
60.05
The Group is also subject to taxation in the UK, but to date, no taxable income has been generated in the UK. Changes in
corporate tax rates can change both the current tax expense (benefit) as well as the deferred tax expense (benefit).
Financial statements
Financial statements
174 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 175
Notes to the Consolidated Financial Statements continued
Deferred Tax Assets and Liabilities
Deferred tax assets have been recognized in the U.S. jurisdiction in respect of the following items:
2024
$
2023
$
For the year ended December 31
Operating tax losses
2,621
3,849
Tax credits
238
2,425
Share-based payments
6,206
5,210
Capitalized research & development expenditures
48,904
39,422
Lease liability
4,851
5,133
Sale of future royalties
42,406
35,920
Other temporary differences
—
1,770
Deferred tax assets
105,226
93,729
Investments held at fair value
(23,565)
(53,411)
Right of use assets
(2,143)
(2,330)
Property and equipment, net
(1,235)
(1,637)
Investment in associates
(637)
(755)
Other temporary differences
(1,900)
—
Deferred tax liabilities
(29,480)
(58,133)
Deferred tax assets (liabilities), net
75,746
35,596
Deferred tax liabilities, net, recognized
—
(52,462)
Deferred tax assets (liabilities), net, not recognized
75,746
88,058
As of December 31, 2024, the Group does not have sufficient taxable temporary differences, has a history of losses and does
not believe it is probable future profits will be available to support the recognition of its deferred tax assets. The unrecognized
deferred tax assets of $75,746 are primarily related to capitalized research & development expenditures and deferred tax asset
related to the sale of future royalties to Royalty Pharma.
Unrecognized Deferred Tax Assets
Deferred tax assets have not been recognized in respect of the following carryforward losses, credits and temporary differences,
because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom.
2024
$
2023
$
For the year ended December 31
Gross Amount
Tax Effected
Gross Amount
Tax Effected
Deductible temporary difference
274,227
72,887
353,323
83,741
Tax losses
7,815
2,621
13,681
3,849
Tax credits
238
238
468
468
Total
282,280
75,746
367,472
88,058
Tax Losses and Tax Credits Carryforwards
Tax losses and tax credits for which no deferred tax asset was recognized are presented below:
Balance as of December 31
2024
$
2023
$
Gross Amount
Tax Effected
Gross Amount
Tax Effected
Tax losses expiring:
Within 10 years
1,537
416
4,741
1,284
More than 10 years
3,285
729
6,635
1,455
Available Indefinitely
2,993
1,476
2,305
1,110
Total
7,815
2,621
13,681
3,849
Tax credits expiring:
Within 10 years
44
44
43
43
More than 10 years
194
194
425
425
Available indefinitely
—
—
—
—
Total
238
238
468
468
27. Taxation continued
Notes to the Consolidated Financial Statements continued
The Group had U.S. federal net operating losses carry forwards (“NOLs”) of $7,815, $13,681 and $219,466 as of December 31,
2024, 2023 and 2022, respectively, which are available to offset future taxable income. These NOLs expire through 2037 with the
exception of $2,993 which is not subject to expiration, and can be utilized up to 80% of annual taxable income. The Group had
U.S. federal research and development tax credits of approximately $238, $1,396 and $4,500 as of December 31, 2024, 2023 and
2022, respectively, which are available to offset future taxes that expire at various dates through 2037. The Group also had Federal
Orphan Drug credits of approximately $0 and $930 as of December 31, 2024, and 2023. A portion of these federal NOLs and
credits can only be used to offset the profits from the Group’s subsidiaries who file separate federal tax returns. These NOLs and
credits are subject to review and possible adjustment by the Internal Revenue Service.
The Group had state net operating losses carry forwards (“NOLs”) of approximately $125,322, $111,446 and $71,700 for the years
ended December 31, 2024, 2023 and 2022, respectively, which are available to offset future taxable income. These NOLs expire
at various dates beginning in 2030. The Group had Massachusetts research and development tax credits of approximately $0, $98
and $600 for the years ended December 31, 2024, 2023 and 2022, respectively. These NOLs and credits are subject to review and
possible adjustment by state taxing authority.
Utilization of the NOLs and research and development credit carryforwards may be subject to a substantial annual limitation under
Section 382 of the Internal Revenue Code of 1986 due to ownership change limitations that have occurred previously or that could
occur in the future. These ownership changes may limit the amount of NOL and research and development credit carryforwards
that can be utilized annually to offset future taxable income and tax, respectively. The Group has performed a Section 382 analysis
through December 31, 2024. The results of this analysis concluded that certain net operating losses were subject to limitation
under Section 382 of the Internal Revenue Code. None of the Group’s net operating losses, which are subject to a Section 382
limitation, has been recognized in the financial statements.
Tax Balances
The tax related balances presented in the Statement of Financial Position are as follows:
For the year ended December 31
2024
$
2023
$
Income tax receivable – current
—
11,746
Income tax payable – current
(75)
—
Uncertain Tax Positions
The Group has no uncertain tax positions as of December 31, 2024. U.S. corporations are routinely subject to audit by federal and
state tax authorities in the normal course of business.
28. Subsequent Events
The Group has evaluated subsequent events after December 31, 2024, up to the date of issuance, April 30, 2025, of the
Consolidated Financial Statements, and has not identified any recordable or disclosable events not otherwise reported in these
Consolidated Financial Statements or notes thereto.
27. Taxation continued
Financial statements
Financial statements
176 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 177
Parent Company Statement of Financial Position
For the years ended December 31
2024
$000s
2023
$000s
Note
Assets
Non-current assets
Investment in subsidiary
2
462,734
456,864
Total non-current assets
462,734
456,864
Current assets
Cash and cash equivalents
26,323
20,425
Total current assets
26,323
20,425
Total assets
489,057
477,289
Equity and liabilities
Equity
Share capital
3
4,860
5,461
Share premium
3
290,262
290,262
Treasury stock
3
(46,864)
(44,626)
Merger reserve
3
138,506
138,506
Other reserve
3
26,407
21,596
Retained earnings - (Income of $107,421 and loss of $3,178 for 2024 and 2023,
respectively)
3
44,574
41,997
Total equity
457,746
453,196
Current liabilities
Trade and other payables
3,661
2,033
Intercompany payables
4
27,650
22,061
Total current liabilities
31,311
24,093
Total equity and liabilities
489,057
477,289
Please refer to the accompanying notes to the PureTech Health plc financial information ("Notes"). Registered number: 09582467.
The PureTech Health plc financial statements were approved by the Board of Directors and authorized for issuance on April 30,
2025 and signed on its behalf by:
Bharatt Chowrira
Chief Executive Officer
April 30, 2025
The accompanying Notes are an integral part of these financial statements.
Parent Company Statement of Changes in Equity
For the years ended December 31
Share Capital
Treasury Shares
Shares
Amount
$000s
Share
Premium
$000s
Shares
Amount
$000s
Merger
Reserve
$000s
Other
Reserve
$000s
Retained
earnings/
(Accumulated
deficit)
$000s
Total
equity
$000s
Balance January 1, 2023
289,161,653
5,455 289,624
(10,595,347) (26,492) 138,506
18,114
45,175
470,382
Exercise of stock options
306,506
6
638
239,226
530
—
(22)
—
1,153
Equity-settled share-based
payments
—
—
—
—
—
—
3,348
—
3,348
Settlement of restricted
stock units
—
—
—
425,219
986
—
156
—
1,142
Purchase of treasury stock
—
—
—
(7,683,526)
(19,650)
—
—
—
(19,650)
Net Income (loss)
—
—
—
—
—
—
—
(3,178)
(3,178)
Balance December 31,
2023
289,468,159
5,461 290,262
(17,614,428) (44,626) 138,506 21,596
41,997
453,196
Exercise of stock options
—
—
—
412,729
1,041
—
(146)
—
895
Equity-settled share-based
payments
—
—
—
—
—
—
4,569
—
4,569
Settlement of restricted
stock units
—
—
—
599,512
1,512
—
(211)
—
1,301
Repurchase and
cancellation of ordinary
shares from Tender Offer
(31,540,670)
(600)
—
—
—
—
600
(104,844) (104,844)
Purchase of treasury stock
—
—
—
(1,903,990)
(4,791)
—
—
—
(4,791)
Net income (loss)
—
—
—
—
—
—
—
107,421
107,421
Balance December 31,
2024
257,927,489
4,860 290,262
(18,506,177) (46,864) 138,506 26,407
44,574
457,746
The accompanying Notes are an integral part of these financial statements.
Financial statements
Financial statements
178 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 179
Notes to the Financial Statements
(amounts in thousands, except share and per share data)
1.
Accounting policies
Basis of Preparation and Measurement
The financial statements of PureTech Health plc (the “Parent”) are presented as of December 31, 2024 and 2023, and for the years
ended December 31, 2024 and 2023, and have been prepared under the historical cost convention in accordance with FRS 101
‘Reduced Disclosure Framework’ and in accordance with the Companies Act 2006 as applicable to companies using FRS 101.
As permitted by FRS 101, the Parent has taken advantage of the disclosure exemptions available under that standard in relation to:
— a cash flow statement
A summary of the material accounting policies that have been applied consistently throughout the year is set out below.
Certain amounts in the Parent Company Financial Statements and accompanying notes may not add due to rounding.
All percentages have been calculated using unrounded amounts.
Functional and Presentation Currency
The functional currency of the Parent is United States ("U.S.”) Dollars and the financial statements are presented in U.S. Dollars.
Investments
Investments are stated at historical cost less any provision for impairment in value, and are held for long-term investment purposes.
Provisions are based upon an assessment of events or changes in circumstances that indicate that an impairment has occurred,
such as the performance and/or prospects (including the financial prospects) of the investee company being significantly below
the expectations on which the investment was based, a significant adverse change in the markets in which the investee company
operates, or a deterioration in general market conditions.
Impairment
If there is an indication that an asset might be impaired, the Parent would perform an impairment review. An asset is impaired if
the recoverable amount, being the higher of fair value less cost to sell and value in use, is less than its carrying amount. Value in
use is measured based on future discounted cash flows attributable to the asset. In such cases, the carrying value of the asset is
reduced to its recoverable amount with a corresponding charge recognized in the profit and loss statement.
Dividend Income
Dividend received from the Parent's subsidiary is recorded as dividend income in the profit and loss statement.
Financial Instruments
Currently the Parent does not have derivative financial instruments. Financial assets and financial liabilities are recognized and
cease to be recognized on the basis of when the related titles pass to or from the Parent.
Share-Based Payments
Share-based payment awards granted in subsidiaries to employees, Board of Directors and consultants to be settled in Parent's
equity instruments are accounted for as equity-settled share-based payment transactions in accordance with IFRS 2. Restricted
stock units granted in subsidiaries to the executives are accounted for as share-based liability awards in accordance with IFRS
2 as they can be cash-settled at PureTech's discretion and have a history of being cash-settled. The grant date fair value of
equity-settled share-based payment awards and the settlement date fair value of the share-based liability awards are recognized
as an increase to the investment with a corresponding increase in equity. For equity-settled restricted stock units, the grant
date fair value is the grant date share price. For share-based liability awards, the fair value at each reporting date is measured
using the Monte Carlo simulation analysis considering share price volatility, risk-free rate, and other covariance of comparable
public companies and other market data to predict distribution of relative share performance. For stock options, the fair value is
measured using an option pricing model, which takes into account the terms and conditions of the options granted. When the
subsidiary settles the equity awards other than by the Parent's equity, the settlement is recorded as a decrease in equity against a
corresponding decrease to the investment account.
Notes to the Financial Statements continued
2.
Investment in subsidiary
$
Balance at December 31, 2021
148,086
Equity-settled share-based payments granted to employees and service providers in subsidiaries
10,384
Conversion of intercompany receivable (net of a portion of intercompany payable) into investment
293,904
Balance at December 31, 2022
452,374
Equity-settled share-based payments granted to employees and service providers in subsidiaries
4,489
Balance at December 31, 2023
456,864
Equity-settled share-based payments granted to employees and service providers in subsidiaries
5,870
Balance at December 31, 2024
462,734
PureTech consists of the Parent and its subsidiaries (together, the “Group”). Investment in subsidiary represents the Parent’s
investment in PureTech LLC as a result of the reverse acquisition immediately prior to the Parent’s initial public offering (“IPO”) on
the London Stock Exchange in June 2015. PureTech LLC operates in the U.S. as a US-focused scientifically-driven research and
development company that conceptualizes, sources, validates and commercializes different approaches to advance the needs of
human health. For a summary of the Parent’s major indirect subsidiaries, please refer to Note 1. Material Accounting Policies, of
the Consolidated Financial Statements of the Group.
The Parent recognizes in its investment in its operating subsidiary PureTech LLC, share-based payments granted to employees,
executives, non-executive directors and service providers in its subsidiary. The increases in investment in subsidiary in 2022, 2023
and 2024, respectively, are due to such share-based payments results from the expenses related to the grant of equity-settled
share-based awards, as well as settlements and payments of these equity awards by the subsidiary, or settlement of share-based
payments through equity by PureTech.
As of December 31, 2024, the Parent performed an impairment assessment on its investment in subsidiary using the fair value
less costs to sell approach. The carrying amount of its investment in subsidiary was approximately 1% lower than the implied
market capitalization. Applying the estimated control premium, the Parent determined that its investment in subsidiary was not
impairment as of December 31, 2024.
3.
Share capital and reserves
PureTech Health plc was incorporated with the Companies House under the Companies Act 2006 as a public company on May 8,
2015.
On June 24, 2015, the Group authorized 227,248,008 of ordinary share capital at one pence apiece. These ordinary shares were
admitted to the premium listing segment of the United Kingdom’s Listing Authority and traded on the Main Market of the London
Stock Exchange for listed securities. In conjunction with the authorization of the ordinary shares, the Parent completed an IPO on
the London Stock Exchange, in which it issued 67,599,621 ordinary shares at a public offering price of 160 pence per ordinary
share, in consideration for $159,270, net of issuance costs of $11,730.
Additionally, the IPO included an over-allotment option equivalent to 15% of the total number of new ordinary shares. The
stabilization manager provided notice to exercise in full its over-allotment option on July 2, 2015. As a result, the Parent issued
10,139,943 ordinary shares at the offer price of 160 pence per ordinary share, which resulted in net proceeds of $24,200, net of
issuance costs of $800.
On March 12, 2018, the Group raised approximately $100,000, before issuance costs and other expenses, by way of a placing of
45,000,000 placing shares.
During the years ended December 31, 2024 and 2023, other reserves increased by $4,811 and $3,482, respectively, primarily due
to equity-settled share-based payments granted to employees, the Board of Directors and service providers in subsidiaries. See
Note 2. Investment in subsidiary above.
Treasury stock and Tender Offer
On May 9, 2022, the Group announced the commencement of a $50,000 share repurchase program (the "Program") of its ordinary
shares of one pence each. The Group executed the Program in two equal tranches. It entered into an irrevocable non-discretionary
instruction with Jefferies International Limited (“Jefferies”) in relation to the purchase by Jefferies of the ordinary shares for an
aggregate consideration (excluding expenses) of no greater than $25,000 for each tranche and the simultaneous on-sale of such
ordinary shares by Jefferies to the Group, subject to certain volume and price restrictions.
In February 2024, the Group completed the Program and has repurchased an aggregate of 20,182,863 ordinary shares under
the Program. These shares have been held as treasury shares and are being used to settle the vesting of restricted stock units or
exercise of stock options.
In March 2024, the Group announced a proposed capital return of $100,000 to its shareholders by way of a tender offer (the
“Tender Offer”). The proposed Tender Offer was approved by shareholders at the Annual General Meeting of Stockholders held
on June 6, 2024, to acquire a maximum number of 33,500,000 ordinary shares (including ordinary shares represented by American
Depository Shares (“ADSs”)) for a fixed price of 250 pence per ordinary share (equivalent to £25.00 per ADS) for a maximum
aggregate amount of $100,000 excluding expenses.
The Tender Offer was completed on June 24, 2024. The Group repurchased 31,540,670 ordinary shares under the Tender Offer.
Following such repurchase, the Group cancelled these shares repurchased. As a result of the cancellation, the nominal value of
$600 related to the cancelled shares was reduced from share capital and transferred to a capital redemption reserve, increasing the
capital redemption reserve balance to $600 which was included in other reserve in the Parent Company Statement of Changes in
Equity.
Financial statements
Financial statements
180 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 181
4.
Intercompany payables
The Parent had a balance due to its operating subsidiary PureTech LLC of $27,650 as of December 31, 2024, which is related to
IPO costs and operating expenses. These intercompany payables do not bear any interest and are repayable upon demand.
5.
Profit and loss account
As permitted by Section 408 of the Companies Act 2006, the Parent’s profit and loss account has not been included in these
financial statements. The Parent’s net income for the year was $107,421.
During the year ended December 31, 2024, the Parent recorded income of $110,500 in respect of dividend received from
its subsidiary.
6.
Directors’ remuneration, employee information and share-based payments
The remuneration of the executive Directors of the Parent company is disclosed in Note 26. Related Parties Transactions, of the
Group's Consolidated Financial Statements. Full details of Directors’ remuneration can be found in the audited sections of the
Directors’ Remuneration Report. Full detail of the share-based payment charge and the related disclosures can be found in Note
10. Share-based Payments, of the Group's Consolidated Financial Statements.
The Parent had no employees during 2024 or 2023.
Notes to the Financial Statements continued
History and Development of the Company
We were incorporated and registered under the laws of England and Wales with the Registrar of Companies of England and Wales,
United Kingdom in May 2015 as “PureTech Health plc.” Our predecessor entity, PureTech Health LLC (the "Predecessor Entity"),
commenced formal operations and began engaging in initial sourcing activities in 2004, raising its first financing round greater
than $5 million in the same year. The Predecessor Entity was acquired by PureTech Health plc on June 18, 2015 in a reorganization
completed in connection with our initial public offering on the London Stock Exchange. The Predecessor Entity is now a wholly-
owned subsidiary of PureTech Health plc. Our registered office is situated at 13th Floor, One Angel Court, London, EC2R 7HJ,
United Kingdom, and our telephone number is +(1) 617 482 2333. Our U.S. operations are conducted by our wholly-owned
subsidiary PureTech Health LLC, a Delaware limited liability company. Our ordinary shares have traded on the main market of the
London Stock Exchange since June 2015, and our ADSs have traded on the Nasdaq Global Market since November 2020. Our
agent for service of process in the United States is PureTech Health LLC located at 6 Tide Street, Suite 400, Boston, Massachusetts
02210 where our corporate headquarters and laboratories are located. Our website address is http://www.puretechhealth.com.
The reference to our website is an inactive textual reference only, and information contained in, or that can be accessed through
our website or any other website cited in this annual report is not part of hereof.
182 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 183
Risk Factor Annex continued
Additional information
Additional information
Our forward-looking statements do not reflect the potential impact of any
future acquisitions, mergers, dispositions, joint ventures or investments
we may undertake. Moreover, we operate in an evolving environment.
New risk factors and uncertainties may emerge from time to time, and it is
not possible for management to predict all risk factors and uncertainties.
Except as may be required by law, we have no plans to update our forward-
looking statements to reflect events or circumstances after the date of
this annual report on Form 20-F. We qualify all of our forward-looking
statements by these cautionary statements.
This Annual Report and Accounts and our associated Annual Report on
Form 20-F include statistical and other industry and market data that we
obtained from industry publications and research, surveys and studies
conducted by third parties. Industry publications and third-party research,
surveys and studies generally indicate that their information has been
obtained from sources believed to be reliable, although they do not
guarantee the accuracy or completeness of such information. Additionally,
certain information we may disclose (either herein or elsewhere) is informed
by the expectations of various stakeholders or third-party frameworks and,
as such, may not necessarily be material for purposes of our filings under
U.S. federal securities laws, even if we use “material” or similar language in
discussing such matters.
Risks Related to our Financial Position and Need for Additional Capital
We are a clinical-stage biotherapeutics company and have incurred
significant operating losses since our inception. We may continue to incur
significant operating losses for the foreseeable future.
Investment in biotechnology, including therapeutic development and
medical device development, is highly speculative because it entails
substantial upfront capital expenditures and significant risk that
any potential therapeutic candidate will be unable to demonstrate
effectiveness or an acceptable safety profile, gain regulatory approval
or certification (where applicable) and become commercially viable. To
date, only three of our Founded Entities’ therapeutic candidates, Karuna
Therapeutics, Inc.’s (now a wholly owned subsidiary of Bristol Myers
Squibb, Inc.) Cobenfy® received U.S. Food and Drug Administration,
or FDA, approval, and both Gelesis, Inc.’s Plenity® and Akili Interactive
Labs, Inc.’s EndeavorRx® have received marketing authorization from the
FDA and have been CE Marked in the European Union, or EU. All of the
therapeutic candidates in our Wholly-Owned Programs and the majority
of our Founded Entities’ therapeutic candidates may require substantial
additional development time, including extensive clinical research, and
resources before we would be able to apply for or receive regulatory
clearances, certifications or approvals and begin generating revenue from
therapeutic sales.
Since our inception, we have invested most of our resources in developing
our technology and therapeutic candidates, building our intellectual
property portfolio, developing our supply chain, conducting business
planning, raising capital and providing general and administrative support
for these operations, including with respect to our Founded Entities. We
are not operationally profitable and have incurred operating losses in
each year since our inception. Our operating losses for the years ended
December 31, 2022, 2023 and 2024 were $197.8 million, $146.2 million
and $136.1 million, respectively. We have no therapeutics developed in
our Wholly-Owned Programs approved for commercial sale and have
not generated any revenues from therapeutic sales, and we and our
Founded Entities have financed operations solely through the sale of
equity securities, revenue from strategic alliances and government funding
and, with respect to certain of our Founded Entities, debt financings.
We continue to incur significant research and development, or R&D,
and other expenses related to ongoing operations and expect to incur
losses for the foreseeable future. We anticipate continued losses for the
foreseeable future.
Due to risks and uncertainties associated with the development of drugs,
biologics and medical devices, we are unable to predict the timing
or amount of our expenses, or when we will be able to generate any
meaningful revenue or achieve or maintain profitability, if ever. In addition,
our expenses could increase beyond our current expectations if we are
required by the FDA, the European Medicines Agency, or the EMA, or
other comparable foreign regulatory authorities and notified bodies in the
EU to perform preclinical studies or clinical trials in addition to those that
we currently anticipate, or if there are any delays in any of our or our future
collaborators’ clinical trials or the development of our existing therapeutic
candidates and any other therapeutic candidates that we may identify.
Even if our existing therapeutic candidates or any future therapeutic
candidates that we may identify are approved for commercial sale, we
anticipate incurring significant costs associated with commercializing any
approved therapeutic and ongoing compliance efforts.
Our business faces significant risks. You should carefully consider all of the
information set forth in this Annual Report and Accounts, including the
following risk factors which we face and which are faced by our industry.
These risks are not listed in any particular order of priority and are intended
to supplement the risks identified elsewhere. Our business, financial
condition or results of operations could be materially and adversely
affected if any of these risks occur.
This Annual Report and Accounts and our associated Annual Report on
Form 20-F also contain forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially and adversely from
those anticipated in these forward-looking statements as a result of certain
important factors including the risks described below and elsewhere.
All statements contained in this Annual Report and Accounts and our
associated Annual Report on Form 20-F, other than statements of historical
fact, including statements regarding our strategy, future operations, future
financial position, future revenues, projected costs, prospects, plans and
objectives of management, are forward-looking statements. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “target,” “potential,” “would,” “could,” “should,”
“continue” and similar expressions are intended to identify forward-
looking statements, although not all forward-looking statements contain
these identifying words. The forward-looking statements in this Annual
Report and Accounts and associated Annual Report on Form 20-F include,
among other things, statements about:
— our ability to realize value from our Founded Entities, which may be
impacted if we reduce our ownership to a minority interest or otherwise
cede control to other investors through contractual agreements
or otherwise;
— the success, cost and timing of our clinical development within our
Wholly-Owned Programs and our Founded Entities, including the
progress of, and results from, our Wholly-Owned Programs ’ and
our Founded Entities’ preclinical and clinical trials of deupirfenidone
(LYT-100), LYT-200, or our therapeutics candidates, and our technology
platforms and other potential therapeutic candidates within our Wholly-
Owned Programs and therapeutic candidates being developed by our
Founded Entities;
— our ability to obtain and maintain regulatory clearance, certification,
authorization, or approval of the therapeutic candidates within our
Wholly-Owned Programs or our Founded Entities, and any related
restrictions, limitations or warnings in the label of any of the therapeutic
candidates, if cleared, certified, authorized, or approved;
— our ability to compete with companies currently marketing or engaged in
the development of treatments for indications within our Wholly-Owned
Programs or our Founded Entities are designed to target;
— our plans to pursue research and development of other future
therapeutic candidates;
— the potential advantages of the therapeutic candidates within our
Wholly-Owned Programs and the therapeutic candidates developed by
our Founded Entities;
— the rate and degree of market acceptance and clinical utility of our
therapeutic candidates;
— the success of our collaborations and partnerships with third parties;
— our estimates regarding the potential market opportunity for the
therapeutic candidates within our Wholly-Owned Programs and the
therapeutic candidates being developed by our Founded Entities;
— our sales, marketing and distribution capabilities and strategy;
— our ability to establish and maintain arrangements for manufacture of
the therapeutic candidates within our Wholly-Owned Programs and
therapeutic candidates being developed by our Founded Entities;
— our intellectual property position;
— our expectations related to the use of capital;
— our estimates regarding expenses, future revenues, capital requirements
and needs for additional financing;
— the impact of government laws and regulations; and
— our competitive position.
We may not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements, and you should not place
undue reliance on our forward-looking statements, which speak only as
of the date made. Actual results or events could differ materially from
the plans, intentions and expectations disclosed in the forward-looking
statements we make. You should refer to the below for a discussion of
important factors that may cause our actual results to differ materially
from those expressed or implied by our forward-looking statements.
Risk Factor Annex
As of December 31, 2024, we had cash, cash equivalents and short term
investments of $367.3 million at the PureTech Health plc level. Based on
current projections, the Directors believe that the company has sufficient
available funding to extend operations into at least 2027. However, our
operating plan may change as a result of many factors currently unknown
to us, and we may need to seek additional funds sooner than planned,
through public or private equity or debt financings, sales of assets or
programs, other sources, such as strategic collaborations or license and
development agreements, or a combination of these approaches. Even
if we believe we have sufficient funds for our current or future operating
plans, we may opportunistically seek additional capital if market conditions
are favorable or if we have specific strategic considerations. Our spending
will vary based on new and ongoing therapeutic development and
corporate activities.
Our future funding requirements, both short-term and long-term, will
depend on many factors, including, but not limited to:
— the time and cost necessary to complete ongoing, planned and future
unplanned clinical trials (such term to include clinical studies in these
Risk Factors where context requires and the item being studied or
subject of a potential study may be regulated as a medical device in the
EU), including our ongoing clinical trials for certain of our therapeutic
candidates, and potential future clinical trials for certain of our
therapeutic candidates;
— the outcome, timing and cost of meeting regulatory requirements
established by the FDA, the EMA and other comparable foreign
regulatory authorities;
— the progress, timing, scope and costs of our preclinical studies, clinical
trials and other related activities for our ongoing and planned clinical
trials, and potential future clinical trials;
— the costs of obtaining clinical and commercial supplies of raw materials
and drug products for the therapeutic candidates within our Wholly-
Owned Programs , as applicable, and any other therapeutic candidates
we may identify and develop;
— our ability to successfully identify and negotiate acceptable terms for
third-party supply and contract manufacturing agreements with contract
manufacturing organizations, or CMOs;
— the costs of commercialization activities for any of the therapeutic
candidates within our Wholly-Owned Programs that receive marketing
approval, including the costs and timing of establishing therapeutic
sales, marketing, distribution and manufacturing capabilities, or entering
into strategic collaborations with third parties to leverage or access these
capabilities;
— the amount and timing of sales and other revenues from the therapeutic
candidates within our Wholly-Owned Programs , if approved, including
the sales price and the availability of coverage and adequate third-party
reimbursement;
— the cash requirements of our Founded Entities and our ability and
willingness to provide them with financing;
— the cash requirements of any future acquisitions or discovery of
therapeutic candidates;
— the time and cost necessary to respond to technological and market
developments, including other therapeutics that may compete
with one or more of our Wholly-Owned Programs or those of our
Founded Entities;
— the costs of acquiring, licensing or investing in intellectual property
rights, therapeutics, therapeutic candidates and businesses;
— our ability to attract, hire and retain qualified personnel as we expand
R&D and establish a commercial infrastructure;
— the costs of maintaining, expanding and protecting our intellectual
property portfolio;
— the costs of operating as a public company in the United Kingdom, or
UK, and the United States, or US, and maintaining listings on both the
London Stock Exchange, or the LSE, and The Nasdaq Global Market,
or Nasdaq; and
— costs associated with any adverse market conditions or other
macroeconomic factors.
We cannot be certain that additional funding will be available on
acceptable terms, or at all. If adequate funds are not available to us on a
timely basis, we may be required to delay, limit or terminate one or more
research or development programs or the potential commercialization
of any approved therapeutics or be unable to expand operations or
otherwise capitalize on business opportunities, as desired, which could
materially affect our business, prospects, financial condition and results
of operations.
As of December 31, 2024, we had never generated revenue from the
therapeutic candidates within our Wholly-Owned Programs , and we may
never be operationally profitable.
We may never be able to develop or commercialize marketable
therapeutics or achieve operational profitability. Revenue from the sale
of any therapeutic candidate for which regulatory clearance, certification,
authorization or approval is obtained will be dependent, in part, upon the
size of the markets in the territories for which we gain regulatory clearance,
certification, authorization or approval, the accepted price for the
therapeutic, the ability to obtain reimbursement at any price and whether
we own the commercial rights for that territory. Our growth strategy
depends on our ability to generate revenue. In addition, if the number
of addressable patients is not as anticipated, the indication or intended
use cleared, certified, authorized or approved by regulatory authorities
or notified bodies is narrower than expected, or the reasonably accepted
population for treatment is narrowed by competition, physician choice or
treatment guidelines, we may not generate significant revenue from sales
of such therapeutics, even if cleared, certified, authorized or approved.
Even if we are able to generate revenue from the sale of any cleared,
certified, authorized or approved therapeutics, we may not become
operationally profitable and may need to obtain additional funding to
continue operations. Even if we achieve operational profitability in the
future, we may not be able to sustain profitability in subsequent periods.
If we are unable to achieve sustained profitability, it would depress
the value of our company and could impair our ability to raise capital,
expand our business, diversify our R&D pipeline, market the therapeutic
candidates within our Wholly-Owned Programs , if cleared or approved,
and pursue or continue our operations. Our prior losses, combined with
expected future losses, have had and may continue to have an adverse
effect on our shareholders’ equity and working capital.
We may require substantial additional funding to achieve our business
goals. If we are unable to obtain this funding when needed and on
acceptable terms, we could be forced to delay, limit or terminate certain
of our therapeutic development efforts. Certain of our Founded Entities
will similarly require substantial additional funding to achieve their
business goals.
Across our Wholly-Owned Programs and our Founded Entities,
we established the underlying platforms that have resulted in the
development of 29 therapeutics and therapeutic candidates, including
three (Cobenfy, Plenity and EndeavorRx) that have commercial approval,
with Cobenfy receiving U.S. FDA approval, and both Plenity and
EndeavorRx receiving both U.S. FDA approval and European marketing
authorization. Developing biotherapeutics is expensive and time-
consuming, and with respect to the therapeutic candidates within our
Wholly-Owned Programs , we expect to require substantial additional
capital to conduct research, preclinical studies and clinical trials for our
current and future programs, establish pilot scale and commercial scale
manufacturing processes and facilities, seek regulatory approvals for the
therapeutic candidates within our Wholly-Owned Programs and launch
and commercialize any therapeutics for which we receive regulatory
approval, including building our own commercial sales, marketing and
distribution organization. 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
doing so would be in the interests of our shareholders. We expect to
finance our future cash needs through a combination of public and
private equity offerings, debt financings, strategic partnerships, sales of
assets and alliances and licensing arrangements, among others. We, and
indirectly, our shareholders, may bear the cost of issuing and servicing any
such securities and of entering into and maintaining any such strategic
partnerships or other arrangements. Because any decision by us to issue
debt or equity securities in the future will depend on market conditions
and other factors beyond our control, we cannot predict or estimate
the amount, timing or nature of any future financing transactions. Our
management and strategic decision makers have not made decisions
regarding the future allocation of certain of our resources among our
Founded Entities, but evaluate the needs and opportunities with respect
to each of these Founded Entities routinely and on a case-by-case basis.
In connection with any collaboration agreements relating to our Wholly-
Owned Programs , we are also responsible for the payments to third parties
of expenses that may include milestone payments, license maintenance
fees and royalties, including in the case of certain of our agreements with
academic institutions or other companies from whom intellectual property
rights underlying their respective programs have been in-licensed or
acquired. Because the outcome of any preclinical or clinical development
and regulatory approval process is highly uncertain, we cannot reasonably
estimate the actual amounts necessary to successfully complete the
development, regulatory approval or certification process and potential
commercialization of our Wholly-Owned Programs and any future
therapeutic candidates we may identify.
184 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 185
Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
Risks Related to Our Founded Entities
Our ability to realize value from our Founded Entities may be impacted
if we reduce our ownership or otherwise cede control to other investors
through contractual agreements or otherwise.
We do not have a majority interest in our Non-Controlled Founded
Entities. Our interests may be further reduced as such companies raise
capital from third-party investors. In addition, we may agree to contractual
arrangements for the funding of further developments by one or more
of our Founded Entities. As a result, with respect to our Non-Controlled
Founded Entities, we may not be able to exercise control over the affairs
of such Founded Entity, including that Founded Entity’s governance
arrangements and access to management and financial information. We
are also party to agreements with certain of our Founded Entities that
contain provisions which could force us to exit from that Founded Entity
at a time and/or price determined by other investor(s) (for example, by the
exercise of drag-along rights). If we were forced to exit out of a Founded
Entity, this could have a material adverse effect on our business, financial
condition or results of operations and prospects. In addition, if the affairs
of one or more Founded Entities in which we hold a minority stake were to
be conducted in a manner detrimental to our interests or intentions, our
business, reputation and prospects may be adversely affected.
As certain of our Founded Entities have completed equity financings, they
have entered into certain agreements with the investors participating
in such financings, including us. We are party to voting agreements
with Entrega, Inc., or Entrega Sonde Health, Inc., or Sonde and Seaport
Therapeutics, Inc. or Seaport; investors’ rights agreements with Akili,
Vedanta, Entrega, Sonde, Seaport and Vor Biopharma Inc., or Vor, and
stockholders’ agreements with Gelesis, Akili, Vedanta, Entrega, and Sonde,
pursuant to which we are subject to certain restrictions on the transfer
or sale of shares (e.g., pre-emptive rights or drag-along, tag-along rights
or lock up agreements), and we may not be able freely to transfer our
interest in such Founded Entities or procure the sale of the entire issued
share capital of such Founded Entities, similar to other investors who are
party to these agreements. In addition, many of our Founded Entities have
employee share plans which further dilute our interest in such business. If
the affairs of one or more of our Founded Entities were to be conducted or
impacted in a manner detrimental to our interests or intentions the value
we are able to realize from such entity may be diminished. For example, in
October 2023, Gelesis ceased operations and filed a voluntary petition for
Chapter 7 bankruptcy liquidation. If we were unable to realize our interest
in a Founded Entity or suffer dilution of our shareholding, this could have
a material adverse effect on our business, financial condition or results of
operation and prospects.
Our overall value may be dominated by a single or limited number of our
Founded Entities.
A large proportion of our overall value may at any time reside in a small
proportion of our Founded Entities. Accordingly, there is a risk that if
one or more of the intellectual property or commercial rights relevant to
a valuable business were impaired, this would have a material adverse
impact on our overall value. Furthermore, a large proportion of our
overall revenue may at any time be the subject of one, or a small number
of, licensed technologies. Should the relevant licenses be terminated or
expire this would be likely to have a material adverse effect on the revenue
received by us. Any material adverse impact on the value of the business
of a Founded Entity could, in the situations described above, or otherwise,
have a material adverse effect on our business, financial condition, trading
performance and/or prospects.
We have limited information about and limited control or influence over our
Non-Controlled Founded Entities.
While we maintain ownership of equity interests in our Non-Controlled
Founded Entities, we do not maintain voting control or direct management
and development efforts for these entities. Each of these entities are
independently managed, and we do not control the clinical and regulatory
development of these Non-Controlled Founded Entities’ therapeutic
candidates. Any failure by our Non-Controlled Founded Entities to adhere
to regulatory requirements, initiate preclinical studies and clinical trials
on schedule or to obtain clearances or approvals for their therapeutic
candidates could have an adverse effect on our business, financial
condition, results of operation and prospects. The information included
in this report about our Non-Controlled Founded Entities is based on (i)
our knowledge, which may in some cases be limited, (ii) information that is
publicly available, including the public filings of SEC reporting companies,
such as Vor, and (iii) information provided to us by our Non-Controlled
Founded Entities. Where a date is provided, the information included in
Raising additional capital may cause dilution to our existing shareholders,
restrict our operations or require us to relinquish rights to current
therapeutic candidates or to any future therapeutic candidates on
unfavorable terms.
To the extent that we or our Founded Entities raise additional capital
through the sale of equity or convertible debt securities, your ownership
interest will be diluted, and the terms may include liquidation or other
preferences that adversely affect your rights as a shareholder. The
incurrence of additional indebtedness would result in increased fixed
payment obligations and could involve additional restrictive covenants,
such as limitations on our ability to incur additional debt, limitations on
our ability to acquire, sell or license intellectual property rights and other
operating restrictions that could adversely impact our ability to conduct
our business. Additionally, any future collaborations we enter into with
third parties may provide capital in the near term, but limit our potential
cash flow and revenue in the future. If we raise additional funds through
strategic partnerships and alliances and licensing arrangements with third
parties, we may have to relinquish valuable rights to our technologies or
therapeutic candidates, or grant licenses or other rights on unfavorable
terms. Any such additional fundraising efforts for us may divert our
management from their day-to-day activities, which may adversely affect
our ability to develop and commercialize therapeutic candidates that we
may identify and pursue. Moreover, such financing may result in dilution to
shareholders, imposition of debt covenants and repayment obligations, or
other restrictions that may affect our business.
In addition, if any of our Founded Entities raises funds through the issuance
of equity securities, our shareholders’ indirect equity interest in such
Founded Entity could be substantially diminished. If any of our Founded
Entities raises additional funds through collaboration and licensing
arrangements, it may be necessary to relinquish some rights to our
technologies or these therapeutic candidates or grant licenses on terms
that are not favorable to us.
If we engage in acquisitions or strategic partnerships, this may increase
our capital requirements, dilute our shareholders, cause us to incur debt or
assume contingent liabilities and subject us to other risks.
We may engage in various acquisitions and strategic partnerships in the
future, including licensing or acquiring complementary therapeutics,
intellectual property rights, technologies or businesses. Any acquisition or
strategic partnership may entail numerous risks, including:
— increased operating expenses and cash requirements;
— the assumption of indebtedness or contingent liabilities;
— the issuance of our equity securities which would result in dilution to our
shareholders;
— assimilation of operations, intellectual property, therapeutics and
therapeutic candidates of an acquired company, including difficulties
associated with integrating new personnel;
— the diversion of our management’s attention from our existing
therapeutic programs and initiatives in pursuing such an acquisition or
strategic partnership;
— retention of key employees, the loss of key personnel and uncertainties in
our ability to maintain key business relationships;
— risks and uncertainties associated with the other party to such a
transaction, including the prospects of that party and their existing
therapeutics or therapeutic candidates and regulatory approvals; and
— our inability to generate revenue from acquired intellectual property,
technology and/or therapeutics sufficient to meet our objectives or even
to offset the associated transaction and maintenance costs.
In addition, if we undertake such a transaction, we may issue dilutive
securities, assume or incur debt obligations, incur large one-time expenses
and acquire intangible assets that could result in significant future
amortization expense.
Risks Related to the Clinical Development, Regulatory Review and
Approval of our and our Founded Entities’ Therapeutic Candidates
Risks Related to Clinical Development
The therapeutic candidates within our Wholly-Owned Programs and most
of our Founded Entities’ therapeutic candidates are in preclinical or clinical
development, which is a lengthy and expensive process with uncertain
outcomes and the potential for substantial delays. We cannot give any
assurance that any of our and our Founded Entities’ therapeutic candidates
will receive regulatory clearance, authorization or approval, which is
necessary before they can be commercialized.
Before obtaining marketing clearance, certification, authorization or
approval from regulatory authorities or notified bodies for the sale of
our or our Founded Entities’ therapeutic candidates, we or our Founded
Entities must conduct extensive clinical trials to demonstrate the safety
and efficacy, or with respect to biologics, safety, purity and potency, of the
therapeutic candidates in humans. To date, we have focused substantially
all of our efforts and financial resources on identifying, acquiring,
and developing therapeutic candidates, including conducting lead
optimization, preclinical studies and clinical trials, and providing general
and administrative support for these operations. To date, only three of our
Founded Entities’ products, Karuna’s Cobenfy, Gelesis’ Plenity and Akili’s
EndeavorRx, have received commercial approvals, with Cobenfy receiving
FDA approval, and both Plenity and EndeavorRx receiving FDA market
authorization and European marketing authorization, and we cannot be
certain that any of our internal or our Founded Entities’ other therapeutic
candidates will receive regulatory clearance, certification, authorization
or approval, the timing of such clearance, certification, authorization or
approval, if received, or that clinical trials will progress as planned. Our
or our Founded Entities’ inability to successfully complete preclinical and
clinical development could result in additional costs to us and negatively
impact our ability to generate revenue. Our future success is dependent
on our and our Founded Entities’ ability to successfully develop, obtain
regulatory clearance, certification, authorization or approval for, and then
successfully commercialize therapeutic candidates. We and our Founded
Entities, with the exceptions of Karuna, Gelesis and Akili, currently have no
drugs or biologics approved or devices cleared, certified, authorized or
approved for sale and have not generated any revenue from sales of drugs,
biologics or devices. We cannot guarantee that we or our Founded Entities
will be able in the future to develop or successfully commercialize any of
our or their therapeutic candidates.
Other than Karuna’s Cobenfy, Gelesis’ Plenity and Akili’s EndeavorRx, all
of our Wholly-Owned Programs and our Founded Entities’ therapeutic
candidates require additional development; management of preclinical,
clinical, and manufacturing activities; and/or regulatory clearances,
certification, authorization or approvals. In addition, we or our Founded
Entities may need to obtain adequate manufacturing supply; build a
commercial organization; commence marketing efforts; and obtain
coverage and reimbursement before we generate any significant revenue
from commercial therapeutic sales, if ever. Many of the therapeutic
candidates in our Wholly-Owned Programs and our Founded Entities’
therapeutic candidates are in early-stage research or translational phases
of development, and the risk of failure for these programs is high. We
cannot be certain that any of the therapeutic candidates in our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates will be
successful in clinical trials or receive regulatory approval, authorization
or clearance. Further, our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates may not receive regulatory clearance,
certification, authorization or approval even if we believe they are
successful in clinical trials. If we or our Founded Entities do not receive
regulatory clearance, certification, authorization or approval for our or
their therapeutic candidates, we may not be able to continue operations,
which may result in dissolution, out-licensing the technology or pursuing an
alternative strategy.
this report about our Non-Controlled Founded Entities is as of that date
and you should not assume that it is accurate as of any other date. As such,
there may be developments at our Non-Controlled Founded Entities of
which we are unaware that could have an adverse effect on our business,
financial condition, results of operation and prospects. For example, on
July 2, 2024, Akili Interactive Labs, Inc., merged with privately-held Virtual
Therapeutics and ceased trading as a public company.
Our Founded Entities are difficult to value given that many of their
therapeutic candidates are in the development stage.
Investments in early-stage companies, particularly privately held entities,
are inherently difficult to value since sales, cash flow and tangible asset
values are very limited, which makes the valuation highly dependent on
expectations of future development, and any future significant revenues
would only arise in the medium to longer terms and are uncertain. Equally,
investments in companies just commencing the commercial stage are
also difficult to value since sales, cash flow and tangible assets are limited,
they have only commenced initial receipts of revenues and valuations are
still dependent on expectations of future development. There can be no
guarantee that our valuation of our Founded Entities will be considered
to be correct in light of the early stage of development for many of these
entities and their future performance. As a result, we may not realize the
full value of our ownership in such Founded Entities which could adversely
affect our business and results of operations. For example, on November
15, 2019, resTORbio, Inc., or resTORbio, announced that its lead therapeutic
candidate, RTB101, did not meet its primary endpoint in its Phase 3 study
and ceased further development leading to a decline in resTORbio’s stock
price from $9.27 to $1.09 and our sale of 7,680,700 common shares of
resTORbio. As a result of the foregoing, we recognized a total cash loss of
approximately $10 million from our initial investment through sale of shares.
Certain of our and our Founded Entities’ therapeutics and therapeutic
candidates represent novel therapeutic approaches and negative
perception of any therapeutic or therapeutic candidate that we or they
develop could adversely affect our ability to conduct our business, obtain
and maintain regulatory clearance, authorization or approvals or identify
alternate regulatory pathways to market for such therapeutic candidate.
Certain of our and our Founded Entities’ therapeutic candidates are
considered relatively new and novel therapeutic approaches. Our and
their success will depend upon physicians who specialize in the treatment
of diseases targeted by our and their therapeutic candidates, prescribing
potential treatments that involve the use of our and their therapeutic
candidates, if approved, in lieu of, or in addition to, existing treatments
with which they are more familiar and for which greater clinical data
may be available. Access will also depend on consumer acceptance and
adoption of therapeutics that are commercialized. In addition, responses
by the U.S., state or foreign governments to negative public perception
or ethical concerns may result in new legislation or regulations that could
limit our or our Founded Entities’ ability to develop or commercialize
any therapeutic candidates, obtain or maintain regulatory approval,
identify alternate regulatory pathways to market or otherwise achieve
profitability. More restrictive statutory regimes, government regulations
or negative public opinion would have an adverse effect on our business,
financial condition, results of operations and prospects and may delay or
impair the development and commercialization of our or our Founded
Entities’ therapeutic candidates or demand for any therapeutics we or
they may develop.
For example, in the United States and the EU, no therapeutics to date
have been approved specifically demonstrating an impact on the
microbiome as part of their therapeutic effect. Vedanta is developing a
pipeline of microbiome-derived modulators for immune and infectious
disease. Microbiome therapies may not be successfully developed or
commercialized or gain the acceptance of the public or the medical
community. Additionally, adverse events, or AEs, in non-investigational
new drug application, or IND, human clinical studies and clinical trials of
Vedanta’s therapeutic candidates or in clinical trials of other companies
developing similar therapeutics and the resulting publicity, similarly to the
AEs publicized with respect to Seres Therapeutics, Inc.’s SER-287 Phase
2 clinical trial, as well as any other AEs in the field of the microbiome,
could result in a decrease in demand for any therapeutic that Vedanta
may develop. Finally, the FDA, the EMA or other comparable foreign
regulatory authorities may lack experience in evaluating the safety and
efficacy of therapeutic candidates based on microbiome therapeutics,
which could result in a longer than expected regulatory review process,
increase expected development costs and delay or prevent potential
commercialization of therapeutic candidates.
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Additional information
Additional information
— changes in regulatory requirements and guidance that require amending
or submitting new clinical protocols;
— changes in the standard of care on which a clinical development plan was
based, which may require new or additional trials;
— the cost of clinical trials of any therapeutic candidates that we may
identify and pursue being greater than we anticipate;
— clinical trials of any therapeutic candidates that we may identify and
pursue producing negative or inconclusive results, which may result in
our deciding, or regulators requiring us, to conduct additional clinical
trials or abandon therapeutic development programs;
— transfer of manufacturing processes to larger-scale facilities operated by
a CMO, or by us, and delays or failures by our CMOs or us to make any
necessary changes to such manufacturing process;
— delays in manufacturing, testing, releasing, validating, or importing/
exporting sufficient stable quantities of therapeutic candidates that
we may identify for use in clinical trials or the inability to do any of the
foregoing; and
— factors we may not be able to control, such as current or potential
pandemics or other events that may limit patients, principal investigators
or staff or clinical site availability, result in clinical trial protocol deviations,
or impact supply of our or our Founded Entities’ therapeutic candidates.
Any inability to successfully initiate or complete clinical trials could result in
additional costs to us or impair our ability to generate revenue. In addition,
if we make manufacturing or formulation changes to our Wholly-Owned
Programs , we may be required to or we may elect to conduct additional
preclinical studies or clinical trials to bridge data obtained from our
modified therapeutic candidates to data obtained from preclinical and
clinical research conducted using earlier versions. Clinical trial delays
could also shorten any periods during which our therapeutics have
patent protection and may allow our competitors to bring therapeutics
to market before we do, which could impair our ability to successfully
commercialize therapeutic candidates and may harm our business and
results of operations.
We could also encounter delays if a clinical trial is suspended or terminated
by us, by the data safety monitoring board, or DSMB, or by the FDA or
other comparable foreign regulatory authorities, or if the IRBs of the
institutions in which such trials are being conducted suspend or terminate
the participation of their clinical investigators and sites subject to their
review. Such authorities may suspend or terminate a clinical trial due
to a number of factors, including failure to conduct the clinical trial
in accordance with regulatory requirements or our clinical protocols,
inspection of the clinical trial operations or trial site by the FDA or other
comparable foreign regulatory authorities resulting in the imposition of
a clinical hold, unforeseen safety issues or adverse side effects, failure
to demonstrate a benefit from using a therapeutic candidate, changes in
governmental regulations or administrative actions or lack of adequate
funding to continue the clinical trial.
Moreover, principal investigators for our clinical trials may serve as scientific
advisors or consultants to us from time to time and receive compensation
in connection with such services. Under certain circumstances, we may be
required to report some of these relationships to the FDA or comparable
foreign regulatory authorities. The FDA or comparable foreign regulatory
authority may conclude that a financial relationship between us and
a principal investigator has created a conflict of interest or otherwise
affected interpretation of the study. The FDA or comparable foreign
regulatory authority may therefore question the integrity of the data
generated at the applicable clinical trial site and the utility of the clinical
trial itself may be jeopardized. This could result in a delay in approval,
or rejection, of our marketing applications by the FDA or comparable
foreign regulatory authority, as the case may be, and may ultimately lead
to the denial of marketing approval of one or more of our Wholly-Owned
Programs or our Founded Entities’ therapeutic candidates.
Delays in the initiation, conduct or completion of any clinical trial of
the therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates will increase our costs, slow
down the therapeutic candidate development and approval process and
delay or potentially jeopardize our ability to commence therapeutic sales
and generate revenue. In addition, many of the factors that cause, or lead
to, a delay in the commencement or completion of clinical trials may also
ultimately lead to the denial of regulatory approval of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates. In the event we identify any additional therapeutic
candidates to pursue, we cannot be sure that submission of an IDE, IND,
CTA, or equivalent application, as applicable, will result in the FDA or
comparable foreign regulatory authority allowing clinical trials to begin
in a timely manner, if at all. Any of these events could have a material
adverse effect on our business, prospects, financial condition and results
of operations.
Preclinical development is uncertain. Our preclinical programs may
experience delays or may never advance to clinical trials, which would
adversely affect our ability to obtain regulatory clearance, authorization
or approvals or commercialize these programs on a timely basis or at all,
which would have an adverse effect on our business.
Certain of our Wholly-Owned Programs are in the preclinical stage, and
their risk of failure is high. Before we can commence clinical trials for a
therapeutic candidate, we must complete extensive preclinical testing
and studies that support our planned INDs, in the United States, or similar
applications in other jurisdictions. We cannot be certain of the timely
completion or outcome of our preclinical testing and studies and cannot
predict if the FDA or other regulatory authorities will accept our proposed
clinical programs or if the outcome of our preclinical testing and studies
will ultimately support the further development of our programs. As a
result, we cannot be sure that we will be able to submit INDs or similar
applications for our preclinical programs on the timelines we expect, if at
all, and we cannot be sure that submission of INDs or similar applications
will result in the FDA or other regulatory authorities allowing clinical
trials to begin.
Clinical trials of our or our Founded Entities’ therapeutic candidates may
be delayed, and certain programs may never advance in the clinic or may
be more costly to conduct than we anticipate, any of which can affect our
ability to fund our company and would have a material adverse impact on
our platform or our business.
Clinical testing is expensive, time-consuming, and subject to uncertainty.
We cannot guarantee that any of our ongoing and planned clinical trials
will be conducted as planned or completed on schedule, if at all. Moreover,
even if these trials are initiated or conducted on a timely basis, issues may
arise that could result in the suspension or termination of such clinical trials.
A failure of one or more clinical trials can occur at any stage of testing, and
our clinical trials may not be successful. Events that may prevent successful
or timely initiation or completion of clinical trials include:
— inability to generate sufficient preclinical, toxicology, or other in vivo or in
vitro data to support the initiation or continuation of clinical trials;
— delays in confirming target engagement, patient selection or other
relevant biomarkers to be utilized in preclinical and clinical therapeutic
candidate development;
— delays in reaching a consensus with regulatory agencies as to the design
or implementation of our clinical studies;
— delays in reaching agreement on acceptable terms with prospective
contract research organizations, or CROs, and clinical trial sites, the
terms of which can be subject to extensive negotiation and may vary
significantly among different CROs and clinical trial sites;
— delays in identifying, recruiting and training suitable clinical investigators;
— delays in obtaining required Institutional Review Board, or IRB, or other
reviewing bodies approval or positive opinion at each clinical trial site;
— imposition of a temporary or permanent clinical hold by regulatory
agencies for a number of reasons, including after review of an IND
or amendment, clinical trial application, or CTA, or amendment,
investigational device exemption, or IDE, or supplement, or equivalent
application or amendment; as a result of a new safety finding that
presents unreasonable risk to clinical trial participants; or a negative
finding from an inspection of our clinical trial operations or study sites;
— developments in trials for other therapeutic candidates with the same
targets or related modalities as our or our Founded Entities’ therapeutic
candidates conducted by competitors that raise regulatory or safety
concerns about risk to patients of the treatment, or if the FDA or similar
foreign authorities find that the investigational protocol or plan is clearly
deficient to meet its stated objectives;
— difficulties in securing access to materials for the comparator arm of
certain of our clinical trials;
— delays in identifying, recruiting and enrolling suitable patients to
participate in clinical trials, and delays caused by patients withdrawing
from clinical trials or failing to return for post-treatment follow-up;
— difficulties in finding a sufficient number of trial sites, or trial sites
deviating from trial protocol or dropping out of a trial;
— difficulty collaborating with patient groups and investigators;
— failure by CROs, other third parties, or us to adhere to clinical trial
requirements;
— failure by CROs, other third parties, or us to perform in accordance
with the FDA’s or any other regulatory authority’s current good
clinical practices, or GCP, requirements, or regulatory guidelines in
other countries;
— occurrence of AEs or undesirable side effects or other unexpected
characteristics associated with the therapeutic candidate that are viewed
to outweigh its potential benefits;
If we encounter difficulties enrolling patients in clinical trials, our clinical
development activities could be delayed or otherwise adversely affected.
Identifying and qualifying trial participants to participate in clinical studies
is critical to our success. The timing of our clinical studies depends on the
speed at which we can recruit trial participants to participate in testing
the therapeutic candidates within our Wholly-Owned Programs . Delays
in enrollment may result in increased costs or may affect the timing or
outcome of the planned clinical trials, which could prevent completion of
these trials and adversely affect our ability to advance the development
of the therapeutic candidates within our Wholly-Owned Programs . If trial
participants are unwilling to participate in our studies because of negative
publicity from AEs in our trials or other trials of similar therapeutics, or
those related to specific therapeutic area, or for other reasons, including
competitive clinical studies for similar patient populations, the timeline for
recruiting trial participants, conducting studies, and obtaining regulatory
approval of potential therapeutics may be delayed.. Any delays could
result in increased costs, delays in advancing our therapeutic candidate
development, delays in testing the effectiveness of the therapeutic
candidates within our Wholly-Owned Programs , or termination of the
clinical studies altogether.
We may not be able to identify, recruit and enroll a sufficient number of trial
participants, or those with required or desired characteristics to achieve
diversity in a study, to complete our clinical studies in a timely manner.
Patient and subject enrollment is affected by factors including:
— the size and nature of a patient population;
— the patient eligibility criteria defined in the applicable clinical trial
protocols, which may limit the patient populations eligible for
clinical trials to a greater extent than competing clinical trials for the
same indication;
— the size of the study population required for analysis of the trial’s
primary endpoints;
— the severity of the disease under investigation;
— the proximity of patients to a trial site;
— the inclusion and exclusion criteria for the trial in question;
— the design of the trial protocol;
— the ability to recruit clinical trial investigators with the appropriate
competencies and experience;
— the availability and efficacy of approved medications or therapies for the
disease or condition under investigation;
— clinicians’ and patients’ perceptions as to the potential advantages and
side effects of the therapeutic candidate being studied in relation to
other available therapies and therapeutic candidates;
— the ability to obtain and maintain patient consents; and
— the risk that patients enrolled in clinical trials will not complete such trials,
for any reason.
Furthermore, our or our collaborators’ ability to successfully initiate, enroll
and conduct a clinical trial outside the United States is subject to numerous
additional risks, including:
— difficulty in establishing or managing relationships with CROs
and physicians;
— differing standards for the conduct of clinical trials;
— differing standards of care for patients with a particular disease;
— an inability to locate qualified local consultants, physicians and
partners; and
— the potential burden of complying with a variety of foreign laws, medical
standards and regulatory requirements, including the regulation of
pharmaceutical and biotechnology therapeutics and treatments.
If we have difficulty enrolling sufficient numbers of patients to conduct
clinical trials as planned, we may need to delay or terminate clinical trials,
either of which would have an adverse effect on our business.
In addition, the FDA’s and other regulatory authorities’ policies with
respect to clinical trials may change and additional government regulations
may be enacted. For instance, the regulatory landscape related to clinical
trials in the EU recently evolved. The EU Clinical Trials Regulation, or
CTR, which was adopted in April 2014 and repeals the EU Clinical Trials
Directive, became applicable on January 31, 2022. While the EU Clinical
Trials Directive required a separate clinical trial application, or CTA, to
be submitted in each member state in which the clinical trial takes place,
to both the competent national health authority and an independent
ethics committee, the CTR introduces a centralized process and only
requires the submission of a single application for multicenter trials. The
CTR allows sponsors to make a single submission to both the competent
authority and an ethics committee in each member state, leading to a
single decision per member state. The assessment procedure of the
CTA has been harmonized as well, including a joint assessment by all
member states concerned, and a separate assessment by each member
state with respect to specific requirements related to its own territory,
including ethics rules. Each member state’s decision is communicated
to the sponsor via the centralized EU portal. Once the CTA is approved,
clinical study development may proceed. The CTR transition period ended
on January 31, 2025, and all clinical trials (and related applications) are
now fully subject to the provisions of the CTR. Compliance with the CTR
requirements by us and our third-party service providers, such as CROs,
may impact our developments plans.
It is currently unclear to what extent the UK will seek to align its regulations
with the EU. The UK regulatory framework in relation to clinical trials is
derived from pre-existing EU legislation (as implemented into UK law,
through secondary legislation), and after Brexit, EU laws on clinical trials
(including the (EU) CTR) have not been directly applicable in Great Britain
(i.e., the UK excluding Northern Ireland). The extent to which the regulation
of clinical trials in the UK will mirror the (EU) CTR in the long term is not yet
certain, however, on December 12, 2024, the UK government introduced
a legislative proposal - the Medicines for Human Use (Clinical Trials)
Amendment Regulations 2024 - that, if implemented, will replace the
current regulatory framework for clinical trials in the UK. The legislative
proposal aims to provide a more flexible regime to make it easier to
conduct clinical trials in the UK, increase the transparency of clinical trials
conducted in the UK and make clinical trials more patient-centered. The UK
government has provided the legislative proposal to the UK Parliament for
its review and approval. Once the legislative proposal is approved (with or
without amendment), it will be adopted into UK law which is expected in
early 2026.Under the terms of the Northern Ireland Protocol, provisions of
the (EU) CTR which relate to the manufacture and import of investigational
medicinal products and auxiliary medicinal products currently apply in
Northern Ireland.
The results of early-stage clinical trials and preclinical studies may not be
predictive of future results. Initial data in clinical trials may not be indicative
of results obtained when these trials are completed or in later stage trials.
The results of preclinical studies may not be predictive of the results of
clinical trials, and the results of any early-stage clinical trials we commence
may not be predictive of the results of the later-stage clinical trials. The
results of preclinical studies and clinical trials in one set of patients or
disease indications, or from preclinical studies or clinical trials that we
did not lead, may not be predictive of those obtained in another. In some
instances, there can be significant variability in safety or efficacy results
between different clinical trials of the same therapeutic candidate due
to numerous factors, including changes in trial procedures set forth in
protocols, differences in the size and type of the patient populations,
changes in and adherence to the dosing regimen and other clinical trial
protocols and the rate of dropout among clinical trial participants. In
addition, preclinical and clinical data are often susceptible to various
interpretations and analyses, and many companies that have believed
their therapeutic candidates performed satisfactorily in preclinical studies
and clinical trials have nonetheless failed to obtain marketing approval.
A number of companies in the pharmaceutical, biopharmaceutical and
biotechnology industries have suffered significant setbacks in clinical
development even after achieving promising results in earlier studies,
and any such setbacks in our clinical development could have a material
adverse effect on our business and operating results. Even if early-stage
clinical trials are successful, we may need to conduct additional clinical
trials of our Wholly-Owned Programs in additional patient populations or
under different treatment conditions before we are able to seek approvals
or clearances from the FDA or other comparable foreign regulatory
authorities to market and sell these therapeutic candidates. Our failure
to obtain marketing authorization for the therapeutic candidates within
our Wholly-Owned Programs would substantially harm our business,
prospects, financial condition and results of operations.
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Additional information
Additional information
Additionally, if any of the therapeutic candidates within our Wholly-
Owned Programs or those of our Founded Entities receives marketing
authorization, the FDA could impose contraindications or a boxed
warning in the labeling of the therapeutic. For any of our drug or biologic
therapeutic candidates receiving marketing authorization, the FDA could
require us to adopt a risk evaluation and mitigation strategy, or REMS,
and could apply elements to assure safe use to ensure that the benefits
of the therapeutic outweigh its risks, which may include, among other
things, a Medication Guide outlining the risks of the therapeutic for
distribution to patients, a requirement that clinicians or health care settings
to become certified prior to prescribing and to participate in additional
REMS activities, such as training, patient counseling, and monitoring, and
a communication plan to health care practitioners. Furthermore, if we or
others later identify undesirable side effects caused by the therapeutic
candidates within our Wholly-Owned Programs or those of our Founded
Entities , once approved, cleared, certified, or authorized, several
potentially significant negative consequences could result, including:
— regulatory authorities may suspend or withdraw approvals of such
therapeutic candidate, or seek an injunction against its manufacture or
distribution;
— regulatory authorities may require additional warnings in the labeling,
including boxed warnings, or issue safety alerts, Dear Healthcare
Provider letters, press releases or other communications containing
warnings or other safety information about the therapeutic;
— we or our Founded Entities may be required by the FDA to implement a
REMS for a marketed drug or biologic or similar risk mitigation measures
by foreign regulatory authorities;
— we or our Founded Entities may be required to change the way a
therapeutic candidate is administered or conduct additional clinical trials;
— we or our Founded Entities may be subject to fines, injunctions or the
imposition of civil or criminal penalties;
— we or our Founded Entities could be sued and held liable for harm
caused to patients; and
— our or our Founded Entities’ reputations may suffer.
Any of these occurrences could prevent us or our Founded Entities from
achieving or maintaining market acceptance of the particular therapeutic
candidate, if approved, authorized, cleared, or certified, and may harm our
business, financial condition and prospects significantly.
Risks Related to Regulatory Review and Approval
Our clinical trials may fail to demonstrate substantial evidence of the
safety and effectiveness of therapeutic candidates that we may identify
and pursue for their intended uses, which would prevent, delay or limit the
scope of regulatory clearance, certification, authorization or approval and
potential commercialization.
Before obtaining regulatory approvals for the commercial sale of any of
our drug or biological therapeutic candidates, we must demonstrate
through lengthy, complex and expensive preclinical studies and clinical
trials that the applicable therapeutic candidate is both safe and effective
for use in each target indication, and in the case of our Wholly-Owned
Programs and Founded Entities’ therapeutic candidates regulated as
biological therapeutics in the United States, that the therapeutic candidate
is safe, pure and potent for use in its targeted indication. Each therapeutic
candidate must demonstrate an adequate risk versus benefit profile in
its intended patient population and for its intended use. Similarly, before
obtaining regulatory clearances, certifications, authorization or approvals
for the commercial sale of any of the device therapeutic candidates of our
Founded Entities, our Founded Entities may be required to demonstrate
through lengthy, complex and expensive preclinical studies and clinical
trials that the applicable therapeutic candidate meets the regulatory
standard of clearance, certification, authorization or approval—for
example, substantial equivalence to a predicate medical device or a
reasonable assurance of safety or effectiveness, as applicable—for
its intended use.
Clinical testing is expensive and can take many years to complete, and its
outcome is inherently uncertain. Failure can occur at any time during the
clinical development process. Most therapeutic candidates that begin
clinical trials are never approved by regulatory authorities or notified
bodies for commercialization. We may be unable to design and execute a
clinical trial to support marketing authorization or certification.
Use of the therapeutic candidates within our Wholly-Owned Programs
or the therapeutic candidates being developed by our Founded Entities
could be associated with side effects, AEs or other properties or safety
risks, which could delay or halt their clinical development, prevent their
regulatory clearance, authorization or approval, cause us to suspend or
discontinue clinical trials, abandon a therapeutic candidate, limit their
commercial potential, if cleared, authorized or approved, or result in other
significant negative consequences that could severely harm our business,
prospects, operating results and financial condition.
As is the case with pharmaceuticals generally, it is likely that there may
be side effects and AEs associated with our and our Founded Entities’
drug or biologic therapeutic candidates’ use. Similarly, investigational
devices may also be subject to side effects and AEs. Results of our clinical
trials or those being conducted by Founded Entities could reveal a high
and unacceptable severity and prevalence of side effects or unexpected
characteristics. Undesirable side effects caused by these therapeutic
candidates could cause us, our Founded Entities or regulatory authorities
to interrupt, delay or halt clinical trials and could result in more restrictive
labeling or the delay or denial of regulatory clearance, certification,
authorization or approval by the FDA, the EMA or other comparable
foreign regulatory authorities, or notified bodies (when applicable). The
side effects related to the therapeutic candidate could affect patient
recruitment or the ability of enrolled patients to complete the trial or result
in potential product liability claims. Any of these occurrences may harm our
business, financial condition and prospects significantly.
Moreover, if therapeutic candidates within our Wholly-Owned Programs
are associated with undesirable side effects in preclinical studies or
clinical trials or have characteristics that are unexpected, we may elect to
abandon their development or limit their development to more narrow
uses or subpopulations in which the undesirable side effects or other
characteristics are less prevalent, less severe or more acceptable from
a risk-benefit perspective, which may limit the commercial expectations
for the therapeutic candidate if approved. We may also be required to
modify or terminate our study plans based on findings in our preclinical
studies or clinical trials. Many therapeutic candidates that initially show
promise in early-stage testing may later be found to cause side effects that
prevent further development. As we work to advance existing therapeutic
candidates and to identify new therapeutic candidates, we cannot be
certain that later testing or trials of therapeutic candidates that initially
showed promise in early testing will not be found to cause similar or
different unacceptable side effects that prevent their further development.
It is possible that as we test the therapeutic candidates within our Wholly-
Owned Programs in larger, longer and more extensive clinical trials, or as
the use of these therapeutic candidates becomes more widespread if they
receive regulatory clearance or approval, illnesses, injuries, discomforts
and other AEs that were observed in earlier trials, as well as conditions
that did not occur or went undetected in previous trials, will be reported
by subjects. If such side effects become known later in development
or upon approval, if any, such findings may harm our business, financial
condition and prospects significantly. Additionally, adverse developments
in clinical trials of pharmaceutical, biopharmaceutical or biotechnology
therapeutics conducted by others may cause the FDA or other regulatory
oversight bodies to suspend or terminate our clinical trials or to change the
requirements for approval of any of our Wholly-Owned Programs .
In addition to side effects caused by the therapeutic candidate, the
administration process or related procedures also can cause adverse side
effects. If any such AEs occur, our clinical trials could be suspended or
terminated. If we are unable to demonstrate that any AEs were not caused
by the therapeutic candidate, the FDA, the European Commission, the
EMA, or other regulatory authorities or bodies could order us to cease
further development of, or deny clearance, certification or approval of,
a therapeutic candidate for any or all targeted indications. Even if we
can demonstrate that all future serious adverse events, or SAEs, are not
therapeutic-related, such occurrences could affect patient recruitment
or the ability of enrolled patients to complete the trial. Moreover, if we
elect, or are required, to not initiate, delay, suspend or terminate any
future clinical trial of any of our Wholly-Owned Programs , the commercial
prospects of such therapeutic candidates may be harmed and our ability to
generate therapeutic revenues from any of these therapeutic candidates
may be delayed or eliminated. Any of these occurrences may harm our
ability to develop other therapeutic candidates, and may harm our
business, financial condition and prospects significantly.
purity, efficacy and potency. Securing regulatory clearance, authorization
or approval also requires the submission of information about the
therapeutic manufacturing process to, and inspection of manufacturing
facilities by, the relevant regulatory authority. Any therapeutic candidates
we or our Founded Entities develop may not be effective, may be only
moderately effective, or may prove to have undesirable or unintended side
effects, toxicities or other characteristics that may preclude our obtaining
marketing clearance, certification, authorization or approval or prevent or
limit commercial use, if cleared, certified, authorized or approved.
The process of obtaining marketing clearance, certification, authorization
or approval, both in the United States and abroad, is expensive, may
take many years if additional clinical trials are required, if clearance,
certification, authorization or approval is obtained at all, and can
vary substantially based upon a variety of factors, including the type,
complexity and novelty of the therapeutic candidates involved. Changes
in marketing authorization policies during the development period,
changes in or the enactment of additional statutes or regulations, or
changes in regulatory review for each submitted therapeutic application,
may cause delays in the clearance, authorization, approval or rejection of
an application. The FDA, comparable authorities and notified bodies in
other countries have substantial discretion in the approval and certification
process and may refuse to accept any application or may decide that
our data are insufficient for clearance, authorization or approval and
require additional preclinical, clinical or other studies. In addition,
varying interpretations of the data obtained from preclinical and clinical
testing could delay, limit, or prevent marketing approval or certification
of a therapeutic candidate. Any marketing approval or certification we
ultimately obtain may be limited or subject to restrictions or post-market
commitments that render the cleared, certified, authorized or approved
therapeutic not commercially viable.
If we experience delays in obtaining clearance, certification, authorization
or approval or if we fail to obtain clearance, certification, authorization or
approval of any therapeutic candidates we may develop, the commercial
prospects for those therapeutic candidates may be harmed, and our ability
to generate revenues will be materially impaired.
We have conducted, and may continue to conduct in the future, clinical
trials for therapeutic candidates outside the United States, and the FDA,
the EMA and comparable foreign regulatory authorities may not accept
data from such trials.
We have conducted clinical trials outside of the United States in the past,
and may in the future choose to conduct one or more clinical trials outside
the United States, including in Europe. For example, we have conducted
clinical trials in Australia and are conducting or may conduct clinical trials in
additional locations outside the United States, including without limitation
Argentina, Australia, Brazil, Bulgaria, Chile, Colombia, Czech Republic,
Finland, Georgia, Greece, India, Malaysia, Mexico, Moldova, Philippines,
Poland, Romania, Spain, South Africa, South Korea, Thailand, Ukraine,
and the United Kingdom. The acceptance of study data from clinical trials
conducted outside the United States or another jurisdiction by the FDA,
the EMA or any comparable foreign regulatory authority may be subject
to certain conditions or may not be accepted at all. For example, in cases
where data from foreign clinical trials are intended to serve as the sole
basis for approval of a drug or biologic in the United States, the FDA
will generally not approve the application on the basis of foreign data
alone unless (i) the data are applicable to the U.S. population and U.S.
medical practice; (ii) the trials were performed by clinical investigators
of recognized competence and pursuant to GCP regulations; and (iii)
if necessary, the FDA is able to validate the data through an on-site
inspection or other appropriate means. In addition, even where the foreign
study data are not intended to serve as the sole basis for approval, if the
study was not otherwise subject to an IND, the FDA will not accept the
data as support for an application for marketing approval unless the study
was conducted in accordance with GCP requirements and unless the FDA
is able to validate the data from the study through an onsite inspection
if deemed necessary. Many foreign regulatory authorities have similar
approval requirements. In addition, such foreign trials would be subject
to the applicable local laws of the foreign jurisdictions where the trials
are conducted. There can be no assurance that the FDA, the EMA or
any comparable foreign regulatory authority will accept data from trials
conducted outside of the United States or the applicable jurisdiction. If
the FDA, the EMA or any comparable foreign regulatory authority does
not accept such data, it would result in the need for additional trials, which
would be costly and time-consuming and delay aspects of our business
plan, and which may result in therapeutic candidates that we may develop
not receiving approval, authorization or clearance for commercialization in
the applicable jurisdiction.
We cannot be certain that our clinical trials will be successful. Additionally,
any safety concerns observed in any one of our clinical trials in our
targeted indications could limit the prospects for regulatory clearances,
certification, authorization or approval of our therapeutic candidates in
those and other indications, which could have a material adverse effect
on our business, financial condition and results of operations. In addition,
even if such clinical trials are successfully completed, we cannot guarantee
that the FDA, the EMA or comparable foreign regulatory authorities or
notified bodies (when applicable) will interpret the results as we do, and
more trials could be required before we submit our therapeutic candidates
for clearance, certification or approval. Even if we believe that our and
our Founded Entities’ clinical trials and preclinical studies demonstrate
the safety and efficacy of our and their therapeutic candidates, only the
FDA and other comparable regulatory agencies may ultimately make such
determination. No regulatory agency has made any such determination
that any of our Wholly-Owned Programs or those of our Founded Entities
are safe or effective for use for any indication.
Additionally, we may utilize an “open-label” trial design for some of our
future clinical trials. An open-label trial is one where both the patient and
investigator know whether the patient is receiving the test article or either
an existing approved drug or placebo. Open-label trials are subject to
various limitations that may exaggerate any therapeutic effect as patients
in open-label studies are aware that they are receiving treatment. Open-
label trials may be subject to a “patient bias” where patients perceive their
symptoms to have improved merely due to their awareness of receiving
an experimental treatment. Patients selected for early clinical studies
often include the most severe sufferers and their symptoms may have
been bound to improve notwithstanding the new treatment. In addition,
open-label trials may be subject to an “investigator bias” where those
assessing and reviewing the physiological outcomes of the clinical trials
are aware of which patients have received treatment and may interpret the
information of the treated group more favorably given this knowledge.
The opportunity for bias in clinical trials as a result of open-label design
may not be adequately handled and may cause any of our trials that utilize
such design to fail or to be considered inadequate and additional trials
may be necessary to support future marketing applications. Moreover,
results acceptable to support approval in one jurisdiction may be deemed
inadequate by another regulatory authority to support regulatory
approval in that other jurisdiction. To the extent that the results of the
trials are not satisfactory to the FDA, the EMA or comparable foreign
regulatory authorities for support of a marketing application, we may be
required to expend significant resources, which may not be available to
us, to conduct additional trials in support of potential approval of our
Wholly-Owned Programs . Even if regulatory approval is secured for a
therapeutic candidate, the terms of such approval may limit the scope
and use of the specific therapeutic candidate, which may also limit its
commercial potential.
Even if we complete the necessary preclinical studies and clinical trials,
the marketing approval and certification process is expensive, time-
consuming and uncertain and may prevent us from obtaining clearance,
certification, authorization or approvals for the potential commercialization
of therapeutic candidates.
Any therapeutic candidate we may develop and the activities associated
with their development and potential commercialization, including
their design, testing, manufacture, safety, efficacy, recordkeeping,
labeling, storage, approval, certification, advertising, promotion, sale
and distribution, are subject to comprehensive regulation by the FDA
and other comparable foreign regulatory authorities. Failure to obtain
marketing authorization or certification for a therapeutic candidate will
prevent us from commercializing the therapeutic candidate in a given
jurisdiction. For example, although Karuna, Gelesis and Akili have received
commercial approvals, with Cobenfy receiving FDA approval, and both
Plenity and EndeavorRx receiving marketing authorization from the FDA
and being CE marked in the EU, we and our Founded Entities have not
received clearance, certification, authorization or approval to market any
of our or their other therapeutic candidates from regulatory authorities
in any jurisdiction and it is possible that none of the other therapeutic
candidates we and our Founded Entities may seek to develop in the future
will ever obtain regulatory clearance, authorization or approval. We have
no experience in filing and supporting the applications necessary to gain
marketing clearance, certification, authorization or approval and expect
to rely on third-party CROs or regulatory consultants to assist us in this
process. Securing regulatory clearance, certification, authorization or
approval requires the submission of extensive preclinical and clinical data
and supporting information to the various regulatory authorities for each
therapeutic indication to establish the therapeutic candidate’s safety,
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Furthermore, clearance, authorization or approval by the FDA in the
United States, if obtained, does not ensure approval or certification
by regulatory authorities or notified bodies in other countries or
jurisdictions. To market any therapeutics outside of the United States,
we or our Founded Entities must establish and comply with numerous
and varying regulatory requirements of other countries regarding safety
and effectiveness. Clinical trials conducted in one country may not be
accepted by regulatory authorities or notified bodies in other countries,
and regulatory approval or certification in one country does not mean that
regulatory approval or certification will be obtained in any other country.
Approval and certification processes vary among countries and can involve
additional therapeutic testing and validation and additional or different
administrative review periods from those in the United States, including
additional preclinical studies or clinical trials, as clinical trials conducted in
one jurisdiction may not be accepted by regulatory authorities or notified
bodies in other jurisdictions. In many jurisdictions outside the United
States, a therapeutic candidate must be approved for reimbursement
before it can be approved for sale in that jurisdiction. In some cases,
the price that we intend to charge for our therapeutics is also subject
to approval. Seeking foreign regulatory approval or certification could
result in difficulties and costs for us or our Founded Entities and require
additional preclinical studies or clinical trials which could be costly and
time-consuming. Regulatory requirements can vary widely from country
to country and could delay or prevent the introduction of our or our
Founded Entities’ therapeutics in those countries. The foreign regulatory
approval and certification process involves all of the risks associated
with FDA approval. We do not have any therapeutics approved for sale
in international markets, though two of our Founded Entities, Akili and
Gelesis, do. If we or our Founded Entities fail to comply with regulatory
requirements in international markets or to obtain and maintain required
approvals, or if regulatory approvals or certifications in international
markets are delayed, our target market will be reduced and our ability to
realize the full market potential of our therapeutics will be harmed.
If the FDA does not conclude that our therapeutic candidates satisfy the
requirements for the Section 505(b)(2) regulatory approval pathway, or if
the requirements for such therapeutic candidates under Section 505(b)
(2) are not as we expect, the approval pathway for those therapeutic
candidates will likely take significantly longer, cost significantly more and
entail significantly greater complications and risks than anticipated, and in
either case may not be successful.
We plan to develop one or more therapeutic candidates for which we
may plan to seek approval under the 505(b)(2) regulatory pathway. The
Drug Price Competition and Patent Term Restoration Act of 1984, also
known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA.
Section 505(b)(2) permits the filing of an NDA where at least some of
the information required for approval comes from studies that were not
conducted by or for the applicant and for which the applicant has not
obtained a right of reference. Section 505(b)(2), if applicable to us under
the FDCA, would allow an NDA we submit to the FDA to rely in part on data
in the public domain or the FDA’s prior conclusions regarding the safety
and effectiveness of approved compounds, which could expedite the
development program for our future therapeutic candidates by potentially
decreasing the amount of nonclinical and/or clinical data that we would
need to generate in order to obtain FDA approval.
If the FDA does not allow us to pursue the Section 505(b)(2) regulatory
pathway as anticipated, we may need to conduct additional nonclinical
studies and/or clinical trials, provide additional data and information, and
meet additional standards for regulatory approval. If this were to occur,
the time and financial resources required to obtain FDA approval for such
therapeutic candidates, and complications and risks associated with such
therapeutic candidates, would likely substantially increase. Moreover,
inability to pursue the Section 505(b)(2) regulatory pathway could result
in new competitive products reaching the market more quickly than any
therapeutic candidates we developed, which could adversely impact our
competitive position and prospects. Even if we are allowed to pursue
the Section 505(b)(2) regulatory pathway, we cannot assure you that any
therapeutic candidates we develop will receive the requisite approval for
commercialization.
In addition, notwithstanding the approval of a number of products by the
FDA under Section 505(b)(2), certain pharmaceutical companies and others
have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s
interpretation of Section 505(b)(2) is successfully challenged, the FDA
may change its 505(b)(2) policies and practices, which could delay or even
prevent the FDA from approving any NDA that we submit under Section
505(b)(2). In addition, the pharmaceutical industry is highly competitive,
and Section 505(b)(2) NDAs are subject to certain requirements designed
to protect the patent rights of sponsors of previously approved drugs that
are referenced in a Section 505(b)(2) NDA. These requirements may give
rise to patent litigation and mandatory delays in approval of our NDAs for
If we are unable to obtain regulatory clearance, certification, authorization
or approval in one or more jurisdictions for any therapeutic candidates that
we may identify and develop, our business could be substantially harmed.
We cannot commercialize a therapeutic until the appropriate regulatory
authorities or notified bodies have reviewed and cleared, certified,
authorized or approved the therapeutic candidate. Clearance, certification,
authorization or approval by the FDA, the EMA and comparable foreign
regulatory authorities and notified bodies is lengthy and unpredictable,
and depends upon numerous factors, including substantial discretion of
the regulatory authorities and notified bodies. Clearance, certification,
authorization or approval policies, regulations, or the type and amount
of preclinical or clinical data necessary to gain clearance, authorization
or approval may change during the course of a therapeutic candidate’s
development and may vary among jurisdictions, which may cause delays
in the clearance, certification, authorization or approval or the decision
not to clear, certify, authorize or approve an application. Karuna, Gelesis
and Akili have obtained commercial approvals, with Cobenfy receiving
FDA approval, and Plenity and EndeavorRx both receiving marketing
authorization from the FDA and being CE marked in the EU, but we and our
Founded Entities have not obtained regulatory clearance, authorization or
approval for any other therapeutic candidates, and it is possible that our
current therapeutic candidates and any other therapeutic candidates which
we and our Founded Entities may seek to develop in the future will not
ever obtain regulatory clearance, certification, authorization or approval.
We cannot be certain that any of our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates will receive regulatory clearance,
certification, authorization or approval or be successfully commercialized
even if we or our Founded Entities receive regulatory clearance,
certification, authorization or approval.
Obtaining marketing clearance, certification, authorization or approval
is an extensive, lengthy, expensive and inherently uncertain process,
and regulatory authorities and notified bodies may delay, limit or deny
clearance , certification, authorization or approval of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates for many reasons, including but not limited to:
— the inability to demonstrate to the satisfaction of the FDA, the EMA
or comparable foreign regulatory authorities that the applicable
therapeutic candidate is safe, pure, potent or effective as a treatment for
our targeted indications or otherwise meets the applicable regulatory
standards for clearance, authorization or approval;
— the FDA, the EMA or comparable foreign regulatory authorities may
disagree with the design, endpoints or implementation of our or our
Founded Entities’ clinical trials;
— the population studied in the clinical program may not be sufficiently
broad or representative to assure safety or efficacy in the full population
for which we or our Founded Entities seek clearance, authorization
or approval;
— the FDA, the EMA or comparable foreign regulatory authorities may
require additional preclinical studies or clinical trials beyond those that
we or our Founded Entities currently anticipate;
— the FDA, the EMA or comparable foreign regulatory authorities may
disagree with our or our Founded Entities’ interpretation of data from
preclinical studies or clinical trials;
— the data collected from clinical trials of therapeutic candidates that we
may identify and pursue may not be sufficient to support the submission
of an NDA, biologics license application, or BLA, or other submission
for regulatory clearance, authorization or approval in the United States
or elsewhere;
— as applicable, we or our Founded Entities may be unable to demonstrate
to the FDA, the EMA or comparable foreign regulatory authorities that
a therapeutic candidate’s risk-benefit ratio for its proposed indication
is acceptable;
— the FDA, the EMA or comparable foreign regulatory authorities may
identify deficiencies in the manufacturing processes, test procedures and
specifications, or facilities of third-party manufacturers with which we or
our Founded Entities contract for clinical and commercial supplies; and
— the clearance, certification, authorization or approval policies or
regulations of the FDA, the EMA or comparable foreign regulatory
authorities may change in a manner that renders the clinical trial design
or data insufficient for clearance or approval.
The lengthy approval process, as well as the unpredictability of the results
of clinical trials and evolving regulatory requirements, may result in our or
our Founded Entities’ failure to obtain regulatory clearance, certification,
authorization or approval to market therapeutic candidates that we or our
Founded Entities may pursue in the United States or elsewhere, which
would significantly harm our or our Founded Entities’ business, prospects,
financial condition and results of operations.
and advertising, user fees and post-clearance, authorization or approval
modifications. Similarly, if applicable, the device components of a
combination therapeutic candidate will require any necessary clearances,
certifications or approvals or other marketing authorizations in other
jurisdictions, which may prove challenging to obtain.
The EU regulates medical devices and medicinal products separately,
through different legislative instruments, and the applicable requirements
will vary depending on the type of drug-device combination product.
For instance, drug-delivery products intended to administer a medicinal
product where the medicinal product and the device form a single integral
product are regulated as medicinal products in the EU. In such a case,
the marketing authorization application must include – where available
– the results of the assessment of the conformity of the device part with
the EU Medical Devices Regulation contained in the manufacturer’s EU
declaration of conformity of the device or the relevant certificate issued by
a notified body. If the marketing authorization application does not include
the results of the conformity assessment and where for the conformity
assessment of the device, if used separately, the involvement of a notified
body is required, the EMA or the EU member state competent authority
must require the applicant to provide a notified body opinion on the
conformity of the device. By contrast, in case of drug-delivery products
intended to administer a medicinal product where the device and the
medicinal product do not form a single integral product (but are e.g., co-
packaged), the medicinal product is regulated in accordance with the rules
for medicinal products described above while the device part is regulated
as a medical device and will have to comply with all the requirements set
forth by the Medical Devices Regulation.
Certain modifications to our Founded Entities’ device therapeutics
may require new 510(k) clearance or other marketing authorizations or
certifications and may require our Founded Entities to recall or cease
marketing their therapeutics.
Akili and Gelesis received de novo classification for EndeavorRx and
Plenity, respectively, from the FDA. Once a medical device is permitted
to be legally marketed in the United States pursuant to a 510(k) clearance,
de novo classification, or a premarket approval, or PMA, a manufacturer
may be required to notify the FDA of certain modifications to the device.
Manufacturers determine in the first instance whether a change to a
medical device requires a new premarket submission, but the FDA
may review any manufacturer’s decision. The FDA may not agree with
our Founded Entities’ decisions regarding whether new clearances,
authorizations or approvals are necessary. They may make modifications
or add additional features in the future that they believe do not require
a new 510(k) clearance, de novo marketing authorization, or approval of
a PMA or PMA amendments or supplements. If the FDA disagrees with
their determinations and requires them to submit new 510(k) notifications,
requests for de novo classification, or PMAs (or PMA supplements or
amendments) for modifications to their previously cleared or authorized
therapeutics for which they have concluded that new clearances,
authorization or approvals are unnecessary, they may be required to cease
marketing or to recall the modified therapeutic until they obtain clearance,
authorization or approval, and they may be subject to significant regulatory
fines or penalties.
In the EU, devices lawfully placed on the market pursuant to the EU Medical
Devices Directive prior to May 26, 2021 may generally continue to be made
available on the market or put into service, provided that the requirements
of the transitional provisions are fulfilled. In particular, no substantial
change must be made to the device as such a modification would
trigger the obligation to obtain a new certification under the EU Medical
Devices Regulation and therefore to have a notified body conducting
a new conformity assessment of the devices. Once our devices will be
certified under the EU Medical Devices Regulation, we must inform the
notified body that carried out the conformity assessment of the medical
devices that we market or sell in the EU and the EEA of any planned
substantial changes to our quality system or substantial changes to our
medical devices that could affect compliance with the general safety and
performance requirements laid down in Annex I to the EU Medical Devices
Regulation or cause a substantial change to the intended use for which the
device has been CE marked. The notified body will then assess the planned
changes and verify whether they affect the products’ ongoing conformity
with the EU Medical Devices Regulation. If the assessment is favorable, the
notified body will issue a new certificate of conformity or an addendum to
the existing certificate attesting compliance with the general safety and
performance requirements and quality system requirements laid down
in the Annexes to the EU Medical Devices Regulation. The notified body
may disagree with our proposed changes and product introductions or
modifications could be delayed or canceled, which could adversely affect
our ability to grow our business.
up to 30 months or longer depending on the outcome of any litigation. It is
not uncommon for a manufacturer of an approved product to file a citizen
petition with the FDA seeking to delay approval of, or impose additional
approval requirements for, pending. competing products. If successful,
such petitions can significantly delay, or even prevent, the approval of a
new product. Even if the FDA ultimately denies such a petition, the FDA
may substantially delay approval while it considers and responds to the
petition. In addition, even if we are able to utilize the Section 505(b)(2)
regulatory pathway, there is no guarantee this would ultimately lead to
streamlined product development or earlier approval.
Interim, “top-line,” and preliminary data from our clinical trials that we
announce or publish from time to time may change as more patient data
become available or as additional analyses are conducted, and as the data
are subject to audit and verification procedures that could result in material
changes in the final data.
From time to time, we may publish interim, “top-line,” or preliminary
data from our clinical studies, which is based on a preliminary analysis of
then-available data, and the results and related findings and conclusions
are subject to change following a more comprehensive review of the
data related to the particular study or trial. We also make assumptions,
estimations, calculations and conclusions as part of our analyses of data,
and we may not have received or had the opportunity to fully and carefully
evaluate all data. As a result, the interim, top-line, or preliminary results
that we report may differ from future results of the same studies or trials,
or different conclusions or considerations may qualify such results, once
additional data have been received and fully evaluated. Data from interim
analyses of clinical trials that we may complete are subject to the risk that
one or more of the clinical outcomes may materially change as patient
enrollment continues and more patient data become available. Preliminary
or “top-line” data also remain subject to audit and verification procedures
that may result in the final data being materially different from the
preliminary data we previously published. As a result, interim, “top-line,”
and preliminary data should be viewed with caution until the final data are
available. Material adverse changes between preliminary, “top-line,” or
interim data and final data could significantly harm our business prospects.
Further, others, including regulatory agencies, may not accept or agree
with our assumptions, estimates, calculations, conclusions or analyses
or may interpret or weigh the importance of data differently, which
could impact the value of the particular program, the approvability or
commercialization of the particular therapeutic candidate or therapeutic
and our company in general. In addition, the information we choose to
publicly disclose regarding a particular study or clinical trial is based
on what is typically extensive information, and you or others may not
agree with what we determine is the material or otherwise appropriate
information to include in our disclosure. Any information we determine
not to disclose may ultimately be deemed significant by you or others with
respect to future decisions, conclusions, views, activities or otherwise
regarding a particular therapeutic candidate or our business.
The complexity of a combination therapeutic that includes a drug or
biologic and a medical device presents additional, unique development
and regulatory challenges, which may adversely impact our or our Founded
Entities’ development plans and our or our Founded Entities’ ability to
obtain regulatory clearance, authorization or approval of our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates.
We or our Founded Entities may decide to pursue marketing authorization
of a combination therapeutic. A combination therapeutic may include,
amongst other possibilities, any drug, device, or biologic that is intended
for use with another individually specified drug, device, or biologic, where
both are required to achieve the intended use, indication, or effect.
Developing and obtaining regulatory clearance, authorization or approval
in the United States for combination therapeutics pose unique challenges
because such therapeutic candidates involve components that are
regulated by the FDA under different types of regulatory requirements,
and in the United States by different FDA centers. As a result, such
therapeutics raise regulatory, policy and review management challenges.
For example, because divisions from both FDA’s Center for Drug Evaluation
and Research or Center for Biologics Evaluation and Research and FDA’s
Center for Devices and Radiological Health must review submissions
concerning therapeutic candidates that are combination therapeutics
comprised of drug or biologics and devices, respectively, the regulatory
review and clearance, authorization or approval process for these
therapeutics may be more complex than would otherwise be required
for single-agent therapeutics. In addition, differences in regulatory
pathways for each component of a combination therapeutic can impact
the regulatory processes for all aspects of therapeutic development and
management, including clinical investigation, marketing applications,
manufacturing and quality control, adverse event reporting, promotion
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(b) the product, without the benefits derived from the orphan status, would
not generate sufficient return in the EU to justify the necessary investment;
and (3) there exists no satisfactory method of diagnosis, prevention
or treatment of the condition in question that has been authorized for
marketing in the EU or, if such method exists, the product will be of
significant benefit to those affected by that condition.
Orphan drug designation entitles a party to financial incentives, such as
tax advantages and user fee waivers. Additionally, if a product that has
orphan designation subsequently receives the first FDA approval for the
disease or condition for which it has such designation, the product is
entitled to orphan drug exclusivity, which means that the FDA may not
approve any other applications to market the same drug for the same
disease or condition for seven years, except in certain circumstances, such
as a showing of clinical superiority (i.e., another product is safer, more
effective or makes a major contribution to patient care) over the product
with orphan exclusivity or where the manufacturer is unable to assure
sufficient product quantity. Competitors, however, may receive approval
of different products for the same disease or condition for which the
orphan product has exclusivity, or obtain approval for the same product
but for a different disease or condition than that for which the orphan
product has exclusivity. In the EU, orphan designation must be requested
before submitting a marketing authorization application, or MAA. An
EU orphan designation entitles a party to incentives such as reduction
of fees or fee waivers, protocol assistance, and access to the centralized
procedure. Upon grant of a marketing authorization, orphan medicinal
products are entitled to ten years of market exclusivity for the approved
indication, which means that the competent authorities cannot accept
another MAA, or grant a marketing authorization, or accept an application
to extend a marketing authorization for a similar medicinal product for the
same indication for a period of ten years. The period of market exclusivity
is extended by two years for orphan medicinal products that have also
complied with an agreed pediatric investigation plan, or PIP. No extension
to any supplementary protection certificate can be granted on the basis of
pediatric studies for orphan indications.
We have obtained orphan drug designation in the United States for LYT-
200 for the treatment of pancreatic cancer and for the treatment of acute
myeloid leukemia, and we may also seek orphan drug designation for other
of our therapeutic candidates in the future. We may not be the first to
obtain regulatory approval of any therapeutic candidate for its orphan-
designated disease or condition and may therefore not obtain orphan
drug exclusivity. In addition, exclusive marketing rights in the United States
may be limited if we seek approval for an disease or condition broader
than the orphan-designated disease or condition or may be lost if the FDA
later determines that the request for orphan designation was materially
defective or if the manufacturer is unable to assure sufficient quantities
of the product to meet the needs of patients with the rare disease or
condition. In the EU, the orphan exclusivity period may be reduced to six
years if, at the end of the fifth year, it is established that the product no
longer meets the criteria for which it received orphan drug destination,
including where it is shown that the product is sufficiently profitable not to
justify maintenance of market exclusivity or where the prevalence of the
condition has increased above the threshold. Additionally, a marketing
authorization may be granted to a similar product for the same indication
at any time if (i) the second applicant can establish that its product,
although similar, is safer, more effective or otherwise clinically superior; (ii)
the applicant consents to a second orphan medicinal product application;
or (iii) the applicant cannot supply enough orphan medicinal product.
Orphan drug designation does not ensure that we will receive marketing
exclusivity in a particular market, and we cannot assure you that any
future application for orphan drug designation with respect to any other
therapeutic candidate will be granted. Orphan drug designation neither
shortens the development time or regulatory review time of a drug, nor
gives the drug any advantage in the regulatory review or approval process.
If we or our Founded Entities are unable to successfully validate, develop
and obtain regulatory clearance, certification, authorization or approval
for companion diagnostic tests for any future drug candidates that require
or would commercially benefit from such tests, or experience significant
delays in doing so, we or our Founded Entities may not realize the full
commercial potential of these drug candidates.
In connection with the clinical development of the therapeutic candidates
within our Wholly-Owned Programs or Founded Entities’ therapeutic
candidates for certain indications, we or our Founded Entities may work
with collaborators to develop or obtain access to in vitro companion
diagnostic tests to identify patient subsets within a disease category who
may derive selective and meaningful benefit from our drug candidates.
To be successful, we, our Founded Entities or our collaborators will need
to address a number of scientific, technical, regulatory and logistical
challenges. The FDA and comparable foreign regulatory authorities
regulate in vitro companion diagnostics as medical devices and, under
that regulatory framework, will likely require the conduct of clinical trials
We may not elect or be able to take advantage of any expedited
development or regulatory review and approval processes available
to therapeutic candidates granted breakthrough therapy or fast track
designation by the FDA.
We intend to evaluate and continue ongoing discussions with the FDA on
regulatory strategies that could enable us or our Founded Entities to take
advantage of expedited development pathways for certain of our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates in the
future, although we cannot be certain that our Wholly-Owned Programs or
our Founded Entities’ therapeutic candidates will qualify for any expedited
development pathways or that regulatory authorities will grant, or allow us
or our Founded Entities to maintain, the relevant qualifying designations.
Examples of expedited development pathways that we could pursue
include breakthrough therapy and fast track designation.
The fast track program is intended to expedite or facilitate the process
for reviewing therapeutic candidates that meet certain criteria.
Specifically, drugs and biologics are eligible for fast track designation
if they are intended, alone or in combination with one or more drugs or
biologics, to treat serious or life-threatening diseases or conditions and
demonstrate the potential to address unmet medical needs for such
diseases or conditions. Fast track designation applies to the combination
of the therapeutic candidate and the specific indication for which it is
being studied. The sponsor of a fast track therapeutic candidate has
opportunities for more frequent interactions with the applicable FDA
review team during product development and, once a BLA or NDA is
submitted, the application may be eligible for priority review. An NDA
or BLA submitted for a Fast Track therapeutic candidate may also be
eligible for rolling review, where the FDA may consider for review sections
of the NDA or BLA on a rolling basis before the complete application
is submitted, if the sponsor provides a schedule for the submission of
the sections of the NDA or BLA, the FDA agrees to accept sections of
the application and determines that the schedule is acceptable, and the
sponsor pays any required user fees upon submission of the first section of
the application.
A “breakthrough therapy” is defined as a drug or biologic that is intended,
alone or in combination with one or more other drugs or biologics, to treat
a serious or life-threatening disease or condition, where preliminary clinical
evidence indicates that the drug or biologic may demonstrate substantial
improvement over existing therapies on one or more clinically significant
endpoints, such as substantial treatment effects observed early in clinical
development. For therapeutic candidates that have been designated
as breakthrough therapies, increased interaction and communication
between the FDA and the sponsor of the trial can help to identify the
most efficient path for clinical development while minimizing the number
of patients placed in ineffective control regimens. Drugs and biologics
designated as breakthrough therapies also receive the same benefits
associated with fast track designation, including eligibility for rolling review
of a submitted NDA or BLA, if the relevant criteria are met.
Even if we believe a particular therapeutic candidate is eligible for
breakthrough therapy or fast track designation, we cannot assure you
that the FDA would decide to grant it. Breakthrough therapy designation
and fast track designation do not change the standards for approval,
and there is no assurance that such designation or eligibility will result in
expedited review or approval. Thus, even if we or our Founded Entities do
receive breakthrough therapy, fast track designation, or other comparable
designation, we or our Founded Entities may not experience a faster
development process, review or approval compared to conventional
FDA procedures. In addition, the FDA may withdraw either breakthrough
therapy or fast track designation if it believes that the therapeutic no
longer meets the qualifying criteria. Our business may be harmed if we are
unable to avail ourselves of these or any other expedited development and
regulatory pathways.
We may not be able to obtain or maintain orphan drug designation or
Zexclusivity for our therapeutic candidates.
Regulatory authorities in some jurisdictions, including the United States,
may designate drugs for relatively small patient populations as orphan
drugs. Under the Orphan Drug Act, the FDA may designate a drug as
an orphan drug if it is intended to treat a rare disease or condition,
which is generally defined as a patient population of fewer than 200,000
individuals in the United States, or if the disease or condition affects more
than 200,000 individuals in the United States and there is no reasonable
expectation that the cost of developing the drug for the type of disease or
condition will be recovered from sales of the product in the United States.
The criteria for designating an “orphan medicinal product” in the EU are
similar in principle to those in the United States. A medicinal product can
be designated as an orphan if its sponsor can establish that: (1) the product
is intended for the diagnosis, prevention or treatment of a life threatening
or chronically debilitating condition (2) either (a) such condition affects not
more than five in 10,000 persons in the EU when the application is made, or
Manufacturers and manufacturers’ facilities are required to comply
with extensive requirements imposed by the FDA, the EMA and other
comparable foreign regulatory authorities, including ensuring that
quality control and manufacturing procedures conform to current good
manufacturing practices, or cGMP, or similar foreign regulations. As such,
we and our CMOs are subject to continual review and inspections to assess
compliance with cGMP, or similar foreign requirements and adherence
to commitments made in any marketing authorization, and any future
510(k), de novo classification, certification, PMA, NDA, BLA, MAA, or
equivalent application. We and our CMOs are also subject to requirements
pertaining to the registration of our manufacturing facilities and the
listing of our and our Founded Entities’ therapeutics and therapeutic
candidates with the FDA; continued complaint, adverse event and
malfunction reporting; corrections and removals reporting; and labeling
and promotional requirements. Accordingly, we and others with whom
we work must continue to expend time, money, and effort in all areas of
regulatory compliance, including manufacturing, production and quality
control. Karuna’s, Gelesis’ and Akili’s marketing approvals, authorizations
and certifications for Cobenfy, Plenity and EndeavorRx, respectively, are
and any regulatory clearances, certification, authorization or approvals
that we may receive for the therapeutic candidates within our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates will
be, subject to limitations on the cleared, certified, authorized or approved
indicated uses for which the therapeutic may be marketed and promoted
or to the conditions of approval. Any regulatory clearances, certifications,
authorizations or approvals that we may receive for the therapeutic
candidates within our Wholly-Owned Programs may contain requirements
for potentially costly post-marketing testing, such as Phase 4 clinical trials
and surveillance to monitor the safety and efficacy of a drug therapeutic.
We are required to report certain adverse reactions and production
problems, if any, to the FDA and other comparable foreign regulatory
authorities. Any new legislation addressing drug or medical safety issues
could result in delays in therapeutic development or commercialization, or
increased costs to assure compliance.
The FDA and other agencies, including the U.S. Department of Justice,
and for certain therapeutics, the Federal Trade Commission, closely
regulate and monitor the marketing, labeling, advertising and promotion
of therapeutics to ensure that they are manufactured, marketed and
distributed only for the cleared, certified, authorized or approved
indications and in accordance with the provisions of the cleared,
certified, authorized or approved labeling. We are, and will be, required
to comply with requirements concerning advertising and promotion
for the therapeutic candidates within our Wholly-Owned Programs , if
cleared, certified, authorized or approved. For example, promotional
communications with respect to prescription drugs and medical devices
are subject to a variety of legal and regulatory restrictions and must be
consistent with the information in the therapeutic’s label or labeling. We
may not promote our therapeutics for indications or uses for which they do
not have approval, certification, authorization or clearance.
The holder of a cleared 510(k), de novo classification, certification or an
approved NDA, BLA, PMA, MAA or equivalent marketing authorization
must submit new or supplemental applications and obtain clearance,
authorization or approval for certain changes to the approved therapeutic,
therapeutic labeling, or manufacturing process. For example, any
modification to Plenity or EndeavorRx that could significantly affect its
safety or effectiveness or that would constitute a major change in its
intended use could require a new 510(k) clearance, de novo classification,
certification or approval of PMA application. Delays in obtaining required
clearances, certifications or approvals would harm our ability to introduce
new or enhanced therapeutic in a timely manner, which in turn would harm
our or our Founded Entities’ future growth. Failure to submit a new or
supplemental application and to obtain approval or certification for certain
changes prior to marketing the modified therapeutic may require a recall
or to stop selling or distributing the marketed therapeutic as modified, and
may lead to significant enforcement actions.
Subject to the transitional provisions and in order to sell our products
in EU member states, our products must comply with the general safety
and performance requirements set forth in the new EU Medical Device
Regulation (EU) 2017/745, which repeals and replaces the EU Medical
Devices Directive. Compliance with these requirements is a prerequisite to
be able to affix the European Conformity, or “CE”, mark to our products,
without which they cannot be marketed or sold in the EU. All medical
devices placed on the market in the EU must meet the general safety
and performance requirements laid down in Annex I to the EU Medical
Devices Regulation (EU) 2017/745 including the requirement that a
medical device must be designed and manufactured in such a way that,
during normal conditions of use, it is suitable for its intended purpose.
Medical devices must be safe and effective and must not compromise
the clinical condition or safety of patients, or the safety and health of
to demonstrate the safety and effectiveness of any diagnostics we or our
Founded Entities may develop, which we expect will require separate
regulatory clearance, certification, authorization or approval prior to
commercialization. In addition, if safe and effective use of a therapeutic
product depends on an in vitro companion diagnostic, the FDA generally
will require approval, authorization or clearance of that diagnostic, known
as a companion diagnostic, before or at the same time that the FDA
approves the therapeutic product.
In addition, the FDA has historically required approval of a PMA application
for companion diagnostics associated with cancer medications. However,
in January 2024, the FDA announced its intention to initiate the process
to reclassify into Class II most in vitro diagnostic tests that are currently
regulated as Class III medical devices, including certain companion
diagnostic in-vitro diagnostics. If such reclassification efforts occur, any
companion diagnostics that are the subject of the down-classification
may no longer require approval of a PMA application, but rather may be
marketed pursuant to the generally less burdensome 510(k) clearance
process. However, there is no assurance that any companion diagnostic
required for therapeutic candidates within our Wholly-Owned Programs or
those of our Founded Entities will benefit from the reclassification, or that
the reclassification, even if it does occur, will result in a shorter timeline to
development or marketing of the companion diagnostic.
We or our Founded Entities may rely on third parties for the design,
development and manufacture of companion diagnostic tests for our
Wholly-Owned Programs ’ or our Founded Entities’ therapeutic candidates
that may require such tests. If we or our Founded Entities enter into
such collaborative agreements, we will be dependent on the sustained
cooperation and effort of our future collaborators in developing and
obtaining approval for these companion diagnostics. It may be necessary
to resolve issues such as selectivity/specificity, analytical validation,
reproducibility, or clinical validation of companion diagnostics during
the development and regulatory clearance, certification, authorization
or approval processes. Moreover, even if data from preclinical studies
and early clinical trials appear to support development of a companion
diagnostic for a therapeutic candidate, data generated in later clinical trials
may fail to support the analytical and clinical validation of the companion
diagnostic. We, our Founded Entities and our future collaborators may
encounter difficulties in developing, obtaining regulatory clearance,
certification, authorization or approval for, manufacturing and
commercializing companion diagnostics similar to those we face with
respect to the therapeutic candidates within our Wholly-Owned Programs
themselves, including issues with achieving regulatory clearance,
certification, authorization or approval, production of sufficient quantities
at commercial scale and with appropriate quality standards, and in
gaining market acceptance. If we or our Founded Entities are unable
to successfully develop companion diagnostics for these therapeutic
candidates, or experience delays in doing so, the development of these
therapeutic candidates may be adversely affected, these therapeutic
candidates may not obtain marketing approval, and we may not realize the
full commercial potential of any of these therapeutic candidates that obtain
marketing approval. As a result, our business, results of operations and
financial condition could be materially harmed. In addition, a diagnostic
company with whom we or our Founded Entities contract may decide to
discontinue selling or manufacturing the companion diagnostic test that
we anticipate using in connection with development and commercialization
of our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates or our relationship with such diagnostic company may
otherwise terminate. We or our Founded Entities may not be able to enter
into arrangements with another diagnostic company to obtain supplies of
an alternative diagnostic test for use in connection with the development
and commercialization of our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates or do so on commercially reasonable
terms, which could adversely affect and/or delay the development or
commercialization of our or our Founded Entities’ therapeutic candidates.
For any cleared, certified, authorized or approved therapeutic, we or
our Founded Entities will be subject to ongoing regulatory obligations
and continued regulatory review, which may result in significant
additional expense and we or our Founded Entities may be subject to
penalties if we or our Founded Entities fail to comply with regulatory
requirements or experience unanticipated problems with the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates.
Karuna’s Cobenfy, Gelesis’ Plenity and Akili’s EndeavorRx are, and
any of the therapeutic candidates within our Wholly-Owned Programs
or our Founded Entities’ therapeutic candidates that are cleared,
certified, authorized or approved will be, subject to ongoing regulatory
requirements for manufacturing, labeling, packaging, storage, advertising,
promotion, sampling, record-keeping, conduct of post-marketing studies,
and submission of safety, efficacy and other post-market information,
including both federal and state requirements in the United States and
requirements of comparable foreign regulatory authorities.
194 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 195
Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
In addition, the FDA has historically required approval of a PMA application
for companion diagnostics associated with cancer medications. However,
in January 2024, the FDA announced its intention to initiate the process
to reclassify into Class II most in vitro diagnostic tests that are currently
regulated as Class III medical devices, including certain companion
diagnostic in-vitro diagnostics. If such reclassification efforts occur, any
companion diagnostics that are the subject of the down-classification
may no longer require approval of a PMA application, but rather may be
marketed pursuant to the generally less burdensome 510(k) clearance
process. However, there is no assurance that any companion diagnostic
required for therapeutic candidates within our Wholly-Owned Programs or
those of our Founded Entities will benefit from the reclassification, or that
the reclassification, even if it does occur, will result in a shorter timeline to
development or marketing of the companion diagnostic.
We also cannot predict the likelihood, nature or extent of government
regulation that may arise from future legislation or administrative action,
either in the United States or abroad. If these legislative or administrative
actions impose constraints on the FDA’s ability to engage in oversight
and implementation activities in the normal course, our business may be
negatively impacted. Outside of the United States, for instance, the EU
pharmaceutical legislation is currently undergoing a complete review
process, in the context of the Pharmaceutical Strategy for Europe initiative,
launched by the European Commission in November 2020. The European
Commission’s proposal for revision of several legislative instruments
related to medicinal products (potentially reducing the duration of
regulatory data protection, revising the eligibility for expedited pathways,
etc.) was published on April 26, 2023. The proposed revisions, remain
to be agreed and adopted by the European Parliament and European
Council, and the proposals may therefore be substantially revised before
adoption, which is not anticipated before early 2026. The revisions may,
however, have a significant impact on the biopharmaceutical industry in
the long term.
The FDA and other regulatory agencies actively enforce the laws and
regulations prohibiting the promotion of off-label uses.
If, for any of our Wholly-Owned Programs that are cleared or approved,
we are found to have improperly promoted off-label uses of those
therapeutics, we may become subject to significant liability. The FDA
and other regulatory agencies strictly regulate the promotional claims
that may be made about prescription therapeutics, if cleared, authorized
or approved. In particular, while the FDA permits the dissemination of
truthful and non-misleading information about a cleared, authorized or
approved therapeutic, a manufacturer may not promote a therapeutic
for uses that are not cleared, authorized or approved by the FDA or
such other regulatory agencies as reflected in the therapeutic’s cleared,
authorized or approved labeling. If we are found to have promoted such
off-label uses, we may become subject to significant liability. The federal
government has levied large civil and criminal fines against companies
for alleged improper promotion of off-label use and has enjoined several
companies from engaging in off-label promotion. The FDA has also
requested that companies enter into consent decrees, corporate integrity
agreements or permanent injunctions under which specified promotional
conduct must be changed or curtailed. If we cannot successfully manage
the promotion of the therapeutic candidates within our Wholly-Owned
Programs , if cleared, authorized or approved, we could become subject
to significant liability, which would materially adversely affect our business
and financial condition.
Certain of our therapeutic candidates may be regulated as controlled
substances, the making, use, sale, importation, exportation, and
distribution of which are subject to significant regulation by the U.S. Drug
Enforcement Administration, or DEA, and other regulatory agencies.
We expect that certain of our therapeutic candidates, if approved, will be
regulated as controlled substances, which are subject to state, federal,
and foreign laws and regulations regarding their manufacture, use, sale,
importation, exportation, and distribution. Among other things, controlled
substances are regulated under the federal Controlled Substances Act of
1970, or CSA, and regulations of the DEA.
The DEA regulates controlled substances as Schedule I, II, III, IV or V
substances. Schedule I substances by definition have no established
medicinal use and may not be marketed or sold in the United States.
A pharmaceutical product may be listed as Schedule II, III, IV or V, with
Schedule II substances considered to present the highest risk of abuse
and Schedule V substances the lowest relative risk of abuse among such
substances. Certain of our other therapeutic candidates contain Schedule
IV substances, which subjects such therapeutic candidates to additional
restrictions regarding their manufacture, shipment, storage, sale and use,
depending on the scheduling of the active ingredients, and may limit the
commercial potential of any of our therapeutic candidates, if approved.
users and – where applicable – other persons, provided that any risks
which may be associated with their use constitute acceptable risks when
weighed against the benefits to the patient and are compatible with
a high level of protection of health and safety, taking into account the
generally acknowledged state of the art. To demonstrate compliance with
the general safety and performance requirements, we or our Founded
Entities must undergo a conformity assessment procedure, which varies
according to the type of medical device and its (risk) classification.
Except for low risk medical devices (Class I), where the manufacturer can
self-assess the conformity of its products with the general safety and
performance requirements (except for any parts which relate to sterility,
metrology or reuse aspects), a conformity assessment procedure requires
the intervention of a notified body. The notified body would typically audit
and examine the technical file and the quality system for the manufacture,
design and final inspection of our devices. If satisfied that the relevant
product conforms to the relevant general safety and performance
requirements, the notified body issues a certificate of conformity, which
the manufacturer uses as a basis for its own declaration of conformity.
The manufacturer may then apply the CE mark to the device, which allows
the device to be placed on the market throughout the EU. If we fail to
comply with applicable laws and regulations, we would be unable to affix
the CE mark to our products, which would prevent us from selling them
within the EU. In June 2020, Gelesis received a certification for Plenity as a
class III medical device indicated for weight loss in overweight and obese
adults with a Body Mass Index of 25-40 kg/m2, when used in conjunction
with diet and exercise. Also in June 2020, Akili received a certification for
EndeavorRx as a prescription-only digital therapeutic software intended
for the treatment of attention and inhibitory control deficits in paediatric
patients with ADHD.
We or our Founded Entities could also be required to conduct post-
marketing clinical trials to verify the safety and efficacy of our or our
Founded Entities’ therapeutics in general or in specific patient subsets.
If original marketing approval of a drug or biologic was obtained via
an accelerated approval pathway, we or our Founded Entities could
be required to conduct a successful post-marketing clinical trial to
confirm clinical benefit for our or our Founded Entities’ therapeutics.
An unsuccessful post-marketing study or failure to complete such a
study could result in the withdrawal of marketing clearance, certification,
authorization or approval.
If a regulatory agency discovers previously unknown problems with
a therapeutic, such as AEs of unanticipated severity or frequency, or
problems with the facility where the therapeutic is manufactured, or
disagrees with the promotion, marketing or labeling of a therapeutic,
such regulatory agency may impose restrictions on that therapeutic or
us, including requiring withdrawal of the therapeutic from the market.
If we or our Founded Entities fail to comply with applicable regulatory
requirements, a regulatory agency or enforcement authority may,
among other things:
— issue warning letters that would result in adverse publicity;
— impose civil or criminal penalties;
— suspend or withdraw regulatory approvals or certifications;
— suspend any of our or our Founded Entities’ ongoing clinical trials;
— refuse to approve pending applications or supplements to approved
applications submitted by us or our Founded Entities;
— impose restrictions on our operations, including closing our
CMOs’ facilities;
— seize or detain therapeutics; or
— require a recall.
Any government investigation of alleged violations of law could require
us to expend significant time and resources in response, and could
generate negative publicity. Any failure to comply with ongoing regulatory
requirements may significantly and adversely affect our ability to
commercialize and generate revenue from our therapeutics. If regulatory
sanctions are applied or if regulatory clearance, authorization or approval
is withdrawn, the value of our company and our operating results will be
adversely affected.
The FDA’s and other regulatory authorities’ policies may change and
additional government regulations may be enacted that could prevent,
limit or delay regulatory clearance, certification, authorization or approval
of the therapeutic candidates within our Wholly-Owned Program or our
Founded Entities’ therapeutic candidates.
Risks Related to Manufacturing our Therapeutic Candidates or Those
of our Founded Entities
Certain of the therapeutic candidates being developed by us or our
Founded Entities rely or may rely on third-party manufacturers outside of
the United States.
Certain of our therapeutic candidates within our Wholly-Owned Programs
or our Founded Entities’ therapeutic candidates are currently or may in the
future be manufactured outside of the United States. In certain years, the
U.S. government has initiated substantial changes in U.S. trade policy and
U.S. trade agreements, including the initiation of tariffs on certain foreign
goods. In response to these tariffs, certain foreign governments, including
Canada, China and Mexico, have instituted or are considering imposing
tariffs on certain U.S. goods. If the U.S. imposes additional tariffs on a
broader range of imports from certain countries, and in response those
countries take further retaliatory trade measures. These actions could
impose additional costs on our business.
Certain of the therapeutic candidates being developed by us or our
Founded Entities are novel, complex and difficult to manufacture.
We could experience manufacturing problems that result in delays
in our development or commercialization programs or otherwise
harm our business.
The manufacturing processes our CMOs use to produce our and our
Founded Entities’ therapeutic candidates are complex and in certain
cases novel. Several factors could cause production interruptions,
including inability to develop novel manufacturing processes, equipment
malfunctions, facility contamination, raw material shortages or
contamination, natural disasters, disruption in utility services, human error
or disruptions in the operations of our suppliers, including acquisition of
the supplier by a third party or declaration of bankruptcy. For example,
Vedanta has its own proprietary cGMP manufacturing facilities for
certain therapeutic candidates, including VE202, VE303, VE800 and
VE416. Creating defined consortia of live microbial therapeutics for
these therapeutic candidates is inherently complex, and therefore can
be vulnerable to delays. The expertise required to manufacture these
therapeutic candidates is unique to Vedanta, and as a result, it would
be difficult and time consuming to find an alternative CMO. In addition,
manufacturing of clinical supply for certain of our therapeutic candidates
is dependent on third party CMOs, and manufacturing such therapeutic
candidates is inherently complex.
Some of our and our Founded Entities’ therapeutic candidates include
biologics, some of which have physical and chemical properties that cannot
be fully characterized. As a result, assays of the finished product may not
be sufficient to ensure that the therapeutic candidate is consistent from
lot-to-lot or will perform in the intended manner. Accordingly, our CMOs
must employ multiple steps to control the manufacturing process to assure
that the process is reproducible and the therapeutic candidate is made
strictly and consistently in compliance with the process. Problems with the
manufacturing process, even minor deviations from the normal process,
could result in therapeutic defects or manufacturing failures that result
in lot failures, therapeutic recalls, product liability claims or insufficient
inventory to conduct clinical trials or supply commercial markets. We or our
Founded Entities may encounter problems achieving adequate quantities
and quality of clinical-grade materials that meet the FDA, the EMA or other
applicable standards or specifications with consistent and acceptable
production yields and costs.
In addition, the FDA and other foreign regulatory authorities may require
us or our Founded Entities to submit samples of any lot of any approved
therapeutic together with the protocols showing the results of applicable
tests at any time. Under some circumstances, the FDA or other foreign
regulatory authorities may require that we or our Founded Entities not
distribute a lot until the agency authorizes its release. Slight deviations in
the manufacturing process, including those affecting quality attributes and
stability, may result in unacceptable changes in the therapeutic that could
result in lot failures or therapeutic recalls. Lot failures or therapeutic recalls
could cause us or our Founded Entities to delay therapeutic launches or
clinical trials, which could be costly to us and otherwise harm our business,
financial condition, results of operations and prospects.
Various states also independently regulate controlled substances. Though
state controlled substances laws often mirror federal law, because the
states are separate jurisdictions, they may separately schedule drugs as
well. While some states automatically schedule a drug when the DEA
does so, in other states there must be rulemaking or a legislative action.
State scheduling may delay commercial sale of any controlled substance
drug product for which we obtain federal regulatory approval and adverse
scheduling could impair the commercial attractiveness of such product.
We or our collaborators must also obtain separate state registrations in
order to be able to obtain, handle and distribute controlled substances for
clinical trials or commercial sale, and failure to meet applicable regulatory
requirements could lead to enforcement and sanctions from the states in
addition to those from the DEA or otherwise arising under federal law.
For any of our products or therapeutic candidates classified as controlled
substances, we and our suppliers, manufacturers, contractors, customers
and distributors are required to obtain and maintain applicable
registrations from state, federal and foreign law enforcement and
regulatory agencies and comply with state, federal and foreign laws and
regulations regarding the manufacture, use, sale, importation, exportation
and distribution of controlled substances. There is a risk that DEA
regulations may limit the supply of the compounds used in clinical trials
for our therapeutic candidates, and, in the future, the ability to produce
and distribute our products in the volume needed to meet commercial
demand. Regulations associated with controlled substances govern
manufacturing, labeling, packaging, testing, dispensing, production
and procurement quotas, recordkeeping, reporting, handling, shipment
and disposal. These regulations increase the personnel needs and
the expense associated with development and commercialization of
therapeutic candidates including controlled substances. The DEA, and
some states, conduct periodic inspections of registered establishments
that handle controlled substances. Failure to obtain and maintain
required registrations or comply with any applicable regulations
could delay or preclude us from developing and commercializing our
therapeutic candidates containing controlled substances and subject
us to enforcement action. The DEA may seek civil penalties, refuse to
renew necessary registrations or initiate proceedings to revoke those
registrations. In some circumstances, violations could lead to criminal
proceedings. Because of their restrictive nature, these regulations could
limit commercialization of any of our products or therapeutic candidates
that are classified as controlled substances.
The EU legislation does not establish different classes of narcotic
or psychotropic substances. However, the United Nations, or UN,
Single Convention on Narcotic Drugs of 1961 and the UN Convention
on Psychotropic Substances of 1971, or the UN Conventions, codify
internationally applicable control measures to ensure the availability of
narcotic drugs and psychotropic substances for medical and scientific
purposes. The individual EU member states are all signatories to these UN
Conventions. All signatories have a dual obligation to ensure that these
substances are available for medical purposes and to protect populations
against abuse and dependence. The UN Conventions regulate narcotic
drugs and psychotropic substances as Schedule I, II, III, IV substances with
Schedule II substances presenting the lowest relative risk of abuse among
such substances and Schedule I and IV substances considered to present
the highest risk of abuse.
The UN Conventions require signatories to require all persons
manufacturing, trading (including exporting and importing) or distributing
controlled substances to obtain a license from the relevant authority. Each
individual export or import of a controlled substance must also be subject
to an authorization. The obligations provided in the UN Conventions
and additional requirements are implemented at national level and
requirements may vary from one member state to another. In order to
develop and commercialize our products in the EU, we need to comply with
the national requirements related to controlled substances which is costly
and may affect our development plans in the EU.
196 PureTech Health plc Annual Report and Accounts 2024
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Risk Factor Annex continued
Additional information
Additional information
The manufacture of pharmaceutical therapeutics is complex and requires
significant expertise and capital investment, including the development
of advanced manufacturing techniques and process controls. We and
our contract manufacturers must comply with cGMP or similar foreign
regulations and guidelines. Manufacturers of pharmaceutical therapeutics
often encounter difficulties in production, particularly in scaling up and
validating initial production. These problems include difficulties with
production costs and yields, quality control, including stability of the
product, quality assurance testing, operator error, shortages of qualified
personnel, as well as compliance with strictly enforced federal, state and
foreign regulations. Furthermore, if microbial, viral or other contaminations
are discovered in our therapeutics or in the manufacturing facilities in
which our therapeutic candidate are made, such manufacturing facilities
may need to be closed for an extended period of time to investigate and
remedy the contamination. We cannot assure you that any stability or other
issues relating to the manufacture of any of our therapeutic candidates will
not occur in the future. Additionally, our manufacturers may experience
manufacturing difficulties due to resource constraints or as a result of labor
disputes or unstable political environments. If our manufacturers were to
encounter any of these difficulties, or otherwise fail to comply with their
contractual obligations, our ability to provide any therapeutic candidates
to patients in clinical trials would be jeopardized. Any delay or interruption
in the supply of clinical trial supplies could delay the completion of clinical
trials, increase the costs associated with maintaining clinical trial programs
and, depending upon the period of delay, require us to commence new
clinical trials at additional expense or terminate clinical trials completely.
Any adverse developments affecting clinical or potential commercial
manufacturing of our therapeutic candidates may result in shipment
delays, inventory shortages, lot failures, therapeutic withdrawals or recalls,
or other interruptions in the supply of our therapeutic candidates. We may
also have to take inventory write-offs and incur other charges and expenses
for therapeutic candidates that fail to meet specifications, undertake
costly remediation efforts or seek more costly manufacturing alternatives.
Accordingly, failures or difficulties faced at any level of our supply chain
could materially adversely affect our business and delay or impede the
development and commercialization of any of our therapeutic candidates
and could have a material adverse effect on our business, prospects,
financial condition and results of operations.
Our or our Founded Entities’ therapeutic candidates must be manufactured
in accordance with federal, state and international regulations, and we or
our Founded Entities could be forced to recall our or our Founded Entities’
medical devices and therapeutic candidates or terminate production if we
or our Founded Entities fail to comply with these regulations.
The methods used in, and the facilities used for, the manufacture of
medical device therapeutics and therapeutic candidates of our Founded
Entities, including Gelesis, Akili, Follica and Sonde, must comply with the
FDA’s cGMPs for medical devices, known as the QSR, which is a complex
regulatory scheme that covers the procedures and documentation of,
among other requirements, the design, testing, validation, verification,
complaint handling, production, process controls, quality assurance,
labeling, supplier evaluation, packaging, handling, storage, distribution,
installation, servicing and shipping of medical devices. Furthermore,
we and our Founded Entities are required to verify that our suppliers
maintain facilities, procedures and operations that comply with our quality
standards and applicable regulatory requirements. The FDA enforces the
QSR through, among other oversight methods, periodic announced or
unannounced inspections of medical device manufacturing facilities, which
may include the facilities of subcontractors, suppliers or CMOs. Our and
our Founded Entities’ therapeutics and therapeutic candidates are also
subject to similar state regulations and various laws and regulations of
foreign countries governing manufacturing.
Our CMOs also may encounter problems hiring and retaining
the experienced scientific, quality assurance, quality-control and
manufacturing personnel needed to operate our manufacturing processes,
which could result in delays in production or difficulties in maintaining
compliance with applicable regulatory requirements.
Any problems in our CMOs’ manufacturing process or facilities could result
in delays in planned clinical trials and increased costs, and could make
us a less attractive collaborator for potential partners, including larger
biotechnology companies and academic research institutions, which could
limit access to additional attractive development programs. Problems
in our manufacturing process could restrict our ability to meet potential
future market demand for therapeutics.
We do not currently have nor do we plan to acquire the infrastructure
or capability internally to manufacture our clinical drug supplies for use
in the conduct of our clinical trials, and we lack the resources and the
capability to manufacture the therapeutic candidates within our Wholly-
Owned Programs on a clinical or commercial scale. Instead, we rely on
our third-party manufacturing partners for the production of the active
pharmaceutical ingredient, or API, and drug formulation. The facilities
used by our third-party manufacturers to manufacture our therapeutic
candidates that we may develop must be successfully inspected by the
applicable regulatory authorities, including the FDA, after we submit any
NDA or BLA to the FDA.
We are currently completely dependent on our third-party manufacturers
for the production of certain of our therapeutic candidates in accordance
with cGMPs or similar foreign requirements, which include, among other
things, quality control, quality assurance and the maintenance of records
and documentation.
Although we have entered into agreements for the manufacture of clinical
supplies for such therapeutic candidates, our third-party manufacturers
may not perform as agreed, may be unable to comply with these cGMP or
similar foreign requirements and with FDA, state and foreign regulatory
requirements or may terminate its agreement with us. If any of our
third-party manufacturers cannot successfully manufacture material that
conforms to our specifications and the applicable regulatory authorities’
strict regulatory requirements, pass regulatory inspection or maintain a
compliance status acceptable to the FDA or state or foreign regulatory
authorities, our NDAs, BLAs or MAAs will not be approved. In addition,
although we are ultimately responsible for ensuring therapeutic quality,
we have no direct day-to-day control over our third-party manufacturers’
ability to maintain adequate quality control, quality assurance and
qualified personnel. If our third-party manufacturers are unable to satisfy
the regulatory requirements for the manufacture of our therapeutics, if
approved, or if our suppliers or third-party manufacturers decide they
no longer want to manufacture our therapeutics, we will need to find
alternative manufacturing facilities, which would be time-consuming and
significantly impact our ability to develop, obtain regulatory approval
for or market our therapeutics, if approved. If we are required to change
contract manufacturers for any reason, we will be required to show that
the new manufacturer maintains facilities and procedures that comply
with quality standards and with all applicable regulations. We will also
need to verify, such as through a manufacturing comparability study,
that any new manufacturing process or procedure will produce our
therapeutic candidate according to specifications previously submitted to
the FDA or another regulatory authority. We might be unable to identify
manufacturers for long-term clinical and commercial supply on acceptable
terms or at all. Manufacturers are subject to ongoing periodic announced
and unannounced inspection by the FDA and other governmental
authorities to ensure compliance with government regulations. As a result,
our third-party manufacturers may be subject to increased scrutiny.
If we were to experience an unexpected loss of supply for clinical
development or commercialization, we could experience delays in our
ongoing or planned clinical trials as our third-party manufacturers would
need to manufacture additional quantities of our clinical and commercial
supply and we may not be able to provide sufficient lead time to enable
our third-party manufacturers to schedule a manufacturing slot, or to
produce the necessary replacement quantities. This could result in delays
in progressing our clinical development activities and achieving regulatory
approval for our therapeutics, which could materially harm our business.
If we enter into arrangements with third parties to perform sales,
marketing, commercial support, and distribution services, our therapeutic
revenue or the profitability of therapeutic revenue may be lower than if
we were to market and sell any therapeutics we may develop internally.
In addition, we may not be successful in entering into arrangements
with third parties to commercialize the therapeutic candidates within
our Wholly-Owned Programs or may be unable to do so on terms that
are favorable to us or them. We may have little control over such third
parties, and any of them may fail to devote the necessary resources and
attention to sell and market our therapeutics effectively or may expose
us to legal and regulatory risk by not adhering to regulatory requirements
and restrictions governing the sale and promotion of prescription drug
therapeutics, including those restricting off-label promotion. If we do
not establish commercialization capabilities successfully, either on our
own or in collaboration with third parties, we will not be successful in
commercializing the therapeutic candidates within our Wholly-Owned
Programs , if approved.
Even if any current or future therapeutic candidate of ours receives
regulatory clearance or approval, it may fail to achieve the degree of
market acceptance by physicians, patients, third-party payors and others
in the medical community necessary for commercial success, in which case
we may not generate significant revenues or become profitable.
We have never commercialized a therapeutic, and even if any current
or future therapeutic candidate of ours is approved by the appropriate
regulatory authorities for marketing and sale, it may nonetheless fail to gain
sufficient market acceptance by physicians, patients, third-party payors
and others in the medical community. Physicians may be reluctant to take
their patients off their current medications and switch their treatment
regimen. Further, patients often acclimate to the treatment regime that
they are currently taking and do not want to switch unless their physicians
recommend switching therapeutics or they are required to switch due to
lack of coverage and adequate reimbursement. In addition, even if we are
able to demonstrate our Wholly-Owned Programs ’ safety and efficacy to
the FDA and other regulators, safety or efficacy concerns in the medical
community may hinder market acceptance.
Efforts to educate the medical community and third-party payors on
the benefits of the therapeutic candidates within our Wholly-Owned
Programs may require significant resources, including management time
and financial resources, and may not be successful. The degree of market
acceptance of the therapeutic candidates within our Wholly-Owned
Programs , if approved for commercial sale, will depend on a number of
factors, including:
— the efficacy and safety of the therapeutic;
— the potential advantages of the therapeutic compared to
competitive therapies;
— the prevalence and severity of any side effects;
— whether the therapeutic is designated under physician treatment
guidelines as a first-, second- or third-line therapy;
— our ability, or the ability of any future collaborators, to offer the
therapeutic for sale at competitive prices;
— the therapeutic’s convenience and ease of administration compared to
alternative treatments;
— the willingness of the target patient population to try, and of physicians
to prescribe, the therapeutic;
— limitations or warnings, including distribution or use restrictions
contained in the therapeutic’s approved labelling;
— the strength of sales, marketing and distribution support;
— changes in the standard of care for the targeted indications for the
therapeutic; and
— availability and adequacy of coverage and reimbursement from
government payors, managed care plans and other third-party payors.
Sales of medical therapeutics also depend on the willingness of
physicians to prescribe the treatment, which is likely to be based on
a determination by these physicians that the therapeutics are safe,
therapeutically effective and cost effective. In addition, the inclusion
or exclusion of therapeutics from treatment guidelines established by
various physician groups and the viewpoints of influential physicians can
affect the willingness of other physicians to prescribe the treatment. We
cannot predict whether physicians, physicians’ organizations, hospitals,
other healthcare providers, government agencies or private insurers will
determine that our therapeutic is safe, therapeutically effective and cost
effective as compared with competing treatments. If any therapeutic
candidates we develop do not achieve an adequate level of acceptance,
we may not generate significant therapeutic revenue, and we may not
become profitable.
Our or our Founded Entities’ third-party manufacturers may not take
the necessary steps to comply with applicable regulations or our or our
Founded Entities’ specifications, which could cause delays in the delivery
of our therapeutic candidates. In addition, failure to comply with applicable
FDA or comparable foreign requirements or later discovery of previously
unknown problems with our or our Founded Entities’ therapeutics or
therapeutic candidates or manufacturing processes could result in,
among other things: warning letters or untitled letters; civil penalties;
suspension or withdrawal of approvals or clearances; seizures or recalls of
our or our Founded Entities’ therapeutics; total or partial suspension of
production or distribution; administrative or judicially imposed sanctions;
the FDA’s or foreign regulatory authorities’ refusal to grant pending or
future clearances, certifications, authorizations, or approvals for our or
our Founded Entities’ therapeutic candidates; clinical holds; refusal to
permit the import or export of our or our Founded Entities’ therapeutics or
therapeutic candidates; and criminal prosecution of us or our employees.
Any of these actions could significantly and negatively impact supply of
our or our Founded Entities’ therapeutics or therapeutic candidates. If
any of these events occurs, our reputation could be harmed, we could be
exposed to product liability claims and we or our Founded Entities could
lose customers and suffer reduced revenue and increased costs.
Risks Related to Commercialization
If, in the future, we are unable to establish sales and marketing
capabilities or enter into agreements with third parties to sell and
market any therapeutic candidates we may develop, we may not be
successful in commercializing those therapeutic candidates if and when
they are approved.
We do not have a sales or marketing infrastructure or the capabilities for
sale, marketing, or distribution of pharmaceutical therapeutics. To achieve
commercial success for any approved therapeutic for which we retain
sales and marketing responsibilities, we must either develop a sales and
marketing organization or outsource these functions to third parties. In the
future, we may choose to build a focused sales, marketing, and commercial
support infrastructure to market and sell the therapeutic candidates within
our Wholly-Owned Programs , if and when they are approved. We may
also elect to enter into collaborations or strategic partnerships with third
parties to engage in commercialization activities with respect to selected
therapeutic candidates, indications or geographic territories, including
territories outside the United States, although there is no guarantee we will
be able to enter into these arrangements even if the intent is to do so.
There are risks involved with both establishing our own commercial
capabilities and entering into arrangements with third parties to perform
these services. For example, recruiting and training a sales force or
reimbursement specialists is expensive and time consuming and could
delay any therapeutic launch. If the commercial launch of a therapeutic
candidate for which we recruit a sales force and establish marketing and
other commercialization capabilities is delayed or does not occur for
any reason, we would have prematurely or unnecessarily incurred these
commercialization expenses. This may be costly, and our investment would
be lost if we cannot retain or reposition commercialization personnel.
Factors that may inhibit our efforts to commercialize any approved
therapeutic on our own include:
— the inability to recruit and retain adequate numbers of effective sales,
marketing, reimbursement, customer service, medical affairs, and other
support personnel;
— the inability of sales personnel to obtain access to physicians or persuade
adequate numbers of physicians to prescribe any future approved
therapeutics;
— the inability of reimbursement professionals to negotiate arrangements
for formulary access, reimbursement, and other acceptance by payors;
— the inability to price therapeutics at a sufficient price point to ensure an
adequate and attractive level of profitability;
— restricted or closed distribution channels that make it difficult to
distribute our therapeutics to segments of the patient population;
— the lack of complementary therapeutics to be offered by sales personnel,
which may put us at a competitive disadvantage relative to companies
with more extensive therapeutic lines; and
— unforeseen costs and expenses associated with creating an independent
commercialization organization.
198 PureTech Health plc Annual Report and Accounts 2024
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Risk Factor Annex continued
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Additional information
Additional information
therapeutics. Sales of these or other therapeutic candidates that we may
identify will depend substantially, both domestically and abroad, on the
extent to which the costs of the therapeutic candidates within our Wholly-
Owned Programs will be paid by health maintenance, managed care,
pharmacy benefit and similar healthcare management organizations, or
reimbursed by government health administration authorities, private health
coverage insurers and other third-party payors. If coverage and adequate
reimbursement is not available, or is available only to limited levels, we may
not be able to successfully commercialize our therapeutics or therapeutic
candidates. Even if coverage is provided, the approved reimbursement
amount may not be high enough to allow us to establish or maintain
pricing sufficient to realize a sufficient return on our investment. A primary
trend in the U.S. healthcare industry and elsewhere is cost containment.
Government authorities and third-party payors have attempted to control
costs by limiting coverage and the amount of reimbursement for particular
medications. In many countries, the prices of medical therapeutics are
subject to varying price control mechanisms as part of national health
systems. In general, the prices of medicines under such systems are
substantially lower than in the United States. Other countries allow
companies to fix their own prices for medicines, but monitor and control
company profits. Additional foreign price controls or other changes in
pricing regulation could restrict the amount that we are able to charge
for the therapeutic candidates within our Wholly-Owned Programs .
Accordingly, in markets outside the United States, the reimbursement for
therapeutics may be reduced compared with the United States and may be
insufficient to generate commercially reasonable revenues and profits.
There is also significant uncertainty related to the insurance coverage
and reimbursement of newly approved therapeutics and coverage may
be more limited than the purposes for which the medicine is approved
by the FDA or comparable foreign regulatory authorities. In the United
States, the principal decisions about reimbursement for new medicines
are typically made by the Centers for Medicare & Medicaid Services, or
CMS, an agency within the U.S. Department of Health and Human Services.
CMS decides whether and to what extent a new medicine will be covered
and reimbursed under Medicare and private payors tend to follow CMS to
a substantial degree. No uniform policy of coverage and reimbursement
for therapeutics exists among third-party payors and coverage and
reimbursement levels for therapeutics can differ significantly from payor
to payor. As a result, the coverage determination process is often a time
consuming and costly process that may require us to provide scientific and
clinical support for the use of our therapeutics to each payor separately,
with no assurance that coverage and adequate reimbursement will be
applied consistently or obtained in the first instance. It is difficult to predict
what CMS will decide with respect to reimbursement for fundamentally
novel therapeutics such as ours, as there is no body of established
practices and precedents for these new therapeutics. Reimbursement
agencies in Europe may be more conservative than CMS. For example, a
number of cancer drugs have been approved for reimbursement in the
United States and have not been approved for reimbursement in certain
European countries. Moreover, eligibility for reimbursement does not
imply that any drug will be paid for in all cases or at a rate that covers
our costs, including research, development, manufacture, sale, and
distribution. Interim reimbursement levels for new drugs, if applicable, may
also not be sufficient to cover our costs and may not be made permanent.
Reimbursement rates may vary according to the use of the drug and the
clinical setting in which it is used, may be based on reimbursement levels
already set for lower cost drugs and may be incorporated into existing
payments for other services. Our inability to promptly obtain coverage
and profitable payment rates from both government-funded and private
payors for any approved therapeutics we may develop could have a
material adverse effect on our operating results, our ability to raise capital
needed to commercialize therapeutic candidates, and our overall financial
condition. As noted above, in the United States we plan to have various
programs to help patients afford our therapeutics, including patient
assistance programs and co-pay coupon programs for eligible patients.
Net prices for drugs may be reduced by mandatory discounts or rebates
required by government healthcare programs or private payors and by
any future relaxation of laws that presently restrict imports of drugs from
countries where they may be sold at lower prices than in the United States.
Our inability to promptly obtain coverage and profitable reimbursement
rates third-party payors for any approved therapeutics that we develop
could have a material adverse effect on our operating results, our ability
to raise capital needed to commercialize therapeutics and our overall
financial condition.
Any failure by any current or future therapeutic candidate of ours that
obtains regulatory approval to achieve market acceptance or commercial
success would adversely affect our business prospects. In addition, any
negative perception of one of our Founded Entities or any therapeutic
candidates marketed or commercialized by them may adversely affect
our reputation in the marketplace or among industry participants and our
business prospects.
The incidence and prevalence for target patient populations of our
therapeutic candidates have not been established with precision. If the
market opportunities for our therapeutic candidates are smaller than we
estimate, or if any approval that we obtain is based on a narrower definition
of the patient population, our revenue and ability to achieve profitability
may be materially adversely affected.
The precise incidence and prevalence for all the conditions we aim to
address with our therapeutic candidates are unknown and cannot be
precisely determined. Our projections of both the number of people who
have these diseases, as well as the subset of people with these diseases
who have the potential to benefit from treatment with our therapeutic
candidates, are based on beliefs and estimates. These estimates have
been derived from a variety of sources, including the scientific literature,
surveys of clinics, patient foundations or market research, and may prove
to be incorrect. Further, new trials may change the estimated incidence or
prevalence of these diseases.
The total addressable market across all of our therapeutic candidates
will ultimately depend upon, among other things, the diagnosis criteria
included in the final label for each of our therapeutic candidates approved
for sale for these indications, acceptance by the medical community and
patient access, drug pricing and reimbursement. The number of patients
in the United States and other major markets and elsewhere may turn out
to be lower than expected, patients may not be otherwise amenable to
treatment with our products or new patients may become increasingly
difficult to identify or gain access to, all of which would adversely affect our
results of operations and our business. Further, even if we obtain significant
market share for our therapeutic candidates, if the potential target
populations are very small, we may never achieve profitability despite
obtaining such significant market share.
The insurance coverage and reimbursement status of newly-approved
therapeutics is uncertain. The therapeutic candidates within our Wholly-
Owned Programs may become subject to unfavorable pricing regulations,
third-party coverage and reimbursement practices, or healthcare reform
initiatives, which would harm our business. Failure to obtain or maintain
coverage and adequate reimbursement for new or current therapeutics
could limit our ability to market those therapeutics and decrease our ability
to generate revenue.
The regulations that govern marketing approvals, pricing, coverage, and
reimbursement for new drugs and other medical therapeutics vary widely
from country to country. In the United States, healthcare reform legislation
may significantly change the approval requirements in ways that could
involve additional costs and cause delays in obtaining approvals. Some
countries require approval of the sale price of a therapeutic before it can
be marketed. In many countries, the pricing review period begins after
marketing or therapeutic licensing approval is granted. In some foreign
markets, pricing remains subject to continuing governmental control even
after initial approval is granted. As a result, we might obtain marketing
approval for a therapeutic in a particular country, but then be subject to
price regulations that delay our commercial launch of the therapeutic,
possibly for lengthy time periods, and negatively impact the revenue
we are able to generate from the sale of the therapeutic in that country.
Adverse pricing limitations may hinder our ability to recoup our investment
in one or more therapeutics or therapeutic candidates, even if any
therapeutic candidates we may develop obtain marketing approval.
Our ability to successfully commercialize our therapeutics and therapeutic
candidates also will depend in part on the extent to which coverage and
adequate reimbursement for these therapeutics and related treatments
will be available from government health administration authorities,
private health insurers, and other organizations. Government authorities
and third-party payors, such as private health insurers and health
maintenance organizations, decide which medications they will pay for
and establish reimbursement levels. The availability of coverage and
extent of reimbursement by governmental and private payors is essential
for most patients to be able to afford treatments such as gene therapy
— federal civil and criminal false claims laws and civil monetary penalty laws,
including the False Claims Act, which impose criminal and civil penalties,
including through civil “qui tam” or “whistleblower” actions, against
individuals or entities for, among other things, knowingly presenting, or
causing to be presented, claims for payment or approval from Medicare,
Medicaid, or other federal health care programs that are false or
fraudulent; knowingly making or causing a false statement material to
a false or fraudulent claim or an obligation to pay money to the federal
government; or knowingly concealing or knowingly and improperly
avoiding or decreasing such an obligation. Manufacturers can be held
liable under the FCA even when they do not submit claims directly to
government payors if they are deemed to “cause” the submission of false
or fraudulent claims. The government may assert that a claim including
items or services resulting from a violation of the federal Anti-Kickback
Statute constitutes a false or fraudulent claim for purposes of the FCA.
The FCA also permits a private individual acting as a “whistleblower” to
bring actions on behalf of the federal government alleging violations of
the FCA and to share in any monetary recovery;
— the federal Health Insurance Portability and Accountability Act of
1996, or HIPAA, which created additional federal criminal statutes that
prohibit knowingly and willfully executing, or attempting to execute, a
scheme to defraud any healthcare benefit program or obtain, by means
of false or fraudulent pretenses, representations, or promises, any of
the money or property owned by, or under the custody or control of,
any healthcare benefit program, regardless of the payor (e.g., public or
private) and knowingly and willfully falsifying, concealing or covering
up by any trick or device a material fact or making any materially false
statements in connection with the delivery of, or payment for, healthcare
benefits, items or services relating to healthcare matters. Similar to the
federal Anti-Kickback Statute, a person or entity can be found guilty of
violating HIPAA without actual knowledge of the statute or specific intent
to violate it;
— the federal civil monetary penalties laws, which impose civil fines for,
among other things, the offering or transfer or remuneration to a
Medicare or state healthcare program beneficiary if the person knows
or should know it is likely to influence the beneficiary’s selection of a
particular provider, practitioner, or supplier of services reimbursable by
Medicare or a state healthcare program, unless an exception applies;
— the federal Physician Payments Sunshine Act, created under the ACA,
and its implementing regulations, which require manufacturers of drugs,
devices, biologicals and medical supplies for which payment is available
under Medicare, Medicaid or the Children’s Health Insurance Program
(with certain exceptions) to report annually to the U.S. Department
of Health and Human Services, or HHS, under the Open Payments
Program, information related to payments or other transfers of value
made to physicians (defined to include doctors, dentists, optometrists,
podiatrists and chiropractors), certain non-physician providers (physician
assistants, nurse practitioners, clinical nurse specialists, certified nurse
anaesthetists, anaesthesiologist assistants and certified nurse midwives),
and teaching hospitals, as well as ownership and investment interests
held by physicians and their immediate family members;
— federal consumer protection and unfair competition laws, which
broadly regulate marketplace activities and activities that potentially
harm consumers;
— federal price reporting laws, which require manufacturers to calculate
and report complex pricing metrics to government programs, where such
reported prices may be used in the calculation of reimbursement and/or
discounts on approved therapeutics; and
— analogous state and foreign laws and regulations, such as state and
foreign anti-kickback, false claims, consumer protection and unfair
competition laws which may apply to pharmaceutical business practices,
including but not limited to, research, distribution, sales and marketing
arrangements as well as submitting claims involving healthcare items
or services reimbursed by any third-party payer, including commercial
insurers; state laws that require pharmaceutical companies to comply
with the pharmaceutical industry’s voluntary compliance guidelines
and the relevant compliance guidance promulgated by the federal
government that otherwise restricts payments that may be made to
healthcare providers and other potential referral sources; state laws that
require drug manufacturers to file reports with states regarding pricing
and marketing information, such as the tracking and reporting of gifts,
compensations and other remuneration and items of value provided to
healthcare professionals and entities; and state and local laws requiring
the registration of pharmaceutical sales representatives.
Increasingly, third-party payors are requiring that pharmaceutical
companies provide them with predetermined discounts from list prices and
are challenging the prices charged for medical therapeutics. We cannot
be sure that reimbursement will be available for any therapeutic candidate
that we commercialize and, if reimbursement is available, the level of
reimbursement. Reimbursement may impact the demand for, or the price
of, any therapeutic or therapeutic candidate for which we obtain marketing
approval. In order to obtain reimbursement, physicians may need to show
that patients have superior treatment outcomes with our therapeutics
compared to standard of care drugs, including lower-priced generic
versions of standard of care drugs. We expect to experience pricing
pressures in connection with the sale of any of the therapeutic candidates
within our Wholly-Owned Programs , due to the trend toward managed
healthcare, the increasing influence of health maintenance organizations
and additional legislative changes. The downward pressure on healthcare
costs in general, particularly prescription drugs and surgical procedures
and other treatments, has become very intense. As a result, increasingly
high barriers are being erected to the entry of new therapeutics.
Additionally, we may develop companion diagnostic tests for use with our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates.
We, or our Founded Entities or our collaborators may be required to obtain
coverage and reimbursement for these tests separate and apart from the
coverage and reimbursement we seek for our Wholly-Owned Programs
or our Founded Entities’ therapeutic candidates, once approved. Even if
we or our Founded Entities obtain regulatory approval or clearance for
such companion diagnostics, there is significant uncertainty regarding
our ability to obtain coverage and adequate reimbursement for the same
reasons applicable to our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates. Medicare reimbursement methodologies,
whether under Part A, Part B, or clinical laboratory fee schedule may be
amended from time to time, and we cannot predict what effect any change
to these methodologies would have on any therapeutic candidate or
companion diagnostic for which we receive approval.
Risks Related to Compliance with Healthcare Laws
If we fail to comply with healthcare laws, we could face substantial
penalties and our business, operations and financial conditions could be
adversely affected.
Healthcare providers, physicians and third-party payors in the United
States and elsewhere play a primary role in the recommendation and
prescription of pharmaceutical therapeutics. Arrangements with healthcare
providers, third-party payors and customers can expose pharmaceutical
manufacturers to broadly applicable fraud and abuse and other healthcare
laws and regulations, including, without limitation, the federal Anti-
Kickback Statute and the federal False Claims Act, or the FCA, which
may constrain the business or financial arrangements and relationships
through which such companies sell, market and distribute pharmaceutical
therapeutics. In particular, the promotion, sales and marketing of
healthcare items and services, as well as certain business arrangements in
the healthcare industry, are subject to extensive laws designed to prevent
fraud, kickbacks, self-dealing and other abusive practices. These laws and
regulations may restrict or prohibit a wide range of ownership, pricing,
discounting, marketing and promotion, structuring and commission(s),
certain customer incentive programs and other business arrangements
generally. Activities subject to these laws also involve the improper use of
information obtained in the course of patient recruitment for clinical trials.
The applicable federal and state healthcare laws and regulations laws that
may affect our ability to operate include, but are not limited to:
— the federal Anti-Kickback Statute, which prohibits, among other things,
persons from knowingly and willfully soliciting, receiving, offering or
paying any remuneration (including any kickback, bribe, or rebate),
directly or indirectly, overtly or covertly, in cash or in kind, to induce, or
in return for, either the referral of an individual, or the purchase, lease,
order or recommendation of any good, facility, item or service for which
payment may be made, in whole or in part, under a federal healthcare
program, such as the Medicare and Medicaid programs. A person or
entity does not need to have actual knowledge of the statute or specific
intent to violate it in order to have committed a violation. Violations are
subject to civil and criminal fines and penalties for each violation, plus
up to three times the remuneration involved, imprisonment of up to
ten years, and exclusion from government healthcare programs. The
Anti-Kickback Statute has been interpreted to apply to arrangements
between pharmaceutical manufacturers, on the one hand, and
prescribers, purchasers and formulary managers, on the other;
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Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
Further, in the event we decide to conduct clinical trials or continue to
enroll subjects in our ongoing or future clinical trials in the European
Economic Area, or EEA, or the United Kingdom, UK, we may be subject to
additional privacy restrictions. The EU General Data Protection Regulation
2016/679, or GDPR, and the UK General Data Protection Regulation and the
Data Protection Act 2018, or the UK GDPR, could impose comprehensive
data privacy compliance obligations in relation to our collection and use
of personal data, including a principle of accountability and the obligation
to demonstrate compliance through policies, procedures, training and
audit, as well as regulating cross-border transfers of personal data out
of the EEA and the UK. In relation to data transfers from the EEA to the
United States, the EU-US Data Privacy Framework, or DPF, was approved
by the European Commission in July 2023 as an effective EU GDPR data
transfer mechanism to U.S. entities self-certified under the DPF. The
UK Extension to the DPF followed in October 2023, as an effective UK
GDPR data transfer mechanism to U.S. entities self-certified under the
UK Extension to the DPF. In relation to such cross border transfers of
personal data, we expect the existing legal complexity and uncertainty
regarding international personal data transfers to continue. In particular,
we expect the European Commission approval of the current DPF to be
challenged and international transfers to the United States and to other
jurisdictions more generally to continue to be subject to enhanced scrutiny
by regulators. As the regulatory guidance and enforcement landscape in
relation to data transfers continue to develop, we could suffer additional
costs, complaints and/or regulatory investigations or fines; we may have to
stop using certain tools and vendors and make other operational changes;
we may have to implement alternative data transfer mechanisms under the
GDPR and/ or take additional compliance and operational measures; and/
or it could otherwise affect the manner in which we provide our services
and could adversely affect our business, operations and financial condition.
Companies that must comply with the GDPR and UK GDPR face increased
compliance obligations and risk, including more robust regulatory
enforcement of data protection requirements and potential fines for
noncompliance of up to €20 million under the GDPR and £17.5 million under
the UK GDPR or 4% of the annual global revenues of the noncompliant
undertaking, whichever is greater. The existence of parallel regimes under
the GDPR and UK GDPR, and divergence in respect of implementing or
supplementary laws across the EEA and UK in certain areas, means that
we could be subject to potentially overlapping or divergent enforcement
actions for certain actual or perceived violations.
Failure to comply with these laws and regulations could result in
government enforcement actions (which could include civil, criminal and
administrative penalties), private litigation, and/or adverse publicity and
could negatively affect our operating results and business. Moreover,
clinical trial subjects, employees and other individuals about whom we
or our potential collaborators obtain personal information, as well as the
providers who share this information with us, may limit our ability to collect,
use and disclose the information. Claims that we have violated individuals’
privacy rights, failed to comply with data protection laws, or breached our
contractual obligations, even if we are not found liable, could be expensive
and time-consuming to defend and could result in adverse publicity that
could harm our business.
Healthcare legislative measures aimed at reducing healthcare costs may
have a material adverse effect on our business and results of operations.
The United States and many foreign jurisdictions have enacted or
proposed legislative and regulatory changes affecting the healthcare
system that could prevent or delay marketing approval of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates or any future therapeutic candidates, restrict or
regulate post-approval activities and affect our or our Founded Entities’
ability to profitably sell any therapeutic for which we or our Founded
Entities obtain marketing approval. Changes in regulations, statutes or
the interpretation of existing regulations could impact our or our Founded
Entities’ business in the future by requiring, for example: (i) changes to our
manufacturing arrangements; (ii) additions or modifications to therapeutic
labeling; (iii) the recall or discontinuation of our therapeutics; or (iv)
additional record-keeping requirements. If any such changes were to be
imposed, they could adversely affect the operation of our business.
In the United States, there have been and continue to be a number of
legislative initiatives and judicial challenges to contain healthcare costs.
For example, in March 2010, the Affordable Care Act, or the ACA, was
passed, which substantially changed the way healthcare is financed by both
governmental and private insurers, and significantly impacted the U.S.
pharmaceutical industry. The ACA, among other things, subjects biological
therapeutics to potential competition by lower-cost biosimilars, addresses
Because of the breadth of these laws and the narrowness of the statutory
exceptions and regulatory safe harbors available, it is possible that some
of our business activities, including compensation of physicians with stock
or stock options, could, despite efforts to comply, be subject to challenge
under one or more of such laws. Additionally, FDA or foreign regulators
may not agree that we have mitigated any risk of bias in our clinical
trials due to payments or equity interests provided to investigators or
institutions which could limit a regulator’s acceptance of those clinical trial
data in support of a marketing application. Moreover, efforts to ensure that
our business arrangements will comply with applicable healthcare laws may
involve substantial costs. It is possible that governmental and enforcement
authorities will conclude that our business practices may not comply with
current or future statutes, regulations or case law interpreting applicable
fraud and abuse or other healthcare laws and regulations. If any such
actions are instituted against us, and we are not successful in defending
ourselves or asserting our rights, those actions could have a significant
impact on our business, including the imposition of significant civil,
criminal and administrative penalties, damages, disgorgement, monetary
fines, exclusion from participation in Medicare, Medicaid and other federal
healthcare programs, integrity and oversight agreements to resolve
allegations of non-compliance, contractual damages, reputational harm,
diminished profits and future earnings, and curtailment or restructuring of
our operations, any of which could adversely affect our ability to operate
our business and our results of operations. In addition, the approval
and commercialization of any of the therapeutic candidates within our
Wholly-Owned Programs outside the United States will also likely subject
us to foreign equivalents of the healthcare laws mentioned above, among
other foreign laws.
Failure to comply with data protection laws and regulations could lead
to government enforcement actions (which could include civil or criminal
penalties), private litigation, and/or adverse publicity and could negatively
affect our operating results and business.
We and any potential collaborators may be subject to federal, state, and
foreign data protection laws and regulations (i.e., laws and regulations that
address privacy and data security). In the United States, numerous federal
and state laws and regulations, including federal health information privacy
laws, state data breach notification laws, state health information privacy
laws, and federal and state consumer protection laws (e.g., Section 5 of the
Federal Trade Commission Act), that govern the collection, use, disclosure
and protection of health-related and other personal information could
apply to our operations or the operations of our collaborators. In addition,
we may obtain health information from third parties (including research
institutions from which we obtain clinical trial data) that are subject to
privacy and security requirements under HIPAA, as amended. Depending
on the facts and circumstances, we could be subject to civil, criminal, and
administrative penalties if we knowingly obtain, use, or disclose individually
identifiable health information maintained by a HIPAA-covered entity in a
manner that is not authorized or permitted by HIPAA.
As our operations and business grow, we may become subject to or
affected by new or additional data protection laws and regulations and
face increased scrutiny or attention from regulatory authorities. In the
United States, certain states have adopted data privacy and security laws
and regulations, which govern the privacy, processing and protection of
health-related and other personal information. Such laws and regulations
will be subject to interpretation by various courts and other governmental
authorities, thus creating potentially complex compliance issues for us and
our future customers and strategic partners. For example, the California
Consumer Privacy Act of 2018, as amended by the California Privacy Rights
Act, or collectively, the CCPA, requires covered businesses that process
the personal information of California residents to, among other things: (i)
provide certain disclosures to California residents regarding the business’s
collection, use, and disclosure of their personal information; (ii) receive
and respond to requests from California residents to access, delete, and
correct their personal information, or to opt out of certain disclosures of
their personal information; and (iii) enter into specific contractual provisions
with service providers that process California resident personal information
on the business’s behalf. Additional compliance investment and potential
business process changes may also be required. Similar laws have passed
in other states and are continuing to be proposed at the state and federal
level, reflecting a trend toward more stringent privacy legislation in
the United States. The enactment of such laws could have potentially
conflicting requirements that would make compliance challenging. In
the event that we are subject to or affected by HIPAA, the CCPA or other
domestic privacy and data protection laws, any liability from failure to
comply with the requirements of these laws could adversely affect our
financial condition.
Such reforms could have an adverse effect on anticipated revenue from
therapeutic candidates that we may successfully develop and for which
we may obtain regulatory approval and may affect our overall financial
condition and ability to develop therapeutic candidates. We cannot predict
the initiatives that may be adopted in the future. The continuing efforts of
the government, insurance companies, managed care organizations and
other payors of healthcare services to contain or reduce costs of healthcare
and/or impose price controls may adversely affect:
— the demand for the therapeutic candidates within our Wholly-Owned
Programs or our Founded Entities’ therapeutic candidates, if approved;
— our ability to receive or set a price that we believe is fair for our
therapeutics;
— our ability to generate revenue and achieve or maintain profitability;
— the amount of taxes that we are required to pay; and
— the availability of capital.
Other healthcare reform measures may be adopted in the future, and may
result in additional reductions in Medicare and other healthcare funding,
more rigorous coverage criteria, lower reimbursement, and new payment
methodologies. This could lower the price that we receive for any approved
therapeutic. Any denial in coverage or reduction in reimbursement from
Medicare or other government-funded programs may result in a similar
denial or reduction in payments from private payors, which may prevent
us from being able to generate sufficient revenue, attain profitability
or commercialize the therapeutic candidates within our Wholly-Owned
Programs or our Founded Entities’ therapeutic candidates, if approved.
Litigation and legislative efforts to change or repeal the ACA are likely to
continue, with unpredictable and uncertain results.
In the EU, similar developments may affect our ability to profitably
commercialize our therapeutic candidates, if approved. On December 13,
2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA,
amending Directive 2011/24/EU, was adopted. The Regulation entered
into force in January 2022 and has been applicable since January 2025,
with phased implementation based on the type of product, i.e. oncology
and advanced therapy medicinal products as of 2025, certain high-risk
medical devices as of 2026, orphan medicinal products as of 2028, and
all other medicinal products by 2030. The Regulation intends to boost
cooperation among EU member states in assessing health technologies,
including new medicinal products as well as certain high-risk medical
devices, and provide the basis for cooperation at the EU level for joint
clinical assessments in these areas. It will permit EU member states to
use common HTA tools, methodologies, and procedures across the EU,
working together in four main areas, including joint clinical assessment of
the innovative health technologies with the highest potential impact for
patients, joint scientific consultations whereby developers can seek advice
from HTA authorities, identification of emerging health technologies
to identify promising technologies early, and continuing voluntary
cooperation in other areas. Individual EU member states will continue to
be responsible for assessing non-clinical (e.g., economic, social, ethical)
aspects of health technology, and making decisions on pricing and
reimbursement.
Risks Related to Competition
We face significant competition in an environment of rapid technological
and scientific change, and there is a possibility that our competitors
may achieve regulatory approval before us or develop therapies that are
safer, more advanced or more effective than ours, which may negatively
impact our ability to successfully market or commercialize any therapeutic
candidates we may develop and ultimately harm our financial condition.
The development and commercialization of new drug therapeutics is highly
competitive. We may face competition with respect to any therapeutic
candidates that we seek to develop or commercialize in the future from
major pharmaceutical companies, specialty pharmaceutical companies,
and biotechnology companies worldwide. Potential competitors also
include academic institutions, government agencies, and other public
and private research organizations that conduct research, seek patent
protection, and establish collaborative arrangements for research,
development, manufacturing, and commercialization.
There are a number of major pharmaceutical and biotechnology companies
that are currently pursuing the development and commercialization of
potential medicines targeting similar treatment areas as we are. If any of
our competitors receive FDA or foreign regulatory authorities approval
before we do, the therapeutic candidates within our Wholly-Owned
Programs would not be the first treatment on the market, and our market
share may be limited. In addition to competition from other companies
targeting our target indications, any therapeutics we may develop may also
face competition from other types of therapies.
a new methodology by which rebates owed by manufacturers under the
Medicaid Drug Rebate Program are calculated for drugs that are inhaled,
infused, instilled, implanted or injected, increases the minimum Medicaid
rebates owed by manufacturers under the Medicaid Drug Rebate Program
and extends the rebate program to individuals enrolled in Medicaid
managed care organizations, and establishes annual fees and taxes on
manufacturers of certain branded prescription drugs. Since the enactment
of the ACA, there have been numerous judicial, administrative, executive,
and legislative challenges to certain aspects of the ACA. On June 17, 2021,
the U.S. Supreme Court dismissed the most recent judicial challenge
to the ACA brought by several states without specifically ruling on the
constitutionality of the ACA.
Payment methodologies may be subject to changes in healthcare
legislation and regulatory challenges. For example, in order for a drug
therapeutic to receive federal reimbursement under the Medicaid or
Medicare Part B programs or to be sold directly to U.S. government
agencies, the manufacturer must extend discounts to entities eligible
to participate in the 340B drug pricing program. In December 2018, the
CMS published a final rule permitting further collections and payments to
and from certain ACA qualified health plans and health insurance issuers
under the ACA risk adjustment program in response to the outcome
of the federal district court litigation regarding the method CMS uses
to determine this risk adjustment. Since then, the ACA risk adjustment
program payment parameters have been updated annually.
In addition, other legislative changes have been proposed and adopted
in the United States since the ACA was enacted. In August 2011, the
Budget Control Act of 2011, among other things, resulted in aggregate
reductions of Medicare payments to providers, which went into effect in
2013, and, due to subsequent legislative amendments, will remain in effect
through 2032, with the exception of a temporary suspension from May 1,
2020 through March 31, 2022, unless additional Congressional action is
taken. The American Taxpayer Relief Act of 2012 further reduced Medicare
payments to several types of providers, including hospitals and cancer
treatment centers, and increased the statute of limitations period for
the government to recover overpayments to providers from three to five
years. In addition, in March 2021, Congress enacted the American Rescue
Plan Act of 2021, which, among other things, eliminated the statutory cap
on drug manufacturers’ Medicaid Drug Rebate Program rebate liability,
effective January 1, 2024.
There has been increasing legislative and enforcement interest in the
United States with respect to drug pricing practices. Specifically, there
have been several recent U.S. Congressional inquiries and proposed
federal and state legislation designed to, among other things, bring more
transparency to drug pricing, reduce the cost of prescription drugs under
Medicare, review the relationship between pricing and manufacturer
patient programs, and reform government program reimbursement
methodologies for drugs. On August 16, 2022, the Inflation Reduction
Act of 2022, or IRA, was signed into law. Among other things, the IRA
requires manufacturers of certain drugs to engage in price negotiations
with Medicare (beginning in 2026), imposes rebates under Medicare Part B
and Medicare Part D to penalize price increases that outpace inflation (first
due in 2023), and replaces the Part D coverage gap discount program with
a new manufacturer discounting program (which began in 2025). The IRA
permits the Secretary of the Department of Health and Human Services
to implement many of these provisions through guidance, as opposed to
regulation, for the initial years. CMS has published the negotiated prices
for the initial ten drugs, which will first be effective in 2026, and the list
of the subsequent 15 drugs that will be subject to negotiation, although
the Medicare drug price negotiation program is currently subject to legal
challenges. For that and other reasons, it is currently unclear how the IRA
will be effectuated.
At the state level, legislatures have increasingly passed legislation and
implemented regulations designed to control pharmaceutical and
biological therapeutic pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain therapeutic access and
marketing cost disclosure, drug price reporting and other transparency
measures, and, in some cases, designed to encourage importation from
other countries and bulk purchasing. Some states have enacted legislation
creating so-called prescription drug affordability boards, which ultimately
may attempt to impose price limits on certain drugs in these states. In
addition, regional healthcare authorities and individual hospitals are
increasingly using bidding procedures to determine what pharmaceutical
therapeutics and which suppliers will be included in their prescription drug
and other healthcare programs. Furthermore, there has been increased
interest by third-party payors and governmental authorities in reference
pricing systems and publication of discounts and list prices.
There have been, and likely will continue to be, legislative and regulatory
proposals at the foreign, federal and state levels directed at containing or
lowering the cost of healthcare. The implementation of cost containment
measures or other healthcare reforms may prevent us from being able to
generate revenue, attain profitability, or commercialize our therapeutic.
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Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
We believe that any of the therapeutic candidates within our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates that are
approved as a biological therapeutic under a BLA should qualify for the 12-
year period of exclusivity. However, there is a risk that this exclusivity could
be shortened due to congressional action or otherwise, or that the FDA
will not consider such therapeutic candidates to be reference therapeutics
for competing therapeutics, potentially creating the opportunity for
generic competition sooner than anticipated. Other aspects of the BPCIA,
some of which may impact the BPCIA exclusivity provisions, have also
been the subject of recent litigation. Moreover, the extent to which a
biosimilar therapeutic, once approved, will be substituted for any one of
our, our Founded Entities’ or our collaborators’ reference therapeutics
in a way that is similar to traditional generic substitution for non-biologic
therapeutics is not yet clear, and will depend on a number of marketplace
and regulatory factors that are still developing. If competitors are able to
obtain marketing approval for biosimilars referencing any therapeutics that
we or our Founded Entities develop alone or with collaborators that may
be approved, such therapeutics may become subject to competition from
such biosimilars, with the attendant competitive pressure and potential
adverse consequences.
Risks Related to Reliance on Third Parties
We are currently party to and may seek to enter into additional
collaborations, licenses and other similar arrangements and may not be
successful in maintaining existing arrangements or entering into new ones,
and even if we are, we may not realize the benefits of such relationships,
which could cause us to expend significant resources and give rise to
substantial business risk with no assurance of financial return.
We are currently parties to license and collaboration agreements with
a number of universities and pharmaceutical companies and expect
to enter into additional agreements as part of our business strategy.
Establishing strategic collaborations is difficult and time-consuming. Our
discussions with potential collaborators may not lead to the establishment
of collaborations on favorable terms, if at all. Potential collaborators
may reject collaborations based upon their assessment of our financial,
regulatory or intellectual property position. Even if we successfully
establish new collaborations, these relationships may never result in the
successful development or commercialization of therapeutic candidates
or the generation of sales revenue. The success of our current and any
future collaboration arrangements will depend heavily on the efforts and
activities of our collaborators. Collaborations are subject to numerous
risks, which may include risks that:
— collaborators may have significant discretion in determining the efforts
and resources that they will apply to collaborations;
— collaborators may not pursue development and commercialization of the
therapeutic candidates within our Wholly-Owned Programs or may elect
not to continue or renew development or commercialization programs
based on clinical trial results, changes in their strategic focus due to their
acquisition of competitive therapeutics or their internal development
of competitive therapeutics, availability of funding or other external
factors, such as a business combination that diverts resources or creates
competing priorities;
— collaborators may delay clinical trials, provide insufficient funding
for a clinical trial program, stop a clinical trial, abandon a therapeutic
candidate, repeat or conduct new clinical trials or require a new
formulation of a therapeutic candidate for clinical testing;
— collaborators could independently develop, or develop with third parties,
therapeutics that compete directly or indirectly with our therapeutics or
therapeutic candidates;
— a collaborator with marketing, manufacturing and distribution rights
to one or more therapeutics may not commit sufficient resources to or
otherwise not perform satisfactorily in carrying out these activities;
— we could grant exclusive rights to our collaborators that would prevent us
from collaborating with others;
— collaborators may not properly maintain or defend our intellectual
property rights or may use our intellectual property or proprietary
information in a way that gives rise to actual or threatened litigation that
could jeopardize or invalidate our intellectual property or proprietary
information or expose us to potential liability;
— disputes may arise between us and a collaborator that cause the delay
or termination of the research, development or commercialization of our
current or future therapeutic candidates or that results in costly litigation
or arbitration that diverts management attention and resources;
— collaborations may be terminated, which may result in a need for
additional capital to pursue further development or commercialization of
the applicable current or future therapeutic candidates;
Many of our current or potential competitors, either alone or with their
strategic partners, have:
— greater financial, technical, and human resources than we have
at every stage of the discovery, development, manufacture, and
commercialization of therapeutics;
— more extensive resources for preclinical testing, conducting clinical trials,
obtaining regulatory approvals, and in manufacturing, marketing, and
selling drug therapeutics;
— therapeutics that have been approved or are in late stages of
development; and
— collaborative arrangements in our target markets with leading companies
and research institutions.
Mergers and acquisitions in the pharmaceutical and biotechnology
industries may result in even more resources being concentrated among a
smaller number of our competitors. Smaller or early-stage companies may
also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies. These competitors
also compete with us in recruiting and retaining qualified scientific
and management personnel and establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring technologies
complementary to, or necessary for, our programs. Our commercial
opportunity could be reduced or eliminated if our competitors develop
and commercialize therapeutics that are safer, more effective, have fewer
or less severe side effects, are more convenient, or are less expensive than
any therapeutics that we may develop. Furthermore, currently approved
therapeutics could be discovered to have application for treatment of
our targeted disease indications or similar indications, which could give
such therapeutics significant regulatory and market timing advantages
over the therapeutic candidates within our Wholly-Owned Programs .
Our competitors may also obtain FDA, EMA or other comparable foreign
regulatory approval for their therapeutics more rapidly than we may obtain
approval for ours and may obtain orphan therapeutic exclusivity from
the FDA for indications that we are targeting, which could result in our
competitors establishing a strong market position before we are able to
enter the market. Additionally, therapeutics or technologies developed
by our competitors may render our potential therapeutic candidates
uneconomical or obsolete and we may not be successful in marketing any
therapeutic candidates we may develop against competitors.
In addition, we could face litigation or other proceedings with respect to
the scope, ownership, validity and/or enforceability of our patents relating
to our competitors’ therapeutics and our competitors may allege that our
therapeutics infringe, misappropriate or otherwise violate their intellectual
property. The availability of our competitors’ therapeutics could limit the
demand, and the price we are able to charge, for any therapeutics that we
may develop and commercialize.
The therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates for which we or our Founded
Entities intend to seek approval as biologic therapeutics may face
competition sooner than anticipated.
If we or our Founded Entities are successful in achieving regulatory
approval to commercialize any biologic therapeutic candidate we or
our Founded Entities develop alone or with collaborators, it may face
competition from biosimilar therapeutics. In the United States, certain
of the therapeutic candidates within our Wholly-Owned Programs and
our Founded Entities’ therapeutic candidates are regulated by the FDA
as biologic therapeutics subject to approval under the BLA pathway.
The Biologics Price Competition and Innovation Act of 2009, or BPCIA,
created an abbreviated pathway for the approval of biosimilar and
interchangeable biologic therapeutics following the approval of an original
BLA. The abbreviated regulatory pathway establishes legal authority for
the FDA to review and approve biosimilar biologics, including the possible
designation of a biosimilar as “interchangeable” based on its similarity
to an existing brand therapeutic. Under the BPCIA, an application for a
biosimilar therapeutic may not be submitted until four years following
the date that the reference therapeutic was first licensed by the FDA.
In addition, the approval of a biosimilar therapeutic may not be made
effective by the FDA until 12 years after the reference therapeutic was
first licensed by the FDA. During this 12-year period of exclusivity, another
company may still market a competing version of the reference therapeutic
if the FDA approves a full BLA for the competing therapeutic containing
the sponsor’s own preclinical data and data from adequate and well-
controlled clinical trials to demonstrate the safety, purity and potency of
their therapeutic. In the EU, upon receiving a marketing authorization, new
biological entities generally receive eight years of data exclusivity and
an additional two years of market exclusivity. If granted, data exclusivity
prevents regulatory authorities in the EU from referencing the innovator’s
data to assess a biosimilar application. During the additional two-year
period of market exclusivity, a biosimilar marketing authorization can be
submitted, and the innovator’s data may be referenced, but no biosimilar
product can be marketed until the expiration of the market exclusivity.
Even if we successfully establish new collaborations, these relationships
may never result in the successful development or commercialization of
therapeutic candidates or the generation of sales revenue. To the extent
that we enter into collaborative arrangements, the related therapeutic
revenues are likely to be lower than if we directly marketed and sold
therapeutics. Such collaborators may also consider alternative therapeutic
candidates or technologies for similar indications that may be available to
collaborate on and whether such a collaboration could be more attractive
than the one with us for any future therapeutic candidate.
Management of our relationships with collaborators will require:
— significant time and effort from our management team;
— coordination of our marketing and R&D programs with the marketing and
R&D priorities of our collaborators; and
— effective allocation of our resources to multiple projects.
We rely on third parties to assist in conducting our clinical trials and some
aspects of our research and preclinical testing, and those third parties
may not perform satisfactorily, including failing to meet deadlines for the
completion of such trials, research, or testing.
We currently rely and expect to continue to rely on third parties, such as
CROs, clinical data management organizations, medical institutions, and
clinical investigators, to conduct some aspects of research and preclinical
testing and clinical trials. Any of these third parties may terminate their
engagements with us or be unable to fulfill their contractual obligations.
If any of our relationships with these third parties terminate, we may
not be able to enter into arrangements with alternative third parties on
commercially reasonable terms, or at all. If we need to enter into alternative
arrangements, it would delay therapeutic development activities.
Further, although our reliance on these third parties for clinical
development activities limits our control over these activities, we remain
responsible for ensuring that each of our trials is conducted in accordance
with the applicable protocol, legal and regulatory requirements and
scientific standards. For example, notwithstanding the obligations of a
CRO for a trial of one of the therapeutic candidates within our Wholly-
Owned Programs , we remain responsible for ensuring that each of our
clinical trials is conducted in accordance with the general investigational
plan and protocols for the trial. Moreover, the FDA and comparable
foreign regulatory authorities require us to comply with requirements,
commonly referred to as GCPs, for conducting, recording and reporting
the results of clinical trials to assure that data and reported results are
credible and accurate and that the rights, integrity and confidentiality
of trial participants are protected. The FDA and comparable foreign
regulatory authorities enforce these GCPs through periodic inspections of
trial sponsors, principal investigators, clinical trial sites and IRBs. If we or
our third-party contractors fail to comply with applicable GCPs, the clinical
data generated in our clinical trials may be deemed unreliable and the FDA
or comparable foreign regulatory authorities may require us to perform
additional clinical trials before approving the therapeutic candidates
within our Wholly-Owned Programs , which would delay the regulatory
approval process. We cannot be certain that, upon inspection, the FDA or
comparable foreign regulatory authorities will determine that any of our
clinical trials comply with GCPs. We are also required to register certain
clinical trials and post the results of completed clinical trials on databases
including a government-sponsored database, ClinicalTrials.gov, within
certain timeframes. Failure to do so can result in fines, adverse publicity
and civil and criminal sanctions.
Furthermore, the third parties conducting clinical trials on our behalf are
not our employees, and except for remedies available to us under our
agreements with such contractors, we cannot control whether or not they
devote sufficient time, skill and resources to our ongoing development
programs. These contractors may also have relationships with other
commercial entities, including our competitors, for whom they may also
be conducting clinical trials or other drug or medical device development
activities, which could impede their ability to devote appropriate time to
our clinical programs. If these third parties, including clinical investigators,
do not successfully carry out their contractual duties, meet expected
deadlines or conduct our clinical trials in accordance with regulatory
requirements or our stated protocols, we may not be able to obtain, or
may be delayed in obtaining, regulatory approvals for the therapeutic
candidates within our Wholly-Owned Programs . If that occurs, we will not
be able to, or may be delayed in our efforts to, successfully commercialize
the therapeutic candidates within our Wholly-Owned Programs . In
such an event, our financial results and the commercial prospects for
any therapeutic candidates that we seek to develop could be harmed,
our costs could increase and our ability to generate revenues could be
delayed, impaired or foreclosed.
— collaborators may own or co-own intellectual property covering
therapeutics that result from our collaboration with them, and in such
cases, we would not have the exclusive right to develop or commercialize
such intellectual property;
— disputes may arise with respect to the ownership of any intellectual
property developed pursuant to our collaborations; and
— a collaborator’s sales and marketing activities or other operations may
not be in compliance with applicable laws resulting in civil or criminal
proceedings.
Additionally, we may seek to enter into additional collaborations, joint
ventures, licenses and other similar arrangements for the development or
commercialization of the therapeutic candidates within our Wholly-Owned
Programs , due to capital costs required to develop or commercialize
the therapeutic candidate or manufacturing constraints. We may not be
successful in our efforts to establish such collaborations for the therapeutic
candidates within our Wholly-Owned Programs because our R&D pipeline
may be insufficient, the therapeutic candidates within our Wholly-Owned
Programs may be deemed to be at too early of a stage of development
for collaborative effort or third parties may not view the therapeutic
candidates within our Wholly-Owned Programs as having the requisite
potential to demonstrate safety and efficacy or significant commercial
opportunity, or collaborators may pursue existing or other development-
stage therapeutics or alternative technologies in preference to those
being developed in collaboration with us. In addition, we face significant
competition in seeking appropriate strategic partners, and the negotiation
process can be time consuming and complex. Further, any future
collaboration agreements may restrict us from entering into additional
agreements with potential collaborators. We cannot be certain that,
following a strategic transaction or license, we will achieve an economic
benefit that justifies such transaction.
Even if we are successful in our efforts to establish such collaborations,
the terms that we agree upon may not be favorable to us, and we may not
be able to maintain such collaborations if, for example, development or
approval of a therapeutic candidate is delayed, the safety of a therapeutic
candidate is questioned or sales of an approved therapeutic candidate
are unsatisfactory. Additionally, if we enter into R&D collaborations during
the early phases of therapeutic development, success will in part depend
on the performance of research collaborators. We will not directly control
the amount or timing of resources devoted by research collaborators to
activities related to therapeutic candidates. Research collaborators may
not commit sufficient resources to our R&D programs. If any research
collaborator fails to commit sufficient resources, the preclinical or clinical
development programs related to the collaboration could be delayed
or terminated.
In addition, any potential future collaborations may be terminable by
our strategic partners, and we may not be able to adequately protect
our rights under these agreements. Furthermore, strategic partners may
negotiate for certain rights to control decisions regarding the development
and commercialization of the therapeutic candidates within our Wholly-
Owned Programs , if approved, and may not conduct those activities in
the same manner as we do. Any termination of collaborations we enter
into in the future, or any delay in entering into collaborations related to the
therapeutic candidates within our Wholly-Owned Programs , could delay
the development and commercialization of the therapeutic candidates
within our Wholly-Owned Programs and reduce their competitiveness if
they reach the market, which could have a material adverse effect on our
business, financial condition and results of operations.
We anticipate relying upon strategic collaborations for marketing and
commercializing our existing therapeutic candidates, and we may rely even
more on strategic collaborations for R&D of other therapeutic candidates
or discoveries. We may sell therapeutic offerings through strategic
partnerships with pharmaceutical and biotechnology companies. If we
are unable to establish or manage such strategic collaborations on terms
favorable to us in the future, our R&D efforts and potential to generate
revenue may be limited. If we fail to make required milestone or royalty
payments to collaborators or to observe other obligations in agreements
with them, the collaborators may have the right to terminate or stop
performance of those agreements.
204 PureTech Health plc Annual Report and Accounts 2024
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Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
The therapeutic candidates within our Wholly-Owned Programs or
our Founded Entities’ therapeutic candidates may compete with
other therapeutic candidates and marketed therapeutics for access to
manufacturing facilities. Any performance failure on the part of our or our
Founded Entities’ existing or future manufacturers could delay clinical
development, marketing approval, certification or commercialization.
Our and certain of our Founded Entities’ current and anticipated future
dependence upon others for the manufacturing of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates may adversely affect our future profit margins
and our ability to commercialize any therapeutic candidates that receive
marketing clearance or approval on a timely and competitive basis.
If the contract manufacturing facilities on which we and certain of our
Founded Entities’ rely do not continue to meet regulatory requirements
or are unable to meet our or our Founded Entities’ supply demands, our
business will be harmed.
All entities involved in the preparation of therapeutic candidates for
clinical trials or commercial sale, including our and certain of our Founded
Entities’ existing CMOs for the therapeutic candidates within our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates, are
subject to extensive regulation. Components of a finished drug or biologic
therapeutic approved for commercial sale or used in late-stage clinical
trials must be manufactured in accordance with cGMP, or similar regulatory
requirements outside the United States. These regulations govern
manufacturing processes and procedures, including recordkeeping, and
the implementation and operation of quality systems to control and assure
the quality of investigational therapeutics and therapeutics approved
for sale. Similarly, medical devices must be manufactured in accordance
with QSR and similar foreign requirements. Poor control of production
processes can lead to the introduction of contaminants or to inadvertent
changes in the properties or stability of Karuna’s Cobenfy, Gelesis’ Plenity,
Akili’s EndeavorRx, our Founded Entities’ other therapeutic candidates or
the therapeutic candidates within our Wholly-Owned Programs . Our or
our Founded Entities’ failure, or the failure of third-party manufacturers,
to comply with applicable regulations could result in sanctions being
imposed on us or our Founded Entities, including clinical holds, fines,
injunctions, civil penalties, delays, suspension or withdrawal of approvals
or certification, license revocation, suspension of production, seizures or
recalls of therapeutic candidates or marketed drugs or devices, operating
restrictions and criminal prosecutions, any of which could significantly
and adversely affect clinical or commercial supplies of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates.
We and/or our CMOs must supply all necessary documentation, as
applicable, in support of a marketing application, such as an NDA, BLA,
PMA or MAA, on a timely basis and must adhere to regulations enforced by
the FDA and other regulatory agencies through their facilities inspection
program. Some of our CMOs have never produced a commercially
approved pharmaceutical therapeutic and therefore have not obtained
the requisite regulatory authority approvals to do so. The facilities and
quality systems of some or all of our third-party contractors must pass a
pre-approval inspection for compliance with the applicable regulations
as a condition of regulatory approval of the therapeutic candidates
within our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates or any of our other potential therapeutics. In addition, the
regulatory authorities may, at any time, audit or inspect a manufacturing
facility involved with the preparation of the therapeutic candidates within
our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates or our other potential therapeutics or the associated quality
systems for compliance with the regulations applicable to the activities
being conducted. Although we oversee the CMOs, we cannot control
the manufacturing process of, and are completely dependent on, our
CMO partners for compliance with the regulatory requirements. If these
facilities do not pass a pre-approval plant inspection, regulatory approval
of the therapeutics may not be granted or may be substantially delayed
until any violations are corrected to the satisfaction of the regulatory
authority, if ever.
Our or our Founded Entities’ use of third parties to manufacture the
therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates and other therapeutic candidates
that we or our Founded Entities may develop for preclinical studies and
clinical trials may increase the risk that we or our Founded Entities will
not have sufficient quantities of our or our Founded Entities’ therapeutic
candidates, therapeutics, or necessary quantities of such materials on time
or at an acceptable cost.
With respect to certain of the therapeutic candidates within our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates, we
and certain of our Founded Entities do not currently have, nor do we plan
to acquire, the infrastructure or capability internally to manufacture drug
supplies for our ongoing clinical trials or any future clinical trials that we or
our Founded Entities may conduct, and we and our Founded Entities lack
the resources to manufacture any therapeutic candidates on a commercial
scale. We rely, and expect to continue to rely, on third-party manufacturers
to produce our and certain of our Founded Entities’ therapeutic candidates
or other therapeutic candidates that we or our Founded Entities may
identify for clinical trials, as well as for commercial manufacture if any
therapeutic candidates receive marketing authorization. Any significant
delay or discontinuity in the supply of a therapeutic candidate, or the raw
material components thereof, for an ongoing clinical trial due to the need
to replace a third-party manufacturer could considerably delay the clinical
development and potential regulatory authorization of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates, which could harm our business and results
of operations.
We or our Founded Entities may be unable to identify and appropriately
qualify third-party manufacturers or establish agreements with third-party
manufacturers or do so on acceptable terms. Even if we or our Founded
Entities are able to establish agreements with third-party manufacturers,
reliance on third-party manufacturers entails additional risks, including:
— reliance on the third party for sourcing of raw materials, components, and
such other goods as may be required for execution of its manufacturing
processes and the oversight by the third party of its suppliers;
— reliance on the third party for regulatory compliance and quality
assurance for the manufacturing activities each performs;
— the possible breach of the manufacturing agreement by the third party;
— the possible misappropriation of proprietary information, including trade
secrets and know-how; and
— the possible termination or non-renewal of the agreement by the
third party at a time that is costly or inconvenient for us or our
Founded Entities.
Furthermore, all of our CMOs are engaged with other companies to
supply and/or manufacture materials or therapeutics for such companies,
which exposes our manufacturers to regulatory risks for the production
of such materials and therapeutics. The facilities used by our contract
manufacturers to manufacture our drug, or medical device therapeutic
candidates are subject to review by the FDA pursuant to inspections
that will be conducted after we submit an NDA, BLA, PMA application
or other marketing application to the FDA. We do not control the
manufacturing process of, and are to some extent dependent on, our
contract manufacturing partners for compliance with the regulatory
requirements, known as cGMP requirements for manufacture of drug,
biologic and device therapeutics. If our contract manufacturers cannot
successfully manufacture material that conforms to our specifications and
the strict regulatory requirements of the FDA or others, we will not be
able to secure or maintain regulatory authorization for the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates manufactured at these manufacturing facilities. We
are subject to similar requirements in foreign jurisdictions. In addition, we
have no control over the ability of our contract manufacturers to maintain
adequate quality control, quality assurance and qualified personnel. If the
FDA or another comparable foreign regulatory agency does not approve
these facilities for the manufacture of the therapeutic candidates within our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates
or if any agency withdraws its approval in the future, we or our Founded
Entities may need to find alternative manufacturing facilities, which would
negatively impact our or our Founded Entities’ ability to develop, obtain
regulatory authorization or certification for or market the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates, if cleared, certified or approved.
The patent position of biotechnology and pharmaceutical companies
generally is highly uncertain, involves complex legal, technological
and factual questions and has in recent years been the subject of much
litigation. The standards that the U.S. Patent and Trademark Office, or the
USPTO, and its foreign counterparts use to grant patents are not always
applied predictably or uniformly. In addition, the laws of foreign countries
may not protect our rights to the same extent as the laws of the United
States, or vice versa. There is no assurance that all potentially relevant
prior art relating to our patents and patent applications has been found,
which can prevent a patent from issuing from a pending application or
later invalidate or narrow the scope of an issued patent. For example,
publications of discoveries in the scientific literature often lag behind the
actual discoveries, and patent applications in the United States and other
jurisdictions are typically not published until 18 months after filing or, in
some cases, not at all. Therefore, we cannot know with certainty whether
we were the first to make the inventions claimed in our patents or pending
patent applications, or that we were the first to file for patent protection of
such inventions. As a result, the issuance, scope, validity, enforceability and
commercial value of our patent rights are highly uncertain. Our pending
and future patent applications may not result in patents being issued that
protect our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates, in whole or in part, or which effectively prevent others from
commercializing competitive therapeutic candidates. Even if our patent
applications issue as patents, they may not issue in a form that will provide
us with any meaningful protection, prevent competitors from competing
with us or otherwise provide us with any competitive advantage. Our
competitors may be able to circumvent our patents by developing similar
or alternative therapeutic candidates in a non-infringing manner.
In addition, the issuance of a patent is not conclusive as to its inventorship,
scope, validity or enforceability, and our patents may be challenged in the
courts or patent offices in the United States and abroad. Such challenges
may result in loss of exclusivity or freedom to operate or in patent claims
being narrowed, invalidated or held unenforceable, in whole or in part,
which could limit our ability to stop others from using or commercializing
similar or identical therapeutic candidates to ours, or limit the duration
of the patent protection of our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates. For example, we may be subject to a
third-party pre-issuance submission of prior art to the USPTO, or become
involved in opposition, derivation, re-examination, inter partes review,
post-grant review or interference proceedings challenging our owned or
licensed patent rights. An adverse determination in any such submission,
proceeding or litigation could reduce the scope of, or invalidate, our
patent rights, allow third parties to commercialize our Wholly-Owned
Programs or our Founded Entities’ therapeutic candidates and compete
directly with us, without payment to us, or result in our inability to
manufacture or commercialize drugs without infringing third-party patent
rights. In addition, if the breadth or strength of protection provided by our
patents and patent applications is threatened, regardless of the outcome,
it could dissuade companies from collaborating with us to license, develop
or commercialize current or future therapeutic candidates.
Furthermore, our and our Founded Entities’ intellectual property rights
may be subject to a reservation of rights by one or more third parties.
We are party to a license agreement with New York University related to
certain intellectual property underlying our LYT-200 therapeutic candidate,
which is subject to certain rights of the government, including march-in
rights, to such intellectual property due to the fact that the research was
funded at least in part by the U.S. government. We are also party to other
license agreements for intellectual property underlying certain of our
therapeutic candidates and programs. Additionally, our Founded Entities
Akili, Follica, Vedanta, Sonde and Vor, are party to license agreements
with academic institutions pursuant to which such Founded Entities
have in-licensed certain intellectual property underlying various of their
therapeutic candidates. While these license agreements are exclusive, they
contain provisions pursuant to which the government has certain rights,
including march-in rights, to such patents and technologies due to the
fact that the research was funded at least in part by the U.S. government.
When new technologies are developed with government funding, the
government generally obtains certain rights in any resulting patents,
including a non-exclusive license authorizing the government to use the
invention or to have others use the invention on its behalf. These rights may
permit the government to disclose our information to third parties and to
exercise march-in rights to use or allow third parties to use our technology.
The regulatory authorities or notified bodies (when applicable) also may,
at any time following clearance, certification or approval of a therapeutic
for sale, audit the manufacturing facilities of our third-party contractors. If
any such inspection or audit identifies a failure to comply with applicable
regulations or if a violation of our therapeutic specifications or applicable
regulations occurs independent of such an inspection or audit, we or the
relevant regulatory authority may require remedial measures that may be
costly and/or time consuming for us or a third party to implement, and that
may include the temporary or permanent suspension of a clinical study or
commercial sales or the temporary or permanent closure of a facility. Any
such remedial measures imposed upon us or third parties with whom we
contract could materially harm our business.
Additionally, if supply from one approved manufacturer is interrupted, an
alternative manufacturer would need to be qualified. For drug and biologic
therapeutics, as applicable, an NDA, BLA supplement or MAA variation,
or equivalent foreign regulatory filing, is also required, which could result
in further delay. Similarly, for medical devices, a new marketing application
or supplement may be required. The regulatory agencies may also require
additional studies if a new manufacturer is relied upon for commercial
production. Switching manufacturers may involve substantial costs and is
likely to result in a delay in our desired clinical and commercial timelines.
These factors could cause us or our Founded Entities to incur higher
costs and could cause the delay or termination of clinical trials, regulatory
submissions, required approvals, or commercialization of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates. Furthermore, if our or our Founded Entities’
suppliers fail to meet contractual requirements and we or our Founded
Entities are unable to secure one or more replacement suppliers capable of
production at a substantially equivalent cost, our or our Founded Entities’
clinical trials may be delayed or we or our Founded Entities could lose
potential revenue.
Risks Related to Our Intellectual Property
Risks Related to Our Intellectual Property Protection
If we or our Founded Entities are unable to obtain and maintain sufficient
intellectual property protection for our or our Founded Entities’ existing
therapeutic candidates or any other therapeutic candidates that we or
they may identify, or if the scope of the intellectual property protection
we or they currently have or obtain in the future is not sufficiently broad,
our competitors could develop and commercialize therapeutic candidates
similar or identical to ours, and our ability to successfully commercialize our
existing therapeutic candidates and any other therapeutic candidates that
we or they may pursue may be impaired.
As is the case with other pharmaceutical and biopharmaceutical
companies, our success depends in large part on our ability to obtain
and maintain protection of the intellectual property we may own solely
and jointly with others, particularly patents, in the United States and
other countries with respect to our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates and technology. We and our
Founded Entities seek to protect our proprietary position by filing patent
applications in the United States and abroad related to our and our
Founded Entities’ existing therapeutic candidates, our various proprietary
technologies, and any other therapeutic candidates or technologies that
we or they may identify.
Obtaining, maintaining and enforcing pharmaceutical and
biopharmaceutical patents is costly, time consuming and complex, and
we may not be able to file or prosecute all necessary or desirable patent
applications, or maintain, enforce or license patents that may issue from
such patent applications, at a reasonable cost or in a timely manner. It
is also possible that we could fail to identify patentable aspects of our
R&D output before it is too late to obtain patent protection. Although
we take reasonable measures, we have systems in place to remind us of
filing and prosecution deadlines, and we employ outside firms and rely on
outside counsel to monitor patent deadlines, we may miss or fail to meet
a patent deadline, including in a foreign country, which could negatively
impact our patent rights and harm our competitive position, business, and
prospects. We may not have the right to control the preparation, filing and
prosecution of patent applications, or to maintain the rights to patents
licensed to third parties. Therefore, these patents and applications may not
be prosecuted and enforced in a manner consistent with the best interests
of our business.
206 PureTech Health plc Annual Report and Accounts 2024
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Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
In some jurisdictions including European Union countries, compulsory
licensing laws compel patent owners to grant licenses to third parties.
In addition, some countries limit the enforceability of patents against
government agencies or government contractors. In these countries, the
patent owner may have limited remedies, which could materially diminish
the value of such patent. If we, our Founded Entities or any of our licensors
are forced to grant a license to third parties under patents relevant to
our or our Founded Entities’ business, or if we, our Founded Entities or
our licensors are prevented from enforcing patent rights against third
parties, our competitive position may be substantially impaired in such
jurisdictions.
Our or our Founded Entities’ proprietary rights may not adequately protect
our technologies and therapeutic candidates, and do not necessarily
address all potential threats to our competitive advantage.
The degree of future protection afforded by our or our Founded Entities’
intellectual property rights is uncertain because intellectual property
rights have limitations, and may not adequately protect our or our Founded
Entities’ business, or permit us to maintain our competitive advantage. The
following examples are illustrative:
— others may be able to make therapeutics that are the same as or similar
to the therapeutic candidates within our Wholly-Owned Programs or
our Founded Entities’ therapeutic candidates but that are not covered
by the claims of the patents that we or our Founded Entities own or have
exclusively licensed;
— others, including inventors or developers of our or our Founded Entities’
owned or in-licensed patented technologies who may become involved
with competitors, may independently develop similar technologies that
function as alternatives or replacements for any of our or our Founded
Entities’ technologies without infringing our intellectual property rights;
— we, our Founded Entities or our licensors or our other collaboration
partners might not have been the first to conceive and reduce to practice
the inventions covered by the patents or patent applications that we or
our Founded Entities own or license or will own or license;
— we, our Founded Entities or our licensors or our other collaboration
partners might not have been the first to file patent applications covering
certain of the patents or patent applications that we or they own or have
obtained a license, or will own or will have obtained a license;
— we, our Founded Entities or our licensors may fail to meet obligations
to the U.S. government with respect to in-licensed patents and patent
applications funded by U.S. government grants, leading to the loss of
patent rights;
— it is possible that our or our Founded Entities’ pending patent
applications will not result in issued patents;
— it is possible that there are prior public disclosures that could invalidate
our, our Founded Entities’ or our licensors’ patents;
— issued patents that we or our Founded Entities own or exclusively
license may not provide us with any competitive advantage, or may
be held invalid or unenforceable, as a result of legal challenges by our
competitors;
— our or our Founded Entities’ competitors might conduct R&D activities
in countries where we do not have patent rights, or in countries where
R&D safe harbor laws exist, and then use the information learned from
such activities to develop competitive therapeutics for sale in our major
commercial markets;
— ownership, validity or enforceability of our, our Founded Entities’ or our
licensors’ patents or patent applications may be challenged by third
parties; and
— the patents of third parties or pending or future applications of third
parties, if issued, may have an adverse effect on our business.
Risks Related to Our License Arrangements
The failure to maintain our licenses and realize their benefits may
harm our business.
We have acquired and in-licensed certain of our technologies from third
parties. We may in the future acquire, in-license or invest in additional
technology that we believe would be beneficial to our business. We are
subject to a number of risks associated with our acquisition, in-license or
investment in technology, including the following:
— diversion of financial and managerial resources from existing operations;
— failure to successfully negotiate a proposed acquisition, in-license or
investment in a timely manner and at a price or on terms and conditions
favorable to us;
— failure to successfully combine and integrate a potential acquisition into
our existing business to fully realize the benefits of such acquisition;
The government can exercise its march-in rights if it determines that
action is necessary because we fail to achieve practical application of the
government-funded technology, because action is necessary to alleviate
health or safety needs, to meet requirements of federal regulations, or to
give preference to U.S. industry. In addition, our rights in such inventions
may be subject to certain requirements to manufacture therapeutics
embodying such inventions in the United States. Any exercise by the
government of such rights or by any third party of its reserved rights could
harm our competitive position, business, financial condition, results of
operations, and prospects.
If our or our Founded Entities’ trademarks and trade names are not
adequately protected, then we may not be able to build name recognition
in our markets of interest and our business may be adversely affected.
Our or our Founded Entities’ registered or unregistered trademarks or
trade names may be challenged, infringed, circumvented or declared
generic or determined to be infringing on other marks. We and our
Founded Entities may not be able to protect our rights to these trademarks
and trade names, which we need to build name recognition among
potential collaborators or customers in our markets of interest. At times,
competitors may adopt trade names or trademarks similar to ours, thereby
impeding our ability to build brand identity and possibly leading to market
confusion. In addition, there could be potential trade name or trademark
infringement claims brought by owners of other trademarks or trademarks
that incorporate variations of our registered or unregistered trademarks
or trade names. Over the long term, if we and our Founded Entities are
unable to establish name recognition based on our trademarks and trade
names, then we may not be able to compete effectively and our business
may be adversely affected. We and our Founded Entities may license
our trademarks and trade names to third parties, such as distributors.
Though these license agreements may provide guidelines for how our or
our Founded Entities’ trademarks and trade names may be used, a breach
of these agreements or misuse of our trademarks and tradenames by our
licensees may jeopardize our rights in or diminish the goodwill associated
with our trademarks and trade names. Our or our Founded Entities’ efforts
to enforce or protect our proprietary rights related to trademarks, trade
names, trade secrets, domain names, copyrights or other intellectual
property may be ineffective and could result in substantial costs and
diversion of resources and could adversely affect our competitive position,
business, financial condition, results of operations and prospects.
We may not be able to protect our intellectual property rights
throughout the world.
Filing, prosecuting and defending patents on the therapeutic candidates
within our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates in all countries throughout the world would be prohibitively
expensive, and our intellectual property rights in some countries outside
the United States can be less extensive than those in the United States.
In addition, the laws of some foreign countries do not protect or enforce
intellectual property rights to the same extent as federal and state laws in
the United States. Consequently, we and our Founded Entities may not be
able to prevent third parties from practicing our inventions in all countries
outside the United States, or from selling or importing therapeutics made
using our inventions in and into the United States or other jurisdictions.
Competitors may use our and our Founded Entities’ technologies in
jurisdictions where we have not obtained patent protection to develop
their own therapeutics and may also export infringing therapeutics to
territories where we have patent protection, but enforcement is not as
strong as that in the United States. These therapeutics may compete
with our or our Founded Entities’ therapeutics and our patents or other
intellectual property rights may not be effective or sufficient to prevent
them from competing.
Many companies have encountered significant problems in protecting and
defending intellectual property rights in foreign jurisdictions. The legal
systems of certain countries, particularly certain developing countries, do
not favor the enforcement of patents, trade secrets, and other intellectual
property protection, particularly those relating to biotechnology and
pharmaceutical therapeutics, which could make it difficult for us to stop
the infringement of our or our Founded Entities’ patents or marketing of
competing therapeutics in violation of our proprietary rights generally.
Proceedings to enforce our or our Founded Entities’ patent rights in
foreign jurisdictions, whether or not successful, could result in substantial
costs and divert our efforts and attention from other aspects of our
business, could put our or our Founded Entities’ patents at risk of being
invalidated or interpreted narrowly and our patent applications at risk
of not issuing, and could provoke third parties to assert claims against
us or our Founded Entities. We may not prevail in any lawsuits that we
or our Founded Entities initiate and the damages or other remedies
awarded, if any, may not be commercially meaningful. Accordingly, our
efforts to enforce our intellectual property rights around the world may
be inadequate to obtain a significant commercial advantage from the
intellectual property that we develop or license.
from our licensors and, in connection with obtaining such licenses, we
may agree to amend our existing licenses in a manner that may be more
favorable to the licensors, including by agreeing to terms that could
enable third parties (potentially including our competitors) to receive
licenses to a portion of the intellectual property rights that are subject
to our or our Founded Entities’ existing licenses. Any of these events
could have a material adverse effect on our or our Founded Entities’
competitive position, business, financial conditions, results of operations,
and prospects.
If we or our Founded Entities fail to comply with our obligations in the
agreements under which we license intellectual property rights from third
parties or these agreements are terminated or we or our Founded Entities
otherwise experience disruptions to our business relationships with our
licensors, we could lose intellectual property rights that are important
to our business.
We are party to various agreements that we depend on to develop our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates
and various proprietary technologies, and our rights to use currently
licensed intellectual property, or intellectual property to be licensed
in the future, are or will be subject to the continuation of and our and
our Founded Entities’ compliance with the terms of these agreements.
For example, under certain of our and our Founded Entities’ license
agreements we and our Founded Entities are required to use commercially
reasonable efforts to develop and commercialize therapeutic candidates
covered by the licensed intellectual property rights, maintain the licensed
intellectual property rights, and achieve certain development milestones,
each of which could result in termination in the event we or our Founded
Entities fail to comply.
In spite of our efforts, our or our Founded Entities’ licensors might
conclude that we have materially breached our obligations under such
license agreements and might therefore terminate the license agreements,
thereby removing or limiting our or our Founded Entities’ ability to
develop and commercialize therapeutics and technology covered by these
license agreements.
Moreover, disputes may arise regarding intellectual property subject to a
licensing agreement, including:
— the scope of rights granted under the license agreement and other
interpretation-related issues;
— the extent to which our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates, technology and processes infringe
on intellectual property of the licensor that is not subject to the
licensing agreement;
— the sublicensing of patent and other rights under our or our Founded
Entities’ collaborative development relationships;
— our and our Founded Entities’ diligence obligations under the license
agreement and what activities satisfy those diligence obligations;
— the inventorship and ownership of inventions and know-how resulting
from the joint creation or use of intellectual property by our and our
Founded Entities’ licensors and us and our Founded Entities and our
partners; and
— the priority of invention of patented technology.
In addition, certain provisions in our and our Founded Entities’ license
agreements may be susceptible to multiple interpretations. The resolution
of any contract interpretation disagreement that may arise could narrow
what we believe to be the scope of our rights to the relevant intellectual
property or technology, or increase what we believe to be our financial
or other obligations under the agreement, either of which could have a
material adverse effect on our or our Founded Entities’ business, financial
condition, results of operations and prospects. Moreover, if disputes over
intellectual property that we or our Founded Entities have licensed prevent
or impair our ability to maintain our current licensing arrangements on
commercially acceptable terms, we may be unable to successfully develop
and commercialize the affected therapeutic candidates, which could have
a material adverse effect on our competitive position, business, financial
conditions, results of operations and prospects.
Third-party claims of intellectual property infringement may prevent or
delay our development and commercialization efforts.
Our commercial success depends in part on our avoiding infringement of
the patents and proprietary rights of third parties. However, our research,
development and commercialization activities may be subject to claims
that we infringe or otherwise violate patents or other intellectual property
rights owned or controlled by third parties. There is a substantial amount of
litigation, both within and outside the United States, involving patent and
other intellectual property rights in the biotechnology and pharmaceutical
— the impact of regulatory reviews on a proposed acquisition, in-license or
investment; and
— the outcome of any legal proceedings that may be instituted with respect
to the proposed acquisition, in-license or investment.
If we fail to properly evaluate potential acquisitions, in-licenses,
investments or other transactions associated with the creation of new R&D
programs or the maintenance of existing ones, we might not achieve the
anticipated benefits of any such transaction, we might incur costs in excess
of what we anticipate, and management resources and attention might be
diverted from other necessary or valuable activities.
Our or our Founded Entities’ rights to develop and commercialize our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates
are subject in part to the terms and conditions of licenses granted to us
and our Founded Entities by others, and the patent protection, prosecution
and enforcement for some of our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates may be dependent on our and
our Founded Entities’ licensors.
We and our Founded Entities currently are reliant upon licenses of certain
intellectual property rights and proprietary technologies from third
parties that are important or necessary to the development of our and
our Founded Entities’ proprietary technologies, including technologies
related to our Wholly-Owned Programs and our Founded Entities’
therapeutic candidates. These licenses, and other licenses we and they
may enter into in the future, may not provide adequate rights to use such
intellectual property and proprietary technologies in all relevant fields
of use or in all territories in which we or our Founded Entities may wish
to develop or commercialize technology and therapeutic candidates in
the future. Licenses to additional third-party proprietary technology or
intellectual property rights that may be required for our or our Founded
Entities’ development programs may not be available in the future or may
not be available on commercially reasonable terms. In that event, we or our
Founded Entities may be required to expend significant time and resources
to redesign our proprietary technology or therapeutic candidates or to
develop or license replacement technology, which may not be feasible on a
technical or commercial basis. If we and our Founded Entities are unable to
do so, we may not be able to develop and commercialize technology and
therapeutic candidates in fields of use and territories for which we are not
granted rights pursuant to such licenses, which could harm our competitive
position, business, financial condition, results of operations and prospects
significantly.
In some circumstances, we and our Founded Entities may not have the right
to control the preparation, filing and prosecution of patent applications,
or to maintain and enforce the patents, covering technology that we or
our Founded Entities license from third parties. In addition, some of our or
our Founded Entities’ agreements with our licensors require us to obtain
consent from the licensor before we can enforce patent rights, and our
licensor may withhold such consent or may not provide it on a timely basis.
Therefore, we cannot be certain that our licensors or collaborators will
prosecute, maintain, enforce and defend such intellectual property rights
in a manner consistent with the best interests of our business, including
by taking reasonable measures to protect the confidentiality of know-how
and trade secrets, or by paying all applicable prosecution and maintenance
fees related to intellectual property registrations for any of our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates and
proprietary technologies. We and our Founded Entities also cannot be
certain that our licensors have drafted or prosecuted the patents and
patent applications licensed to us in compliance with applicable laws and
regulations, which may affect the validity and enforceability of such patents
or any patents that may issue from such applications. This could cause us
to lose rights in any applicable intellectual property that we in-license, and
as a result our ability to develop and commercialize therapeutic candidates
may be adversely affected and we may be unable to prevent competitors
from making, using and selling competing therapeutics.
In addition, our or our Founded Entities’ licensors may own or control
intellectual property that has not been licensed to us and, as a result, we
may be subject to claims, regardless of their merit, that we are infringing
or otherwise violating the licensor’s rights. In addition, while we cannot
currently determine the amount of the royalty obligations we would be
required to pay on sales of future therapeutics, if any, the amounts may
be significant. The amount of our and our Founded Entities’ future royalty
obligations will depend on the technology and intellectual property
we and our Founded Entities use in therapeutic candidates that we
successfully develop and commercialize, if any. Therefore, even if we or
our Founded Entities successfully develop and commercialize therapeutic
candidates, we may be unable to achieve or maintain profitability. In
addition, we or our Founded Entities may seek to obtain additional licenses
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Additional information
Additional information
Parties making claims against us or our Founded Entities may be able
to sustain the costs of complex patent litigation more effectively than
we can because they have substantially greater resources. Furthermore,
because of the substantial amount of discovery required in connection
with intellectual property litigation or administrative proceedings, there is
a risk that some of our confidential information could be compromised by
disclosure. In addition, any uncertainties resulting from the initiation and
continuation of any litigation could have material adverse effect on our
ability to raise additional funds or otherwise have a material adverse effect
on our business, results of operations, financial condition and prospects.
Risks Related to Our Patents
Patent terms may be inadequate to protect our competitive position on
therapeutic candidates for an adequate amount of time.
Patents have a limited lifespan. In the United States, if all maintenance fees
are timely paid, the natural expiration of a patent is generally 20 years from
its earliest U.S. non-provisional or international patent application filing
date. Various extensions may be available, but the life of a patent, and
the protection it affords, is limited. Even if patents covering our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates are
obtained, once the patent life has expired, we or our Founded Entities may
be open to competition from competitive therapeutics, including generics
or biosimilars. Given the amount of time required for the development,
testing and regulatory review of new therapeutic candidates, patents
protecting such candidates might expire before or shortly after such
candidates are commercialized. As a result, our or our Founded Entities’
owned and licensed patent portfolio may not provide us with sufficient
rights to exclude others from commercializing therapeutics similar or
identical to ours.
If we or our Founded Entities are not able to obtain patent term extension
or non-patent exclusivity in the United States under the Hatch-Waxman
Act and in foreign countries under similar legislation, thereby potentially
extending the marketing exclusivity term of the therapeutic candidates
within our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates, our business may be materially harmed.
Depending upon the timing, duration and specifics of FDA marketing
approval of the therapeutic candidates within our Wholly-Owned Programs
or our Founded Entities’ therapeutic candidates, one or more of the U.S.
patents covering each of such therapeutic candidates or the use thereof
may be eligible for up to five years of patent term extension under the
Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one
patent to be extended per new drug application, or NDA, for an FDA
approved therapeutic as compensation for the patent term lost during the
FDA regulatory review process. A patent term extension cannot extend
the remaining term of a patent beyond a total of 14 years from the date
of therapeutic approval and only those claims covering such approved
drug therapeutic, a method for using it or a method for manufacturing
it may be extended. Patent term extension also may be available in
certain foreign countries upon regulatory approval of the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates. Nevertheless, we or our Founded Entities may
not be granted patent term extension either in the United States or in any
foreign country because of, for example, failing to exercise due diligence
during the testing phase or regulatory review process, failing to apply
within applicable deadlines, failing to apply prior to expiration of relevant
patents or otherwise failing to satisfy applicable requirements. Moreover,
the term of extension, as well as the scope of patent protection during
any such extension, afforded by the governmental authority could be less
than we request.
If we or our Founded Entities are unable to obtain patent term extension
or restoration, or the term of any such extension is less than our request,
the period during which we will have the right to exclusively market our
therapeutic may be shortened and our competitors may obtain approval
of competing therapeutics following our patent expiration sooner, and our
revenue could be reduced, possibly materially.
Further, for certain of our and our Founded Entities’ licensed patents, we
and our Founded Entities do not have the right to control prosecution,
including filing with the USPTO, a petition for patent term extension
under the Hatch-Waxman Act. Thus, if one of our or our Founded Entities’
licensed patents is eligible for patent term extension under the Hatch-
Waxman Act, we may not be able to control whether a petition to obtain a
patent term extension is filed with, or whether a patent term extension is
obtained from, the USPTO.
industries, including patent infringement lawsuits, interferences,
derivation, oppositions, inter partes review and post-grant review before
the USPTO, and corresponding foreign patent offices. Numerous U.S. and
foreign issued patents and pending patent applications, which are owned
by third parties, exist in the fields in which we are pursuing development
candidates. Our competitors in both the United States and abroad, many
of which have substantially greater resources and have made substantial
investments in patent portfolios and competing technologies, may have
applied for or obtained or may in the future apply for or obtain, patents
that will prevent, limit or otherwise interfere with our ability to make, use
and sell, if approved, the therapeutic candidates within our Wholly-Owned
Programs or our Founded Entities’ therapeutic candidates. In addition,
many companies in the biotechnology and pharmaceutical industries have
employed intellectual property litigation as a means to gain an advantage
over their competitors. As the biotechnology and pharmaceutical
industries expand and more patents are issued, and as we gain greater
visibility and market exposure as a public company, the risk increases that
our existing therapeutic candidates and any other therapeutic candidates
that we or our Founded Entities may identify may be subject to claims of
infringement of the patent rights of third parties.
There may be other third-party patents or patent applications with claims
to materials, formulations, methods of manufacture or methods for
treatment related to the use or manufacture of our or our Founded Entities’
existing therapeutic candidates and any other therapeutic candidates
that we or they may identify. Because patent applications can take many
years to issue, there may be currently pending patent applications which
may later result in issued patents that our or our Founded Entities’ existing
therapeutic candidates and any other therapeutic candidates that we
or they may identify may infringe. In addition, third parties may obtain
patents in the future and claim that use of our or our Founded Entities’
technologies infringes upon these patents. If any third-party patents were
held by a court of competent jurisdiction to cover the manufacturing
process of our or our Founded Entities’ existing therapeutic candidates
and any other therapeutic candidates that we or they may identify,
any molecules formed during the manufacturing process, or any final
therapeutic itself, the holders of any such patents may be able to block our
ability to commercialize such therapeutic candidate unless we obtained
a license under the applicable patents, or until such patents expire.
Additionally, pending patent applications that have been published can,
subject to certain limitations, be later amended in a manner that could
cover our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates. Furthermore, the scope of a patent claim is determined by
an interpretation of the law, the written disclosure in a patent and the
patent’s prosecution history and can involve other factors such as expert
opinion. Our analysis of these issues, including interpreting the relevance
or the scope of claims in a patent or a pending application, determining
applicability of such claims to our proprietary technologies or therapeutic
candidates, predicting whether a third party’s pending patent application
will issue with claims of relevant scope, and determining the expiration
date of any patent in the United States or abroad that we consider relevant
may be incorrect, which may negatively impact our or our Founded
Entities’ ability to develop and market the therapeutic candidates within
our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates. We do not always conduct independent reviews of pending
patent applications of and patents issued to third parties.
Similarly, if any third-party patents were held by a court of competent
jurisdiction to cover aspects of our or our Founded Entities’ formulations,
processes for manufacture or methods of use, including any combination
therapies, the holders of any such patents may be able to block our or our
Founded Entities’ ability to develop and commercialize the applicable
therapeutic candidate unless we obtained a license or until such patent
expires. In either case, such a license may not be available on commercially
reasonable terms or at all, or it may be non-exclusive, which could result in
our competitors gaining access to the same intellectual property.
Parties making claims against us or our Founded Entities may obtain
injunctive or other equitable relief, which could effectively block our ability
to further develop and commercialize our or our Founded Entities’ existing
therapeutic candidates and any other therapeutic candidates that we may
identify. Defense of these claims, regardless of their merit, would involve
substantial litigation expense and would be a substantial diversion of
management and employee resources from our business. In the event of
a successful claim of infringement against us or our Founded Entities, we
or our Founded Entities may have to pay substantial damages, including
treble damages and attorneys’ fees for willful infringement, pay royalties,
redesign our infringing therapeutics or obtain one or more licenses from
third parties, which may be impossible or require substantial time and
monetary expenditure.
The America Invents Act also includes a number of significant changes
that affect the way patent applications are prosecuted and also may
affect patent litigation. These include allowing third party submission
of prior art to the USPTO during patent prosecution and additional
procedures to attack the validity of a patent by USPTO administered
post-grant proceedings, including post-grant review, inter partes review,
and derivation proceedings. Because of a lower evidentiary standard in
USPTO proceedings compared to the evidentiary standard in U.S. federal
courts necessary to invalidate a patent claim, a third party could potentially
provide evidence in a USPTO proceeding sufficient for the USPTO to hold
a claim invalid even though the same evidence would be insufficient to
invalidate the claim if first presented in a district court action. Accordingly,
a third party may attempt to use the USPTO procedures to invalidate our
patent claims that would not have been invalidated if first challenged by the
third party as a defendant in a district court action. Therefore, the America
Invents Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our or our Founded Entities’ owned
or in-licensed patent applications and the enforcement or defense of our
or our Founded Entities’ owned or in-licensed issued patents, all of which
could have a material adverse effect on our competitive position, business,
financial condition, results of operations, and prospects.
In addition, the patent positions of companies in the development and
commercialization of pharmaceuticals are particularly uncertain. Recent
U.S. Supreme Court and Federal Circuit rulings have narrowed the scope
of patent protection available in certain circumstances and weakened the
rights of patent owners in certain situations. This combination of events
has created uncertainty with respect to the validity and enforceability of
patents, once obtained. Depending on future actions by the U.S. Congress,
the federal courts, and the USPTO, the laws and regulations governing
patents could change in unpredictable ways that could have a material
adverse effect on our existing patent portfolio and our ability to protect
and enforce our intellectual property in the future.
Obtaining and maintaining our patent protection depends on compliance
with various procedural, document submission, fee payment and other
requirements imposed by governmental patent agencies, and our patent
protection could be reduced or eliminated for non-compliance with
these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other
governmental fees on patents and/or applications will be due to be paid
to the USPTO and various governmental patent agencies outside of the
United States in several stages over the lifetime of the patents and/or
applications. We and our Founded Entities have systems in place to remind
us to pay these fees, and we and our Founded Entities employ outside
firms and rely on outside counsel to pay these fees due to the USPTO
and non-U.S. patent agencies. However, we and our Founded Entities
cannot guarantee that our licensors have similar systems and procedures
in place to pay such fees. In addition, the USPTO and various non-U.S.
governmental patent agencies require compliance with a number of
procedural, documentary, fee payment and other similar provisions during
the patent application process. We employ reputable law firms and other
professionals to help us comply, and in many cases, an inadvertent lapse
can be cured by payment of a late fee or by other means in accordance
with the applicable rules. However, there are situations in which non-
compliance can result in abandonment or lapse of the patent or patent
application, resulting in partial or complete loss of patent rights in the
relevant jurisdiction. In such an event, our competitors might be able to
enter the market and this circumstance would have a material adverse
effect on our business.
Risks Related to Confidentiality
If we are unable to protect the confidentiality of our trade secrets, the
value of our technology could be materially adversely affected and our
business would be harmed.
We and our Founded Entities consider proprietary trade secrets,
confidential know-how and unpatented know-how to be important to
our business. We and our Founded Entities may rely on trade secrets and
confidential know-how to protect our technology, especially where patent
protection is believed by us to be of limited value. However, trade secrets
and confidential know-how are difficult to protect, and we have limited
control over the protection of trade secrets and confidential know-how
used by our licensors, collaborators and suppliers. Because we have relied
in the past on third parties to manufacture the therapeutic candidates
within our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates, because we may continue to do so in the future, and because
we expect to collaborate with third parties on the development of our
current therapeutic candidates and any future therapeutic candidates we
develop, we may, at times, share trade secrets with them. We also conduct
joint R&D programs that may require us to share trade secrets under
the terms of our R&D partnerships or similar agreements. Under such
circumstances, trade secrets and confidential know-how can be difficult to
maintain as confidential.
Also, there are detailed rules and requirements regarding the patents that
may be submitted to the FDA for listing in the Approved Drug Products
with Therapeutic Equivalence Evaluations, or the Orange Book. We or our
Founded Entities may be unable to obtain patents covering the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates that contain one or more claims that satisfy the
requirements for listing in the Orange Book. Even if we or our Founded
Entities submit a patent for listing in the Orange Book, the FDA may
decline to list the patent, or a manufacturer of generic drugs may challenge
the listing. If or when one of the therapeutic candidates within our Wholly-
Owned Programs or our Founded Entities’ therapeutic candidates is
approved and a patent covering that therapeutic candidate is not listed
in the Orange Book, a manufacturer of generic drugs would not have to
provide advance notice to us of any abbreviated new drug application, or
ANDA, filed with the FDA to obtain permission to sell a generic version of
such therapeutic candidate.
Issued patents covering our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates could be found invalid or unenforceable if
challenged in courts or patent offices.
If we, our Founded Entities or one of our licensing partners initiated legal
proceedings against a third party to enforce a patent covering one or more
of our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates, the defendant could counterclaim that the patent covering
the relevant therapeutic candidate is invalid and/or unenforceable. In
patent litigation in the United States, defendant counterclaims alleging
invalidity and/or unenforceability are commonplace. Grounds for a validity
challenge could be an alleged failure to meet any of several statutory
requirements, including subject matter eligibility, novelty, nonobviousness,
written description or enablement. Grounds for an unenforceability
assertion could be an allegation that someone connected with prosecution
of the patent withheld relevant information from the USPTO, or made
a misleading statement, during prosecution. Third parties may also
raise similar claims before administrative bodies in the United States or
abroad, even outside the context of litigation. Such mechanisms include
re-examination, post grant review, and equivalent proceedings in foreign
jurisdictions (e.g., opposition proceedings). Such proceedings could result
in revocation or amendment to our or our Founded Entities’ patents in
such a way that they no longer cover our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates. The outcome following legal
assertions of invalidity and unenforceability is unpredictable. With respect
to the validity question, for example, we cannot be certain that there is no
invalidating prior art, of which we and the patent examiner were unaware
during prosecution. If a defendant were to prevail on a legal assertion of
invalidity and/or unenforceability, we would lose at least part, and perhaps
all, of the patent protection on our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates. Such a loss of patent protection
could have a material adverse impact on our business.
Changes in U.S. patent law could diminish the value of patents in general,
thereby impairing our and our Founded Entities’ ability to protect
our therapeutics.
Changes in either the patent laws or interpretation of the patent laws in
the United States could increase the uncertainties and costs surrounding
the prosecution of patent applications and the enforcement or defense
of issued patents. Assuming that other requirements for patentability
are met, prior to March 2013, in the United States, the first to invent the
claimed invention was entitled to a patent, while outside the United States,
the first to file a patent application was entitled to the patent. After March
2013, under the Leahy-Smith America Invents Act, or the America Invents
Act, enacted in September 2011, the United States transitioned to a first
inventor to file system in which, assuming that other requirements for
patentability are met, the first inventor to file a patent application will be
entitled to the patent on an invention regardless of whether a third party
was the first to invent the claimed invention. A third party that files a patent
application in the USPTO after March 2013, but before us could therefore
be awarded a patent covering an invention of ours even if we had made the
invention before it was made by such third party. This will require us and
our Founded Entities to be cognizant of the time from invention to filing
of a patent application and be diligent in filing patent applications, but
circumstances could prevent us from promptly filing patent applications
on our inventions. Since patent applications in the United States and
most other countries are confidential for a period of time after filing or
until issuance, we cannot be certain that we, our Founded Entities or our
licensors were the first to either (i) file any patent application related to our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates
or (ii) invent any of the inventions claimed in our, our Founded Entities or
our licensor’s patents or patent applications.
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Additional information
Additional information
Risks Related to Challenges or Lawsuits Related to
Intellectual Property
We may become involved in lawsuits to protect or enforce our or our
Founded Entities’ patents or other intellectual property, which could be
expensive, time consuming and unsuccessful.
Competitors may infringe our or our Founded Entities’ patents or other
intellectual property. Our and our Founded Entities’ ability to enforce our
patent or other intellectual property rights depends on our ability to detect
infringement. It may be difficult to detect infringers who do not advertise
the components or methods that are used in connection with their
therapeutics and services. Moreover, it may be difficult or impossible to
obtain evidence of infringement in a competitor’s or potential competitor’s
therapeutic or service. We may not prevail in any lawsuits that we initiate
and the damages or other remedies awarded if we were to prevail may
not be commercially meaningful. If we were to initiate legal proceedings
against a third party to enforce a patent covering one or more of our
Wholly-Owned Programs or our Founded Entities’ therapeutic candidates,
the defendant could counterclaim that the patent covering our or our
Founded Entities’ therapeutic candidate is invalid and/or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging
invalidity and/or unenforceability are commonplace. Grounds for a validity
challenge could be an alleged failure to meet any of several statutory
requirements, including subject matter eligibility, novelty, nonobviousness,
written description or enablement. Grounds for an unenforceability
assertion could be an allegation that someone connected with prosecution
of the patent withheld relevant information from the USPTO, or made a
misleading statement, during prosecution. The outcome following legal
assertions of invalidity and unenforceability is unpredictable. Interference
or derivation proceedings provoked by third parties or brought by us or
declared by the USPTO may be necessary to determine the priority of
inventions with respect to our or our Founded Entities’ patents or patent
applications. An unfavorable outcome could require us to cease using the
related technology or to attempt to license rights to it from the prevailing
party. Our business could be harmed if the prevailing party does not offer
us a license on commercially reasonable terms or at all, or if a non-exclusive
license is offered and our competitors gain access to the same technology.
Our defense of litigation or interference or derivation proceedings may
fail and, even if successful, may result in substantial costs and distract
our management and other employees. In addition, the uncertainties
associated with litigation could have a material adverse effect on our ability
to raise the funds necessary to continue clinical trials, continue research
programs, license necessary technology from third parties, or enter into
development partnerships that would help us bring therapeutic candidates
to market. Furthermore, because of the substantial amount of discovery
required in connection with intellectual property litigation, there is a risk
that some of our or our Founded Entities’ confidential information could
be compromised by disclosure during this type of litigation. There could
also be public announcements of the results of hearings, motions, or other
interim proceedings or developments. If securities analysts or investors
perceive these results to be negative, it could adversely impact the price of
our ADSs. Furthermore, any of the foregoing could have a material adverse
effect on our financial condition, results of operations, and prospects.
We and our Founded Entities may be subject to claims challenging the
inventorship of our patents and other intellectual property.
Our and our Founded Entities’ agreements with employees and our
personnel policies provide that any inventions conceived by an individual
in the course of rendering services to us shall be our exclusive property.
Although our policy is to have all such individuals complete these
agreements, we may not obtain these agreements in all circumstances,
and individuals with whom we have these agreements may not comply
with their terms. The assignment of intellectual property may not
be automatic upon the creation of an invention and despite such
agreement, such inventions may become assigned to third parties.
In the event of unauthorized use or disclosure of our trade secrets or
proprietary information, these agreements, even if obtained, may not
provide meaningful protection, particularly for our trade secrets or other
confidential information.
We, our Founded Entities or our licensors may be subject to claims that
former employees, collaborators or other third parties have an interest
in our owned or in-licensed patents, trade secrets, or other intellectual
property as an inventor or co-inventor. For example, we, our Founded
Entities or our licensors may have inventorship disputes arising from
conflicting obligations of employees, consultants or others who are
involved in developing our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates. Litigation may be necessary to defend
against these and other claims challenging inventorship of our, our
We and our Founded Entities seek to protect our confidential proprietary
information, in part, by confidentiality agreements and invention
assignment agreements with our employees, consultants, scientific
advisors, contractors and collaborators. These agreements are designed
to protect our proprietary information. However, we cannot be certain
that such agreements have been entered into with all relevant parties,
and we cannot be certain that our and our Founded Entities’ trade secrets
and other confidential proprietary information will not be disclosed
or that competitors will not otherwise gain access to our trade secrets
or independently develop substantially equivalent information and
techniques. For example, any of these parties may breach the agreements
and disclose proprietary information, including trade secrets, and we may
not be able to obtain adequate remedies for such breaches. We and our
Founded Entities also seek to preserve the integrity and confidentiality of
our confidential proprietary information by maintaining physical security
of our premises and physical and electronic security of our information
technology systems, but it is possible that these security measures could
be breached. If any of our or our Founded Entities’ confidential proprietary
information were to be lawfully obtained or independently developed by
a competitor, we or our Founded Entities would have no right to prevent
such competitor from using that technology or information to compete
with us, which could harm our competitive position.
Unauthorized parties may also attempt to copy or reverse engineer
certain aspects of our or our Founded Entities’ therapeutics that we
consider proprietary. We or our Founded Entities may not be able
to obtain adequate remedies in the event of such unauthorized use.
Enforcing a claim that a party illegally disclosed or misappropriated a
trade secret can be difficult, expensive and time-consuming, and the
outcome is unpredictable. In addition, some courts inside and outside
the United States are less willing or unwilling to protect trade secrets.
Trade secrets will also over time be disseminated within the industry
through independent development, the publication of journal articles
and the movement of personnel skilled in the art from company to
company or academic to industry scientific positions. Though our or our
Founded Entities’ agreements with third parties typically restrict the
ability of our advisors, employees, collaborators, licensors, suppliers,
third-party contractors and consultants to publish data potentially
relating to our trade secrets, our agreements may contain certain limited
publication rights. In addition, if any of our or our Founded Entities’ trade
secrets were to be lawfully obtained or independently developed by
a competitor, we would have no right to prevent such competitor from
using that technology or information to compete with us, which could
harm our competitive position. Despite employing the contractual and
other security precautions described above, the need to share trade
secrets increases the risk that such trade secrets become known by our
competitors, are inadvertently incorporated into the technology of others,
or are disclosed or used in violation of these agreements. If any of these
events occurs or if we otherwise lose protection for our trade secrets, the
value of such information may be greatly reduced and our competitive
position, business, financial condition, results of operations, and prospects
would be harmed.
We or our Founded Entities may be subject to claims that our employees,
consultants or independent contractors have wrongfully used or
disclosed confidential information of third parties or that our employees
have wrongfully used or disclosed alleged trade secrets of their
former employers.
As is common in the biotechnology and pharmaceutical industries, we and
our Founded Entities employ individuals who were previously employed
at universities or other biotechnology or pharmaceutical companies,
including our competitors or potential competitors. Although we and
our Founded Entities try to ensure that our employees, consultants and
independent contractors do not use the proprietary information or know-
how of others in their work for us, we or our Founded Entities may be
subject to claims that we or our employees, consultants or independent
contractors have inadvertently or otherwise used or disclosed intellectual
property, including trade secrets or other proprietary information, of
any of our employee’s former employer or other third parties. Litigation
may be necessary to defend against these claims. If we or our Founded
Entities fail in defending any such claims, in addition to paying monetary
damages, we may lose valuable intellectual property rights or personnel,
which could adversely impact our business. Even if we or our Founded
Entities are successful in defending against such claims, litigation could
result in substantial costs and be a distraction to management and
other employees.
or other key employees could impede the achievement of research,
development and commercialization objectives and seriously harm our
ability to successfully implement our business strategy. Furthermore,
replacing executive officers and key employees may be difficult and
may take an extended period of time because of the limited number
of individuals in our industry with the breadth of skills and experience
required to successfully develop, gain regulatory approval for and
commercialize the therapeutic candidates within our Wholly-Owned
Programs . Competition to hire qualified personnel in our industry is
intense, and we may be unable to hire, train, retain or motivate these key
personnel on acceptable terms given the competition among numerous
pharmaceutical and biotechnology companies for similar personnel.
Furthermore, to the extent we hire personnel from competitors, we may
be subject to allegations that they have been improperly solicited or that
they have divulged proprietary or other confidential information, or that
their former employers own their research output. We also experience
competition for the hiring of scientific and clinical personnel from
universities and research institutions.
In addition, we rely on consultants and advisors, including scientific and
clinical advisors, to assist us in formulating our research and development
and commercialization strategy. Our consultants and advisors may be
employed by employers other than us and may have commitments under
consulting or advisory contracts with other entities that may limit their
availability to us. If we are unable to continue to attract and retain high
quality personnel, our ability to pursue our growth strategy will be limited.
We will need to expand our organization and we may experience
difficulties in managing this growth, which could disrupt our operations.
As we mature, we expect to expand our full-time employee base and to
hire more consultants and contractors. Our management may need to
divert a disproportionate amount of its attention away from our day-to-day
activities and devote a substantial amount of time toward managing these
growth activities. We may not be able to effectively manage the expansion
of our operations, which may result in weaknesses in our infrastructure,
operational mistakes, loss of business opportunities, loss of employees and
reduced productivity among remaining employees. Our expected growth
could require significant capital expenditures and may divert financial
resources from other projects, such as the development of additional
therapeutic candidates. If our management is unable to effectively manage
our growth, our expenses may increase more than expected, our ability
to generate and/or grow revenues could be reduced, and we may not be
able to implement our business strategy. Our future financial performance
and our ability to commercialize therapeutic candidates and compete
effectively will depend, in part, on our ability to effectively manage any
future growth.
Because we are developing multiple programs and therapeutic candidates
and are pursuing a variety of target indications and treatment modalities,
we may expend our limited resources to pursue a particular therapeutic
candidate and fail to capitalize on development opportunities or
therapeutic candidates that may be more profitable or for which there is a
greater likelihood of success.
Because we have limited financial and personnel resources, we may
forgo or delay pursuit of opportunities with potential target indications
or therapeutic candidates that later prove to have greater commercial
potential than our current and planned development programs and
therapeutic candidates. Our resource allocation decisions may cause
us to fail to capitalize on viable commercial therapeutics or profitable
market opportunities. Our spending on current and future research
and development programs and other future therapeutic candidates
for specific indications may not yield any commercially viable future
therapeutic candidates. If we do not accurately evaluate the commercial
potential or target market for a particular therapeutic candidate, we may be
required to relinquish valuable rights to that therapeutic candidate through
collaboration, licensing or other royalty arrangements in cases in which it
would have been more advantageous for us to retain sole development
and commercialization rights to such future therapeutic candidates.
Additionally, we may pursue additional in-licenses or acquisitions of
development-stage assets or programs, which entails additional risk to
us. Identifying, selecting and acquiring promising therapeutic candidates
requires substantial technical, financial and human resources expertise.
Efforts to do so may not result in the actual acquisition or license of a
successful therapeutic candidate, potentially resulting in a diversion of
our management’s time and the expenditure of our resources with no
resulting benefit. For example, if we are unable to identify programs that
ultimately result in approved therapeutics, we may spend material amounts
of our capital and other resources evaluating, acquiring and developing
therapeutics that ultimately do not provide a return on our investment.
Founded Entities’ or our licensors’ ownership of our owned or in-licensed
patents, trade secrets or other intellectual property. If we, our Founded
Entities or our licensors fail in defending any such claims, in addition to
paying monetary damages, we may lose valuable intellectual property
rights, such as exclusive ownership of, or right to use, intellectual property
that is important to our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates. Even if we are successful in defending against such
claims, litigation could result in substantial costs and be a distraction to
management and other employees.
Any of the foregoing could have a material adverse effect on our
competitive position, business, financial condition, results of operations
and prospects.
Risks Related to Our Business and Industry
We attempt to distribute our scientific, execution and financing risks
across a variety of therapeutic areas, indications, programs and modalities
that are driven by our proven innovation and drug development
strategy. However, our assessment of, and approach to, risk may not be
comprehensive or effectively avoid delays or failures in one or more of our
programs. Failures in one or more of our programs could adversely impact
other programs and have a material adverse impact on our business,
results of operations and ability to fund our business.
While we aim to distribute our scientific, execution and financing risks
across programs, there may be foreseen and unforeseen risks across the
therapeutic candidates within our Wholly-Owned Programs and programs
being developed by our Founded Entities in whole or in part. In addition,
if any one or more of our clinical programs encounter safety, tolerability,
or efficacy problems, developmental delays, regulatory issues, or other
problems, our business could be significantly harmed. As our and certain
of our Founded Entities’ therapeutic candidates progress through clinical
development, we or others may determine that certain of our risk allocation
decisions were incorrect or insufficient, that individual programs or our
science in general has technology or biology risks that were unknown
or underappreciated, or that we have allocated resources across our
programs in such a way that did not maximize potential value creation. All
of these risks may relate to our current and future programs sharing similar
science and infrastructure, and in the event material decisions in any of
these areas turn out to have been incorrect or under-optimized, we may
experience a material adverse impact on our business and ability to fund
our operations.
Our business is highly dependent on the clinical advancement of
our programs and our success in identifying potential therapeutic
candidates. Delay or failure to advance our programs could adversely
impact our business.
Over time, our and our Founded Entities’ preclinical and clinical work led
us to identify potential synergies across target therapeutic indications,
generating a broad portfolio of therapeutic candidates across multiple
programs. Even if a particular program is successful in any phase of
development, such program could fail at a later phase of development,
and other programs within the same therapeutic area may still fail at any
phase of development including at phases where earlier programs in
that therapeutic area were successful. This may be a result of technical
challenges unique to that program or due to biology risk, which is
unique to every program. As we progress our programs through clinical
development, there may be new technical challenges that arise that cause
an entire program or a group of programs within an area of focus to fail.
Our future success depends on our ability to retain key employees,
directors, consultants and advisors and to attract, retain and motivate
qualified personnel.
Our ability to compete in the highly competitive biotechnology industry
depends upon our ability to attract and retain highly qualified managerial,
scientific and medical personnel. We are highly dependent on the
management, R&D, clinical, financial and business development expertise
of our executive officers, our directors, as well as the other members of our
scientific and clinical teams, including Bharatt Chowrira, our chief executive
officer, and Eric Elenko, our President. The loss of the services of any of
our executive officers and other key personnel, and our inability to find
suitable replacements could result in delays in therapeutic development
and our financial condition and results of operations could be materially
adversely affected.
Furthermore, each of our executive officers may terminate their
employment with us at any time. Recruiting and retaining qualified
scientific and clinical personnel and, if we progress the development of
the therapeutic candidates within our Wholly-Owned Programs toward
scaling up for commercialization, sales and marketing personnel, will also
be critical to our success. The loss of the services of our executive officers
212 PureTech Health plc Annual Report and Accounts 2024
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disclosure of sensitive information or negative or inaccurate posts or
comments about us on any social networking website. If any of these
events were to occur or we otherwise fail to comply with applicable
regulations, we could incur liability, face regulatory actions or incur other
harm to our business.
Our and our Founded Entities’ employees, independent contractors,
consultants, commercial partners and vendors may engage in misconduct
or other improper activities, including noncompliance with regulatory
standards and requirements.
We are exposed to the risk of fraud, misconduct or other illegal activity
by our employees, independent contractors, consultants, commercial
partners and vendors as well as the employees, independent contractors,
consultants, commercial partners and vendors of our Founded Entities.
Misconduct by these parties could include intentional, reckless and
negligent conduct that fails to: comply with the laws of the FDA and
comparable foreign regulatory authorities; provide true, complete and
accurate information to the FDA and comparable foreign regulatory
authorities; comply with manufacturing standards we have established;
comply with healthcare fraud and abuse laws in the United States and
similar foreign fraudulent misconduct laws; or report financial information
or data accurately or to disclose unauthorized activities. If we or our
Founded Entities obtain FDA or comparable foreign regulatory authorities
approval, or notified bodies certification, of the therapeutic candidates
within our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates and begin commercializing those therapeutics in the United
States and abroad, our potential exposure under such laws will increase
significantly, and our costs associated with compliance with such laws are
also likely to increase. In particular, research, sales, marketing, education
and other business arrangements in the healthcare industry are subject to
extensive laws designed to prevent fraud, kickbacks, self-dealing and other
abusive practices. These laws and regulations may restrict or prohibit a
wide range of pricing, discounting, educating, marketing and promotion,
sales and commission, certain customer incentive programs and other
business arrangements generally. Activities subject to these laws also
involve the improper use of information obtained in the course of patient
recruitment for clinical trials, which could result in regulatory sanctions and
cause serious harm to our reputation. It is not always possible to identify
and deter misconduct by employees and third parties, and the precautions
we take to detect and prevent this activity may not be effective in
controlling unknown or unmanaged risks or losses or in protecting us from
governmental investigations or other actions or lawsuits stemming from a
failure to be in compliance with such laws. If any such actions are instituted
against us, and we are not successful in defending ourselves or asserting
our rights, those actions could have a significant impact on our business,
including the imposition of significant fines or other sanctions.
Employee litigation and unfavorable publicity could negatively affect our
future business.
Our employees may, from time to time, bring lawsuits against us regarding
injury, creating a hostile work place, discrimination, wage and hour
disputes, sexual harassment, or other employment issues. In recent years,
there has been an increase in the number of discrimination and harassment
claims generally. Coupled with the expansion of social media platforms
and similar devices that allow individuals access to a broad audience, these
claims have had a significant negative impact on some businesses. Certain
companies that have faced employment- or harassment-related lawsuits
have had to terminate management or other key personnel, and have
suffered reputational harm that has negatively impacted their business.
If we were to face any employment-related claims, our business could be
negatively affected.
If we fail to comply with environmental, health and safety laws and
regulations, we could become subject to fines or penalties or incur costs
that could harm our business.
We are subject to numerous environmental, health and safety laws and
regulations, including those governing laboratory procedures and the
handling, use, storage, treatment and disposal of hazardous materials
and wastes. Our operations involve the use of hazardous and flammable
materials, including chemicals and biological materials. Our operations
also produce hazardous waste therapeutics. We generally contract with
third parties for the disposal of these materials and wastes. We cannot
eliminate the risk of contamination or injury from these materials. In the
event of contamination or injury resulting from our use of hazardous
materials, we could be held liable for any resulting damages, and any
liability could exceed our resources. We also could incur significant costs
associated with civil or criminal fines and penalties for failure to comply
with such laws and regulations.
Product liability lawsuits against us could cause us to incur substantial
liabilities and could limit commercialization of any therapeutic candidates
that we may develop.
We face an inherent risk of product liability exposure related to the
testing of therapeutic candidates in human clinical trials and will face an
even greater risk if we commercially sell any therapeutics that we may
develop. If we cannot successfully defend ourselves against claims that the
therapeutic candidates within our Wholly-Owned Programs or medicines
caused injuries, we could incur substantial liabilities. Regardless of merit or
eventual outcome, liability claims may result in:
— decreased demand for any therapeutic candidates or medicines that we
may develop;
— injury to our reputation and significant negative media attention;
— withdrawal of clinical trial participants;
— significant costs to defend the related litigation;
— substantial monetary awards to trial participants or patients;
— loss of revenue; and
— the inability to commercialize the therapeutic candidates within our
Wholly-Owned Programs .
Although we maintain product liability insurance, including coverage for
clinical trials that we sponsor, it may not be adequate to cover all liabilities
that we may incur. We anticipate that we will need to increase our insurance
coverage as we commence additional clinical trials and if we successfully
commercialize any therapeutic candidates. The market for insurance
coverage is increasingly expensive, and the costs of insurance coverage
will increase as our clinical programs increase in size. We may not be able
to maintain insurance coverage at a reasonable cost or in an amount
adequate to satisfy any liability that may arise.
Litigation against us could be costly and time-consuming to defend and
could result in additional liabilities.
In March 2024, a complaint was filed against us by a third-party alleging
breach of contract with respect to certain payments alleged to be owed
to such third party by us. We intend to defend ourselves vigorously
though the ultimate outcome of this matter and the timing for resolution
remains uncertain. We may from time to time be subject to additional
legal proceedings and claims that arise in the ordinary course of business
or otherwise, such as claims brought by third parties in connection with
commercial disputes and employment claims made by our current or
former employees. Claims may also be asserted by or on behalf of a variety
of other parties, including government agencies, patients, or stockholders.
We could also be subject to securities class action litigation. In the past,
securities class action litigation has often been brought against a company
following a decline in the market price of its securities. This risk is especially
relevant for us because biotechnology companies have experienced
significant stock price volatility in recent years. If we face such litigation, it
could result in substantial costs and a diversion of management’s attention
and resources, which could harm our business.
Any litigation involving us may result in substantial costs, operationally
restrict our business, and may divert management’s attention and
resources, which may seriously harm our business, overall financial
condition, and results of operations. Insurance may not cover existing
or future claims, be sufficient to fully compensate us for one or more of
such claims, or continue to be available on terms acceptable to us. A
claim brought against us that is uninsured or underinsured could result in
unanticipated costs, thereby adversely impacting our results of operations.
The increasing use of social media platforms presents new risks
and challenges.
Social media is increasingly being used to communicate about our and
our Founded Entities’ clinical development programs and the diseases
our therapeutics are being developed to treat, and we intend to utilize
appropriate social media in connection with our commercialization efforts
following approval of the therapeutic candidates within our Wholly-Owned
Programs . Social media practices in the biopharmaceutical industry
continue to evolve and regulations relating to such use are not always
clear. This evolution creates uncertainty and risk of noncompliance with
regulations applicable to our business. For example, patients may use
social media channels to comment on their experience in an ongoing
blinded clinical study or to report an alleged adverse event. When such
disclosures occur, there is a risk that we fail to monitor and comply with
applicable adverse event reporting obligations or we may not be able
to defend our business or the public’s legitimate interests in the face
of the political and market pressures generated by social media due
to restrictions on what we may say about the therapeutic candidates
within our Wholly-Owned Programs . There is also a risk of inappropriate
Focus on environmental sustainability and social initiatives could increase
our costs, harm our reputation and adversely impact our financial results.
There has been public focus by investors, patients, environmental
activists, the media, governmental and nongovernmental organizations
and other stakeholders on a variety of environmental, social and other
sustainability matters. We may experience pressure to make commitments
relating to sustainability matters that affect us, including the design and
implementation of specific risk mitigation strategic initiatives relating to
sustainability. Expectations regarding the management of environmental,
social and governance (“ESG”) initiatives continue to evolve. While we may
from time to time engage in various initiatives (including but not limited
to voluntary disclosures, policies or goals) to improve our ESG profile or
respond to stakeholder expectations, we cannot guarantee that these
initiatives will have the desired effect. If we do not, or are not perceived to,
adequately address ESG matters affecting our business or set and meet
relevant sustainability goals, our reputation and financial results may suffer.
In addition, even if we are effective at addressing such concerns, we may
experience increased costs as a result of executing upon our sustainability
goals that may not be offset by any benefit to our reputation, which could
have an adverse impact on our business and financial condition.
In addition, this emphasis on environmental, social and other sustainability
matters has resulted and may result in the adoption of new laws, rules and
regulations, including new reporting requirements. If we fail to comply with
such laws, rules, regulations or reporting requirements, our reputation and
business could be adversely impacted.
We may acquire businesses, or therapeutics or therapeutic candidates, or
form strategic alliances, in the future, and we may not realize the benefits
of such acquisitions.
We acquire or in-license businesses or therapeutics from other companies
or create joint ventures with third parties that we believe will complement
or augment our existing business. If we acquire businesses with promising
markets or technologies, we may not be able to realize the benefit of
acquiring such businesses if we are unable to successfully integrate them
with our existing operations and company culture or retain key personnel
from the acquired company. We may encounter numerous difficulties
in developing, manufacturing and marketing any new therapeutics or
therapeutic candidates resulting from a strategic alliance or acquisition
that delay or prevent us from realizing their expected benefits or
enhancing our business. We cannot assure you that, following any such
acquisition or license, we will achieve the expected synergies to justify
the transaction. Failure to successfully identify, complete, manage and
integrate acquisitions could materially and adversely affect our business,
financial condition and results of operations and could cause the price of
our securities to decline.
Changes in funding or staffing for the FDA, the SEC and other government
agencies could hinder their ability to hire and retain key leadership and
other personnel, prevent new therapeutics and services from being
developed or commercialized in a timely manner or otherwise prevent
those agencies from performing normal functions on which the operation
of our business may rely, which could negatively impact our business.
The ability of the FDA, foreign regulatory authorities and notified bodies
to review and approve or certify new therapeutics or take action with
respect to other regulatory matters can be affected by a variety of factors,
including government budget and funding levels, ability to hire and retain
key personnel and accept payment of user fees, and statutory, regulatory,
and policy changes. In addition, government funding of the SEC and other
government agencies on which our operations may rely, including those
that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable. The priorities of the
FDA and foreign regulatory authorities may also influence the ability of
the FDA and foreign regulatory authorities to take action on regulatory
matters, for example the FDA’s and foreign regulatory authorities’ budget
and funding levels and ability to hire and retain key personnel.
Disruptions at the FDA and foreign regulatory authorities may also slow
the time necessary for new drugs to be reviewed and/or approved, or
for other actions to be taken, by relevant government agencies, which
would adversely affect our business. For example, in recent years, the U.S.
government has shut down several times and certain regulatory agencies,
such as the FDA and the SEC, have had to furlough critical FDA, SEC and
other government employees and stop critical activities. If a prolonged
government shutdown occurs, it could significantly impact the ability of
the FDA to timely review and process our regulatory submissions, which
could have a material adverse effect on our business. Similarly, a prolonged
government shutdown could prevent the timely review of our patent
applications by the USPTO, which could delay the issuance of any U.S.
patents to which we might otherwise be entitled. Further, in our operations
as a public company, future government shutdowns could impact our
ability to access the public markets and obtain necessary capital in order to
properly capitalize and continue our operations.
Although we maintain workers’ compensation insurance to cover us
for costs and expenses we may incur due to injuries to our employees
resulting from the use of hazardous materials, this insurance may not
provide adequate coverage against potential liabilities. We do not
maintain insurance for environmental liability or toxic tort claims that
may be asserted against us in connection with our storage or disposal of
biological, hazardous or radioactive materials.
In addition, we may incur substantial costs in order to comply with
current or future environmental, health and safety laws and regulations.
These current or future laws and regulations may impair our research,
development or therapeutic efforts. Our failure to comply with these
laws and regulations also may result in substantial fines, penalties or
other sanctions.
Cyberattacks or other failures in our telecommunications or information
technology systems, or those of our collaborators, contract research
organizations, third-party logistics providers, distributors or other
contractors or consultants, could result in information theft, data
corruption and significant disruption of our business operations.
We collect and maintain information in digital form that is necessary to
conduct our business, and we are increasingly dependent on information
technology, or IT, systems and infrastructure to operate our business. In
the ordinary course of our business, we collect, store, and transmit large
amounts of confidential information, including intellectual property,
proprietary business information, clinical trial data, and personal
information (collectively, “Confidential Information”) of clinical trial
participants, employees, and contractors. It is critical that we do so in
a secure manner to maintain the confidentiality and integrity of such
Confidential Information.
As use of digital technologies has increased, cyber incidents, including
third parties gaining access to employee accounts using stolen or
inferred credentials, computer malware (e.g., ransomware), viruses,
misconfigurations, “bugs” or other vulnerabilities, malicious code
spamming, phishing attacks or other means, and deliberate attacks and
attempts to gain unauthorized access to computer systems and networks,
have increased in frequency and sophistication. These threats pose a risk
to the security of our, our collaborators’, our CROs’, third-party logistics
providers’, distributors’ and other contractors’ and consultants’ systems
and networks, and the confidentiality, availability and integrity of our
data. There can be no assurance that we will be successful in preventing
cyberattacks or successfully mitigating their effects. Similarly, there can be
no assurance that our collaborators, CROs, third-party logistics providers,
distributors and other contractors and consultants will be successful in
protecting our clinical and other data that is stored on their systems.
We and certain of our service providers are from time to time subject to
cyberattacks and security incident. Although to our knowledge we have
not experienced any significant system failure, accident or material security
breach to date, if such an event were to occur and cause interruptions
in our operations, it could result in a material disruption of development
programs and business operations.
Any cyberattack, data breach or destruction or loss of data could result in
a violation of applicable U.S. and international privacy, data protection and
other laws, and subject us to litigation and governmental investigations
and proceedings by federal, state and local regulatory entities in the
United States and by international regulatory entities, resulting in exposure
to material civil and/or criminal liability. A security incident could also
expose us to risks and could cause management distraction and the
obligation to devote significant financial and other resources to mitigate
such problems, which would increase our future information security costs,
including through organizational changes, deploying additional personnel,
reinforcing administrative, physical and technical safeguards, further
training of employees, changing third-party vendor control practices, and
engaging third-party subject matter experts and consultants and reduce
the demand for our technology and services. Any security compromise
affecting us, our collaborators, CROs, third-party logistics providers,
distributors, and other contractors and consultants, or our industry,
whether real or perceived, could harm our reputation, erode confidence in
the effectiveness of our security measures and lead to regulatory scrutiny.
Further, our general liability insurance and corporate risk program may
not cover all potential claims to which we are exposed and may not be
adequate to indemnify us for all liability that maybe imposed; and could
have a material adverse effect on our business and prospects. For example,
the loss of clinical trial data from completed or ongoing clinical trials for
any of the therapeutic candidates within our Wholly-Owned Programs or
our Founded Entities’ therapeutic candidates could result in delays in our
development and regulatory approval efforts and significantly increase our
costs to recover or reproduce the data.
214 PureTech Health plc Annual Report and Accounts 2024
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— differing and changing regulatory requirements;
— difficulties in compliance with different, complex and changing laws,
regulations and court systems of multiple jurisdictions and compliance
with a wide variety of foreign laws, treaties and regulations;
— changes in a specific country’s or region’s political or economic
environment, including, but not limited to, the implications of one or
more of the following occurring the decision of the United Kingdom:
— future activities subject to the terms of the Trade and Cooperation
Agreement between the United Kingdom and the European Union
effective May 1, 2021, which has not impacted our results to-date;
— a second referendum on Scottish independence from the United
Kingdom; and/or
— a snap general election; and
— negative consequences from changes in tax laws.
In addition, our business strategy incorporates potential international
expansion to target patient populations outside the United States. If we or
our Founded Entities receive regulatory approval for and commercialize
any of the therapeutic candidates within our Wholly-Owned Programs
or our Founded Entities’ therapeutic candidates in patient populations
outside the United States, we may hire sales representatives and conduct
physician and patient association outreach activities outside of the United
States. Doing business internationally involves a number of risks, including,
but not limited to:
— multiple, conflicting, and changing laws and regulations such as privacy
regulations, tax laws, export and import restrictions, employment laws,
regulatory requirements, and other governmental approvals, permits,
and licenses;
— failure by us to obtain and maintain regulatory approvals for the use of
our therapeutics in various countries;
— additional potentially relevant third-party patent rights;
— complexities and difficulties in obtaining protection and enforcing our
intellectual property;
— difficulties in staffing and managing foreign operations;
— complexities associated with managing multiple payor reimbursement
regimes, government payors, or patient self-pay systems;
— limits in our ability to penetrate international markets;
— financial risks, such as longer payment cycles, difficulty collecting
accounts receivable, the impact of local and regional financial crises
on demand and payment for our therapeutics, and exposure to foreign
currency exchange rate fluctuations;
— natural disasters, political and economic instability, including wars,
terrorism, and political unrest, outbreak of disease, boycotts, curtailment
of trade, and other business restrictions;
— certain expenses including, among others, expenses for travel,
translation, and insurance; and
— regulatory and compliance risks that relate to maintaining accurate
information and control over sales and activities that may fall within the
purview of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or
the FCPA, its books and records provisions, or its anti-bribery provisions.
Any of these factors could significantly harm our potential international
expansion and operations and, consequently, our results of operations.
Unfavorable global economic conditions could adversely affect our
business, financial condition or results of operations.
Our ability to invest in and expand our business and meet our financial
obligations, to attract and retain third-party contractors and collaboration
partners and to raise additional capital depends on our operating and
financial performance, which, in turn, is subject to numerous factors,
including the prevailing economic and political conditions and financial,
business and other factors beyond our control, such as the rate of
unemployment, the number of uninsured persons in the United States,
political influences and inflationary pressures. For example, an overall
decrease in or loss of insurance coverage among individuals in the United
States as a result of unemployment, underemployment or the repeal of
certain provisions of the ACA, may decrease the demand for healthcare
services and pharmaceuticals. If fewer patients are seeking medical care
because they do not have insurance coverage, we and our Founded
Entities may experience difficulties in any eventual commercialization of
the therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates and our business, results of
operations, financial condition and cash flows could be adversely affected.
In addition, our results of operations could be adversely affected by
general conditions in the global economy and in the global financial
markets upon which pharmaceutical and biopharmaceutical companies
such as us are dependent for sources of capital. The global economy,
including credit and financial markets, has recently experienced extreme
volatility and disruptions, including severely diminished liquidity and credit
Separately, in response to the global COVID-19 pandemic, the FDA
postponed most inspections of domestic and foreign manufacturing
facilities at various points. If a prolonged government shutdown, shortages
In funding or staffing or other disruption occurs, it could significantly
impact the ability of the FDA to timely review and process our regulatory
submissions, which could have a material adverse effect on our business.
Future shutdowns or other disruptions could also affect other government
agencies such as the SEC, which may also impact our business by delaying
review of our public filings, to the extent such review is necessary, and our
ability to access the public markets.
Furthermore, in the EU, notified bodies must be officially designated to
certify products and services in accordance with the EU Medical Devices
Regulation. Their designation process, which is significantly stricter
under the new Regulation, has experienced considerable delays due to
the COVID-19 pandemic . Despite a recent increase in designations, the
current number of notified bodies designated under the new Regulation
remains significantly lower than the number of notified bodies designated
under the previous regime. The current designated notified bodies
are therefore facing a backlog of requests as a consequence of which
review times have lengthened. This situation may impact the way we are
conducting our business in the EU and the EEA and the ability of our
notified body to timely review and process our regulatory submissions and
perform its audits.
We or the third parties upon whom we depend may be adversely affected
by a natural disaster and our business continuity and disaster recovery
plans may not adequately protect us from a serious disaster.
Natural disasters could severely disrupt our operations, and have a
material adverse effect on our business, results of operations, financial
condition and prospects. If a natural disaster, power outage or other
event occurred that prevented us from using all or a significant portion
of our headquarters, that damaged critical infrastructure, such as the
manufacturing facilities of our third-party CMOs, or that otherwise
disrupted operations, it may be difficult or, in certain cases, impossible
for us to continue our business for a substantial period of time. The
disaster recovery and business continuity plans we have in place currently
are limited and are unlikely to prove adequate in the event of a serious
disaster or similar event. We may incur substantial expenses as a result of
the limited nature of our disaster recovery and business continuity plans,
which, could have a material adverse effect on our business, financial
condition, results of operations and prospects.
We will continue to incur increased costs as a result of operating as a U.S.-
listed public company, and our management will be required to devote
substantial time to new compliance initiatives.
As a U.S. public company, and particularly now that we are no longer an
emerging growth company, we have incurred and will continue to incur
significant legal, accounting and other expenses that we did not incur as a
public company listed only on the LSE. In addition, the Sarbanes-Oxley Act
of 2002, or the Sarbanes-Oxley Act, and rules subsequently implemented
by the SEC and Nasdaq have imposed various requirements on public
companies, including establishment and maintenance of effective
disclosure and financial controls and corporate governance practices.
Our management and other personnel continue to devote a substantial
amount of time to these compliance initiatives. Moreover, these rules and
regulations will increase our legal and financial compliance costs and will
make some activities more time-consuming and costly. For example, we
expect that these rules and regulations may make it more difficult and
more expensive for us to obtain director and officer liability insurance.
We continue to evaluate these rules and regulations and cannot predict
or estimate the amount of additional costs we may incur or the timing
of such costs. These rules and regulations are often subject to varying
interpretations, in many cases due to their lack of specificity, and, as a
result, their application in practice may evolve over time as new guidance
is provided by regulatory and governing bodies. This could result in
continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices.
Risks Related to Our International Operations
Our international operations may expose us to business, regulatory,
political, operational, financial, pricing and reimbursement and economic
risks associated with doing business outside of the United States.
As a company based in the United Kingdom, our business is subject to
risks associated with being organized outside of the United States. While
the majority of our operations are in the United States and our functional
currency is the U.S. dollar, our future results could be harmed by a variety
of international factors, including:
— economic weakness, including rising inflation and interest rates, or
political instability in particular non-U.S. economies and markets;
The United Kingdom’s withdrawal from the European Union may have a
negative effect on our business.
Since the end of the Brexit transition period on January 1, 2021, and the
implementation of the Windsor Framework on January 1, 2025, the UK has
not been directly subject to EU laws with respect to medicinal products
As a result of the Northern Ireland Protocol, different rules applied in
Northern Ireland than in Great Britain; broadly, Northern Ireland continued
to follow the EU regulatory regime. However, on January 1, 2025, a new
arrangement called the “Windsor Agreement” came into effect and
reintegrated Northern Ireland under the regulatory authority of the MHRA
with respect to medicinal products. The Windsor Framework removes EU
licensing processes, and EU labelling and serialization requirements in
relation to Northern Ireland, and introduces a UK-wide licensing process
for medicinal products. There could be additional uncertainty and risk
around what these changes mean to our business. It is currently unclear to
what extent the UK Government will seek to align its regulations with the
EU. The EU laws that have been transposed into UK law through secondary
legislation remain applicable in Great Britain, but new legislation such as
the (EU) CTR is not applicable in Great Britain. Whilst the EU-UK Trade and
Cooperation Agreement, or TCA, includes the mutual recognition of Good
Manufacturing Practice, or GMP, inspections of manufacturing facilities
for medicinal products and GMP documents issued, it does not contain
wholesale mutual recognition of UK and EU pharmaceutical regulations
and product standards. There may be divergent local requirements
in Great Britain from the EU in the future, which may impact clinical
and development activities that occur in the UK in the future. Similarly,
clinical trial submissions in the UK cannot be bundled with those of EU
member states within the EMA Clinical Trial Information System, or CTIS,
adding further complexity, cost and potential risk to future clinical and
development activity in the UK.
Exchange rate fluctuations may materially affect our results of operations
and financial condition.
Although we are based in the United Kingdom, our financial statements
are denominated in U.S dollars and many of our business activities are
carried out with partners outside the U.S. and United Kingdom and these
transactions may be denominated in another currency. As a result, our
business and the price of our ADSs may be affected by fluctuations in
foreign exchange rates not only between the pound sterling and the
U.S. dollar, but also the currencies of other countries, which may have
a significant impact on our results of operations and cash flows from
period to period. Currently, we do not have any exchange rate hedging
arrangements in place.
Risks Related to Our Equity Securities and ADSs
The market price of our ADSs has been and will likely continue to be highly
volatile, and you could lose all or part of your investment.
The market price of our ADSs has been and will likely continue to be
volatile. The stock market in general, and the market for biopharmaceutical
companies in particular, has experienced extreme volatility that has often
been unrelated to the operating performance of particular companies. As
a result of this volatility, you may not be able to sell your ADSs at or above
the purchase price. The market price for our ADSs may be influenced by
many factors, including:
— adverse results or delays in our preclinical studies or clinical trials;
— reports of AEs or other negative results in clinical trials of third parties’
therapeutic candidates that target the therapeutic candidates within
our Wholly-Owned Programs or our Founded Entities’ therapeutic
candidates’ target indications;
— an inability for us to obtain additional funding on reasonable
terms or at all;
— any delay in submitting an IND, BLA or NDA for the therapeutic
candidates within our Wholly-Owned Programs or our Founded
Entities’ therapeutic candidates and any adverse development or
perceived adverse development with respect to the FDA’s review of that
IND, BLA or NDA;
— failure to develop successfully and commercialize the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates;
— announcements we make regarding our current therapeutic candidates,
acquisition of potential new therapeutic candidates and companies and/
or in-licensing;
— failure to maintain our or our Founded Entities’ existing license
arrangements or enter into new licensing and collaboration agreements;
— failure by us, our Founded Entities or our licensors to prosecute, maintain
or enforce our intellectual property rights;
— changes in laws or regulations applicable to future therapeutics;
availability, fluctuating interest and inflation rates, tariffs and trade wars,
declines in consumer confidence, declines in economic growth, increases
in unemployment rates and uncertainty about economic stability. A
severe or prolonged economic downturn could result in a variety of risks
to our business, including a reduced ability to raise additional capital
when needed on acceptable terms, if at all, and weakened demand for
the therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates. A weak or declining economy
could also strain our suppliers, possibly resulting in supply disruption.
Any of the foregoing could harm our business and we cannot anticipate
all of the ways in which the current economic climate and financial market
conditions could adversely impact our business. Additionally, we maintain
the majority of our cash and cash equivalents in accounts with major U.S.
and multi-national financial institutions, and our deposits at certain of
these institutions exceed insured limits. Market conditions can impact the
viability of these institutions. In the event of failure of any of the financial
institutions where we maintain our cash and cash equivalents, there can be
no assurance that we would be able to access uninsured funds in a timely
manner or at all. Any inability to access or delay in accessing these funds
could adversely affect our business and financial position.
We are subject to the U.K. Bribery Act 2010, or the Bribery Act, the U.S.
Foreign Corrupt Practices Act of 1977 (as amended) (“FCPA”) and other
anti-corruption laws, as well as export control laws, import and customs
laws, trade and economic sanctions laws and other laws governing
our operations.
Our operations are subject to anti-corruption laws, including the Bribery
Act, the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C.
§201, the U.S. Travel Act, and other anti-corruption laws that apply in
countries where we do business. These laws generally prohibit us and
our employees and intermediaries acting on our behalf from corruptly
authorizing, promising, offering, or providing, directly or indirectly,
anything of value, to government officials or other persons to obtain or
retain business or gain some other business advantage. The Bribery Act
also prohibits: (i) “commercial” bribery of private parties, in addition to
bribery involving domestic or foreign officials; (ii) the acceptance of bribes,
as well as the giving of bribes, and (iii) “facilitation payments”, meaning
generally low level payments designed to secure or expedite routine
governmental actions or other conduct to which persons are already under
obligations to perform. The Bribery Act also creates an offence applicable
corporate entities for failure to prevent bribery by our employees, officers,
directors and other third parties acting on our behalf, to which the only
defence is to maintain “adequate procedures” designed to prevent such
acts of bribery.
In the future, we and our strategic partners may operate in jurisdictions that
pose a heightened risk of potential Bribery Act or FCPA violations, and we
may participate in collaborations and relationships with third parties whose
conduct could potentially subject us to liability under the Bribery Act,
FCPA or other anti-corruption laws, even if we do not explicitly authorize
or have actual knowledge of such activities. In addition, we cannot predict
the nature, scope or effect of future regulatory requirements to which our
international operations might be subject or the manner in which existing
laws might be administered or interpreted.
We are also subject to other laws and regulations governing our
international operations, including regulations administered by the
governments of the United Kingdom and the United States, and authorities
in the European Union and its member states, including applicable export
control regulations, economic sanctions and embargoes on certain
countries, regions, and persons, import and customs requirements and
currency exchange regulations, collectively referred to as the Trade Control
laws. Compliance with Trade Control Laws regarding the import and export
of our products may create delays in the introduction of our products
in international markets, and, in some cases, prevent the export of our
products to some countries altogether.
We have policies and procedures designed to promote compliance
with anti-corruption laws and Trade Control laws. However, there is no
assurance that we will be completely effective in ensuring our compliance
with all applicable anti-corruption laws, including the Bribery Act, the FCPA
or other legal requirements, including Trade Control laws. If we are not in
compliance with the Bribery Act, the FCPA and other anti-corruption laws
or Trade Control laws, we may be subject to criminal and civil penalties,
disgorgement, suspension or debarment from government contracts as
well as other sanctions and remedial measures, and may also result in
collateral litigation. These consequences could have an adverse impact
on our business, financial condition, results of operations and liquidity.
Likewise, any investigation of any potential violations of the Bribery Act, the
FCPA, other anti-corruption laws or Trade Control laws by United Kingdom,
United States or other authorities could also have an adverse impact on our
reputation, our business, results of operations and financial condition. In
addition, responding to any enforcement action may result in a significant
diversion of management’s attention and resources and significant defense
costs and other professional fees.
216 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 217
Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
Holders of ADSs are not treated as holders of our ordinary shares.
If you purchase an ADS, you will become a holder of ADSs with underlying
ordinary shares in a company incorporated under English law. Holders
of ADSs are not treated as holders of our ordinary shares, unless they
withdraw the ordinary shares underlying their ADSs in accordance with the
deposit agreement and applicable laws and regulations. The depositary
is the holder of the ordinary shares underlying the ADSs. Holders of ADSs
therefore do not have any rights as holders of our ordinary shares, other
than the rights that they have pursuant to the deposit agreement. See
“Description of Securities Other Than Equity Securities” in our Annual
Report on Form 20-F.
Holders of ADSs may be subject to limitations on the transfer of their ADSs
and the withdrawal of the underlying ordinary shares.
ADSs are transferable on the books of the depositary. However, the
depositary may close its books at any time or from time to time when it
deems expedient in connection with the performance of its duties. The
depositary may refuse to deliver, transfer or register transfers of ADSs
generally when our books or the books of the depositary are closed, or at
any time if we or the depositary think it is advisable to do so because of
any requirement of law, government or governmental body, or under any
provision of the deposit agreement, or for any other reason, subject to
the right of ADS holders to cancel their ADSs and withdraw the underlying
ordinary shares. Temporary delays in the cancellation of your ADSs and
withdrawal of the underlying ordinary shares may arise because the
depositary has closed its transfer books or we have closed our transfer
books, the transfer of ordinary shares is blocked to permit voting at
a shareholders’ meeting or we are paying a dividend on our ordinary
shares. In addition, ADS holders may not be able to cancel their ADSs and
withdraw the underlying ordinary shares when they owe money for fees,
taxes and similar charges and when it is necessary to prohibit withdrawals
in order to comply with any laws or governmental regulations that apply to
ADSs or to the withdrawal of ordinary shares or other deposited securities.
See “Description of Securities Other Than Equity Securities” in our Annual
Report on Form 20-F.
ADS holders may not be entitled to a jury trial with respect to claims
arising under the deposit agreement, which could result in less favorable
outcomes to the plaintiff(s) in any such action.
The deposit agreement governing the ADSs representing our ordinary
shares provides that, to the fullest extent permitted by law, holders and
beneficial owners of ADSs irrevocably waive the right to a jury trial of any
claim they may have against us or the depositary arising out of or relating
to the ADSs or the deposit agreement.
If this jury trial waiver provision is not permitted by applicable law, an
action could proceed under the terms of the deposit agreement with a
jury trial. If we or the depositary opposed a jury trial demand based on the
waiver, the court would determine whether the waiver was enforceable
based on the facts and circumstances of that case in accordance with the
applicable state and federal law. To our knowledge, the enforceability of a
contractual pre-dispute jury trial waiver in connection with claims arising
under the federal securities laws has not been finally adjudicated by the
U.S. Supreme Court. However, we believe that a contractual pre-dispute
jury trial waiver provision is generally enforceable, including under the laws
of the State of New York, which govern the deposit agreement, by a federal
or state court in the City of New York, which has non-exclusive jurisdiction
over matters arising under the deposit agreement. In determining whether
to enforce a contractual pre-dispute jury trial waiver provision, courts will
generally consider whether a party knowingly, intelligently and voluntarily
waived the right to a jury trial. We believe that this is the case with respect
to the deposit agreement and the ADSs. It is advisable that you consult
legal counsel regarding the jury waiver provision before entering into the
deposit agreement.
If you or any other holders or beneficial owners of ADSs bring a claim
against us or the depositary in connection with matters arising under the
deposit agreement or the ADSs, including claims under federal securities
laws, you or such other holder or beneficial owner may not be entitled to a
jury trial with respect to such claims, which may have the effect of limiting
and discouraging lawsuits against us and/or the depositary. If a lawsuit is
brought against us and/or the depositary under the deposit agreement, it
may be heard only by a judge or justice of the applicable trial court, which
would be conducted according to different civil procedures and may result
in different outcomes than a trial by jury would have had, including results
that could be less favorable to the plaintiff(s) in any such action, depending
on, among other things, the nature of the claims, the judge or justice
hearing such claims, and the venue of the hearing.
No condition, stipulation or provision of the deposit agreement or ADSs
serves as a waiver by any holder or beneficial owner of ADSs or by us or the
depositary of compliance with the U.S. federal securities laws and the rules
and regulations promulgated thereunder.
— inability to obtain adequate clinical or commercial supply for the
therapeutic candidates within our Wholly-Owned Programs or our
Founded Entities’ therapeutic candidates or the inability to do so at
acceptable prices;
— adverse regulatory decisions, including failure to reach agreement with
applicable regulatory authorities on the design or scope of our planned
clinical trials;
— failure to obtain and maintain regulatory exclusivity for the therapeutic
candidates within our Wholly-Owned Programs or our Founded Entities’
therapeutic candidates;
— regulatory approval or commercialization of new therapeutics or other
methods of treating our target disease indications by our competitors;
— failure to meet or exceed financial projections we may provide to the
public or to the investment community;
— publication of research reports or comments by securities or
industry analysts;
— the perception of the pharmaceutical and biotechnology industries by
the public, legislatures, regulators and the investment community;
— announcements of significant acquisitions, strategic partnerships,
joint ventures or capital commitments by us, our Founded Entities our
strategic collaboration partners or our competitors;
— disputes or other developments relating to proprietary rights, including
patents, litigation matters and our or our Founded Entities’ ability to
obtain patent protection for our technologies;
— additions or departures of our key scientific or management personnel;
— significant lawsuits, including patent or shareholder litigation, against us;
— changes in the market valuations of similar companies;
— adverse developments relating to any of the above or additional factors
with respect to our Founded Entities;
— sales or potential sales of substantial amounts of our ADSs; and
— trading volume of our ADSs.
In addition, companies trading in the stock market in general, and
Nasdaq, in particular, have experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the
operating performance of these companies. Broad market and industry
factors may negatively affect the market price of our ADSs, regardless of
our actual operating performance. Since our ADSs were initially sold in
November 2020 at a price of $33.00 per ADS, our ADS price has fluctuated
significantly. If the market price of our ADSs does not exceed the price
at which you acquired them, you may not realize any return on your
investment in us and may lose some or all of your investment.
If securities or industry analysts do not publish research or publish
inaccurate or unfavorable research about our business, our ADS price and
trading volume could decline.
The trading market for our ADSs and ordinary shares depends in part
on the research and reports that securities or industry analysts publish
about us or our business. If no or few securities or industry analysts cover
our company, the trading price for our ADSs and ordinary shares would
be negatively impacted. If one or more of the analysts who covers us
downgrades our equity securities or publishes incorrect or unfavorable
research about our business, the price of our ordinary shares and ADSs
would likely decline. If one or more of these analysts ceases coverage of
our company or fails to publish reports on us regularly, or downgrades our
securities, demand for our ordinary shares and ADSs could decrease, which
could cause the price of our ordinary shares and ADSs or their trading
volume to decline.
Future sales, or the possibility of future sales, of a substantial number
of our securities could adversely affect the price of the shares and
dilute shareholders.
Sales of a substantial number of our ADSs in the public market could occur
at any time, subject to certain restrictions described below. If our existing
shareholders sell, or indicate an intent to sell, substantial amounts of our
securities in the public market, the trading price of the ADSs could decline
significantly and could decline below the original purchase price. As of
March 31, 2025, we had 240,189,449 outstanding ordinary shares. Ordinary
shares subject to outstanding options under our equity incentive plans and
the ordinary shares reserved for future issuance under our equity incentive
plans will become eligible for sale in the public market in the future, subject
to certain legal and contractual limitations.
One of our principal shareholders has a significant holding in the company
which may give them influence in certain matters requiring approval by
shareholders, including approval of significant corporate transactions in
certain circumstances.
As of March 31, 2025, Invesco Asset Management Limited, or Invesco, held
approximately 17.07 percent of our ordinary shares. Accordingly, Invesco
may, as a practical matter, be able to influence certain matters requiring
approval by shareholders, including approval of significant corporate
transactions in certain circumstances. Such concentration of ownership
may also have the effect of delaying or preventing any future proposed
change in control of the company. The trading price of the ordinary shares
could be adversely affected if potential new investors are disinclined to
invest in the company because they perceive disadvantages to a large
shareholding being concentrated in the hands of a single shareholder.
The interests of Invesco and the investors that acquire ADSs may not
be aligned. Invesco may make acquisitions of, or investments in, other
businesses in the same sectors as us or our Founded Entities. These
businesses may be, or may become, competitors of us or our Founded
Entities. In addition, funds or other entities managed or advised by Invesco
may be in direct competition with us or our Founded Entities on potential
acquisitions of, or investments in, certain businesses. In addition, Invesco
holds equity interests in certain of our Founded Entities where they may
exert direct influence.
You will not have the same voting rights as the holders of our ordinary
shares and may not receive voting materials in time to be able to exercise
your right to vote.
Except as described in our Annual Report on Form 20-F and the deposit
agreement, holders of the ADSs will not be able to exercise voting rights
attaching to the ordinary shares represented by the ADSs. Under the terms
of the deposit agreement, holders of the ADSs may instruct the depositary
to vote the ordinary shares underlying their ADSs. Otherwise, holders of
ADSs will not be able to exercise their right to vote unless they withdraw
the ordinary shares underlying their ADSs to vote them in person or by
proxy in accordance with applicable laws and regulations and our Articles
of Association. Even so, ADS holders may not know about a meeting far
enough in advance to withdraw those ordinary shares. If we ask for the
instructions of holders of the ADSs, the depositary, upon timely notice from
us, will notify ADS holders of the upcoming vote and arrange to deliver
our voting materials to them. Upon our request, the depositary will mail to
holders a shareholder meeting notice that contains, among other things, a
statement as to the manner in which voting instructions may be given. We
cannot guarantee that ADS holders will receive the voting materials in time
to ensure that they can instruct the depositary to vote the ordinary shares
underlying their ADSs. A shareholder is only entitled to participate in, and
vote at, the meeting of shareholders, provided that it holds our ordinary
shares as of the record date set for such meeting and otherwise complies
with our Articles of Association. In addition, the depositary’s liability to
ADS holders for failing to execute voting instructions or for the manner
of executing voting instructions is limited by the deposit agreement. As
a result, holders of ADSs may not be able to exercise their right to give
voting instructions or to vote in person or by proxy and they may not have
any recourse against the depositary or us if their ordinary shares are not
voted as they have requested or if their shares cannot be voted.
You may not receive distributions on our ordinary shares represented by
the ADSs or any value for them if it is illegal or impractical to make them
available to holders of ADSs.
The depositary for the ADSs has agreed to pay to you any cash dividends
or other distributions it or the custodian receives on our ordinary shares
or other deposited securities after deducting its fees and expenses. You
will receive these distributions in proportion to the number of our ordinary
shares your ADSs represent. However, in accordance with the limitations
set forth in the deposit agreement, it may be unlawful or impractical to
make a distribution available to holders of ADSs. We have no obligation to
take any other action to permit distribution on the ADSs, ordinary shares,
rights or anything else to holders of the ADSs. This means that you may not
receive the distributions we make on our ordinary shares or any value from
them if it is unlawful or impractical to make them available to you. These
restrictions may have an adverse effect on the value of your ADSs.
Because we do not have immediate plans to pay any cash dividends on our
ADSs, capital appreciation, if any, may be your sole source of gains and you
may never receive a return on your investment.
Under current English law, a company’s accumulated realized profits must
exceed its accumulated realized losses (on a non-consolidated basis)
before dividends can be declared and paid. Therefore, we must have
sufficient distributable profits before declaring and paying a dividend.
We have not paid dividends in the past on our ordinary shares. We have
not announced any immediate plans to pay any cash dividends. As a
result, capital appreciation, if any, on our ADSs will be your sole source
of gains for the foreseeable future, and you would suffer a loss on your
investment if you were unable to sell your ADSs at or above the price that
you initially paid for them. Investors seeking cash dividends should not
purchase our ADSs.
Risks Related to Our Corporate Status
We are not regulated as an “investment company” under the Investment
Company Act of 1940, as amended, or the 1940 Act, and if we were
deemed an “investment company” under the 1940 Act, applicable
restrictions could make it impractical for us to continue our business as
contemplated and could have a material adverse effect on our business.
The 1940 Act and the rules thereunder contain detailed parameters for the
organization and operation of investment companies. Among other things,
the 1940 Act and the rules thereunder limit or prohibit transactions with
affiliates, impose limitations on the issuance of debt and equity securities
and impose certain governance requirements. We have not been and do
not intend to become regulated as an investment company, and we intend
to conduct our activities so that we will not be deemed to be an investment
company under the 1940 Act. In order to ensure that we are not deemed
to be an investment company, we may be limited in the assets that we may
continue to own and, further, may need to dispose of or acquire certain
assets at such times or on such terms as may be less favorable to us than
in the absence of such requirement. If anything were to happen which
would cause us to be deemed to be an investment company under the
1940 Act (such as significant changes in the value of our Founded Entities
or a change in circumstance that results in a reclassification of our interests
in our Founded Entities for purposes of the 1940 Act), the requirements
imposed by the 1940 Act could make it impractical for us to continue our
business as currently conducted, which would materially adversely affect
our business, results of operations and financial condition. In addition, if
we were to become inadvertently subject to the 1940 Act, any violation of
the 1940 Act could subject us to material adverse consequences, including
potentially significant regulatory penalties and the possibility that certain
of our contracts could be deemed unenforceable.
AAs a foreign private issuer, we are exempt from a number of rules under
the U.S. securities laws and are permitted to file less information with
the SEC than a U.S. company. This may limit the information available to
holders of ADSs or our ordinary shares.
We are a “foreign private issuer,” as defined in the SEC’s rules and
regulations and, consequently, we are not subject to all of the disclosure
requirements applicable to U.S. domestic public companies. For example,
we are exempt from certain rules under the Exchange Act that regulate
disclosure obligations and procedural requirements related to the
solicitation of proxies, consents or authorizations applicable to a security
registered under the Exchange Act, including the U.S. proxy rules under
Section 14 of the Exchange Act. In addition, our officers and directors are
exempt from the reporting and “short-swing” profit recovery provisions
of Section 16 of the Exchange Act and related rules with respect to their
purchases and sales of our securities. Moreover, while we currently make
annual and semi-annual filings with respect to our listing on the LSE, we
will not be required to file periodic reports and financial statements with
the SEC as frequently or as promptly as U.S. domestic issuers and will not
be required to file quarterly reports on Form 10-Q or current reports on
Form 8-K under the Exchange Act. In addition, “foreign private issuers”
are exempt from Regulation FD, which prohibits selective disclosures
of material information. Accordingly, there will be less publicly available
information concerning our company than there would be if we were not a
foreign private issuer.
As a foreign private issuer, we are permitted to adopt certain home
country practices in relation to corporate governance matters that differ
significantly from Nasdaq corporate governance listing standards. These
practices may afford less protection to shareholders than they would enjoy
if we complied fully with corporate governance listing standards.
As a foreign private issuer listed on Nasdaq, we are subject to corporate
governance listing standards. However, rules permit a foreign private issuer
like us to follow the corporate governance practices of its home country.
Certain corporate governance practices in the United Kingdom, which
is our home country, may differ significantly from corporate governance
listing standards. For example, neither the corporate laws of the United
Kingdom nor our articles of association require a majority of our directors
to be independent and we could include non-independent directors
as members of our nomination and remuneration committee, though a
majority is required, and our independent directors would not necessarily
hold regularly scheduled meetings at which only independent directors
are present. Currently, we follow home country practice to the maximum
extent possible. Therefore, our shareholders may be afforded less
protection than they otherwise would have under corporate governance
listing standards applicable to U.S. domestic issuers. See “Governance” of
this Annual Report and Accounts and “Item 16G—Corporate Governance”
of our Annual Report on Form 20-F.
218 PureTech Health plc Annual Report and Accounts 2024
PureTech Health plc Annual Report and Accounts 2024 219
Risk Factor Annex continued
Risk Factor Annex continued
Additional information
Additional information
the time periods specified in the rules and forms of the SEC. We believe
that any disclosure controls and procedures or internal controls and
procedures, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the
control system are met. These inherent limitations include the realities
that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can
be circumvented by the individual acts of some persons, by collusion
of two or more people or by an unauthorized override of the controls.
Accordingly, because of the inherent limitations in our control system,
misstatements or insufficient disclosures due to error or fraud may occur
and not be detected.
Risks Related to Tax Matters
We are treated as a U.S. domestic corporation for U.S. federal
income tax purposes.
We are treated as a U.S. domestic corporation for U.S. federal income tax
purposes under Section 7874(b) of the Internal Revenue Code of 1986, as
amended, or the Code. As a result, we are subject to U.S. income tax on
our worldwide income and any dividends paid by us (or deemed to be paid
by us for U.S. federal income tax purposes) to Non-U.S. Holders (as defined
in the discussion under “Taxation in the United States” in our Annual
Report on Form 20-F) will generally be subject to U.S. federal income
tax withholding at a 30 percent rate or such lower rate as provided in an
applicable treaty. Furthermore, PureTech Health plc is also resident for tax
purposes in the U.K. and subject to U.K. corporation tax on its worldwide
income and gains. Consequently, we may be liable for both U.S. and U.K.
income tax, which could have a material adverse effect on our financial
condition and results of operations.
This discussion of certain U.S. federal income tax risks is subject in its
entirety to the summaries set forth in “Certain United Kingdom Tax
Considerations” and “Taxation in the United States” in our Annual
Report on Form 20-F.
Our ability to use our U.S. net operating losses and certain other tax
attributes to offset future U.S. taxable income and income tax liabilities
may be subject to certain limitations.
As of December 31, 2024, we had U.S. federal and state net operating loss
carryforwards, or NOLs, of approximately $7.8 million and $380.8 million,
respectively, which, subject to the following discussion, are generally
available to be carried forward to offset our future taxable income, if any,
until such NOLs are used or expire. Our federal NOLs generated in taxable
years beginning after December 31, 2017 are not subject to expiration,
but may generally only be used to offset 80% of taxable income in years
beginning after December 31, 2020. As of December 31, 2024, we also had
U.S. federal research and development and other tax credit carryforwards
of approximately $0.2 million, available to reduce our future income tax
liabilities, if any. These NOLs and tax credit carryforwards could expire
unused, to the extent subject to expiration, and be unavailable to offset
future taxable income or income tax liabilities.
In general, under Sections 382 and 383 of the Code, a corporation that
undergoes an “ownership change,” generally defined as a greater than
50 percentage point change (by value) in its equity ownership by certain
shareholders or groups of shareholders over a rolling three year period,
is subject to limitations on its ability to utilize its pre-change U.S. federal
NOLs and tax credit carryforwards to offset future taxable income and
income tax liabilities. Similar rules may apply under state law. Our existing
federal NOLs and tax credits may be subject to limitation arising from
previous ownership changes. Future changes in our stock ownership, some
of which are outside of our control, could result in ownership changes
under Sections 382 or 383 of the Code, and our ability to utilize our federal
NOLs or tax credit carryforwards could be further limited.
Additionally, we may not be able to utilize the NOLs or tax credit
carryforwards of our Founded Entities that have been deconsolidated
or that will deconsolidate in the future. Furthermore, our ability to utilize
NOLs of companies that we have acquired or may acquire in the future may
be subject to similar limitations.
For these reasons, even if we attain profitability, we may not be able to
realize a tax benefit from the use of our NOLs or tax credit carryforwards.
We may be unable to use net operating loss and tax credit carryforwards
and certain built-in losses to reduce future U.K. tax liabilities.
As a U.K. incorporated and tax resident entity, PureTech Health plc is
subject to U.K. corporate taxation on its tax-adjusted trading profits. Due
to the nature of our business, PureTech Health plc has generated losses
since inception and therefore we have not paid any U.K. corporation tax.
Subject to numerous utilization criteria and restrictions (including those
that limit the percentage of profits that can be reduced by carried forward
losses and those that can restrict the use of carried forward losses where
there is a change of ownership of more than half the ordinary shares of the
We may lose our foreign private issuer status in the future, which could
result in significant additional cost and expense.
While we currently qualify as a foreign private issuer, the determination of
foreign private issuer status is made annually on the last business day of an
issuer’s most recently completed second fiscal quarter and, accordingly,
the next determination will be made with respect to us on June 30, 2025.
In the future, we would lose our foreign private issuer status if we to fail to
meet the requirements necessary to maintain our foreign private issuer
status as of the relevant determination date. For example, if more than
50 percent of our securities are held by U.S. residents and more than 50
percent of the members of our executive committee or members of our
board of directors are residents or citizens of the United States, we could
lose our foreign private issuer status.
The regulatory and compliance costs to us under U.S. securities laws
as a U.S. domestic issuer may be significantly more than costs we incur
as a foreign private issuer. If we are not a foreign private issuer, we will
be required to file periodic reports and registration statements on U.S.
domestic issuer forms with the SEC, which are more detailed and extensive
in certain respects than the forms available to a foreign private issuer.
We would be required under current SEC rules to prepare our financial
statements in accordance with U.S. GAAP, rather than IFRS, and modify
certain of our policies to comply with corporate governance practices
associated with U.S. domestic issuers. Such conversion of our financial
statements to U.S. GAAP will involve significant time and cost. In addition,
we may lose our ability to rely upon exemptions from certain corporate
governance requirements on U.S. stock exchanges that are available to
foreign private issuers such as the ones described above and exemptions
from procedural requirements related to the solicitation of proxies.
Risks Related to Our Internal Controls
Failure to maintain effective internal control over financial reporting
could have a material adverse effect on our business, financial condition,
results of operations, and stock price and may adversely affect investor
confidence in our company and, as a result, the value of our ADSs and
your investment. Section 404 of the Sarbanes-Oxley Act requires us to
evaluate the effectiveness of our internal controls over financial reporting
as of the end of each fiscal year, including a management report assessing
the effectiveness of our internal controls over financial reporting, and
a report issued by our independent registered public accounting firm
on that assessment. Our ability to comply with the annual internal
control reporting requirements will depend on the effectiveness of our
financial reporting and data systems and controls across our company.
We expect these systems and controls to require additional investment
as we become increasingly more complex and our business grows. To
effectively manage this complexity, we will need to continue to maintain
and revise our operational, financial and management controls, and our
reporting systems and procedures. Certain weaknesses or deficiencies or
failures to implement required new or improved controls, or difficulties
encountered in the implementation or operation of these controls, could
harm our operating results and cause us to fail to meet our financial
reporting obligations, or result in material misstatements in our financial
statements, which could adversely affect our business and reduce the
value of our ADSs. We have in the past and may in the future identify
a material weakness in our internal control over financial reporting. If
we discover additional material weaknesses in our internal control over
financial reporting in the future, we may not successfully remediate
any such material weakness on a timely basis or at all. Any failure to
remediate any significant deficiencies or material weaknesses identified
by us or to implement required new or improved controls, or difficulties
encountered in their implementation, could cause us to fail to meet our
reporting obligations.
If we fail to maintain effective internal control over financial reporting, we
could suffer material misstatements in our financial statements and fail
to meet our reporting obligations, which could cause investors to lose
confidence in our reported financial information. This could in turn limit
our access to capital markets or lead to a decline in the trading price of
our securities. We may also be required to restate our financial statements
from prior periods. Additionally, ineffective internal control over financial
reporting could expose us to increased risk of fraud or misuse of corporate
assets and subject us to potential delisting from the stock exchange on
which we list, regulatory investigations, litigation from shareholders and
civil or criminal sanctions, which could have a material adverse effect
on our business.
Our disclosure controls and procedures may not prevent or detect all errors
or acts of fraud.
We are subject to certain reporting requirements of the Exchange Act.
Our disclosure controls and procedures are designed to reasonably
assure that information required to be disclosed by us in reports we file
or submit under the Exchange Act is accumulated and communicated
to management, recorded, processed, summarized and reported within
company and a major change in the nature, conduct or scale of the trade),
we expect these to be eligible for carry forward and utilization against
future U.K. operating profits.
Future changes to tax laws could materially adversely affect our company
and reduce net returns to our shareholders.
The tax treatment of the company is subject to changes in tax laws,
regulations and treaties, or the interpretation thereof, tax policy initiatives
and reforms under consideration and the practices of tax authorities
in jurisdictions in which we operate, as well as tax policy initiatives and
reforms related to the Organisation for Economic Co-Operation and
Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS,
Project, the European Commission’s state aid investigations and other
initiatives. Such changes may include (but are not limited to) the taxation
of operating income, investment income, dividends received or (in the
specific context of withholding tax) dividends paid. We are unable to
predict what tax reform may be proposed or enacted in the future or what
effect such changes would have on our business, but such changes, to
the extent they are brought into tax legislation, regulations, policies or
practices, could affect our financial position and overall or effective tax
rates in the future in countries where we have operations, reduce post-tax
returns to our shareholders, and increase the complexity, burden and cost
of tax compliance.
Tax authorities may disagree with our positions and conclusions regarding
certain tax positions, resulting in unanticipated costs, taxes or non-
realization of expected benefits.
A tax authority may disagree with tax positions that we have taken, which
could result in increased tax liabilities. For example, HM Revenue &
Customs, or HMRC, the Internal Revenue Service or another tax authority
could challenge our allocation of income by tax jurisdiction and the
amounts paid between certain of our Founded Entities pursuant to our
intercompany arrangements and transfer pricing policies, including
amounts paid with respect to our intellectual property development.
Similarly, a tax authority could assert that we are subject to tax in
a jurisdiction where we believe we have not established a taxable
connection, often referred to as a “permanent establishment” under
international tax treaties, and such an assertion, if successful, could
increase our expected tax liability in one or more jurisdictions. A tax
authority may take the position that material income tax liabilities, interest
and penalties are payable by us, in which case, we expect that we might
contest such assessment. Contesting such an assessment may be lengthy
and costly and if we were unsuccessful in disputing the assessment,
the implications could increase our anticipated effective tax rate,
where applicable.
Shareholder protections found in provisions under the U.K. City Code
on Takeovers and Mergers, or the Takeover Code, will not apply if our
securities are no longer admitted to trading on a regulated market or a
multilateral trading facility in the United Kingdom or on any stock exchange
in the Channel Islands or the Isle of Man and our place of management and
control is considered to change to outside the United Kingdom.
We are registered as a public limited company incorporated in England
and Wales and have our ordinary shares admitted to trading on a
regulated market in the United Kingdom (being the main market of the
LSE). Accordingly, we are currently subject to the Takeover Code and, as
a result, our shareholders are entitled to the benefit of certain takeover
offer protections provided under the Takeover Code. The Takeover Code
provides a framework within which takeovers of companies are regulated
and conducted. If, at the time of a takeover offer, we have de-listed from
the main market of the LSE (and do not maintain a listing of securities on
any other regulated market or a multilateral trading facility in the United
Kingdom or on any stock exchange in the Channel Islands or the Isle of
Man) and the Panel on Takeovers and Mergers determine that we do not
have our place of central management and control in the United Kingdom,
then the Takeover Code may not apply to us and our shareholders would
not be entitled to the benefit of the various protections that the Takeover
Code affords. In particular, we would not be subject to the rules regarding
mandatory takeover bids. The following is a brief summary of some of the
most important rules of the Takeover Code:
— when any person acquires, whether by a series of transactions over a
period of time or not, an interest in shares which (taken together with
shares already held by that person and an interest in shares held or
acquired by persons acting in concert with him or her) carry 30 percent
or more of the voting rights of a company that is subject to the Takeover
Code, that person is generally required to make a mandatory offer
to all the holders of any class of equity share capital or other class of
transferable securities carrying voting rights in that company to acquire
the balance of their interests in the company;
— when any person who, together with persons acting in concert with him
or her, is interested in shares representing not less than 30 percent but
does not hold more than 50 percent of the voting rights of a company
that is subject to the Takeover Code, and such person, or any person
acting in concert with him or her, acquires an additional interest in shares
which increases the percentage of shares carrying voting rights in which
he or she is interested, then such person is generally required to make
a mandatory offer to all the holders of any class of equity share capital
or other class of transferable securities carrying voting rights of that
company to acquire the balance of their interests in the company;
— a mandatory offer triggered in the circumstances described in the
two paragraphs above must be in cash (or be accompanied by a cash
alternative) and at not less than the highest price paid within the
preceding 12 months to acquire any interest in shares in the company by
the person required to make the offer or any person acting in concert
with him or her;
— in relation to a voluntary offer (i.e. any offer which is not a mandatory
offer), when interests in shares representing 10 percent or more of
the shares of a class have been acquired for cash by an offeror (i.e., a
bidder) and any person acting in concert with it in the offer period and
the previous 12 months, the offer must be in cash or include a cash
alternative for all shareholders of that class at not less than the highest
price paid for any interest in shares of that class by the offeror and by
any person acting in concert with it in that period. Further, if an offeror
acquires for cash any interest in shares during the offer period, a cash
alternative must be made available at not less than the highest price paid
for any interest in the shares of that class;
— if the offeror acquires an interest in shares in an offeree company (i.e.,
a target) at a price higher than the value of the offer, the offer must be
increased to not less than the highest price paid for the interest in shares
so acquired;
— the offeree company must obtain competent advice as to whether the
terms of any offer are fair and reasonable and the substance of such
advice must be made known to all the shareholders, together with the
opinion of the board of directors of the offeree company;
— special or favorable deals for selected shareholders are not permitted,
except in certain circumstances where independent shareholder
approval is given and the arrangements are regarded as fair and
reasonable in the opinion of the financial adviser to the offeree;
— all shareholders must be given the same information;
— each document published in connection with an offer by or on behalf of
the offeror or offeree must state that the directors of the offeror or the
offeree, as the case may be, accept responsibility for the information
contained therein;
— profit forecasts, quantified financial benefits statements and asset
valuations must be made to specified standards and must be reported on
by professional advisers;
— misleading, inaccurate or unsubstantiated statements made in
documents or to the media must be publicly corrected immediately;
— actions during the course of an offer by the offeree company, which
might frustrate the offer are generally prohibited unless shareholders
approve these plans. Frustrating actions would include, for example,
lengthening the notice period for directors under their service contract
or agreeing to sell off material parts of the target group;
— stringent and detailed requirements are laid down for the disclosure
of dealings in relevant securities during an offer, including the prompt
disclosure of positions and dealing in relevant securities by the parties
to an offer and any person who is interested (directly or indirectly) in 1
percent or more of any class of relevant securities; and employees of
both the offeror and the offeree company and the trustees of the offeree
company’s pension scheme must be informed about an offer. In addition,
the offeree company’s employee representatives and pension scheme
trustees have the right to have a separate opinion on the effects of the
offer on employment appended to the offeree board of directors’ circular
or published on a website.
220 PureTech Health plc Annual Report and Accounts 2024
Additional information
Joint Corporate Brokers
UBS AG
5 Broadgate
London EC2M 2QS
United Kingdom
Tel: +44 207 567 8000
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
United Kingdom
Tel: +44 207 418 8900
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
United Kingdom
Tel: +44 (0)370 707 1147
Solicitors
DLA Piper UK LLP
160 Aldersgate Street
Barbican, London EC1A 4HT
United Kingdom
Tel: +44 870 011 1111
Company Registration Number
09582467
Registered Office
13th Floor
One Angel Court
London EC2R 7HJ
United Kingdom
Website
www.puretechhealth.com
Board of Directors
Dr. Raju Kucherlapati (Chair)
Dr. Bharatt Chowrira (Chief Executive Officer)
Dr. Robert Langer (Non-Executive Director)
Dr. John LaMattina (Senior Independent Director)
Dr. Michele Holcomb (Independent Non-Executive Director)
Ms. Kiran Mazumdar-Shaw (Independent Non-
Executive Director)
Ms. Sharon Barber-Lui (Independent Non-Executive Director)
Company Secretary
Mr. Charles Sherwood
Media and Public Relations
FTI Consulting, Inc.
200 Aldersgate Street
Barbican
London EC1A 4HD
United Kingdom
Tel: +44 203 727 1000
Independent Auditor
PricewaterhouseCoopers LLP
3 Forbury Place
23 Forbury Road
Reading RG1 3JH
United Kingdom
Tel: +44 (0) 118 959 7111
Company information
Directors, Secretary and Advisors to PureTech
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PureTech Health
6 Tide Street
Suite 400
Boston
MA 02210
Tel: +1 617 482 2333
Email: info@puretechhealth.com