REG - PureTech Health PLC - Final Results
Wed 07:02
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RNS Number : 2953C PureTech Health PLC 29 April 2026
29 April 2026
PureTech Health plc
PureTech Announces Annual Results for Year Ended December 31, 2025
Refined strategy and disciplined execution position Company to unlock value
from its portfolio, which includes Celea Therapeutics' Phase 3-ready
deupirfenidone for idiopathic pulmonary fibrosis, Gallop Oncology's
clinically-validated LYT-200 for myeloid malignancies, and Seaport
Therapeutics' advancing clinical-stage pipeline for neuropsychiatric disorders
PureTech level cash, cash equivalents and short-term investments of $277.1
million(1) and Consolidated cash, cash equivalents and short-term investments
of $277.3 million(1) as of December 31, 2025; Operational runway at least
through the end of 2028, inclusive of the Company's expected participation in
Founded Entity fundraisings
As of March 31, 2026, PureTech level cash and cash equivalents were $248.1
million(2)
Company to host a webcast and conference call today at 9:00am EDT / 2:00pm BST
PureTech Health plc (https://www.puretechhealth.com/) (Nasdaq: PRTC, LSE:
PRTC) ("PureTech" or the "Company") today announces its results for the year
ended December 31, 2025, as well as its cash balance as of the first quarter
ended March 31, 2026. The following information represents select highlights
and references page numbers from the full UK Annual Report and Accounts,
except as noted herein, a portion of which will be filed as an exhibit to
PureTech's Annual Report on Form 20-F for the fiscal year ended December 31,
2025, to be filed with the United States Securities and Exchange Commission
(the "SEC") and will also be available later today at
https://investors.puretechhealth.com/financials-filings/reports.
Webcast and conference call details
Members of the PureTech management team will host a conference call at 9:00am
EDT / 2:00pm BST today, April 29, 2026, to discuss these results. A live
webcast and presentation slides will be available on the investors section of
PureTech's website under the Events and Presentations tab. To join by phone,
please dial:
United Kingdom (Local): +44 20 3936 2999
United States (Local): +1 646 233 4753
Global Dial-In Numbers
(https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Furldefense.com%2Fv3%2F__https%3A%2F%2Fwww.netroadshow.com%2Fconferencing%2Fglobal-numbers%3FconfId%3D98580__%3B!!GEb1pAs!Brd9mBnFAqQomoYgyMeek2nMBlLSqZvMn296ZIy-CjMHZCLiJY94QOSQ1VpIiiF_jRcOmU2Mny52ja3wXkxDLO2BWTWALHDAcEc%24&data=05%7C02%7Ckdeluca%40puretechhealth.com%7C756620d3429f4899b93f08de90a16c05%7C0b1663cc5eee4bf8a6a5172d9c5379e2%7C0%7C0%7C639107220174432729%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=5i%2FyLF2tQqJCBkuJB7Vx3JeFBpXWZL%2BIpR97Zz6%2FAds%3D&reserved=0)
Access Code: 932950
For those unable to listen to the call live, a replay will be available on the
PureTech website.
Commenting on the annual results, Robert Lyne, Chief Executive Officer of
PureTech, said:
"2025 was a year of continued progress for PureTech, as we built on the
strength of our portfolio and took important steps to sharpen our strategic
focus. We have refined how we deploy capital and scale our programs, with an
emphasis on advancing therapeutic candidates through key value-inflection
points and leveraging external investment to support later-stage development.
This approach enables us to operate with greater discipline and efficiency
while maintaining meaningful long-term exposure to the value we create.
"Alongside these efforts, we have continued to advance our portfolio. During
the year, we advanced deupirfenidone to Phase 3 readiness in idiopathic
pulmonary fibrosis through our Founded Entity Celea Therapeutics (Celea). I'm
pleased to note that Celea has secured sufficient non-binding commitments from
external investors, in addition to participation from PureTech, such that the
fundraising is substantially complete, subject to continued negotiations.
Whilst mindful of macro factors, Celea is targeting to close the financing by
early in the third quarter of 2026. The financing is intended to support the
Phase 3 SURPASS-IPF trial, which Celea expects to commence in close proximity
to closing the financing.
"We also reported positive clinical results from LYT-200 in
relapsed/refractory myeloid malignancies and, with these data in hand, intend
to pursue external financing for Gallop Oncology to support its next phase of
development, with an initial focus on relapsed/refractory high-risk
myelodysplastic syndrome. Additionally, Seaport Therapeutics continued to
advance its neuropsychiatric pipeline, including encouraging initial results
from one of two ongoing clinical trials initiated in 2025, and filed a
registration statement with the United States Securities and Exchange
Commission for a potential initial public offering, though the timing, number
of shares to be offered, and the price range for the offering has not yet been
determined.
"We are also focused on ensuring that the value we create is more clearly
reflected for shareholders. Our model has historically generated meaningful
returns through a combination of equity ownership and non-dilutive economics,
and we believe our continued progress positions us to deliver this more
consistently over time. Critically, following the completion of Celea's
financing, we expect to reduce our operational burn significantly compared to
our historical run rate, with a lower and more predictable cost base going
forward. This will be driven in part by the transition of the Celea team and
related development activities into the externally funded Founded Entity,
reducing operating costs at the PureTech hub.
"As part of this broader focus on efficiency and alignment, we have announced
our intention to voluntarily delist our American Depositary Shares from Nasdaq
and concentrate our listing on the London Stock Exchange, where the
substantial majority of trading volume and liquidity in our shares has
consistently occurred. We believe this step simplifies our structure and
reduces cost and administrative burden for the business, whilst retaining our
primary London listing, providing access to both the UK and global investment
community.
"Together, these actions are intended to create a leaner, more focused
business. As part of this approach, we will look to return a greater
proportion of future cash generation to shareholders, particularly in the
event of any outsized returns, whilst maintaining appropriate operational
runway.
"Looking ahead, our priorities remain clear. We are focused on advancing our
most promising programs with urgency and discipline. At the same time, we will
continue to invest in our innovation engine to generate the next wave of
Founded Entities, while maintaining a thoughtful approach to capital
allocation.
"PureTech was founded on the belief that innovative science and disciplined
capital allocation can work hand in hand to deliver meaningful impact. As we
move forward with greater focus and clarity, we believe we are well positioned
to translate that approach into sustained value for both patients and
shareholders."
2025 and Early 2026 Operational Highlights
For full details, please see PureTech's 2025 Annual Report.
Celea Therapeutics (Celea)
Delivering transformative treatments for people with serious respiratory
diseases
Economic interest:(3) 100%
KEY HIGHLIGHTS - April 2026 post-period: Publication of results from the Phase 2b ELEVATE
IPF trial of deupirfenidone (LYT-100) in people with idiopathic pulmonary
fibrosis (IPF) in The American Journal of Respiratory and Critical Care
Medicine.
- February 2026 post-period: Announced the U.S. Food and Drug Administration
(FDA) and European Commission had granted Orphan Drug Designation to
deupirfenidone for the treatment of IPF, providing financial and commercial
advantages for the development of deupirfenidone.
- December 2025: Announced successful completion of the End-of-Phase 2
meeting with the FDA regarding development of deupirfenidone for the treatment
of IPF and shared plans for pivotal, Phase 3 head-to-head SURPASS-IPF trial
evaluating superiority of deupirfenidone compared with pirfenidone.
- Through 2025: Presented data from the Phase 2b ELEVATE IPF trial at
various medical meetings, including the American Thoracic Society (ATS) and
European Respiratory Society (ERS) annual meetings.
UPCOMING MILESTONES - Celea has secured sufficient non-binding commitments from external
investors, in addition to participation from PureTech, such that the
fundraising is substantially complete, subject to continued negotiations.
Whilst mindful of macro factors, Celea is targeting to close the financing by
early in the third quarter of 2026. The financing is intended to support the
Phase 3 SURPASS-IPF trial, which Celea expects to commence in close proximity
to closing the financing.
Gallop Oncology (Gallop)
Targeting galectin-9 to transform treatment paradigm for people with myeloid
malignancies
Economic interest:(3) 100%
KEY HIGHLIGHTS - April 2026 post-period: Announced positive topline data from the completed
Phase 1b clinical trial of LYT-200 (anti-galectin-9 monoclonal antibody),
which evaluated LYT-200 both as a monotherapy and in combination regimens in
heavily pretreated patients with relapsed/refractory (R/R) high-risk (HR)
myelodysplastic syndrome (MDS) and R/R acute myeloid leukemia (AML).
- December 2025: Presented initial topline results from the Phase 1b
clinical trial of LYT-200 in patients with R/R HR-MDS and R/R AML at the
American Society of Hematology Annual Meeting.
- January 2025: FDA granted Fast Track Designation to LYT-200 for the
treatment of AML, which is intended to streamline the development and
accelerate the assessment of drugs that target serious conditions with unmet
medical need. LYT-200 was also granted Orphan Drug Designation in 2024,
providing financial and commercial advantages for the development of LYT-200
in AML.
UPCOMING MILESTONES - Gallop has selected a recommended Phase 2 dose and intends to engage with
the FDA to discuss the design of a subsequent trial that could potentially
support registration of LYT-200 in R/R HR-MDS.
- Gallop intends to pursue third-party capital to support a potentially
registration-enabling trial in R/R HR-MDS, with the round targeted to close in
the first quarter of 2027.
Seaport Therapeutics (Seaport)
Inventing and developing new medicines for patients with neuropsychiatric
disorders
Economic interest:(3) 35.0% equity; 3-5% tiered royalties on Glyph product net
sales; modest regulatory and commercial milestone payments
KEY HIGHLIGHTS - April 2026 post-period: Publicly filed a Registration Statement on Form
S-1 with the U.S. Securities and Exchange Commission relating to a proposed
initial public offering of shares of its common stock. The timing, number of
shares to be offered, and the price range for the offering has yet been
determined as of the date of this release. The offering is subject to market
and other conditions, and there can be no assurance as to whether or when the
offering may be completed, or as to the actual size or terms of the offering.
- April 2026 post-period: Announced positive topline data from the
single-ascending dose and crossover portions of the ongoing Phase 1
proof-of-concept clinical trial of GlyphAgo™ (SPT-320 or Glyph Agomelatine)
in healthy adults for the potential treatment of generalized anxiety disorder
(GAD), having announced first patient dosed in September 2025.
- March 2026 post-period: Published first-in-human clinical and preclinical
data for GlyphAllo™ (SPT-300 or Glyph Allopregnanolone) in Science
Translational Medicine.
- July 2025: Announced first patient dosed in the Phase 2b BUOY-1 trial of
GlyphAllo in patients with major depressive disorder (MDD) with or without
anxious distress.
- February 2025: Published new data in Molecular Pharmaceutics showcasing
the Glyph platform's unique ability to enhance drug transport through the
lymphatic system for increased therapeutic exposure.
UPCOMING MILESTONES - Seaport anticipates topline data from the Phase 2b BUOY-1 trial of
GlyphAllo in patients with MDD with or without anxious distress in the first
half of 2027.
- Seaport plans to initiate a Phase 2a proof-of-pharmacology trial designed
to evaluate the potential sleep benefit of GlyphAgo in patients with GAD and
sleep disturbance, with topline data expected in early 2028.
- Seaport also plans to initiate, in parallel, a Phase 2b trial evaluating
the efficacy and safety of GlyphAgo in patients with GAD, with topline data
expected by the end of 2028.
Karuna Therapeutics (Karuna)
(Acquired by Bristol Myers Squibb as of March 18, 2024)
Economic interest: 2% royalty on annual Cobenfy(™4) sales above $2 billion
in addition to milestone payments under its agreements with Royalty Pharma and
Bristol Myers Squibb upon the achievements of certain regulatory approvals
and Cobenfy sales milestones
KEY HIGHLIGHTS Karuna was a PureTech Founded Entity through which Cobenfy™ (xanomeline and
trospium chloride; formerly known as KarXT) was invented and advanced. Cobenfy
was approved by the U.S. Food and Drug Administration on September 26, 2024,
for the treatment of schizophrenia in adults. It is the first new mechanism
approved to treat schizophrenia in decades.
UPCOMING MILESTONES Under Bristol Myers Squibb, Cobenfy continues to be evaluated across
additional indications, including in the Phase 3 ADEPT program for the
treatment of psychosis associated with Alzheimer's disease. For additional
details and updates, please refer to Bristol Myers Squibb's disclosures.
Financial Highlights
- PureTech level cash, cash equivalents and short-term investments were
$277.1 million,(1) based on consolidated cash, cash equivalents and
short-term investments of $277.3 million as of December 31, 2025.
- PureTech level cash and cash equivalents were $248.1 million, based on
consolidated cash and cash equivalents of $248.2 million,(2) as of March 31,
2026.
- PureTech has operational runway at least through the end of 2028.
PureTech Health will release its Annual Report for the year ended December 31,
2025, today. In compliance with the Financial Conduct Authority's UK Listing
Rule 6.4.3, the following documents will be submitted to the National Storage
Mechanism today and be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
- Annual Report and Accounts for the year ended December 31, 2025; and
- Notice of 2026 Annual General Meeting (AGM).
Printed copies of these documents together with the Form of Proxy will be
posted to shareholders in accordance with applicable UK rules. The Company
will provide a hard copy of the Annual Report containing its audited financial
statements, free of charge, to its shareholders upon request in accordance
with Nasdaq requirements. Requests should be directed in writing by email to
ir@puretechhealth.com. Copies will also be available electronically on the
Investor Relations section of the Company's website
at https://investors.puretechhealth.com/financials-filings/reports.
PureTech's 2026 AGM will be held on June 10, 2026, at 11:00am EDT / 4:00pm BST
at the Company's Corporate Headquarters at 6 Tide Street, Suite 400, Boston,
Massachusetts, 02210, United States.
Shareholders are strongly encouraged to submit a proxy vote in advance of the
meeting and to appoint the Chair of the meeting to act as their proxy. If a
shareholder wishes to attend the meeting in person, we ask that the
shareholder notify the Company by email to ir@puretechhealth.com to assist us
in planning and implementing arrangements for this year's AGM.
Any specific questions on the business of the AGM and resolutions can be
submitted ahead of the meeting by e-mail to ir@puretechhealth.com (marked
for the attention of Mr. Charles Sherwood).
Shareholders are encouraged to complete and return their votes by proxy, and
to do so no later than 4:00pm BST on June 8, 2026. This will appoint the Chair
of the meeting as proxy and will ensure that votes will be counted even though
attendance at the meeting is restricted and you are unable to attend in
person. Details of how to appoint a proxy are set out in the notice of AGM.
PureTech will keep shareholders updated of any changes it may decide to make
to the current plans for the AGM. Please visit the Company's website at
www.puretechhealth.com for the most up-to-date information.
About PureTech Health
PureTech Health is a hub-and-spoke biotherapeutics company dedicated to giving
life to science and transforming innovation into value. We do this through a
proven, capital-efficient R&D model focused on opportunities with
validated pharmacology and untapped potential to address significant patient
needs. This strategy has produced dozens of therapeutic candidates, including
three that have received U.S. FDA approval. By identifying, shaping, and
de-risking these high-conviction assets and scaling them through dedicated
structures backed by external capital, we accelerate their path to patients
while creating sustainable value for shareholders.
For more information, visit www.puretechhealth.com or connect with us on
LinkedIn (https://www.linkedin.com/company/puretech-health/) and X (formerly
Twitter) @puretechh.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that are or may be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking statements,
including without limitation those statements that relate to expectations
regarding PureTech's and its Founded Entities' future prospects, development
plans and strategies, including the success and scalability of the Company's
R&D model, the progress and timing of clinical trials and data readouts,
the timing of potential regulatory submissions, and the sufficiency of
available resources and expected operational runway. The forward-looking
statements are based on current expectations and are subject to known and
unknown risks, uncertainties and other important factors that could cause
actual results, performance and achievements to differ materially from current
expectations, including, but not limited to, the following: our history of
incurring significant operating losses since our inception; our ability to
realize value from our Founded Entities; our need for additional funding to
achieve our business goals, which may not be available and which may force us
to delay, limit or terminate certain of our therapeutic development efforts;
our limited information about and limited control or influence over our
Non-Controlled Founded Entities; the lengthy and expensive process of
preclinical and clinical drug development, which has an uncertain outcome and
potential for substantial delays; potential difficulties with enrolling
patients in clinical trials, which could delay our clinical development
activities; side effects, adverse events or other safety risks which could be
associated with our therapeutic candidates and delay or halt their clinical
development; our ability to obtain regulatory approval for and commercialize
our therapeutic candidates; our ability to compete with companies currently
marketing or engaged in the development of treatments for indications within
our programs are designed to target; our ability to realize the benefits of
our collaborations, licenses and other arrangements; the impact of government
laws and regulations; our ability to maintain and protect our intellectual
property rights; our reliance on third parties, including clinical research
organizations, clinical investigators and manufacturers; our vulnerability to
natural disasters, global economic factors, geo-political actions and
unexpected events; and those additional important factors described under the
caption "Risk Factors" in our Annual Report on Form 20-F for the year ended
December 31, 2025, to be filed with the SEC and in our other regulatory
filings. These forward-looking statements are based on assumptions regarding
the present and future business strategies of the Company and the environment
in which it will operate in the future. Each forward-looking statement speaks
only as at the date of this press release. Except as required by law and
regulatory requirements, we disclaim any obligation to update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise.
Contact:
PureTech EU/UK media U.S. media
Public Relations Ben Atwell, Rob Winder Justin Chen
publicrelations@puretechhealth.com +44 (0) 20 3727 1000 +1 609 578 7230
Investor Relations puretech@fticonsulting.com jchen@tenbridgecommunications.com
IR@puretechhealth.com
1 PureTech level cash, cash equivalents and short-term investments excludes
cash and cash equivalents at non-wholly owned subsidiary of $0.2m. 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, please see below under the heading "Financial
Review."
2 PureTech level cash and cash equivalents as of March 31, 2026, is an
unaudited figure and excludes cash and cash equivalents at non-wholly owned
subsidiary of $0.1m. PureTech level cash and cash equivalents is a non-IFRS
measure.
3 Relevant ownership interests were calculated on a partially diluted basis
(as opposed to a voting basis) as of December 31, 2025, including outstanding
shares and stock options, but excluding unallocated shares authorized to be
issued pursuant to equity incentive plans. PureTech controls Celea
Therapeutics and Gallop Oncology, Inc.
4 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.
Letter from the Chair
Strengthening Our Foundation for Sustainable Value Creation
With a refreshed strategic focus, we have sharpened our hub-and-spoke model to
more effectively advance differentiated programs through our Founded
Entities, while cultivating the next wave of innovation with increased
discipline.
2025 marked a defining year for PureTech, as we sharpened our strategic focus,
strengthened our leadership, and positioned the Company for a new phase of
disciplined value creation. Building on more than two decades of translating
breakthrough science into value, we have taken important steps to align our
model, portfolio, and governance with the opportunities ahead.
At the core of this progress is a renewed clarity around our differentiated
hub-and-spoke model. By advancing programs through our Founded Entities, we
are enhancing capital efficiency, reducing risk concentration, and
accelerating paths to value realization. This approach reflects a more
disciplined approach to portfolio management while preserving the scientific
ambition that has long defined PureTech.
A key milestone in the year was the appointment of Robert Lyne as Chief
Executive Officer in December 2025, following his tenure as Interim CEO. After
a thorough and deliberate process, the Board unanimously concluded that Rob
is the right leader to guide PureTech through this next phase. His deep
understanding of our model, combined with a strong track record of aligning
scientific innovation with disciplined execution, positions the Company to
deliver on its strategic priorities with clarity and focus.
Under Rob's leadership, we are sharpening operational execution across the
portfolio while maintaining our capital-efficient approach. During the year,
we continued to advance key programs and support our Founded Entities in
attracting external capital, reinforcing the strength and scalability of our
model. These efforts underscore our ability to translate scientific insight
into meaningful progress for patients while creating long-term value for
shareholders.
To further align our capital markets presence with our investor base and
strategic priorities, the Board has decided to concentrate trading on the
London Stock Exchange and voluntarily delist our American Depositary Shares
from Nasdaq. As a London-listed company with operations in Boston, PureTech
offers UK and global investors access to the world's leading biotechnology
hub. This decision simplifies our structure, reduces cost and administrative
complexity, and strengthens our engagement with the UK investment community.
Consistent with this focus, the Board is also progressing a search for up to
two additional independent non-executive directors with relevant UK capital
markets expertise. This will further enhance our governance and support deeper
engagement with our shareholders. We look forward to providing an update in
due course.
On behalf of the Board, I would like to thank our shareholders for their
continued support. PureTech enters this next chapter with renewed clarity of
purpose and confidence in the strengths that define the Company. We are well
positioned to translate our differentiated model into sustained progress to
unlock value across our portfolio, deliver impact for patients, and generate
long-term returns for our investors.
Sharon Barber-Lui
Interim Chair of the Board of Directors
April 29, 2026
Letter from the Chief Executive Officer
Moving Forward with Focus
We are building on the strengths of our model and portfolio while moving
forward with greater focus and discipline.
PureTech was founded to create innovative therapeutic candidates, advance them
through critical stages of validation, and leverage external capital to enable
long-term value creation for both patients and shareholders. Through this
model, we have delivered meaningful clinical progress, regulatory success, and
substantial cash generation while continuing to build a diversified pipeline
of future opportunities.
It is a privilege to lead PureTech at this important moment in the Company's
evolution. Having served as Interim Chief Executive Officer and previously as
Chief Portfolio Officer, I have seen firsthand the depth of innovation within
our Portfolio and the strength of the team advancing it. As we look ahead, our
focus is clear: sharpen execution, strengthen capital discipline, and ensure
that PureTech's distinctive model continues to translate breakthrough science
into meaningful value for both patients and shareholders.
At the core of PureTech's strategy is a simple principle: advance programs
through the most critical value-creating stages with disciplined capital
deployment, then leverage external investment to support later-stage
development. This hub-and-spoke model has successfully generated both approved
therapies for patients and significant cashflows to support our ongoing
business. Going forward, we will be focusing our activities on areas where we
have had greatest success, namely therapeutic candidates with validated
pharmacology. By combing this refined approach with increased operational and
financial discipline, I am confident that we can continue to bring new
treatments for patients to market whilst increasing returns to shareholders
via a variety of means.
In recent years, PureTech advanced several programs through later stages of
development before transitioning them to Founded Entities. While this approach
allowed the Company to retain larger equity ownership in later-stage programs,
it also required greater capital investment and operational infrastructure at
the PureTech hub, concentrating both resources and execution within the parent
organization.
Going forward, we intend to establish and capitalize these entities earlier in
the development lifecycle, once programs have reached key clinical value
inflection points. As return on capital is typically higher earlier in the
lifecycle, this approach should increase the overall financial performance of
the Portfolio whilst maintaining diversifications. This shift represents a
return to many of the founding principles of our model. By transitioning
programs into externally funded Founded Entities earlier, PureTech can retain
meaningful long-term upside while operating with greater capital efficiency
and maintaining a leaner organizational structure.
External investment also provides important third-party validation of our
programs, which have collectively secured over $4 billion in third-party
funding since 2018, while retaining non-dilutive economics for PureTech and
creating opportunities for greater visibility into the value of our Portfolio.
Unlocking value across our Portfolio
PureTech's portfolio includes economics in Cobenfy™, Seaport Therapeutics
(Seaport), Celea Therapeutics (Celea), and Gallop Oncology (Gallop) (see pages
9 - 19 for details), and I am pleased with the progress made in 2025 and the
beginning of 2026. Notably, Celea's deupirfenidone is now Phase-3 ready in
idiopathic pulmonary fibrosis; Gallop's LYT-200 demonstrated positive Phase 1b
data, and the team is preparing to discuss a potentially registration-enabling
trial in relapsed/refractory high-risk myelodysplastic syndrome with FDA; and
Seaport progressed two clinical trials for neuropsychiatric conditions and
filed a registration statement for a potential initial public offering on
Nasdaq.
We also maintain an interest in Legacy Holdings(1), which represent historical
Founded Entities. While there may be potential upside from these programs,
they are not a current focus of our capital allocation, nor do we currently
expect them to have a material impact on the overall value of PureTech moving
forward.
Our Founded Entities are structured to generate long-term, multifold value
through a combination of equity ownership and non-dilutive economics,
including milestone and royalty rights. This structure has historically
enabled PureTech to self-fund the advancement of our portfolio through key
catalysts without relying on traditional dilutive capital raises at the parent
company level.
Following the completion of Celea's financing, we expect to reduce our
operational burn significantly compared to our historical run rate, with a
lower and more predictable cost base going forward. This will be driven in
part by the transition of the Celea team and related development activities
into the externally funded Founded Entity, reducing operating costs at the
PureTech hub. I'm pleased to note that Celea has secured sufficient
non-binding commitments from external investors, in addition to participation
from PureTech, such that the fundraising is substantially complete, subject to
continued negotiations. Whilst mindful of macro factors, Celea is targeting to
close the financing by early in the third quarter of 2026. The financing is
intended to support the Phase 3 SURPASS-IPF trial, which Celea expects to
commence in close proximity to closing the financing.
More broadly, our refreshed strategy of establishing Founded Entities earlier
in the development lifecycle will allow PureTech to maintain a lean operating
structure while preserving exposure to the long-term upside of our programs.
Together, these changes strengthen our capital discipline and enhance our
flexibility to allocate capital thoughtfully, including evaluating
opportunities to deliver additional shareholder returns beyond the $150
million returned to date. As part of this approach - and to ensure
shareholders benefit from our operational and financial success - we will look
to return an increased proportion of future cash generation to shareholders
beyond those needed to run our lean operating model, particularly in the event
of any outsized returns.
Scaling the next wave of innovation
PureTech's innovation engine is the foundation of our future Founded Entities
and long-term value creation.
Our track record demonstrates the potential of this model. Cobenfy™ began as
a PureTech invention and ultimately resulted in the first novel mechanism
approved for schizophrenia in decades.
From an initial investment of $18.5 million, PureTech has realized
approximately $1.1 billion in cash to date, while retaining long-term economic
upside.
This outcome exemplifies the capital-efficient value creation we intend to
reproduce, and I'm pleased to say that our Innovation Team, led by Dr. Eric
Elenko, President and Co-founder of PureTech, has continued to progress their
work with this goal in mind.
Over the next three years, we plan to generate up to two new development
candidates. Each program would have the potential to become a new Founded
Entity supported by external capital for clinical development, thus
contributing to the next wave of growth for PureTech.
This strategy enables us to advance multiple promising opportunities through
the most critical, value-driving milestones with modest spend before
leveraging external investors to fund later development. It also provides
multiple "shots on goal," diversifies risk across our Portfolio, and enables
us to progress more potential therapies toward patients.
Crucially, this model allows us to generate reproducible value creation
without incurring the costs and overhead necessary to scale into a fully
integrated commercial organization. We believe our greatest strength within
the biotechnology ecosystem lies in serving as a highly productive innovation
engine - identifying breakthrough opportunities, advancing them through key
inflection points, and building Founded Entities capable of realizing their
full potential.
Commitment to shareholders
A central tenet of this refreshed strategy is to provide a clearer, more
measurable and more predictable path to shareholder value. We are committed to
improving transparency around our portfolio, including greater visibility into
the value of our ownership positions, capital allocation priorities, and
progress towards key value-inflection milestones. In the coming year, we will
continue strengthening our engagement with shareholders to ensure that the
benefits of PureTech's model and portfolio are more clearly understood.
At the same time, we will remain thoughtful stewards of capital. Where
appropriate, we will evaluate opportunities to return capital to shareholders
while maintaining the flexibility to reinvest in high-conviction innovation.
Building value together
None of this progress would be possible without the people who make PureTech
what it is today. I am deeply grateful to our team for their scientific rigor,
entrepreneurial creativity, and resilience - qualities that continue to define
this organization - as well as to our Board of Directors for their continued
guidance as we lead the Company into this next chapter.
I would also like to thank our shareholders for their continued support and
engagement. Your confidence in our strategy enables us to pursue meaningful
innovation while building long-term value.
To the broader clinical community - including patients, caregivers,
clinicians, and advocates - thank you for the trust you place in the work we
do. Our commitment remains steadfast: to advance transformative therapies that
have the potential to improve patients' lives.
It is a privilege to lead PureTech at this pivotal moment, and we remain
firmly committed to driving sustained progress and value creation in the years
ahead.
Robert Lyne
Chief Executive Officer and Director
April 29, 2026
1 Legacy Holdings represent our interests in historical Founded Entities. We
retain potential upside from these positions but do not expect them to be
material value drivers for PureTech and only expect to allocate modest, if
any, capital to these entities. To the extent we believe that these holdings
could produce material value to PureTech or receive material investment from
PureTech, we would move them into the Founded Entities category. As of
December 31, 2025, Legacy Holdings include, among others, Sonde Health,
Entrega, and Vedanta Biosciences.
Letter from the President
Driving Innovation and Delivering Impact
We focus on identifying opportunities with validated pharmacology and applying
the right approach to unlock their full potential.
At PureTech, we focus on a distinct category of opportunity: therapies with
validated pharmacology that have not reached their full potential.
These are medicines where human efficacy has already been demonstrated, but
where prior development was constrained by specific challenges. By identifying
and addressing those limitations, we aim to unlock differentiated therapeutic
opportunities with a higher probability of success and a more
capital-efficient path to value creation.
Our unique approach to innovation is grounded in what we refer to as our LIFE
model - Launching Innovation From Existing pharmacology. Refined over two
decades, this framework reflects a systematic and repeatable way of creating
new innovation.
We begin by targeting areas of significant patient need and then look to
identify therapies with the potential to have meaningful impact. Our search
for these opportunities is intentionally broad and disciplined, spanning
discontinued industry programs, academic discoveries, previously tested drug
candidates, and even approved medicines. By continuously evaluating this
landscape, we identify programs where prior data suggest meaningful
pharmacological activity, but where earlier development strategies left
important questions unresolved. In taking this broad, agnostic approach to
sourcing, we are able to direct resources toward the most compelling
opportunities without undue continuation bias.
Critically, the opportunity set is not static. Periods of industry
consolidation, shifts in capital availability, and corporate portfolio
prioritization often result in promising therapeutics being overlooked.
Because our model is designed to systematically evaluate these dynamics, it
remains resilient across industry cycles and allows us to identify potential
value even during periods of broader sector realignment.
In many cases, the therapies we pursue were initially limited by tolerability,
dosing constraints or pharmacokinetics that prevented them from being fully
realized in development. We address these limitations through a bespoke
approach to each opportunity that generates new intellectual property, drawing
on a range of capabilities. Previous solutions have included combining a
second drug with the drug of interest, as we did when inventing Cobenfy™
(see page 19), or applying medicinal chemistry, which was our approach with
the Glyph platform (see page 17).
By conducting a continual therapeutic search and allocating capital
selectively, we ensure that we only advance the most promising programs while
discontinuing those that do not meet our predefined thresholds for impact and
return. This approach mitigates binary risk while allowing us to capture both
the clinical and financial value created by successful innovation.
Once identified, programs progress through a structured internal evaluation
process designed to assess both scientific and commercial potential. Because
the starting point is often a known drug, and the characteristics required for
success can be clearly defined, we design capital-efficient preclinical
go/no-go experiments that determine whether a program should advance or be
deprioritized.
Each year we will aim to progress up to three concept-stage programs through
defined scientific milestones. Our investment at this stage is modest, and
experiments are designed to generate decisive data - often through focused
"killer experiments." Only after these milestones are met do we commit to
nominating a development candidate, ensuring that capital is deployed
selectively and supported by robust data with a credible path forward.
Programs that demonstrate sufficient promise may then be advanced under a
Founded Entity. These companies are built around specific programs and are
supported by dedicated third-party capital, allowing development to scale
while maintaining a focused and lean operating structure at the PureTech hub.
The strength of this approach is reflected in our track record. PureTech has
achieved a clinical trial success rate of nearly 80 percent(1), with three
programs from our portfolio having received U.S. FDA approval. Our Founded
Entities have also secured over $4 billion in third-party funding since 2018,
providing important external validation of both the scientific rigor and
commercial potential of our programs.
The LIFE model continues to generate new opportunities. We currently have
several promising programs progressing through our concept-stage evaluation
process, reflecting the ongoing productivity of our model. Over the next three
years, we expect to nominate up to two new development candidates that could
serve as the foundation for future Founded Entities and potential third-party
financing.
To support this next phase of innovation, we are focusing on the areas that
have consistently delivered the strongest clinical and financial results. In
particular, we will prioritize small molecules and traditional biologics
(e.g., antibodies) with validated pharmacology that can be efficiently
de-risked and financed through focused experimentation, with the intention of
advancing these programs into clinical development through externally funded
Founded Entities.
We will continue to concentrate on therapeutic areas where PureTech has built
deep expertise, such as central nervous system disorders, while remaining open
to compelling opportunities across the broader biomedical landscape.
At the same time, we are enhancing the front end of our innovation engine
through the integration of artificial intelligence (AI). These capabilities
build on the model that has guided PureTech's innovation process and produced
programs such as Karuna's Cobenfy, Celea's deupirfenidone, and Seaport's
pipeline of medicines for neuropsychiatric disorders, well before the
emergence of modern AI tools. AI allows us to interrogate decades of dense
clinical data at a scale and speed that would otherwise require a large team
of analysts. What continues to differentiate PureTech is the ability to
identify the innovative step that unlocks a therapy's potential and design
focused, capital-efficient experiments to prove it. AI can accelerate
discovery, but the solutions themselves remain bespoke - shaped by scientific
judgment, experience, and disciplined execution.
Innovation in medicine is rarely the result of a single breakthrough moment.
More often, it emerges from disciplined experimentation, careful scientific
judgment, and the willingness to revisit ideas others may have overlooked.
This philosophy has guided PureTech since its founding, and it will continue
to shape how we identify and advance the next generation of transformative
therapies.
Ultimately, the purpose of this work is to deliver meaningful outcomes for
patients. A therapy only has value if it can be tolerated, effectively
delivered and provide clinically meaningful benefit. As we refine and enhance
our model, we remain focused on advancing medicines that can make a meaningful
difference in patients' lives while strengthening long-term shareholder value.
Eric Elenko, Ph.D.
President and Co-founder
April 29, 2026
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 historical Founded Entities from 2009 onward.
Risk management
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.
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 185 to 223 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 The failure of any of our businesses could decrease our value. A failure of Prior to additional steps in the development of any technology, extensive due
businesses may fail and/or our businesses may not be able to develop their one of the major businesses could also impact the reputation of PureTech as a diligence is carried out that covers all the major business risks, including
intellectual property into commercially viable therapeutics or technologies. developer of high value technologies and possibly make additional fundraising technological feasibility, competition and technology advances, market size,
by PureTech or any Founded Entity more difficult or unavailable on acceptable strategy, adoption and intellectual property protection.
There is also a risk that certain of the businesses may fail or not succeed as terms at all.
anticipated, resulting in significant decline of our value. 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.
2 Risks related to clinical trial failure
Clinical trials and other tests to assess the commercial viability of a A critical failure of a clinical trial may result in termination of the We have a diversified model to limit the impact of clinical trial outcomes on
therapeutic candidate are typically expensive, complex and time-consuming, and program and a significant decrease in our value. Significant delays in a our ability to operate as a going concern. We have dedicated internal
have uncertain outcomes. clinical trial to support the appropriate regulatory approvals could impact resources to establish and monitor each of the clinical programs for the
the amount of capital required for the business to become fully sustainable on purpose of maximising successful outcomes. We also engage outside experts to
Conditions in which clinical trials are conducted differ, and results achieved a cash flow basis. help create well-designed clinical programs that provide valuable information
in one set of conditions could be different from the results achieved in and mitigate the risk of failure. Significant scientific due diligence and
different conditions or with different subject populations. If our therapeutic preclinical experiments are conducted prior to a clinical trial to evaluate
candidates fail to achieve successful outcomes in their respective clinical the odds of the success of the trial. In the event of the outsourcing of these
trials, the therapeutics will not receive regulatory approval and in such trials, care and attention are given to assure the quality of the vendors used
event cannot be commercialized. In addition, if we fail to complete or to perform the work.
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.
3 Risks related to regulatory approval
The pharmaceutical industry is highly regulated. Regulatory authorities across The failure of one of our therapeutics to obtain any required regulatory We manage our regulatory risk by employing highly experienced clinical
the world enforce a range of laws and regulations governing the testing, approval, or conditions imposed in connection with any such approval, may managers and regulatory affairs professionals who, where appropriate, will
approval, manufacturing, labelling and marketing of pharmaceutical result in a significant decrease in our value. commission advice from external advisors and consult with the regulatory
therapeutics. Stringent standards are imposed which relate to the quality, authorities on the design of our preclinical and clinical programs. These
safety and efficacy of these therapeutics. These requirements are a major experts ensure that high-quality protocols and other documentation are
determinant of the commercial viability of developing a drug substance or submitted during the regulatory process, and that well-reputed contract
medical device given the time, expertise and expense which must be invested. research organizations with global capabilities are retained to manage the
trials. We also engage with experts, including on our R&D Committee, to
We may not obtain regulatory approval for our therapeutic candidates. help design clinical trials to help provide valuable information and maximize
Moreover, approval in one territory offers no guarantee that regulatory the likelihood of regulatory approval. Additionally, we have a diversified
approval will be obtained in any other territory. Even if therapeutics are model with numerous assets such that the failure to receive regulatory
approved, subsequent regulatory difficulties may arise, or the conditions approval or subsequent regulatory difficulties with respect to any one
relating to the approval may be more onerous or restrictive than we therapeutic would not adversely impact all of our therapeutics and
anticipate. businesses.
4 Risks related to therapeutic safety
There is a risk of adverse reactions with all drugs and medical devices. If Adverse reactions or unacceptable side effects may result in a smaller market Safety is our top priority in the design of our therapeutics. We conduct
any of our therapeutics are found to cause adverse reactions or unacceptable for our therapeutics, or even cause the therapeutics to fail to meet extensive preclinical and clinical trials which test for and identify any
side effects, then therapeutic development may be delayed, additional expenses regulatory requirements necessary for sale of the therapeutic. This, as well adverse side effects. Despite these steps and precautions, we cannot fully
may be incurred if further studies are required, and, in extreme as any claims for injury or harm resulting from our therapeutics, may avoid the possibility of unforeseen side effects. To mitigate the risk further
circumstances, it may prove necessary to suspend or terminate development. result in a significant decrease in our value. we have insurance in place to cover product liability claims which may arise
This may occur even after regulatory approval has been obtained, in which case during the conduct of clinical trials.
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.
5 Risks related to Programs or Founded Entities
We may be unable to achieving funding for our Founded Entities or our various The failure to obtain funding for any of our Founded Entities or therapeutic We maintain relationships with key potential funding partners for our various
therapeutic Programs if potential sources of financing, including venture candidates could result in the need to spend additional resources to progress Programs and Founded Entities and dedicate significant resources and time to
capital groups, industry partners, and others, do not believe such entities or these assets internally or could otherwise require us to delay or cease such relationships. We seek to employ repeatable approaches that allow for
programs can become profitable or otherwise form the basis for investment or development activities with respect to specific therapeutic candidates or pattern recognition and streamlined investment decisions for third parties. We
if broader market conditions are unfavourable for raising capital at the point Founded Entities. also perform key experiments and other work early in the development process
in time at which such capital is needed. Conditions for raising capital differ for any therapeutic candidate to de-risk development activities and promote
materially on a case-by-case basis and there is no guarantee that our ability third party investment.
to raise capital in one circumstance or from one partner will translate to
other circumstances or partners. Raising capital at appropriate times in the
development cycle of therapeutic candidates is crucial to their clinical
progression, and a failure to raise capital at the necessary time could impair
our ability to progress such candidates.
6 Risks related to therapeutic profitability
and competition
We may be unable to sell our therapeutics profitably if reimbursement from The failure to obtain reimbursement from third party payers, and competition We engage reimbursement experts to conduct pricing and reimbursement studies
third-party payers - such as private health insurers and government health from other therapeutics, could significantly decrease the amount of revenue we for our therapeutics to ensure that a viable path to reimbursement, or direct
authorities - is restricted or not available. If, for example, it proves may receive from therapeutic sales for certain therapeutics. This may result user payment, is available. We also closely monitor the competitive landscape
difficult to build a sufficiently strong economic case based on the burden of in a significant decrease in our value. for our therapeutics and therapeutic candidates and adapt our business plans
illness and population impact. accordingly. Not all therapeutics that we are developing will rely on
reimbursement. Also, while we cannot control outcomes, we seek to design
Third-party payers are increasingly attempting to curtail healthcare costs by studies to generate data that will help support potential reimbursement.
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.
7 Risks related to intellectual
property protection
We may not be able to obtain patent protection for some of our therapeutics or The failure to obtain patent protection and maintain the secrecy of key We spend significant resources in the prosecution of our patent applications
maintain the secrecy of their trade secrets and know-how. If we are information may significantly decrease the amount of revenue we may receive and maintenance of our patents, and we have in-house patent counsel and patent
unsuccessful in doing so, others may market competitive therapeutics at from therapeutic sales. Any infringement litigation against us may result in group to help with these activities. We also work with experienced external
significantly lower prices. Alternatively, we may be sued for infringement of the payment of substantial damages by us and result in a significant decrease attorneys and law firms to help with the protection, maintenance and
third-party patent rights. If these actions are successful, then we would have in our value. enforcement of our patents. Third party patent filings are monitored to ensure
to pay substantial damages and potentially remove our therapeutics from the the Group continues to have freedom to operate. Confidential information (both
market. We license certain intellectual property rights from third parties. If our own and information belonging to third parties) is protected through use
we fail to comply with our obligations under these agreements, it may enable of confidential disclosure agreements with third parties, and suitable
the other party to terminate the agreement. This could impair our freedom to provisions relating to confidentiality and intellectual property exist in our
operate and potentially lead to third parties preventing us from selling employment and advisory contracts. Licenses are monitored for compliance with
certain of our therapeutics. their terms.
8 Risks related to enterprise profitability
We expect to continue to incur substantial expenditure in further research and The strategic aim of the business is to generate profits for our shareholders We retain significant cash in order to support funding of our Founded Entities
development activities. There is no guarantee that we will become through the commercialization of technologies through therapeutic sales, and our Wholly-Owned Programs. We have close relationships with a wide group
operationally profitable, and, even if we do so, we may be unable to sustain strategic partnerships and sales of businesses or parts thereof. The timing of investors and strategic partners to ensure we can continue to access the
operational profitability. and size of these potential inflows are uncertain. Should revenues from our capital markets and additional monetization and funding for our businesses.
activities not be achieved, or in the event that they are achieved but at Additionally, our Founded Entities are able to raise money directly from third
values significantly less than the amount of capital invested, then it would party investors and strategic partners.
be difficult to sustain our business.
9 Risks related to hiring and retaining
qualified employees and key personnel
We operate in complex and specialized business domains and require highly The failure to attract highly effective personnel or the loss of key The Board regularly seeks external expertise to assess the competitiveness of
qualified and experienced management to implement our strategy successfully. personnel would have an adverse impact on our ability to continue to grow and the compensation packages of its senior management. Senior management
We and many of our businesses are located in the United States which is a very may negatively affect our competitive advantage. continually monitors and assesses compensation levels to ensure we remain
competitive employment market. competitive in the employment market. We maintain an extensive recruiting
network through our Board members, advisors and scientific community
Moreover, the rapid development which is envisaged by us may place involvement. We also employ an executive as a full-time in-house recruiter and
unsupportable demands on our current managers and employees, particularly if retain outside recruiters when necessary or advisable. Additionally, we are
we cannot attract sufficient new employees. There is also the risk that we proactive in our retention efforts and include incentive-based compensation in
may lose key personnel. 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.
10 Risks related to business, economic or
public health disruptions
Business, economic, financial or geopolitical disruptions or global health Broad-based business, economic, financial or geopolitical disruptions could We regularly review the business, economic, financial and geopolitical
concerns could seriously harm our development efforts and increase our costs adversely affect our ongoing or planned research and development activities. environment in which we operate. It is possible that we may see further
and expenses. Global health concerns, such as a further pandemic, or geopolitical events, impact as a result of current geopolitical tensions. We monitor the position
like the ongoing consequences of the armed conflicts, could also result in of our suppliers, clinical trial sites, regulators, providers of financial
social, economic, and labor instability in the countries in which we operate services and other third parties with whom we conduct business. We develop
or the third parties with whom we engage. We consider the risk to be and execute contingency plans to address risks where appropriate.
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.
Financial Review
Reporting Framework
You should read the following discussion and analysis together with our
Consolidated Financial Statements, including the notes thereto, set forth
elsewhere in this report. Some of the information contained in this discussion
and analysis or set forth elsewhere in this report, including information with
respect to our plans and strategy for our business and financing our business,
includes forward-looking statements that involve risks and uncertainties. As a
result of many factors, including the risks set forth on pages 59 to 64 and in
the Additional Information section from pages 185 to 223, 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, 2025 and
2024, and for the years ended December 31, 2025, 2024 and 2023, have been
prepared in accordance with UK-adopted International Financial Reporting
Standards ("IFRS"). The Consolidated Financial Statements also comply fully
with IFRS Accounting Standards 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 Entities(1) 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 overall portfolio, including our Wholly-Owned
programs(3) and Founded Entities.
Our ability to achieve profitability will depend on the successful
monetization of our Founded Entities or Wholly-Owned programs or other revenue
generating activities. Such monetization will largely depend on the successful
development and eventual commercialization of one or more therapeutic
candidates of our Founded Entities, which may or may not occur.
Monetization includes the sale of our equity interest in our Founded Entities,
the receipt of, or the sale of rights to, royalties, entering into strategic
partnerships, and other related business development activities.
We have deconsolidated a number of our Founded Entities, specifically Seaport
Therapeutics, Inc. ("Seaport") in 2024, Vedanta Biosciences, Inc. ("Vedanta")
in 2023, Sonde Health Inc. ("Sonde") in 2022, Karuna Therapeutics, Inc.
("Karuna"), Vor Biopharma Inc. ("Vor") and Gelesis, Inc. ("Gelesis") in 2019,
and Akili Interactive Labs, Inc. ("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 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 deupirfenidone (LYT-100) or LYT-200
programs, we anticipate that we will invest in the respective Founded Entities
that house those programs, Celea Therapeutics and Gallop Oncology, in
conjunction with external investors. We also anticipate we will be providing a
certain level of funding for these programs in 2026 and, to the extent we are
able to secure external sources of cash for these programs, potentially also
in future years. Consequently, we anticipate our expenses will increase in the
short term as we continue to advance our 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.
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 Entities(2)
and deconsolidated Founded Entities. As of December 31, 2025, deconsolidated
Founded Entities included 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, 2025, 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 ,2025, 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 (also referred as "Celea" or "Celea
Therapeutics"), and LYT-200.
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 (or
our Directors), 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 additional funding, whether through
monetizations or other mechanisms, 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 strategic objectives,
including participating in financing activities at the Founded Entity level
and pursuing early-stage innovation and development of new assets. 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 strategic objectives, including participating in financing
activities at the Founded Entity level and pursuing early-stage innovation and
development of new assets. Further, if we are unable to obtain external
funding for our deupirfenidone and LYT-200 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 Accounting
Standards.
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, 2025)
The Group has evaluated subsequent events after December 31, 2025 up to the
date of issuance, April 29, 2026, 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 non-IFRS alternative
performance measure described above:
(in thousands) December 31, 2025 December 31, 2024
Cash and cash equivalents $252,470 $280,641
Short-term investments 24,829 86,666
Consolidated cash, cash equivalents and short-term investments 277,299 367,307
Less: cash and cash equivalents held at non-wholly owned subsidiaries (237) (493)
PureTech Level cash, cash equivalents and short-term investments $277,062 $366,813
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 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 the segment 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.
Following is the description of our reportable segments:
Wholly-Owned Segment
The Wholly-Owned segment is advancing Wholly-Owned programs which are focused
on treatments for patients with devastating diseases. The Wholly-Owned 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 segment is conducted by the
PureTech Health team, which is responsible for the strategy, business
development, and research and development.
Controlled Founded Entities Segment
The Controlled Founded Entities segment is comprised of the Group's
consolidated operational subsidiaries as of December 31, 2025 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 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 our deconsolidated entities through the date of
deconsolidation (e.g. Seaport in 2024, and Vedanta in 2023), 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, and Vedanta) and our net
income or loss of associates accounted for using the equity method.
Changes within Reportable Segments
There was no change to the reportable segments in 2025 or 2024, except for the
changes to the composition of the reportable segments as described below.
In August 2025, we announced a new Founded Entity, Celea Therapeutics
("Celea") to advance our deupirfenidone (LYT-100) program if external funding
is secured. The financial results of this program, which is currently housed
within PureTech LYT 100, Inc., were included in the Wholly-Owned segment as of
and for the year ended December 31, 2025. Upon raising dilutive third-party
financing, the financial results of this program will be included in the
Controlled Founded Entities segment or Parent and Other column depending on if
we maintain control over this entity.
In January 2024, we launched two new Founded Entities (Seaport Therapeutics
"Seaport" and Gallop Oncology "Gallop") to advance certain programs from the
Wholly-Owned segment. The financial results of these programs were included
in the Wholly-Owned 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 Gallop has not raised dilutive third-party financing as of December 31,
2025, the financial results of Gallop were included in the Wholly-Owned
segment as of and for the year ended December 31, 2025 and 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 segment and are
included in the Parent Company and Other column. The corresponding information
for 2023 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, 2025:
Wholly-Owned Segment Ownership Percentage
PureTech LYT, Inc. 100.0%
PureTech LYT 100, Inc. 100.0%
Gallop Oncology, Inc. (Indirectly Held through PureTech LYT, Inc.) 100.0%
Controlled Founded Entities Segment
Entrega, Inc. 77.3%
Parent Company and Other(1)
Alivio Therapeutics, Inc.(2) 100.0%
Follica, LLC(2) 85.4%
Gelesis, Inc.(3) -%
Seaport Therapeutics, Inc.(4) 42.9%
Sonde Health, Inc.(5) 40.2%
Vedanta Biosciences, Inc.(6) 5.1%
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 2025.
2 This entity was considered inactive as of December 31, 2025.
3 Gelesis filed for bankruptcy in October 2023.
4 Seaport Therapeutics, Inc. was deconsolidated on October 18, 2024.
5 Sonde Health, Inc. was deconsolidated on May 25, 2022. It was considered
inactive as of December 31, 2025.
6 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.
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 Controlled 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 deupirfenidone (LYT-100) or LYT-200
programs, we anticipate providing certain level of funding in 2026 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.
We expect that our general and administrative expenses in support of our
research and development efforts will decrease in the short term while we seek
funding from external sources for the Wholly-Owned programs as we execute on
our plans for a disciplined approach to maintain a lean operating model. We
anticipate a further 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 deupirfenidone (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
amounts in 2023, 2024 and 2025 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 2024, for the changes in the fair value of
these notes. The 2025 loss of $3.6 million was primarily due to the decrease
in the fair value of our notes from Vedanta prior to their conversion into
preferred shares in connection with Vedanta's recapitalization in August 2025.
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 Investments
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 $0. 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 $0. In 2025, we recorded our
share of the net losses of Seaport which reduced the carrying amount of our
investment in Seaport to $0.
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.
Results of Operations
The following table, which has been derived from our financial statements for
the years ended December 31, 2025, 2024, and 2023, included herein, summarizes
our results of operations for the periods indicated, together with the changes
in those items:
Year ended December 31,
(in thousands) 2025 2024 2023 Change Change
(2024 to 2025) (2023 to 2024)
Contract revenue $4,659 $4,315 $750 $344 $3,565
Grant revenue - 513 2,580 (513) (2,067)
Total revenue 4,659 4,828 3,330 (169) 1,498
Operating expenses:
General and administrative expenses (46,618) (71,469) (53,295) 24,852 (18,175)
Research and development expenses (56,567) (69,454) (96,235) 12,887 26,781
Operating income/(loss) (98,527) (136,095) (146,199) 37,569 10,104
Other income/(expense):
Gain/(loss) on deconsolidation of subsidiary - 151,808 61,787 (151,808) 90,021
Gain/(loss) on investments held at fair value 38,485 (2,398) 77,945 40,883 (80,344)
Realized gain/(loss) on sale of investments 375 151 (122) 225 273
Gain/(loss) on investments in notes from associates (3,628) 13,131 (27,630) (16,759) 40,761
Other income/(expense) 1,331 961 (908) 370 1,869
Other income/(expense) 36,564 163,652 111,072 (127,089) 52,580
Net finance income/(costs) (32,735) 4,773 5,078 (37,508) (306)
Share of net income/(loss) of associates accounted for using the equity method (17,928) (8,754) (6,055) (9,174) (2,699)
Gain/(loss) on dilution of ownership interest in associates 1,699 199 - 1,500 199
Income/(loss) before income taxes (110,927) 23,774 (36,103) (134,701) 59,878
Taxation 842 4,008 (30,525) (3,166) 34,532
Net income/(loss) including non-controlling interest (110,084) 27,782 (66,628) (137,867) 94,410
Less income/(loss) attributable to non-controlling interests (345) (25,728) (931) 25,383 (24,797)
Net income/(loss) attributable to the Owners of the Group $(109,739) $53,510 $(65,697) $(163,249) $119,207
Comparison of the Years Ended December 31, 2025 and December 31, 2024
Total Revenue
Year ended December 31,
(in thousands) 2025 2024 Change
Total Contract Revenue $4,659 $4,315 $344
Total Grant Revenue - 513 (513)
Total Revenue $4,659 $4,828 $(169)
Our total revenue was $4.7 million for the year ended December 31, 2025, a
decrease of $0.2 million, or 4% compared to the year ended December 31, 2024.
The decrease in revenue is primarily due to a decrease in grant revenue of
$0.5 million related to completed grants in 2024, partially offset by an
increase in the recognition of royalty revenue from sales of Cobenfy (formerly
KarXT), approved by the U.S. Food and Drug Administration in September 2024,
pursuant to a patent license agreement between PureTech and Karuna. The
royalty revenue recognized for the year ended December 31, 2025 was paid to
Royalty Pharma in accordance with the Royalty Purchase Agreement. See Note 18.
Sale of Future Royalties Liability.
General and Administrative Expenses
Our general and administrative expenses were $46.6 million for the year ended
December 31, 2025, a decrease of $24.9 million, or 35% compared to the year
ended December 31, 2024. The decrease is primarily driven by workforce
reductions, particularly decrease in workforce related expenses such as
payroll, share-based compensation, and recruiting expenses resulting from the
deconsolidation of Seaport.
Research and Development Expenses
The following table shows the research and development expenses by program.
Year ended December 31,
(in thousands) 2025 2024 Change
Deupirfenidone (LYT-100) program external costs $(31,027) $(29,942) $(1,084)
LYT-200 program external costs (13,341) (10,464) (2,877)
LYT-300* program external costs - (1,157) 1,157
Wholly owned PureTech platform and other non-clinical programs external costs - (6,514) 6,514
Controlled Founded Entities programs - (3,904) 3,904
Other research program external costs (380) (355) (25)
Payroll costs (10,824) (15,023) 4,199
Facilities and other expenses (996) (2,095) 1,100
Total Research and Development Expenses: $(56,567) $(69,454) $12,887
*Now Known as GlyphAllo (SPT-300)
Our research and development expenses were $56.6 million for the year ended
December 31, 2025, a decrease of $12.9 million, or 19% compared to the year
ended December 31, 2024.
The decrease in research and development expenses in 2025 is driven by the
following changes in program costs:
- Increase in deupirfenidone program costs of $1.1 million is due to costs
incurred in preparation for the upcoming phase III study partially offset by
the reduction in clinical operating expenses due to the completion of phase II
study and data readout in December 2024.
- Increase in LYT-200 program costs of $2.9 million was driven by increase
in clinical operating expenses for the ongoing AML phase I study and
preparation for the potential phase II study.
- Decrease in LYT-300 program costs of $1.2 million and decrease in wholly
owned PureTech platform and other non-clinical programs costs of $6.5 million
are due to the development of LYT-300 program and Glyph platform, now owned by
Seaport, our Founded Entity, which was deconsolidated in October, 2024. As a
result, there were no costs recorded for the LYT-300 program or Glyph platform
for the year ended December 31, 2025.
- 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 in October 2024.
- Decrease in payroll costs of $4.2 million is driven by an overall yearly
average reduction in headcount, primarily driven by the deconsolidation of
Seaport in October 2024.
- Decrease in facilities and other expenses of $1.1 million is primarily
driven by lower consulting spend in 2025 and lower depreciation expense
resulting from the lower fixed asset balance in 2025.
Total Other Income/(Expense)
Total other income was $36.6 million for the year ended December 31, 2025
compared to $163.7 million for the year ended December 31, 2024, a decrease
of $127.1 million, or 78%. The decrease is primarily attributable to the one
time gain of $151.8 million recognized in 2024 on the deconsolidation of
Seaport as well as the increase of $16.8 million in the loss on changes in the
fair value of notes from associates: A loss of $3.6 million for the year
ended December 31, 2025 attributed to the decrease in the fair value of the
Vedanta convertible debt compared to a gain of $13.1 million for the year
ended December 31, 2024 primarily attributed to the increase in the fair value
of the Gelesis notes. These decreases are partially offset by an increase of
$40.9 million in gain on investments held at fair value for the year ended
December 31, 2025 attributed to the increase in the fair value of investment
in Seaport.
Net Finance Income/(Costs)
Net finance cost was $32.7 million for the year ended December 31, 2025,
compared to an income of $4.8 million for the year ended December 31, 2024, a
decrease of net finance income of $37.5 million or 786%. The decrease in net
finance income is primarily attributed to a $35.9 million increase in non-cash
interest expense related to the sale of future royalties liability resulting
from a change in forecast for Cobenfy sales. The decrease is further
attributed to a $9.6 million decrease in interest income resulting from lower
interest rate and lower cash and cash equivalents and short-term investments
balances for the year ended December 31, 2025. The decreases are partially
offset by the decrease in the loss from increase in fair value of subsidiary
preferred share liability with the deconsolidation of Seaport in October,
2024.
Share of Net Income/(loss) of Associates Accounted for Using the Equity Method
For the year ended December 31, 2025, the share in net loss of associates
reported under the equity method was $17.9 million as compared to the share
in net loss of associates of $8.8 million for the year ended December 31,
2024, an increase in loss of $9.2 million or 105%. The increase in loss was
primarily attributable to the Group's share of net loss from Seaport accounted
for under the equity method upon deconsolidation in October, 2024.
Taxation
For the year ended December 31, 2025, the income tax benefit was
$0.8 million, compared to an income tax benefit of $4.0 million for the year
ended December 31, 2024, a decrease in income tax benefit of $3.2 million or
79%.
The income tax benefit recognized during the year ended December 31, 2025 was
primarily due to the capital loss generated on the sale of the Vor Biopharma
investment and general business tax credits, partially offset by the
recognition of a reserve for uncertain tax positions related to a state audit
and the effect of prior year return to provision adjustments. The income tax
benefit recognized during the year ended December 31, 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.
Comparison of the Years Ended December 31, 2024 and 2023
For the comparison of 2024 to 2023, refer to the financial review section of
the Group's Annual Report and Accounts for the year ended December 31, 2024.
Significant Accounting Policies and Significant Judgments and Estimates
Our financial review is based on our financial statements, which we have
prepared in accordance with UK-adopted International Financial Reporting
Standards. The Consolidated Financial Statements also comply fully with IFRS
Accounting Standards as issued by the 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.
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.
Investments 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 $0 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 investments 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, 2025, we had cash and cash equivalents of $252.5 million
and short-term investments of $24.8 million. As of December 31, 2025, we had
PureTech Level cash, cash equivalents and short-term investments of
$277.1 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 June 2025, we received total proceeds of $2.8 million before
income tax for disposition of our holding of 2,671,800 shares of Vor common
stock. 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) 2025 2024 2023
Net cash provided by (used in) operating activities $(85,131) $(134,369) $(105,917)
Net cash provided by (used in) investing activities 63,288 240,888 68,991
Net cash provided by (used in) financing activities (6,328) (16,958) 78,141
Net increase (decrease) in cash and cash equivalents $(28,171) $89,560 $41,215
Operating Activities
Net cash used in operating activities was $85.1 million for the year ended
December 31, 2025, as compared to $134.4 million for the year ended December
31, 2024, resulting in a decrease of $49.2 million in net cash used in
operating activities. The decrease in cash outflows is primarily attributable
to a decrease of $37.6 million in operating loss primarily driven by the
deconsolidation of Seaport in October 2024, a decrease of $32.4 million in tax
payments, and a change in working capital of $7.1 million, partially offset by
a decrease of $14.6 million in share-based compensation expense and a net
decrease in interest receipts and increase in interest payments of $13.2
million.
Investing Activities
Net cash provided by investing activities was $63.3 million for the year ended
December 31, 2025, as compared to net cash provided by investing activities of
$240.9 million for the year ended December 31, 2024, resulting in a decrease
of $177.6 million in cash provided by investing activities. The decrease in
net cash inflow was primarily attributable to a decrease in proceeds from sale
of investments held at fair value of $295.4 million, partially offset by an
increase in cash inflows from short-term investment activities (purchases, net
of redemptions) amounting to $12.8 million in 2025 as well as one time cash
outflows in 2024, including $91.6 million due to the derecognition of Seaport
cash balance upon deconsolidation of Seaport in October 2024, and $14.4
million due to the investment in Seaport preferred shares in 2024.
Financing Activities
Net cash used in financing activities was $6.3 million for the year ended
December 31, 2025, as compared to $17.0 million for the year ended December
31, 2024, resulting in a decrease of $10.6 million in net cash used in
financing activities. The decrease in cash outflow was primarily attributable
to a $105.5 million decrease in share repurchase activities, primarily in
connection with the Tender Offer in 2024, partially offset by one time cash
inflows in 2024 including $68.1 million in cash proceeds from the issuance of
the subsidiary preferred shares in 2024 and a $25.0 million cash inflow from
Royalty Pharma under Royalty Purchase Agreement in 2024.
Funding Requirements
We have incurred operating losses since inception. Based on our current plans,
we believe our existing financial assets as of December 31, 2025, will be
sufficient to fund our operations and capital expenditure requirements at
least through the end of 2028. 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 deupirfenidone (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 at least through the end of 2028. 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, the receipt of, or the sale of rights to,
royalties, entering into strategic partnerships, and other 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 Position
Summary Financial Position
As of December 31,
(in thousands) 2025 2024 Change
Investments held at fair value $217,426 $191,426 $26,000
Other non-current assets 12,266 24,953 (12,687)
Non-current assets 229,692 216,379 13,312
Cash and cash equivalents, and short-term investments 277,299 367,307 (90,008)
Other current assets 27,720 18,949 8,771
Current assets 305,018 386,256 (81,237)
Total assets 534,710 602,635 (67,925)
Lease liability 11,087 14,671 (3,584)
Sale of future royalties liability, non-current 170,422 136,782 33,640
Other non-current liabilities 1,217 1,861 (643)
Non-current liabilities 182,726 153,314 29,412
Trade and other payables 23,185 27,020 (3,835)
Notes payable 4,916 4,111 804
Preferred share liability 169 169 -
Sale of future royalties liability, current 13,247 6,435 6,813
Other current liabilities 4,792 3,654 1,138
Current liabilities 46,309 41,388 4,921
Total liabilities 229,034 194,702 34,333
Net assets 305,676 407,933 (102,257)
Total equity $305,676 $407,933 $(102,257)
Investments Held at Fair Value
Investments held at fair value increased by $26.0 million to $217.4 million
as of December 31, 2025. As of December 31, 2025, Investments held at fair
value consisted primarily of our preferred share investment in Seaport and
Vedanta. The increase in value is primarily related to the convertible
preferred shares of Seaport, partially offset by equity method losses applied
to the long-term interest ("LTI") as well as the decrease in fair value in
Vedanta preferred shares and the disposition of Vor common stock.
Cash, Cash Equivalents, and Short-Term Investments
Consolidated cash, cash equivalents and short-term investments decreased by
$90.0 million to $277.3 million as of December 31, 2025. The decrease is
primarily attributed to our operating loss of $98.5 million, partially offset
by $2.8 million in proceeds from the disposition of Vor shares.
Non-current liabilities
Non-current liabilities increased by $29.4 million to $182.7 million as of
December 31, 2025. The increase is primarily attributed to an increase in the
sale of future royalties liability driven by a change in forecast for Cobenfy
sales and the accretion of non-cash interest expense on the liability.
Quantitative and Qualitative Disclosures about Financial Risks
Interest Rate Sensitivity
As of December 31, 2025, we had cash and cash equivalents of $252.5 million
and short-term investments of $24.8 million, while we had PureTech Level
cash, cash equivalents and short-term investments of $277.1 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, 2025 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 $217.4 million and $11.4 million, respectively, as of
December 31, 2025, 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. As of December 31, 2025, the carrying amount
of investments in associates was $0.0 million. Accordingly, we view this risk
as low.
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. These common shares were sold in 2025. As of December
31, 2025, we held immaterial investments in listed entities on an active
exchange. As such, 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.
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.
Consolidated Statement of Comprehensive Income/(Loss)
For the years ended December 31
Note 2025 2024 2023
$000s $000s $000s
Contract revenue 3 4,659 4,315 750
Grant revenue 3 - 513 2,580
Total revenue 4,659 4,828 3,330
Operating expenses:
General and administrative expenses 9 (46,618) (71,469) (53,295)
Research and development expenses 9 (56,567) (69,454) (96,235)
Operating income/(loss) (98,527) (136,095) (146,199)
Other income/(expense):
Gain/(loss) on deconsolidation of subsidiary 8 - 151,808 61,787
Gain/(loss) on investments held at fair value 5 38,485 (2,398) 77,945
Realized gain/(loss) on sale of investments 5 375 151 (122)
Gain/(loss) on investments in notes from associates 7 (3,628) 13,131 (27,630)
Other income/(expense) 1,331 961 (908)
Other income/(expense) 36,564 163,652 111,072
Finance income/(costs):
Finance income 11 13,048 22,669 16,012
Finance costs - contractual 11 (1,876) (1,731) (3,424)
Finance income/(costs) - fair value accounting 11 - (8,108) 2,650
Finance costs - non-cash interest expense related to sale of future royalties 11, 18 (43,908) (8,058) (10,159)
Net finance income/(costs) (32,735) 4,773 5,078
Share of net income/(loss) of associates accounted for using the equity method 6 (17,928) (8,754) (6,055)
Gain/(loss) on dilution of ownership interest in associates 6 1,699 199 -
Income/(loss) before taxes (110,927) 23,774 (36,103)
Tax benefit/(expense) 27 842 4,008 (30,525)
Income/(loss) for the year (110,084) 27,782 (66,628)
Other comprehensive income/(loss):
Items that are or may be reclassified as profit or loss
Equity-accounted associates - share of other comprehensive income/(loss) - - 92
Total other comprehensive income/(loss) - - 92
Total comprehensive income/(loss) for the year (110,084) 27,782 (66,535)
Income/(loss) attributable to:
Owners of the Group (109,739) 53,510 (65,697)
Non-controlling interests (345) (25,728) (931)
(110,084) 27,782 (66,628)
Comprehensive income/(loss) attributable to:
Owners of the Group (109,739) 53,510 (65,604)
Non-controlling interests (345) (25,728) (931)
(110,084) 27,782 (66,535)
$ $ $
Earnings/(loss) per share:
Basic earnings/(loss) per share 12 (0.46) 0.21 (0.24)
Diluted earnings/(loss) per share 12 (0.46) 0.21 (0.24)
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Financial Position
As of December 31,
Note 2025 2024
$000s $000s
Assets
Non-current assets
Property and equipment, net 13 5,202 7,069
Right of use asset, net 23 6,297 8,061
Intangible assets, net 14 601 601
Investments held at fair value 5 217,426 191,426
Investment in associates - equity method 6 - 2,397
Investment in notes from associates, non-current 7 - 6,350
Other non-current assets 165 475
Total non-current assets 229,692 216,379
Current assets
Trade and other receivables 24 1,758 1,522
Income tax receivable 6,372 -
Prepaid expenses 6,576 4,404
Other financial assets 15 1,596 1,642
Investment in notes from associates, current 7 11,417 11,381
Short-term investments 24 24,829 86,666
Cash and cash equivalents 24 252,470 280,641
Total current assets 305,018 386,256
Total assets 534,710 602,635
Equity and liabilities
Equity
Share capital 4,860 4,860
Share premium 290,262 290,262
Treasury stock (41,154) (46,864)
Merger reserve 138,506 138,506
Translation reserve 182 182
Other reserve 16 (3,352) (4,726)
Retained earnings/(Accumulated deficit) (77,231) 32,486
Equity attributable to the owners of the Group 312,073 414,707
Non-controlling interests 21 (6,397) (6,774)
Total equity 305,676 407,933
Non-current liabilities
Sale of future royalties liability, non-current 18 170,422 136,782
Lease liability, non-current 23 11,087 14,671
Liability for share-based awards 10 1,217 1,861
Total non-current liabilities 182,726 153,314
Current liabilities
Lease liability, current 23 3,584 3,579
Trade and other payables 22 23,185 27,020
Sale of future royalties liability, current 18 13,247 6,435
Tax liability, current 27 1,208 75
Notes payable 20 4,916 4,111
Preferred share liability 17, 19 169 169
Total current liabilities 46,309 41,388
Total liabilities 229,034 194,702
Total equity and liabilities 534,710 602,635
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 29, 2026 and signed on its behalf by:
Robert Lyne
Chief Executive Officer
April 29, 2026
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Changes in Equity
For the years ended December 31
Share Capital Treasury Shares
Note Shares Amount Share premium Shares Amount Merger reserve $000s Translation reserve Other reserve Retained earnings/ (accumulated deficit) Total Parent equity Non-controlling interests Total
$000s $000s $000s $000s $000s $000s $000s $000s Equity
$000s
Balance January 1, 2023 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), net - - - - - - 92 - - 92 - 92
Total comprehensive income/(loss) - - - - - - 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
Expiration of share options in subsidiary 10 - - - - - - - 1,458 - 1,458 (1,458) -
Settlement of restricted stock units - - - 425,219 986 - - 156 - 1,142 - 1,142
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
Net income/(loss) - - - - - - - - 53,510 53,510 (25,728) 27,782
Total comprehensive income/(loss) - - - - - - - - 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
Net income/(loss) - - - - - - - - (109,739) (109,739) (345) (110,084)
Total comprehensive income/(loss) - - - - - - - - (109,739) (109,739) (345) (110,084)
Exercise of stock options 10 - - - 65,000 164 - - (58) - 106 - 106
Equity-settled share-based awards expense 10 - - - - - - - 6,338 - 6,338 758 7,095
Settlement of restricted stock units 10 - - - 2,197,726 5,544 - - (4,942) - 603 - 603
Expiration of share options in subsidiary - - - - - - - 36 - 36 (36) -
Other - - - - 1 - - - 22 23 - 23
Balance December 31, 2025 257,927,489 4,860 290,262 (16,243,451) (41,154) 138,506 182 (3,352) (77,231) 312,073 (6,397) 305,676
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Cash Flows
For the years ended December 31
Note 2025 2024 2023
$000s $000s $000s
Cash flows from operating activities:
Income/(loss) for the year (110,084) 27,782 (66,628)
Adjustments to reconcile income/(loss) for the period to net cash used in
operating activities:
Non-cash items:
Depreciation and amortization 3,348 3,571 4,933
Share-based compensation expense 10 8,222 22,850 4,415
(Gain)/loss on investment held at fair value 5 (38,485) 2,398 (77,945)
Realized (gain)/loss on sale of investments 5 (375) (151) 265
Gain on dilution of ownership interest in associates 6 (1,699) (199) -
Gain on deconsolidation of subsidiary 8 - (151,808) (61,787)
Share of net (gain)/loss of associates accounted for using the equity method 6 17,928 8,754 6,055
(Gain)/loss on investments in notes from associates 7 3,628 (13,131) 27,630
(Gain)/loss on disposal of assets (93) 14 318
Impairment of fixed assets 112 226 1,260
Income taxes expense/(benefit) 27 (842) (4,008) 30,525
Finance (income)/costs, net 11 32,735 (4,773) (5,078)
Changes in operating assets and liabilities:
Trade and other receivables (236) 629 9,750
Prepaid expenses and other financial assets (1,862) (1,262) 2,834
Deferred revenue - - (283)
Trade and other payables 22 (1,025) (9,695) 3,844
Other - 92 1,374
Income taxes paid (5,503) (37,913) (150)
Interest received 13,621 23,547 14,454
Interest paid (4,521) (1,295) (1,701)
Net cash provided by (used in) operating activities (85,131) (134,369) (105,917)
Cash flows from investing activities:
Purchase of property and equipment 13 (6) (11) (70)
Proceeds from sale of property and equipment 269 255 865
Purchases of intangible assets - - (175)
Investment in preferred shares held at fair value 5, 17 (888) (14,400) -
Sale of investments held at fair value 5 2,753 298,109 33,309
Investment in convertible notes from associates 7 (150) - (16,850)
Short-term note to associate - (660) -
Repayment of short-term note from associate - 660 -
Cash derecognized upon loss of control over subsidiary 8 - (91,570) (13,784)
Purchases of short-term investments (84,049) (308,942) (178,860)
Proceeds from maturity of short-term investments 145,310 357,447 244,556
Other 50 - -
Net cash provided by (used in) investing activities 63,288 240,888 68,991
Cash flows from financing activities:
Receipts from Royalty Purchase Agreement 18 - 25,000 100,000
Issuance of subsidiary preferred shares 17 - 68,100 -
Payment of lease liability 23 (3,579) (3,394) (3,338)
Exercise of stock options 106 895 1,153
Repurchase of ordinary shares from Tender Offer, including associated costs 16 (2,053) (102,768) -
Payments of withholding taxes in connection with stock-based awards (801) - -
Purchase of treasury stock 16 - (4,791) (19,650)
Other - - (23)
Net cash provided by (used in) financing activities (6,328) (16,958) 78,141
Net increase (decrease) in cash and cash equivalents (28,171) 89,560 41,215
Cash and cash equivalents at beginning of year 280,641 191,081 149,866
Cash and cash equivalents at end of year 252,470 280,641 191,081
Supplemental disclosure of non-cash investment and financing activities:
Purchase of intangible assets not yet paid in cash - - 25
Cost associated with Tender Offer not yet paid in cash - 2,076 -
Settlement of restricted stock units through issuance of equity 1,404 1,301 1,142
Conversion of note receivable from associate into preferred shares 2,836 - -
The accompanying notes are an integral part of these financial statements.
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, 2025 and 2024, and for
the years ended December 31, 2025, 2024 and 2023. The Consolidated Financial
Statements have been approved by the Directors on April 29, 2026, and are
prepared in accordance with UK-adopted International Financial Reporting
Standards. The Consolidated Financial Statements also comply fully with IFRS
Accounting Standards as issued by the IASB. UK-adopted IFRS Accounting
Standards differ in certain respects from IFRS Accounting Standards 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 preferred share liabilities.
Use of Judgments and Estimates
In preparing the Consolidated Financial Statements, management has made
judgments, 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
and the probability of entering into an initial public offering.
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 judgments 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, and investee dependence on the Group. 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.
- 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, 2025, the Group had cash and cash equivalents of $252,470
and short-term investments of $24,829. Considering the Group's financial
position as of December 31, 2025, 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, 2025 and 2024, and
for each of the years ended December 31, 2025, 2024 and 2023, 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, 2025, and the Group's total voting
percentage, based on outstanding voting common and preferred shares as of
December 31, 2025, 2024 and 2023, is outlined below. All current subsidiaries
are domiciled within the United States and conduct business activities solely
within the United States.
Voting percentage at December 31, through the holdings in
2025 2024 2023
Subsidiary Common Preferred Common Preferred Common Preferred
Subsidiary operating companies
Gallop Oncology, Inc. (Indirectly Held through PureTech LYT)( 1, 2) 100.0 - 100.0 - 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 LLC(3) 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, 5, 6) - - - - 14.6 -
Gelesis, Inc. (2, 8) - - - - - -
Seaport Therapeutics, Inc. (1,) (2,) (4, 6) 0.8 42.1 0.8 42.1 N/A N/A
SPTX, Inc. (held Indirectly through Seaport) (1,) (2,) (4, 6) 0.8 42.1 0.8 42.1 N/A N/A
Karuna Therapeutics, Inc.(2, 5 , 6) - - - - 2.3 -
Vedanta Biosciences, Inc.(2, 4, 6) 0.2 4.8 - 46.9 - 47.0
Vedanta Biosciences Securities Corp. (indirectly held through Vedanta)(2, 4, 0.2 4.8 - 46.9 - 47.0
6)
Vor Biopharma Inc.(2, 5, 6) - - 2.1 - 3.9 -
Non-trading 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 -
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
Commense Inc.(2, 7) - - - - - 99.1
Enlight Biosciences, LLC(2) 86.0 - 86.0 - 86.0 -
Ensof Biosystems, Inc. (held indirectly through Enlight)(2, 7) - - - - 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
Libra Biosciences, Inc.(2, 7) - - - - - 100.0
Mandara Sciences, LLC(2, 7) - - - - 98.3 -
Tal Medical, LLC.(2, 7) - - - - - 100.0
1 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.
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, 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 The Group's investments in Akili and Karuna were disposed of in 2024.
The Group's investments in Vor were disposed of in 2025.
6 See Notes 5. Investments Held at Fair Value for additional discussion on
the Group's investment held in these entities.
7 Inactive subsidiary dissolved in November 2024.
8 On October 30, 2023, Gelesis ceased operations and filed a voluntary
petition for relief under the United States bankruptcy code.
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.
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 the 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.
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 the 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 the 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.
- 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.
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.
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 as the
Group has a historical practice of settling these awards in cash. 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.
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 the 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's leases are virtually all leases of real estate for use in
operations. 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 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.
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 the IFRS Interpretations Committee ("Committee")'s
agenda decision published by the International Accounting Standards Board in
July 2024, for the first time for its reporting period ended December 31,
2025. This Committee agenda decision clarifies certain requirements for
disclosure of revenue and expenses for reporting segments under IFRS 8,
Operating Segments. The adoption of this Committee agenda decision did not
have any impact on the amounts recognized or disclosed 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 does not
expect these amendments to have a material impact on the Group's Consolidated
Financial Statements.
On July 18, 2024, IASB issued five standards as a result of IASB's annual
improvements project. IASB uses the annual improvements process to make
necessary, but non-urgent, amendments to IFRS Accounting Standards that will
not be included as part of another major project. The amended standards are:
IFRS 1 - First-time Adoption of International Financial Reporting Standards,
IFRS 7 and its accompanying Guidance on implementing IFRS 7, IFRS 9, IFRS 10 -
Consolidated Financial Statements and IAS 7 - Statement of Cash Flows. The
effective date for adoption of these amendments is annual reporting periods
beginning on or after January 1, 2026, and early adoption is permitted. The
Group does not expect these amendments to have a material impact on the
Group's Consolidated Financial Statements.
3. Revenue
Revenue recorded in the Consolidated Statement of Comprehensive Income/(Loss)
consists of the following:
For the years ended December 31, 2025 2024 2023
$ $ $
Contract revenue 4,659 4,315 750
Grant revenue - 513 2,580
Total revenue 4,659 4,828 3,330
All amounts recorded in contract revenue were generated in the United States.
During the years ended December 31, 2025, and 2024 the Group recognized
$4,659 and $315, respectively in royalty revenue pursuant to a license
agreement executed in 2011 with Karuna Therapeutics, Inc. ("Karuna"). Under
the terms of the license agreement, Karuna and its acquirer Bristol Myers
Squibb ("BMS") pays the Group a royalty that amounts to 3% of annual net sales
of Cobenfy.
During the year ended December 31, 2024, the Group achieved and received a
$4,000 milestone payment from BMS following the approval by the U.S. Food and
Drug Administration ("FDA") to market KarXT as Cobenfy, pursuant to the
license agreement discussed above. This milestone payment was recognized as
contract revenue during the year ended December 31, 2024.
The Group's contract related to contract revenue for the year ended December
31, 2023 was determined to have a single performance obligation which
consisted of a deliverable of research and development services. For such
contract, revenue was recognized over time based on the input method which the
Group believes is a faithful depiction of the transfer of goods and services.
Progress was measured based on costs incurred to date as compared to total
projected costs. Payments for such contract were primarily made up-front on a
periodic basis.
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 2025 2024 2023
for the years ended December 31, $ $ $
Transferred at a point in time 4,659 4,315 -
Transferred over time - - 750
4,659 4,315 750
Customers over 10% of revenue 2025 2024 2023
$ $ $
Customer A - - 750
Customer B 4,659 4,315 -
4,659 4,315 750
Accounts receivable represent rights to consideration in exchange for 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 receivables on the
Consolidated Statement of Financial Position. The accounts receivable related
to contract revenue were $1,517 and $868 as of December 31, 2025 and 2024,
respectively.
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 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 Segment
The Wholly-Owned segment is advancing Wholly-Owned programs which are focused
on treatments for patients with devastating diseases. The Wholly-Owned 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 segment is conducted by the
PureTech Health team, which is responsible for the strategy, business
development, and research and development.
Controlled Founded Entities Segment
The Controlled Founded Entities segment is comprised of the Group's
consolidated operational subsidiaries as of December 31, 2025 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, and Vedanta in 2023) 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 Seaport, Vedanta, and Sonde) 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.
Changes within the Reportable Segments
There was no change to the reportable segments in 2025 or 2024, except for the
changes to the composition of the reportable segments as described below.
In August 2025, the Group announced a new Founded Entity, Celea Therapeutics
("Celea") to advance our deupirfenidone (LYT-100) program if external funding
is secured. The financial results of this program, which is currently housed
within PureTech LYT 100, Inc. were included in the Wholly-Owned segment as of
and for the year ended December 31, 2025. Upon raising dilutive third-party
financing, the financial results of this program will be included in the
Controlled Founded Entities segment or Parent and Other column depending on if
the Group maintains control over this entity.
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 segment. The financial results of these
programs were included in the Wholly-Owned 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 year ended December 31, 2023 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 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 Gallop has not raised dilutive third-party financing as of December 31,
2025, the financial results of Gallop were included in the Wholly-Owned
segment as of and for the years ended December 31, 2025 and 2024.
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 segment and are included in the Parent Company and Other
column. The corresponding information for 2023 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 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.
For the year ended December 31, 2025
Wholly-Owned Segment Controlled Founded Entities Segment Parent Company and Consolidated
$ $ Other $
$
Contract revenue - - 4,659 4,659
Total revenue - - 4,659 4,659
General and administrative expenses (11,401) (120) (35,097) (46,618)
Research and development expenses (55,900) (701) 34 (56,567)
Total operating expenses (67,301) (821) (35,063) (103,185)
Operating income/(loss) (67,301) (821) (30,405) (98,527)
Income/(expenses) not allocated to segments
Other income/(expense):
Gain/(loss) on investment held at fair value 38,485
Realized gain/(loss) on sale of investments 375
Gain/(loss) on investment in notes from associates (3,628)
Other income/(expense) 1,331
Total other income/(expense) 36,564
Net finance income/(costs) (32,735)
Share of net income/(loss) of associates accounted for using the equity method (17,928)
Gain on dilution of ownership interest in associate 1,699
Income/(loss) before taxes (110,927)
As of December 31, 2025
Available Funds
Cash and cash equivalents 6,361 116 245,993 252,470
Short-term Investments - - 24,829 24,829
Consolidated cash, cash equivalents and short-term investments 6,361 116 270,822 277,299
For the year ended December 31, 2024
Wholly-Owned Segment Controlled Founded Entities Segment Parent Consolidated
$ $ Company and $
Other
$
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 expenses (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 151,808
Gain/(loss) on investment held at fair value (2,398)
Realized gain/(loss) 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 (8,754)
equity method
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
For the year ended December 31, 2023
Wholly-Owned Segment Controlled Founded Entities Segment Parent Consolidated
$ $ Company and $
Other
$
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 gain/(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 associates accounted for using the (6,055)
equity method
Income/(loss) before taxes (36,103)
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 and Sonde along with other insignificant investments as of December
31, 2025, are initially measured at fair value, and are subsequently
re-measured at fair value at each reporting date with changes in 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:
Balance under IFRS 9 Equity method loss recorded against LTI Carrying Amount
Investments held at fair value $ $ $
Balance as of January 1, 2024 317,841 317,841
Sale of Karuna shares (292,672) (292,672)
Investment in Seaport preferred shares - Seaport deconsolidation 179,248 179,248
Sale of Akili shares (5,437) (5,437)
Gain realized on sale of Karuna shares 151 151
Gain/(loss) - changes in fair value through profit and loss (2,398) (2,398)
Equity method losses recorded against LTI, net (5,307) (5,307)
Balance as of December 31, 2024 196,733 (5,307) 191,426
Sale of Vor Shares (2,753) (2,753)
Gain realized on sale of Vor shares 375 375
Investment in Vedanta preferred shares 888 888
Conversion of Vedanta note to preferred shares 2,836 2,836
Gain/(loss) - changes in fair value through profit and loss 38,485 38,485
Equity method losses recorded against LTI, net (13,831) (13,831)
Balance as of December 31, 2025 236,564 (19,138) 217,426
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. Upon
deconsolidation, the Group owns 950,000 of common stock, 40,000,000 of Series
A-1 preferred stock, 8,421,052 of Series A-2 preferred stock, and 3,031,578 of
Series B preferred stock. The common shares are subject to IAS 28 Investments
in Associates and Joint Ventures due to the significant influence the Group
retained and are accounted for under the equity method. See Note 6.
Investments in Associates. 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 December 31,
2025 and 2024, these preferred shares had a fair value of $236,003 and
$177,288, 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 and the probability of Seaport entering into an
initial public offering. See Note 19. Financial Instruments for valuation of
these preferred shares.
During the year ended December 31, 2025 and 2024, the Group recognized a gain
of $58,715 and a loss of $1,960 for the changes in the fair value of the
investment in Seaport that was included in gain/(loss) on investments held at
fair value within the Consolidated Statement of Comprehensive Income/(Loss).
For the year ended December 31, 2025, the increase in fair value of $58,715
was reduced by $19,138, which represented the excess equity method losses from
the Group's investment in Seaport common stock. The recognition of the $19,138
loss against the investment in Seaport's Preferred A-1, A-2 and B shares
occurred because the Group's share of equity method losses from applying the
equity method of accounting to its investment in Seaport's common shares was
greater than its equity method investment balance and because the Group's
investment in Seaport's Preferred A-1, A-2 and B shares represents a
long-term interest ("LTI"). The $19,138 loss was included in share of net
income/(loss) of associates accounted for using the equity method within the
Consolidated Statement of Comprehensive Income/(Loss) as it represented a
portion of the Group's share of equity method losses from applying the equity
method of accounting.
Vedanta
2023
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 were 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 had significant influence over
Vedanta through its voting interest in Vedanta and its remaining
representation on Vedanta's Board of Directors.
2025
On August 5, 2025, Vedanta completed a recapitalization of its capital
structure. Vedanta issued new Series A convertible preferred shares to
investors. The Group invested $888 in exchange for 1,477,692 shares of Series
A convertible preferred stock. In addition, as part of the recapitalization,
the Group's secured convertible promissory note in the principal amount of
$5,000 was converted into 10,129,586 shares of Vedanta Series A-1 convertible
preferred shares and the Group's existing investment in Vedanta's convertible
preferred shares was converted into 577,851 shares of Vedanta common stock.
Following Vedanta's recapitalization, the Group's ownership interest was
reduced to 5.1% and, thus, the Group no longer has significant influence over
Vedanta's relevant activities.
The Group's investments in Vedanta convertible preferred shares prior to or
after the 2025 recapitalization do not provide it 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. The Group's investments in Vedanta common
stock is accounted for at fair value under IFRS 9 as investments held at fair
value with changes in fair value recorded in profit and loss.
During the years ended December 31, 2025, 2024 and 2023, the Group recognized
losses of $14,335, $2,990, and $6,303, respectively, 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 $553 and $11,163 as of December 31, 2025 and 2024, respectively.
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.
Following deconsolidation, the Group still has 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. See Note 6. Investments in Associates.
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.
The Group's investment in Sonde's Preferred A-2 and B shares represents a LTI.
When 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 is greater
than its equity method investment balance, the additional loss is applied to
the LTI. In accordance with IAS 28, IFRS 9 should be applied independently
ignoring any prior equity method loss absorption. The prior year excess equity
method losses absorbed by the LTI should be reversed if the LTI's fair value
decreases.
During the year ended December 31, 2023, the Group recognized a loss of $994
for the changes in the fair value of the investment in Sonde that was included
in gain/(loss) on investments held at fair value within the Consolidated
Statement of Comprehensive Income/(Loss).
As of December 31, 2024, the fair value of the Group's investment in Sonde
Preferred A-2 and B shares was $5,307 prior to applying the excess equity
method losses from the investment in Sonde Preferred A-1 shares. After the
excess equity method losses were applied, the balance of the investment in
Sonde Preferred A-2 and B shares was $0. During the year ended December 31,
2024, the Group recognized a loss of $5,102 for the changes in the fair value
of its investment in Sonde's Preferred A-2 and B shares that was included in
gain/(loss) on investments held at fair value within the Consolidated
Statement of Comprehensive Income/(Loss). In addition, the Group also
recognized a loss of $5,307 on its investment in Sonde's Preferred A-2 and B
shares because the Group's share of equity method losses was greater than its
equity method investment balance. The additional loss was included in share of
net income/(loss) of associates accounted for using the equity method within
the Consolidated Statement of Comprehensive Income/(Loss).
As of December 31, 2025, the fair value of the Group's investment in Sonde
Preferred A-2 and B shares was $0, a fair value reduction of $5,307 from
December 31, 2024. Due to the decrease in the fair value of Sonde's Preferred
A-2 and B shares under IFRS 9, during the year ended December 31, 2025, the
Group recognized the decrease in fair value within gain/(loss) on investments
held at fair value in the Consolidated Statement of Comprehensive
Income/(Loss) and reversed $5,307 of equity method loss that had reduced the
fair value of Sonde's Preferred A-2 and B shares in the prior year. The
reversal of $5,307 was included in the Group's share of net income/(loss) of
associates accounted for using the equity method within the Consolidated
Statement of Comprehensive Income/(Loss).
Vor
Vor was deconsolidated in February 2019 after its initial public offering.
As of December 31, 2024, the Group held 2,671,800 shares of Vor common stock
with fair value of $2,966. On June 26, 2025, the Group sold its remaining
shares of Vor common stock at $1.03 per share for aggregate proceeds of $2,753
before income tax. As a result of this transaction, the Group recognized a
gain of $375 which was included in realized gain/(loss) on sale of investments
within the Consolidated Statement of Comprehensive Income/(Loss). Therefore,
the Group no longer holds any ownership interest in Vor.
During the years ended December 31, 2025, 2024 and 2023, the Group recognized
losses of $588, $3,046, and $11,756, 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).
Karuna
Karuna was deconsolidated in March 2019. During 2019, Karuna completed its
initial public offering 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.
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, Karuna common shares were acquired by Bristol Myers Squibb 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. As a result, the Group no longer holds
any ownership interest in Karuna.
During the years ended December 31, 2024 and 2023, the Group recognized gains
of $11,813 and $107,079, 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).
Akili
Akili was deconsolidated in 2018. At the 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.
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 interest in Akili.
During the years ended December 31, 2024 and 2023, the Group recognized losses
of $985, and $8,681, 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).
Gelesis
Gelesis was deconsolidated in July 2019. On January 13, 2022, Gelesis
completed its business combination with Capstar Special Purpose Acquisition
Corp ("Capstar"). 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.
As the Group had significant influence over Gelesis, the investment in Gelesis
common shares was accounted for under the equity method. Please refer to Note
6. Investments in Associates for information regarding the Group's investment
in Gelesis as an associate.
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 with an exercise price of $0.0182 per share and (iii) warrants to
purchase 43,133,803 shares of Gelesis common stock with 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 with changes in fair value
recorded through profit and loss.
As Gelesis ceased operations in October 2023, the fair value of the Gelesis
2023 Warrants was written down to $0 as of December 31, 2023. During the year
ended December 31, 2023, the Group recognized a loss of $1,264 related to the
change in the fair value of these warrants that was included in gain/(loss) on
investments held at fair value within the Consolidated Statement of
Comprehensive Income/(Loss).
6. Investments in Associates
Gelesis (Boston, MA)
Gelesis was founded by the Group and was deconsolidated from the Group's
financial statements as of July 1, 2019. On January 13, 2022, Gelesis
completed its business combination with Capstar Special Purpose Acquisition
Corp ("Capstar"). 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. As
the Group had significant influence over Gelesis through its voting interest
in Gelesis and representation on Gelesis' Board of Directors, the investment
in Gelesis common shares was accounted for under the equity method as
prescribed by IAS 28, Investments in Associates and Joint Ventures.
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 over
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 reduced to $0.
Sonde (Boston, MA)
Following the deconsolidation of Sonde in May 2022, 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.
During the years ended December 31, 2025, 2024, and 2023, the Group recorded
income of $5,307, loss of $8,492 and loss of $1,052, 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 was 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 losses,
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.
During the year ended December 31, 2025, the Group recorded income of $5,307
within its share of net income/(loss) of associates accounted for using the
equity method in the Consolidated Statement of Comprehensive Income/(Loss).
This amount represents the reversal of previously recognized equity method
losses that were applied against the Group's Sonde's Preferred A-2 and B
investment. Due to the decrease in the fair value of Sonde's Preferred A-2 and
B shares under IFRS 9, during the year ended December 31, 2025, the Group
reversed the excess equity method losses that had been applied in prior
periods to reduce the fair value of the Group's investment in Sonde's
Preferred A-2 and B shares. See Note 5. Investments Held at Fair Value.
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 since 2024. As of December 31, 2025 and 2024, unrecognized
equity method losses amounted to $1,651 and $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 and its remaining representation on
Seaport's Board of Directors. The Group's voting interest as of the date of
deconsolidation was 43.0% and remained at 42.9% subsequently. The Group holds
both common shares and preferred shares in Seaport. The common shares are
subject to IAS 28 Investments 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.
The fair value of the common shares on the date of deconsolidation amounted to
$2,461, which was 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 12.4% and 13.1% as of December 31, 2025 and 2024, respectively.
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.
During the year ended December 31, 2025, the Group's share in Seaport's losses
amounted to $23,234 which exceeded the balance of Group's equity method
investment in Seaport. The Group recorded a loss of $4,096 related to
Seaport's equity method of accounting and a gain of $1,699 for the dilution of
ownership interest. As a result, the Group's equity method investment in
Seaport was reduced to $0 as of December 31, 2025. Since the Group's
investment in Seaport Preferred A-1, A-2 and B shares represents a long-term
interest, the Group recognized additional equity method losses, totaling
$19,138 against the fair value of Seaport Preferred A-1, A-2, and B shares.
See Note 5. Investments Held at Fair Value.
The following table provides summarized financial information for Seaport, the
Group's material associate for the years ended December 31, 2025 and 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, 2025 As of December 31, 2024
Summarized statement of financial position $ $
Current assets 222,944 310,151
Non-current assets 25,688 5,632
Current liabilities (12,633) (11,149)
Non-current liabilities (564,576) (460,996)
Equity awards issued to third parties (12,425) (2,042)
Other (301) -
Net assets/(liabilities) (341,302) (158,405)
Reconciliation to carrying amounts:
Opening net assets/(liabilities) (158,405) (156,414)
Profit/(loss) for the period (182,897) (1,991)
Closing net assets/(liabilities) (341,302) (158,405)
Group's share in % 12.4% 13.1%
Group's share of net assets (net deficit) (42,300) (20,764)
Unrecognized goodwill and intangibles 23,162 23,162
Equity method losses recorded against long-term interests (19,138) -
Carrying amount of Investment in associates - 2,397
For the year ended December 31,
Statement of comprehensive income/(loss) 2025 2024
Profit/(loss) from continuing operations (100%) (182,897) (1,991)
Profit/(loss) for the year (182,897) (1,991)
Other comprehensive income/(loss) - -
Total comprehensive income/(loss) (182,897) (1,991)
Dividends received from associates - -
Group's share in gain (net losses) (23,234) (262)
The following table summarizes the activities related to the investment in
associates balance for the years ended December 31, 2025 and 2024.
Investment in Associates $
Balance as of January 1, 2024 3,185
Investment in Seaport - deconsolidation 2,461
Gain on dilution of interest in associates 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
Gain on dilution of interest in associates 1,699
Share in net gain/(loss) of associates - limited to net investment amount (17,928)
Share of losses recorded against long-term Interests (LTIs) 13,831
Balance as of December 31, 2025 -
7. Investment in Notes from Associates
Sonde
In July 2025, Sonde closed a bridge financing in the form of convertible
promissory notes with its existing investors for total proceeds of $1,200, of
which the Group invested $150. The notes 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
December 31, 2025, the Group wrote down the convertible note to $0 and
recognized a loss of $150 for the year ended December 31, 2025, which was
included in gain/(loss) on investments in notes from associates in the
Consolidated Statement of Comprehensive Income/(Loss).
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
represent solely 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. As of December 31, 2025 and 2024, these notes were
determined to have a fair value of $11,417 and $11,381, respectively.
For the years ended December 31, 2025, 2024 and 2023, the Group recorded a
gain of $36, 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 carried an interest rate of 9% per annum. The debt
had various conversion triggers, and the conversion price was 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
was not earlier converted or repaid, the entire outstanding amount of the
convertible debt should be due and payable upon the earliest to occur of (a)
the later of (x) November 1, 2025 and (y) the date which was sixty (60) days
after all amounts owed under, or in connection with, the loan Vedanta received
from a certain investor had been paid in full, or (b) the consummation of a
Deemed Liquidation Event (as defined in Vedanta's Amended and Restated
Certificate of Incorporation).
On August 5, 2025, Vedanta completed a recapitalization of its capital
structure. See Note 5. Investments Held at Fair Value. The secured convertible
promissory note held by the Group in the principal amount of $5,000 with a
fair value of $2,836 was converted into 10,129,586 shares of Series A-1
preferred stock. As a result, the convertible promissory note is no longer
outstanding as of December 31, 2025.
Due to the terms of the convertible debt, the investment in such convertible
debt was measured at fair value with changes in the fair value recorded
through profit and loss. As of December 31, 2024, the Vedanta convertible debt
was determined to have a fair value of $6,350. During the years ended December
31, 2025, 2024 and 2023, the Group recorded a loss of $3,514, 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
$11,417 and $17,731 as of December 31, 2025 and December 31, 2024,
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, 2024 4,600
Changes in the fair value of the notes 13,131
Balance as of December 31, 2024 17,731
Investment in Sonde convertible note 150
Conversion of Vedanta note to preferred shares (2,836)
Changes in the fair value of the notes (3,628)
Balance as of December 31, 2025 11,417
Investment in notes from associates, current 11,417
Investment in notes from associates, non-current -
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).
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 Vedanta's deconsolidation, the Group had significant influence over
Vedanta through its voting interest in Vedanta and its remaining
representation on Vedanta's Board of Directors. The convertible preferred
shares in Vedanta the Group holds 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
do 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, 2025 and December 31, 2024, the Group's investment in
Vedanta convertible preferred shares was held at fair value of $553 and
$11,163, respectively, and categorized as Level 3 in the fair value hierarchy.
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, 2025 and December 31, 2024, the Group's investment in
Seaport's convertible preferred shares was held at fair value of $236,003 and
$177,288, 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
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 and Vedanta derecognized from the Group in the years ended
December 31, 2024 and 2023, respectively.
2024 2023
$ $
Assets, Liabilities and non-controlling interests in deconsolidated subsidiary Seaport Vedanta
Cash and cash equivalents (91,570) (13,784)
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
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 preferred shares and warrants 76,208 24,568
Other assets and liabilities, net (475) (462)
Sub-total (net assets)/liabilities (8,070) 32,246
Derecognize carrying value of non-controlling interest (7,430) 9,085
Recognize investment retained in deconsolidated subsidiary at fair value* 167,308 20,456
Calculated gain on deconsolidation 151,808 61,787
* 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.
9. Operating Expenses
Total operating expenses were as follows:
For the years ended December 31, 2025 2024 2023
$ $ $
General and administrative 46,618 71,469 53,295
Research and development 56,567 69,454 96,235
Total operating expenses 103,185 140,923 149,530
The average number of persons employed by the Group during the year, analyzed
by category, was as follows:
For the years ended December 31, 2025 2024 2023
General and administrative 35 39 40
Research and development 27 41 56
Total 62 80 96
The aggregate payroll costs of these persons were as follows:
2025 2024 2023
$ $ $
For the years ended December 31,
General and administrative 22,616 40,559 24,586
Research and development 10,824 15,023 21,102
Total 33,440 55,581 45,688
Detailed operating expenses were as follows:
2025 2024 2023
$ $ $
For the years ended December 31,
Salaries and wages 22,475 29,032 37,084
Healthcare and other benefits 1,707 2,203 2,599
Payroll taxes 1,035 1,496 1,590
Share-based payments 8,222 22,850 4,415
Total payroll costs 33,440 55,581 45,688
Amortization 1,764 1,764 1,979
Depreciation 1,585 1,807 2,955
Total amortization and depreciation expenses 3,348 3,571 4,933
Other general and administrative expenses 20,653 27,491 25,180
Other research and development expenses 45,743 54,280 73,729
Total other operating expenses 66,397 81,771 98,909
Total operating expenses 103,185 140,923 149,530
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, 2025 2024 2023
$ $ $
Audit of these financial statements 2,272 2,377 2,241
Audit of the financial statements of associate** - 150 -
Audit-related assurance services* 300 316 445
Non-audit related services 6 6 9
Total 2,578 2,848 2,695
*The amounts represent assurance service relating to SOX controls work for
purposes of the ICFR audit of Form 20-F
**The amount represents audit fee in respect of financial statements of
Seaport for the stub period after deconsolidation in 2024.
10. Share-based Payments
Share-based payments include 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, 2025,
2024 and 2023, was $8,222, $22,850, and $4,415, 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, 2025 2024 2023
$ $ $
General and administrative 6,893 21,993 3,185
Research and development 1,329 857 1,230
Total 8,222 22,850 4,415
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, 2025, the Group has issued
32,199,101 units of share-based awards under these plans.
RSUs
During the twelve months ended December 31, 2025 and 2024, the Group granted
the following RSUs to certain non-executive Directors, executives and
employees:
Year ended December 31, 2025 2024
Time-based RSUs 4,855,916 4,388,116
Performance-based RSUs 1,494,919 1,822,151
Total RSUs 6,350,835 6,210,267
RSU activity for the years ended December 31, 2025, 2024 and 2023 is detailed
as follows:
Number of Shares/Units Weighted Average Grant Date Fair Value (GBP) (*)
Outstanding (Non-vested) at 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 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
RSUs Granted in Period 6,350,835 1.14
Vested (3,184,023) 1.62
Forfeited (2,757,344) 1.39
Outstanding (Non-vested) at December 31, 2025 9,388,190 1.20
*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.
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 share-based compensation expense.
The Group recorded $5,713, $4,388, and $827, respectively, for the years ended
December 31, 2025, 2024 and 2023 in respect of all restricted stock units, of
which $1,127, $909, and $402, respectively, were in respect of liability
settled share-based awards.
As of December 31, 2025, the carrying amount of the RSU liability awards was
$3,044 with $1,827 current and $1,217 non-current, out of which $1,827 related
to awards that have met all their performance and market conditions and were
settled in March 2026. 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 met all their performance and market
conditions and were settled in February 2025.
Stock Options
Stock option activity for the years ended December 31, 2025, 2024 and 2023, 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, 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 9,065,830 2.19 6.01
Outstanding at December 31, 2023 16,956,590 2.29 7.20
Granted 2,665,875 1.87
Exercised (412,729) 1.73 2.20
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
Granted 381,000 1.24
Exercised (65,000) 1.20 1.39
Forfeited and expired (2,388,931) 2.41
Options Exercisable at December 31, 2025 9,690,271 2.28 4.87
Outstanding at December 31, 2025 12,411,059 2.19 5.62
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, 2025 2024 2023
Expected volatility 45.18% 44.76% 43.69%
Expected term (in years) 6.16 6.16 6.16
Risk-free interest rate 3.81% 4.31% 4.04%
Expected dividend yield - - -
Exercise price (GBP) 1.24 1.87 2.22
Underlying stock price (GBP) 1.24 1.87 2.22
Expected volatility is based on 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,
2025, 2024 and 2023 of $0.80, $1.18 and $1.37, respectively.
The Group incurred share-based payment expense for the stock options of
$1,751, $1,092 and $3,310 for the years ended December 31, 2025, 2024 and
2023, respectively.
For shares outstanding as of December 31, 2025, 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 - 3.75
1.00 to 2.00 5,627,230 1.62 5.73
2.00 to 3.00 4,100,484 2.25 6.49
3.00 to 4.00 2,593,500 3.40 4.07
Total 12,411,059 2.19 5.62
Subsidiary Plans
For the years ended December 31, 2025, 2024 and 2023, the subsidiaries
incurred share-based payment expense of $758, $17,372 and $277, respectively.
For the year-ended December 31, 2025, Gallop recognized share-based payment
expense of $758. The share-based payment expense for the year-ended December
31, 2025 is related to 6,309,087 shares of restricted stock issued to Gallop
executives under the Gallop 2025 Stock Option and Grant Plan (the "Gallop
Plan") approved by the Gallop Board of Directors in September 2025. These
awards vest over 25 months and have weighted average grant date fair value of
$0.46. As of December 31, 2025, all of these awards were unvested and
outstanding.
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 was 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 and the weighted average exercise
prices for the options was $1.28.
A summary of stock option activity by number of shares in these subsidiaries
is presented in the following table:
Outstanding as of January 1, 2025 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, 2025
Entrega 334,500 - - (87,500) - - 247,000
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) -
The weighted-average exercise prices, remaining contractual life and exercise
price range for the options outstanding and exercisable as of December 31,
2025, were as follows:
Outstanding and exercisable at December 31, 2025 Number of options Weighted-average exercise price Weighted-average contractual life outstanding Exercise Price Range
$ $
Entrega 247,000 1.85 2.41 0.02-2.36
11. Finance Income/(Costs), net
The following table shows the breakdown of finance income and costs:
2025 2024 2023
$ $ $
For the years ended December 31,
Finance income
Interest income from financial assets 13,048 22,669 16,012
Total finance income 13,048 22,669 16,012
Finance costs
Contractual interest expense on notes payable (804) (684) (1,422)
Interest expense on other borrowings - - (363)
Interest expense on lease liability (1,065) (1,295) (1,544)
Gain on forgiveness of debt - 273 -
Gain/(loss) on foreign currency exchange (6) (25) (94)
Total finance costs - contractual (1,876) (1,731) (3,424)
Gain/(loss) from changes in fair value of warrant liability - - 33
Gain/(loss) from changes in fair value of preferred shares - (8,108) 2,617
Total finance income/(costs) - fair value accounting - (8,108) 2,650
Total finance costs - non-cash interest expense related to sale of future (43,908) (8,058) (10,159)
royalties
Finance income/(costs), net (32,735) 4,773 5,078
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, 2025 and 2023, 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 in 2025 and 2023 amounted to 1,117,792 and
1,509,900 shares, respectively.
Earnings/(Loss) Attributable to Owners of the Group:
2025 2024 2023
Basic $ Diluted $ Basic $ Diluted $ Basic $ Diluted $
Income/(loss) for the year, attributable to the owners of the Group (109,739) (109,739) 53,510 53,510 (65,697) (65,697)
Weighted-Average Number of Ordinary Shares:
2025 2024 2023
Basic Diluted Basic Diluted Basic Diluted
Issued ordinary shares at January 1, 239,421,312 239,421,312 271,853,731 271,853,731 278,566,306 278,566,306
Effect of shares issued & treasury shares purchased 1,366,273 1,366,273 (17,397,423) (17,397,423) (2,263,773) (2,263,773)
Effect of dilutive shares - - - 1,571,612 - -
Weighted average number of ordinary shares at December 31, 240,787,585 240,787,585 254,456,308 256,027,920 276,302,533 276,302,533
Earnings/(Loss) per Share:
2025 2024 2023
Basic $ Diluted $ Basic $ Diluted $ Basic $ Diluted $
Basic and diluted earnings/(loss) per share (0.46) (0.46) 0.21 0.21 (0.24) (0.24)
13. Property and Equipment
Cost Laboratory and Manufacturing Equipment Furniture and Computer Equipment and Leasehold Improvements Construction in Total
$ Fixtures Software $ process $
$ $ $
Balance as of January 1, 2024 5,363 1,072 917 15,165 1 22,518
Additions, net of transfers 246 - 11 - - 256
Disposals (2,215) - (387) - (1) (2,602)
Deconsolidation of subsidiaries (246) - (11) - - (256)
Balance as of December 31, 2024 3,148 1,072 530 15,165 - 19,916
Additions, net of transfers - 6 - - - 6
Disposals (1,313) - (266) - - (1,578)
Balance as of December 31, 2025 1,836 1,078 264 15,165 - 18,343
Accumulated depreciation and impairment loss Laboratory and Manufacturing Equipment Furniture and Computer Equipment and Leasehold Improvements Construction in Total
$ Fixtures Software $ process $
$ $ $
Balance as of January 1, 2024 (4,142) (698) (894) (7,248) - (12,982)
Depreciation (139) (153) (13) (1,503) - (1,807)
Disposals/Impairment 1,485 - 376 - - 1,861
Deconsolidation of subsidiaries 81 - - - - 81
Balance as of December 31, 2024 (2,715) (851) (530) (8,751) - (12,847)
Depreciation - (154) - (1,431) - (1,585)
Disposals/Impairment 1,025 - 266 - - 1,291
Balance as of December 31, 2025 (1,691) (1,005) (264) (10,181) - (13,141)
Property and Equipment, net Laboratory and Manufacturing Equipment Furniture and Computer Equipment and Leasehold Improvements Construction in Total
$ Fixtures Software $ process $
$ $ $
Balance as of December 31, 2024 433 221 - 6,414 - 7,069
Balance as of December 31, 2025 145 74 - 4,983 - 5,202
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 $1,585, $1,807 and $2,955 for the years ended December
31, 2025, 2024 and 2023, respectively.
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
activities of intangible assets is as follows:
Cost Licenses
$
Balance as of January 1, 2024 906
Write-off (80)
Deconsolidation of subsidiary (225)
Balance as of December 31, 2024 601
Balance as of December 31, 2025 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.
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 $1,596 and $1,642 as of December 31, 2025
and 2024, respectively.
16. Equity
Total equity for the Group as of December 31, 2025, and 2024, was as follows:
December 31, 2025 December 31, 2024
$ $
Equity
Share capital, £0.01 par value, issued and paid 257,927,489, as of December 4,860 4,860
31, 2025 and 2024
Share premium 290,262 290,262
Treasury shares, 16,243,451 and 18,506,177 as of December 31, 2025 and 2024, (41,154) (46,864)
respectively
Merger reserve 138,506 138,506
Translation reserve 182 182
Other reserves (3,352) (4,726)
Retained earnings/(accumulated deficit) (77,231) 32,486
Equity attributable to owners of the Group 312,073 414,707
Non-controlling interests (6,397) (6,774)
Total equity 305,676 407,933
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, 2025 and December 31, 2024, the Group's issued share
capital was 257,927,489 shares, including 16,243,451 shares and 18,506,177
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.
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 was reduced to $0 upon deconsolidation.
The fair value of all subsidiary preferred shares as of December 31, 2025 and
December 31, 2024 was $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, 2025 and December 31, 2024, 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:
2025 2024
$ $
Balance as of December 31,
Entrega 2,216 2,216
Follica 6,405 6,405
Total minimum liquidation preference 8,621 8,621
For the years ended December 31, 2025 and 2024, the Group recognized the
following changes in the value of subsidiary preferred shares:
2025 2024
$ $
Balance as of January 1, 169 169
Issuance of Seaport preferred shares - financing cash flow - 68,100
Increase in value of preferred shares measured at fair value - finance income - 8,108
Deconsolidation of subsidiary - (Seaport) - (76,208)
Balance as of December 31, 169 169
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 from 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 judgment.
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 $3,456 in 2025 for the royalties received from BMS for the sales of
Cobenfy from the fourth quarter of 2024 through the third quarter of 2025. For
the year ended December 31, 2025, the Group recognized $4,659 royalty revenue
from BMS' sale of Cobenfy. The royalties for the fourth quarter of 2025 was
paid to Royalty Pharma in February 2026.
The following shows the activity in respect of the sale of future royalties
liability:
Sale of future royalties liability
$
Balance as of 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
Payments to Royalty Pharma (3,456)
Non-cash interest expense recognized 43,908
Balance as of December 31, 2025 183,669
Sale of future royalties liability, current 13,247
Sale of future royalties liability, non-current 170,422
19. Financial Instruments
The Group's financial instruments consist of financial assets in the form of
convertible notes, investment in shares, and financial liabilities, including
notes and 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 Description
Hierarchy Level
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, 2025 and December 31, 2024, 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 are recorded in finance income/(costs) - fair value
accounting in the Consolidated Statement of Comprehensive Income/(Loss).
Investments Held at Fair Value
The Group has immaterial investments in listed entities on an active exchange,
and as such, the fair value of these investments as of December 31, 2025 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, 2025, the Group accounted for the following investments
under IFRS 9 as investments held at fair value with changes in fair value
through profit and loss: Seaport preferred shares, Vedanta preferred shares,
and Sonde preferred A-2 and B shares. 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, 2025, the Group recorded such investments at fair value and
recognized a gain of $39,074 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:
Level 3 Investments held at fair value Balance under IFRS 9 Equity method loss recorded against LTI Carrying Amount $
$ $
Balance as of January 1, 2024 24,872 - 24,872
Deconsolidation of Seaport - new investment in Seaport preferred shares 179,248 - 179,248
Gain/(loss) on changes in fair value (10,361) - (10,361)
Equity method loss recorded against LTI - (5,307) (5,307)
Balance as of December 31, 2024 193,758 (5,307) 188,452
Investment in Vedanta preferred shares 888 - 888
Conversion of Vedanta note to preferred shares 2,836 - 2,836
Gain/(loss) on changes in fair value 39,074 - 39,074
Equity method loss recorded against LTI, net - (13,831) (13,831)
Balance as of December 31, 2025 236,557 (19,138) 217,419
The changes in fair value of investments held at fair value are recorded in
gain/(loss) on investments held at fair value in the Consolidated Statement of
Comprehensive Income/(Loss).
As of December 31, 2025, the Group's material investment held at fair value
categorized as Level 3 in the fair value hierarchy included the preferred
shares of Seaport with fair value of $236,003. The significant unobservable
inputs used at December 31, 2025 in the fair value measurement of this
investment and the sensitivity of the fair value measurement to changes in
these significant unobservable inputs are summarized in the table below.
As of December 31, 2025 Investment Measured through
Market Backsolve & PWERM
Unobservable Inputs Input Value Sensitivity Range Fair Value Increase/(Decrease) $
Equity Value 689,748 -10% (24,667)
+10% 24,634
Probability of entering into an initial public offering ("IPO")* 50% -10% (5,270)
+10% 5,270
*Assumed the IPO event occurs on June 30, 2026.
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, 2025. Whilst the Group considers the
methodologies and assumptions used in the fair value measurement to be
supportable and reasonable based on a number of factors, including stage of
development for underlying programs and market conditions, 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, 2025 and 2024, the investment in notes from associates was
$11,417 and $17,731, respectively. The balance as of December 31, 2025
represents the fair value of convertible promissory notes issued by Gelesis
with a principal value of $26,850. The balance as of December 31, 2024
represents the fair value of the aforementioned convertible debt issued by
Gelesis as well as the convertible promissory note issued by Vedanta with a
principal value of $5,000. The Vedanta convertible note was converted into
shares of Vedanta Series A-1 preferred stock in August 2025. See Note 5.
Investments Held at Fair Value. As a result, the Vedanta convertible
promissory note is no longer outstanding.
During the year ended December 31, 2025, the Group recorded a loss of $3,628
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 loss was primarily driven by a decrease of
$3,514 in the fair value of the Vedanta convertible note prior to its
conversion.
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 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 legal and administrative costs
incurred by the Bankruptcy Court. As of December 31, 2025 and 2024, these
notes were determined to have a fair value of $11,417 and $11,381,
respectively.
The convertible debt issued by Vedanta was valued at the conversion date using
a probability-weighted backsolve approach.
Fair Value Measurement and Classification
The fair value of financial instruments by category as of December 31, 2025
and 2024:
2025
Carrying Amount Fair Value
Financial Assets Financial Liabilities Level 1 Level 2 Level 3 Total
$ $ $ $ $ $
Financial assets(1):
Money Markets(2) 97,447 - 97,447 - - 97,447
Investment in notes from associates 11,417 - - - 11,417 11,417
Investments held at fair value(3) 217,426 - 7 - 217,419 217,426
Total financial assets 326,290 - 97,454 - 228,836 326,290
Financial liabilities:
Subsidiary preferred shares - 169 - - 169 169
Share-based liability awards - 3,044 - - 3,044 3,044
Total financial liabilities - 3,213 - - 3,213 3,213
1. Excluded from the table above are short-term investments of $24,829 and
cash equivalent of $124,538 that are classified at amortized cost as of
December 31, 2025. The cost of these short-term investments and cash
equivalent approximates current fair value.
2. Included within cash and cash equivalents.
3. The carrying amount of $217,419 reflects the fair value of $236,557 as
of December 31, 2025, net of $19,138 in equity method loss allocated to the
long-term interest.
2024
Carrying Amount Fair Value
Financial Assets Financial Liabilities Level 1 Level 2 Level 3 Total
$ $ $ $ $ $
Financial assets(1):
Money Markets(2) 181,716 - 181,716 - - 181,716
Investment in notes from associates 17,731 - - - 17,731 17,731
Investments held at fair value(3) 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.
3. The carrying amount of $188,452 reflects the fair value of $193,758 as of
December 31, 2024, net of $5,307 in equity method loss allocated to the
long-term interest.
20. Subsidiary Notes Payable
The subsidiary notes payable was comprised of loans as of December 31, 2025
and 2024 with a balance of $4,916 and $4,111, respectively. It also included
convertible notes of $260 as of December 31, 2023. These instruments do not
contain embedded derivatives, and therefore, are held at amortized cost.
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 Total
$ $ $
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 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, 2025 and 2024, non-controlling interests included Entrega
and Follica. Ownership interests of the non-controlling interests in these
entities as of December 31, 2025 were 11.7%, and 19.9%, respectively. There
was no change from December 31, 2024, in the ownership interests of the
non-controlling interests in these two entities. 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. See Note 8. Gain/(loss) on Deconsolidation of Subsidiary.
The following table summarizes the changes in the non-controlling ownership
interest in subsidiaries:
Non-Controlling Interest
$
Balance as of January 1, 2023 5,369
Share of comprehensive income/(loss) (931)
Equity settled share-based payments 277
Expiration of share options in subsidiary (1,458)
Deconsolidation of subsidiary (Vedanta) (9,085)
Other (6)
Balance as of December 31, 2023 (5,835)
Share of comprehensive income/(loss) (25,728)
Equity settled share-based payments 17,372
Deconsolidation of subsidiary (Seaport) 7,430
Other (13)
Balance as of December 31, 2024 (6,774)
Share of comprehensive income/(loss) (345)
Equity settled share-based payments - See Note 10. Share-based Payments 758
Expiration of share options in subsidiary (36)
Balance as of December 31, 2025 (6,397)
22. Trade and Other Payables
Information regarding Trade and other payables was as follows:
Balance as of December 31, 2025 2024
$ $
Trade payables 3,070 5,522
Accrued expenses 18,273 18,705
Liability for share-based awards, short-term 1,827 1,875
Other 15 917
Total trade and other payables 23,185 27,020
23. Leases and subleases
The activity related to the Group's right of use asset and lease liability for
the years ended December 31, 2025 and 2024 is as follows:
Right of use asset, net
2025 2024
$ $
Balance as of January 1, 8,061 9,825
Depreciation (1,764) (1,764)
Balance as of December 31, 6,297 8,061
Total lease liability
2025 2024
$ $
Balance as of January 1, 18,250 21,644
Cash paid for rent - principal - financing cash flow (3,579) (3,394)
Cash paid for rent - interest - operating cash flow (1,065) (1,295)
Interest expense 1,065 1,295
Balance as of December 31, 14,671 18,250
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 Consolidated Statement of
Comprehensive Income/(Loss). The Group recorded depreciation expense of
$1,764, $1,764 and $1,979 for the years ended December 31, 2025, 2024 and
2023, respectively.
The following table details the short-term and long-term portion of the lease
liability as of December 31, 2025 and 2024:
Total lease liability
2025 2024
$ $
Short-term portion of lease liability 3,584 3,579
Long-term portion of lease liability 11,087 14,671
Total lease liability 14,671 18,250
The following table details the future maturities of the lease liability,
showing the undiscounted lease payments to be paid after the reporting date:
2025
$
Less than one year 4,419
One to two years 4,551
Two to three years 4,687
Three to four years 2,796
Four to five years -
More than five years -
Total undiscounted lease maturities 16,452
Interest 1,781
Total lease liability 14,671
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 expired 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 was initially 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 annual lease fee was $1,111 per year. The lease term was for two years
from the rent commencement date, and Allonnia had the option to extend the
sublease. In February 2024, Allonnia extended the lease term through May 31,
2026. The annual lease fee increased to $1,279 per year. In May 2025,
Allonnia extended the lease term through June 26, 2027. The average annual
lease fee increased to $1,384 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.
Rental income recognized by the Group during the year ended December 31,
2025, 2024, and 2023 was $1,238, $1,053, and $781 respectively, which was
included in the other income/(expense) line item in the Consolidated Statement
of Comprehensive Income/(Loss).
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:
2025 2024
$ $
Balance as of December 31,
Cash and cash equivalents 252,470 280,641
Short-term investments 24,829 86,666
Trade and other receivables 1,758 1,522
Total 279,057 368,828
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, 2025 and 2024, 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, 2025 and 2024, based on
contractual undiscounted payments:
Balance as of December 31, 2025
Carrying Amount Within Three Months Three to Twelve Months One to Five Years Total
$
$
$
$
$ (*)
Subsidiary notes payable (Note 20) 4,916 4,916 - - 4,916
Trade and other payables (Note 22) 23,185 23,185 - - 23,185
Tax liability (Note 27) 1,208 - 1,208 - 1,208
Subsidiary preferred shares (Note 17)(1) 169 169 - - 169
Total 29,477 28,269 1,208 - 29,477
Balance as of December 31, 2024
Carrying Amount Within Three Months Three to Twelve Months One to Five Years Total
$
$
$
$
$ (*)
Subsidiary notes payable (Note 20) 4,111 4,111 - - 4,111
Trade and other payables (Note 22) 27,020 27,020 - - 27,020
Tax liability (Note 27) 75 75 - - 75
Subsidiary preferred shares (Note 17)(1) 169 169 - - 169
Total 31,375 31,375 - - 31,375
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
Interest Rate Sensitivity
As of December 31, 2025, the Group had cash and cash equivalents of $252,470,
and short-term investments of $24,829. 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, 2025. 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 $217,426 and $11,417, respectively, as of December 31,
2025, 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, 2025, the investments in associates include Sonde and Seaport,
and the carrying amounts of the investments under the equity method were $0.
Accordingly, the Group views the risk as low.
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. These common shares were sold in 2025. As of December
31, 2025, the Group held immaterial investments in listed entities on an
active exchange. As such, 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.
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 royalties on
future sales. As of December 31, 2025, 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 $7,121, respectively, as of December 31, 2025 and December 31, 2024. 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, 2025 and December
31, 2024, the noncancellable commitments in respect of such contracts amounted
to approximately $4,308 and $8,395, 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 represented management's
best estimate of the expected settlement related to the financial obligation
associated with the lawsuit, considering the likelihood of settlement. During
the year ended December 31, 2025, a settlement was reached, and payments in
the amounts of $850 and $89 were made in June 2025 and July 2025,
respectively.
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 in the years ended December 31, 2025 and
2024.
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 $0 as
Gelesis ceased operations and filed for bankruptcy. The Group recorded $23 of
interest income with respect to the sublease during the year ended December
31, 2023, which is presented within finance income in the Consolidated
Statement of Comprehensive Income/(Loss).
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:
2025 2024 2023
$ $ $
For the years ended December 31,
Short-term employee benefits 3,918 5,166 9,714
Post-employment benefits 76 61 41
Termination benefits 408 395 417
Share-based payment expense 2,174 2,540 599
Total 6,576 8,161 10,772
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, 2025 and 2024, the payable due to the key
management employees was $1,613, and $1,509, respectively.
In addition, the Group incurred remuneration expense for non-executive
directors in the amounts of $673, $670 and $475 for the years ended December
31, 2025, 2024 and 2023, respectively. Also, the Group incurred $574, $501 and
$373 of share-based compensation expense for such non-executive directors for
the years ended December 31, 2025, 2024 and 2023, respectively.
During 2025, the Group entered into an agreement with a contract research,
development, and manufacturing organization whose board chairperson is also a
non-executive director of the Group. As of December 31, 2025, $210 was
included in the Consolidated Statement of Financial Position as an accounts
payable to this related party, of which $58 was expensed during the year in
connection with this related party agreement.
During the years ended December 31, 2025, 2024 and 2023, the Group incurred
$46, $34, and $46 respectively, of expenses from other related parties.
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).
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, 2025:
Business name (share class) Number of shares held as of December 31, 2025 Number of options held as of December 31, 2025 Number of RSUs held as of December 31, 2025 Ownership
interest¹
Directors:
Dr Robert Langer Entrega (Common) 250,000 82,500 - 4.35%
Dr John LaMattina Vedanta Biosciences (Common) 2,500 427,416 - 0.15%
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%
Kiran Mazumdar-Shaw Seaport Therapeutics (Preferred B)(3) 21,052 - - 0.01%
Senior Managers:
Eric Elenko Seaport Therapeutics (Common) 950,000 - - 0.63%
1 Ownership interests as of December 31, 2025 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.
2 Dr. John and Ms. Mary LaMattina hold 21,052 Series B preferred shares
of Seaport Therapeutics.
3 Shares owned through Glentec International.
Directors and senior managers hold 7,522,370 ordinary shares and 3.1% voting
rights of the Group as of December 31, 2025. This amount excludes options to
purchase 422,221 ordinary shares. This amount also excludes 2,535,651 shares,
which are issuable based on the terms of performance-based RSU awards granted
to certain senior managers covering the financial years from 2023 to 2027, and
2,180,815 shares of time-based RSUs to senior managers, which vest primarily
over 3 years. Such shares will be issued to such senior managers 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. This amount also excludes 469,720 shares, which are issuable to
non-executive directors immediately prior to the Group's 2026 Annual General
Meeting of Stockholders, based on the terms of the RSU awards granted to
non-executive directors in 2025.
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, Sonde, and Vedanta to the Group.
As of December 31, 2025, and 2024 the Group had receivables outstanding from
Seaport in the amounts of $7, and $408, respectively.
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, 2025, 2024 and 2023, the Group filed a
consolidated U.S. federal income tax return that included all subsidiaries in
which the Group owned greater than 80% of the vote and value. For the years
ended December 31, 2025, 2024 and 2023, 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):
2025 2024 2023
$ $ $
For the year ended December 31,
Income/(loss) for the year (110,084) 27,782 (66,628)
Income tax expense/(benefit) (842) (4,008) 30,525
Income/(loss) before taxes (110,927) 23,774 (36,103)
Recognized Income Tax Expense/(Benefit):
2025 2024 2023
$ $ $
For the year ended December 31,
Federal - current 874 35,310 (2,246)
State - current 1,018 13,144 (46)
Total current income tax expense/(benefit) 1,892 48,454 (2,292)
Federal - deferred (2,734) (46,442) 29,294
State - deferred - (6,020) 3,523
Total deferred income tax expense/(benefit) (2,734) (52,462) 32,817
Total income tax expense/(benefit), recognized (842) (4,008) 30,525
The income tax expense/(benefit) was $(842), $(4,008) and $30,525 for the tax
years ended December 31, 2025, 2024 and 2023, respectively.
The income tax benefit recognized in 2025 was primarily due to capital loss
generated on the sale of the Vor Biopharma investment and general business tax
credits, partially offset by the recognition of a reserve for uncertain tax
positions related to a state audit.
The income tax benefit recognized in 2024 was primarily attributable to the
recognition of a deferred tax asset, which was generated in 2024 from the sale
of the Group's investment in Akili common stock. This deferred tax asset 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.
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:
2025 2024 2023
For the year ended December 31, $ % $ % $ %
US federal statutory rate (23,295) 21.00 4,994 21.00 (7,573) 21.00
State taxes, net of federal effect (5,664) 5.11 1,026 4.32 (3,974) 11.01
Tax credits (1,772) 1.60 (2,517) (10.59) (9,167) 25.39
Stock-based compensation 777 (0.70) 2,123 8.93 589 (1.63)
Finance income/(costs) - fair value accounting 769 (0.69) 1,640 6.90 (556) 1.54
Loss with respect to associate for which no deferred tax asset is recognized 639 (0.58) 210 0.88 249 (0.69)
Revaluation of deferred due to rate change (271) 0.24 (3,419) (14.38) - -
Nondeductible compensation 505 (0.46) 1,534 6.45 872 (2.42)
Recognition of deferred tax assets and tax benefits not previously recognized (962) 0.87 (12,396) (52.14) (433) 1.20
Unrecognized deferred tax asset - - - - 83,984 (232.63)
Deconsolidation of subsidiary - - 3,863 16.25 (17,506) 48.49
Cancellation of Debt Income - - (987) (4.15) - -
Current year losses and credits for which no deferred tax asset is recognized 27,288 (24.60) - - - -
Uncertain tax positions 1,208 (1.09) - - - -
Other (66) 0.06 755 3.16 1,321 (3.65)
Worthless stock deduction - - (833) (3.50) (17,281) 47.87
(842) 0.76 (4,008) (16.86) 30,525 (84.52)
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).
Deferred Tax Assets and Liabilities
Deferred tax assets have been recognized in the U.S. jurisdiction in respect
of the following items:
2025 2024
$ $
For the year ended December 31,
Operating tax losses 33,810 2,621
Tax credits 272 238
Share-based payments 5,989 6,206
Capitalized research & development expenditures 40,696 48,904
Lease liability 3,912 4,851
Sale of future royalties 53,321 42,406
Deferred tax assets 137,999 105,226
Investments held at fair value (31,289) (23,565)
Right of use assets (1,679) (2,143)
Property and equipment, net (796) (1,235)
Investment in associates - (637)
Other temporary differences (2,198) (1,900)
Deferred tax liabilities (35,962) (29,480)
Deferred tax assets (liabilities), net 102,037 75,746
Deferred tax assets (liabilities), net, not recognized 102,037 75,746
As of December 31, 2025, 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 $102,037 are primarily
related to capitalized research & development expenditures, net operating
loss carryforwards 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.
2025 2024
$ $
For the year ended December 31,
Gross Amount Tax Effected Gross Amount Tax Effected
Deductible temporary difference 254,843 67,955 274,227 72,887
Tax losses* 123,691 33,810 7,815 2,621
Tax credits 272 272 238 238
Total 378,806 102,037 282,280 75,746
* The gross amount in the table above represents federal tax losses;
tax-effected amounts reflect both federal and state net operating losses. See
the footnote disclosure below for details on gross state tax net operating
losses carryforwards.
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, 2025 2024
$ $
Gross Amount Tax Effected Gross Amount Tax Effected
Tax losses expiring:
Within 10 years 2,382 593 1,537 416
More than 10 years 2,440 7,604 3,285 729
Available Indefinitely 118,870 25,613 2,993 1,476
Total* 123,691 33,810 7,815 2,621
Tax credits expiring:
Within 10 years 91 91 44 44
More than 10 years 181 181 194 194
Available indefinitely - - - -
Total 272 272 238 238
* The gross amount in the table above represents federal tax losses;
tax-effected amounts reflect both federal and state net operating losses. See
the footnote disclosure below for details on gross state tax net operating
losses carryforwards.
The Group had U.S. federal net operating losses carry forwards ("NOLs") of
$123,691, $7,815 and $13,681 as of December 31, 2025, 2024 and 2023,
respectively, which are available to offset future taxable income. These NOLs
expire through 2037 with the exception of $118,870, 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 $272,
$238 and $1,396 as of December 31, 2025, 2024 and 2023, respectively, which
are available to offset future taxes that expire at various dates through
2044. 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 $376,066, $125,322 and $111,446 for the years ended December 31,
2025, 2024 and 2023, respectively, which are available to offset future
taxable income. These NOLs expire at various dates beginning in 2030. These
NOLs 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, 2025. 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 Consolidated Statement of Financial
Position are as follows:
For the year ended December 31, 2025 2024
$ $
Income tax receivable - current 6,372 -
Tax liability - current (1,208) (75)
Uncertain Tax Positions
The Group has recorded an uncertain tax position reserve of approximately
$1,208 as of December 31, 2025, inclusive of interest and penalties, related
to a state audit. 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, 2025, up to the
date of issuance, April 29, 2026, 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.
Parent Company Statement of Financial Position
For the years ended December 31
2025 2024
$000s $000s
Note
Assets
Non-current assets
Investment in subsidiary 2 470,476 462,734
Total non-current assets 470,476 462,734
Current assets
Cash and cash equivalents 25,976 26,323
Total current assets 25,976 26,323
Total assets 496,451 489,057
Equity and liabilities
Equity
Share capital 3 4,860 4,860
Share premium 3 290,262 290,262
Treasury stock 3 (41,154) (46,864)
Merger reserve 3 138,506 138,506
Other reserve 3 27,745 26,407
Retained earnings 3 41,972 44,574
Total equity 462,191 457,746
Current liabilities
Trade and other payables 1,465 3,661
Intercompany payables 4 32,795 27,650
Total current liabilities 34,260 31,311
Total equity and liabilities 496,451 489,057
Please refer to the accompanying notes to the PureTech Health plc financial
information ("Notes"). Registered number: 09582467.
As permitted by Section 408 of the Companies Act 2006, the Parent Company's
profit and loss account is not presented. The Parent Company's net loss for
the year was $2,624 (2024: net income of $107,421).
The PureTech Health plc financial statements were approved by the Board of
Directors and authorized for issuance on April 29, 2026 and signed on its
behalf by:
Robert Lyne
Chief Executive Officer
April 29, 2026
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 Share Shares Amount Merger Reserve Other Reserve Retained earnings/ (Accumulated Total equity
$000s Premium $000s $000s $000s deficit) $000s
$000s $000s
Balance January 1, 2024 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
Exercise of stock options - - - 65,000 164 - (58) - 106
Equity-settled share-based payments - - - - - - 6,338 - 6,338
Settlement of restricted stock units - - - 2,197,726 5,544 - (4,942) - 603
Other - - - - 1 - - 22 23
Net income/(loss) - - - - - - - (2,624) (2,624)
Balance December 31, 2025 257,927,489 4,860 290,262 (16,243,451) (41,154) 138,506 27,745 41,972 462,191
The accompanying Notes are an integral part of these financial statements.
Notes to the Financial Statements
(amounts in thousands, except share and per share data)
1. Material accounting policies
Basis of Preparation and Measurement
The financial statements of PureTech Health plc (the "Parent") are presented
as of December 31, 2025 and 2024, and for the years ended December 31, 2025
and 2024, 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 in subsidiary 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.
Significant Accounting Estimates and Judgments
In preparing these financial statements, management has made judgments,
estimates and assumptions that affect the application of the accounting
policies and the reported amount of assets, liabilities, income and expenses.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimate is revised and in any future periods affected.
There is a significant estimate for the Parent in determining the recoverable
amount of the investment in its subsidiary. The related sensitivities are
detailed in note 2 of the Parent financial statements.
2. Investment in subsidiary
$
Balance at January 1, 2023 452,374
Equity-settled share-based payments granted to employees and service providers 4,489
in subsidiaries
Balance at December 31, 2023 456,864
Equity-settled share-based payments granted to employees and service providers 5,870
in subsidiaries
Balance at December 31, 2024 462,734
Equity-settled share-based payments granted to employees and service providers 7,742
in subsidiaries
Balance at December 31, 2025 470,476
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 2023, 2024 and 2025, 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 settlement of share-based
payments through equity by the Parent.
As of December 31, 2025, the Parent performed an impairment assessment on its
investment in subsidiary using the fair value less cost to sell approach. The
fair value less cost to sell was calculated using the Parent's publicly traded
stock price, adjusted for a reasonable control premium and estimated selling
costs, based on market norms. The carrying amount of its investment in
subsidiary was 13.5% lower than the implied market capitalization. After
applying an estimated control premium, the Parent determined that the
investment in its subsidiary was not impaired as of December 31, 2025.
A sensitivity analysis indicates that a 1% stock price variation would affect
the investment's fair value by $4,716, while a 1% change in the control
premium would alter the value by $4,068. The impairment assessment follows FRS
102, reflecting key management judgement regarding a reasonable control
premium and estimated associated selling costs.
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, 2025 and 2024, other reserves increased by
$1,338 and $4,811, 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.
As of December 31, 2025 and 2024, the Group's issued share capital was
257,927,489 shares, including 16,243,451 shares and 18,506,177 shares
repurchased under the share repurchase program, and were held by the Group in
treasury, respectively. All issued share capital is fully paid.
4. Intercompany payables
As of December 31, 2025 and 2024, the Parent had a balance due to its
operating subsidiary PureTech LLC of $32,795 and $27,650, respectively,
which is related to IPO costs and operating expenses. These intercompany
payables do not bear any interest and are repayable upon demand.
5. 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 2025 or 2024.
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