REG - PureTech Health PLC - PRTC Launches Seaport w/ $100M; Leadership Changes

Puretech HealthAnnouncement

09/04/2024 07:00

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RNS Number : 7636J  PureTech Health PLC  09 April 2024

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF THE MARKET ABUSE REGULATION (EU 596/ 2014) AS IT FORMS PART
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9 April 2024

PureTech Health plc

 

PureTech Launches Seaport Therapeutics with $100 Million Oversubscribed Series
A and Announces Management Transitions

 

Bharatt Chowrira, Ph.D., J.D., named Chief Executive Officer of PureTech;

PureTech Co-founder, Eric Elenko, Ph.D., promoted to President

 

PureTech Founding Chief Executive Officer, Daphne Zohar, to lead Seaport as
Chief Executive Officer, together with former Karuna Chief Executive Officer
and Chair, Steven M. Paul, M.D., as Chairman

 

PureTech Health plc (http://www.puretechhealth.com/) (Nasdaq: PRTC, LSE: PRTC)
("PureTech" or the "Company"), a clinical-stage biotherapeutics company
dedicated to changing the lives of patients with devastating diseases, today
announced key progress on its strategic initiatives to deliver innovative
medicines to patients and unlock value for shareholders.

 

Seaport Therapeutics i  (#_edn1)

Seaport Therapeutics ("Seaport"), the latest Founded Entity to be created by
PureTech, today announced that it has raised $100 million ii  (#_edn2) in an
oversubscribed Series A financing with participation from top tier biotech
investors ARCH Venture Partners, Sofinnova Investments and Third Rock Ventures
to support the development of a novel clinical-stage pipeline of
neuropsychiatric medicines created and initially developed internally at
PureTech. Seaport will be led by Daphne Zohar along with Founder Steven M.
Paul, M.D., who is the former Chief Executive officer of Karuna Therapeutics
("Karuna"), another CNS-focused PureTech Founded Entity that was recently
acquired by Bristol Myers Squibb for $14 billion
(https://news.puretechhealth.com/news-releases/news-release-details/14b-acquisition-prtcs-karuna-bms-completed)
. Seaport was established by PureTech to advance certain neuropsychiatric
programs and relevant Glyph(TM) intellectual property. Following the Series A
financing, PureTech will hold equity ownership in Seaport of 61.5 percent on a
diluted basis.

 

Executing on PureTech's Hub-and-Spoke Strategy

Consistent with its model, PureTech has internally advanced Seaport's
neuropsychiatric medicines programs to a key inflection point such that the
pipeline can now drive value for PureTech through an equity stake and license
consideration. This enables PureTech to share the significant costs of
later-stage development with outside investors and direct additional resources
to its innovative R&D engine for the creation and validation of new
therapeutic candidates. This same approach yielded PureTech's Karuna, which
resulted in approximately $1.1 billion in gross proceeds for PureTech to date
after the Company directed $18.5 million to Karuna's founding and internal
development. Under its license agreement with Karuna, PureTech retains the
right to receive milestone payments upon the achievement of certain regulatory
approvals. PureTech is also owed certain royalties on net sales and is
eligible to receive up to $400 million in milestone payments under its
agreement with Royalty Pharma. iii  (#_edn3)

 

PureTech's business model is designed to repeat and scale this type of outcome
with rigorous financial discipline. Proceeds are recycled into the support of
new programs and returns to shareholders while maintaining at least three
years of operating cash runway. The platform supporting Seaport's pipeline is
one of several programs advanced during a period in which PureTech largely
fueled its internal development with funds generated from Founded Entity
monetization events, and PureTech has not needed to raise capital from the
public markets in six years.

 

Management Transitions

As part of the strategic advancement of Seaport, Daphne Zohar, PureTech's
founding Chief Executive Officer and a successful entrepreneur with a
longstanding passion for developing neuropsychiatric medicines, will
transition into the role of Seaport's Chief Executive Officer. Ms. Zohar will
formally step down from the board of directors of PureTech with immediate
effect and has agreed to serve as a senior advisor and observer to the board
of directors of PureTech.

 

Long-term PureTech senior executive, Bharatt Chowrira, Ph.D., J.D., has been
named Chief Executive Officer of PureTech effective as of today and will
therefore continue to serve as a director of PureTech. Eric Elenko, Ph.D., a
PureTech co-founder and current Chief Innovation Officer, has been promoted to
the role of President of PureTech.

 

A 30-year veteran of the biotech industry, Dr. Chowrira has been a member of
the PureTech senior management team since March 2017, serving as the Company's
President and Chief Business, Finance and Operating Officer and as a member of
the Board of Directors. Prior to joining PureTech, he held leadership roles
including Chief Executive Officer, Chief Operating Officer and General Counsel
in multiple biotech companies, including Auspex Pharmaceuticals Inc., which
was acquired by Teva Pharmaceuticals for $3.5 billion, and Sirna Therapeutics,
which was acquired by Merck & Co. for $1.1 billion, and was also a Vice
President at Merck & Co.

 

Commenting on today's announcements, Dr. Chowrira said:

 

"I am excited to step into the CEO role and to lead PureTech through this next
phase of its evolution. We have demonstrated the evergreen success of our
hub-and-spoke R&D model of venture creation, where we are able to recycle
proceeds from our Founded Entities into both the funding of our current and
future programs to change patients' lives and capital returns for
shareholders. As we continue to derive value from our existing pipeline, we
will focus on what we have always done best: innovating the next wave of
highly differentiated medicines.

 

"Our fundamentals are centered on careful de-risking and streamlined
development internally, quickly de-prioritizing those programs that don't
achieve our prespecified thresholds for advancement to move resources to those
that are the most promising. We maintain 100 percent ownership of programs
until a key value inflection point is reached, and we then have the option to
pursue outside financial or strategic partners to advance these programs or to
continue development internally.

 

"This approach has enabled our R&D engine to be both very productive, as
demonstrated by the 28 therapeutics and therapeutic candidates it has
generated, and uniquely capital efficient - reflected in the fact that we have
not had to raise money from the public markets in more than six years and will
have returned $150 million to shareholders, pending shareholder approval of
our proposed $100 million tender offer
(https://news.puretechhealth.com/news-releases/news-release-details/puretech-proposes-100-million-capital-return)
, which is expected to be launched after the publication of the Company's Full
Year Results, subject to market conditions. This capital efficiency also
allows us to be selective in determining the best path forward for each of our
programs, and - as demonstrated today with the top tier syndicate of investors
now supporting Seaport - our discerning strategy has created tremendous value
internally that has not yet been appropriately recognized by the market.

 

"At Seaport Therapeutics, PureTech has brought together the proven team that
helped build Karuna and some of the investors that backed Karuna's initial
funding rounds. I am confident that following our well charted strategy of
starting with validated mechanisms and applying our proprietary Glyph
technology to solve previous limitations will enable Seaport to provide
important new options for patients with depression, anxiety and other
neuropsychiatric conditions."

 

"I would like to thank Daphne for her leadership since founding PureTech and
for shepherding the Company to this next phase. I am grateful that we will
continue to benefit from Daphne's entrepreneurial spirit while she transitions
to run one of our new Founded Entities to drive significant value for
PureTech. I look forward to continuing to work alongside our exceptional team,
and I fervently believe that with this proven R&D model, supported by a
robust balance sheet and strong management team, PureTech has all the
ingredients for tremendous, continued growth and success."

 

Reflecting on today's announcement, Daphne Zohar said:

 

"I am extremely proud of what the PureTech team has accomplished and the
pipeline of groundbreaking medicines which we have created that can have an
impact on the lives of millions of people. PureTech has now reached both
financial independence and the important inflection point of returning
capital. The team is positioned to excel and is infused with the spirit of
creativity that has been with us since the beginning. I will continue to work
on behalf of PureTech shareholders by advancing the exciting Seaport programs
through a structure that can help unlock their value for PureTech.

 

"PureTech is in a strong position with an innovative portfolio of new
medicines, stellar team and robust balance sheet, and I am pleased to be
passing the baton to Bharatt who is a respected executive in the biotech
industry and has been a key senior leader on our team over the last seven
years. I have confidence that under his leadership, together with my
co-founder Eric Elenko, who is now taking on the expanded role of President,
and other outstanding senior team and board members, PureTech will continue to
thrive, grow, and innovate on behalf of patients and shareholders. I look
forward to supporting PureTech as a senior advisor, board observer and
shareholder as it continues to deliver on its mission of 'Giving Life to
Science' to change patients' lives."

 

Interim Chair of the PureTech Board of Directors, Raju Kucherlapati, Ph.D.,
said:

 

"On behalf of the Board, I would like to thank Daphne for her vision,
leadership and dedication in founding and building PureTech. Daphne pioneered
the hub-and-spoke model to create cutting-edge medicines, assembled a leading
team and positioned PureTech for an exciting future and continued growth. I am
pleased we will have her ongoing participation. We are fortunate to have
someone with Bharatt's experience and deep knowledge of our business to step
into the role of Chief Executive Officer. He is the ideal person to
successfully lead PureTech through this next phase of growth."

 

The full text of the announcement from Seaport is as follows:

 

Seaport Therapeutics Launches with $100 Million Oversubscribed Series A
Financing Round to Advance Novel Neuropsychiatric Medicines

 

Daphne Zohar, Founding CEO of PureTech Health and Co-Founder of Karuna
Therapeutics, is Founder, Chief Executive Officer and Member of the Board of
Directors of Seaport

 

Steven M. Paul, M.D., former CEO and Chair of Karuna Therapeutics, President
of Lilly Research Laboratories, is Founder and Chair of the Board of Directors
of Seaport

 

BOSTON - Seaport Therapeutics (https://seaporttx.com/) , a clinical-stage
biopharmaceutical company that is charting a proven path in neuropsychiatry,
today announced the closing of a $100 million oversubscribed Series A
financing round. The round was co-led by ARCH Venture Partners and Sofinnova
Investments along with Third Rock Ventures and Seaport founder PureTech
Health. Seaport also announced the appointment of Daphne Zohar as Founder,
Chief Executive Officer and a member of the Board of Directors, and Steven M.
Paul, M.D., as Founder and Chair of the Board of Directors.

 

Seaport is advancing a clinical-stage pipeline of novel neuropsychiatric
medicines powered by its proprietary Glyph(TM) Technology Platform, which
leverages the lymphatic system to create new medicines building on clinically
validated mechanisms. The financing will support the rapid advancement of
Seaport's clinical-stage pipeline of first and best-in-class medicines as well
as further development of the Glyph platform, which has demonstrated clinical
proof-of-concept.

 

The company is built on a proven development strategy and is led by the team
that created and advanced the groundbreaking drug candidate KarXT
(xanomeline-trospium), which is now poised to be the first new class of
medicine in over 50 years for patients living with schizophrenia. Daphne
Zohar, the Chief Executive Officer of Seaport, is the founder and former CEO
of PureTech Health where she also co-founded Karuna Therapeutics. Under Ms.
Zohar's leadership, PureTech's R&D engine led to 28 new medicines,
including two that received U.S. FDA clearance and a third (KarXT) that has
been filed for FDA approval.

 

Dr. Paul, Founder and Chair of the Seaport Board of Directors, is the former
CEO and Chair of the Board of Directors of Karuna Therapeutics, which was
recently acquired by Bristol Myers Squibb. Dr. Paul is also the former
President of Research and Development at Eli Lilly, where he oversaw the
development of CNS drugs such as Zyprexa® and Cymbalta® as well as
xanomeline, where its anti-psychotic and pre-cognitive properties were
initially demonstrated.

 

"Major depression and anxiety disorders are among the most common, disabling
and potentially fatal of all medical conditions. Current standard-of-care
treatments provide inadequate relief for far too many patients. Seaport's
pipeline of investigational antidepressants and anxiolytics are well
positioned to more effectively treat these disorders and to help millions of
people and their families," said Steven M. Paul M.D. "Given the historically
low success rates within neuropsychiatric drug development, precisely solving
the previous limitations of clinically validated mechanisms improves the
probability of success and enables us to significantly accelerate
development."

 

"We are dedicated to bringing first and best-in-class medicines to those that
are suffering from depression, anxiety and other neuropsychiatric disorders,"
said Daphne Zohar, Founder and CEO of Seaport Therapeutics. "I'm excited to
deliver on this mission along with a stellar team of senior leaders and
investors."

 

All of the programs in Seaport's pipeline are based on the Glyph platform,
which is designed to enable and enhance oral bioavailability, avoid first-pass
metabolism and reduce hepatotoxicity and other side effects to advance active
drugs that were previously held back by those limitations. Seaport's most
advanced therapeutic candidate is SPT-300, iv  (#_edn4) which is an oral
prodrug of allopregnanolone, an endogenous neurosteroid, in development for
the treatment of anxious depression. Allopregnanolone has demonstrated
therapeutic benefit in a range of neuropsychiatric conditions, but it is only
approved as an intravenous infusion, which has limited the scope of its
clinical use. Using the Glyph platform, SPT-300 retains the activity and
potency of endogenous allopregnanolone in an oral form and has the potential
to capture the breadth of the natural biological response. In a Phase 2a
clinical trial, SPT-300 demonstrated proof-of-concept in a validated clinical
model of anxiety in healthy volunteers.

 

Seaport's pipeline also includes SPT-320, v  (#_edn5) a novel prodrug of
agomelatine being advanced for the treatment of Generalized Anxiety Disorder,
which uses the Glyph platform to bypass first-pass metabolism by the liver and
thus has the potential to lower its effective dose, reduce liver exposure and
eliminate the need for liver function monitoring that has held back
agomelatine. SPT-348, a prodrug of a non-hallucinogenic neuroplastogen in
development for the treatment of mood and other neuropsychiatric disorders,
leverages Glyph to create a potential first-in-class treatment with improved
pharmacokinetics and tolerability compared to conventional psychedelics.
Beyond these programs, Seaport has multiple discovery and preclinical programs
underway.

 

The additional members joining the Seaport Board of Directors are Robert
Nelsen (Managing Partner and Co-founder of ARCH Venture Partners), James
Healy, M.D., Ph.D. (Managing Partner of Sofinnova Investments), Eric Elenko,
Ph.D. (Co-founder and President of PureTech and Co-inventor of KarXT), and
Bharatt Chowrira Ph.D., (newly appointed Chief Executive Officer of PureTech).
Courtney Wallace (Venture Partner at Third Rock Ventures) is joining as Board
Observer.

 

"I'm thrilled to be partnering again with this outstanding team, led by Daphne
and Steve, to change lives for people with neuropsychiatric disorders," said
Robert Nelsen, Co-founder and Managing Director of ARCH Venture Partners. "We
were the lead investors in Karuna's Series A and Series B financing rounds,
and I'm excited to partner with these strong leaders again to deliver on
Seaport's proven strategy and robust pipeline and bring important new
medicines to patients."

 

"Seaport has the potential to meaningfully change the lives of patients with
neuropsychiatric disorders," said James Healy, M.D., Ph.D., Managing Partner
at Sofinnova Investments. "We've had the pleasure of knowing Steve and Daphne
for a number of years, as one of the investors in Karuna, and we believe this
team has the unique expertise to help solve the challenges of treating serious
mental health conditions. I am eager to support Seaport as an investor and
board member as the team continues to advance its clinical-stage pipeline of
novel therapeutics."

 

About the Glyphä Platform

Glyph is Seaport's proprietary technology platform which uses the lymphatic
system to enable and enhance the oral administration of drugs. With the Glyph
platform, drugs are absorbed like dietary fats through the intestinal
lymphatic system and transported into circulation. Seaport believes the Glyph
technology has the potential to be widely applied to many therapeutic
molecules that have high first-pass metabolism leading to low bioavailability
and/or side effects, including hepatotoxicity. The Glyph platform has been
refined at Seaport to efficiently generate multiple therapeutic candidates
within the company's pipeline. Seaport has exclusively licensed this
technology from Monash University based on the pioneering research of the
Porter research group, along with the co-inventors from PureTech Health and
Seaport. The group and its collaborators have published research in Nature
Metabolism (https://www.nature.com/articles/s42255-021-00457-w) , Frontiers in
Pharmacology (https://doi.org/10.3389/fphar.2022.879660) and the Journal of
Controlled Release
(https://www.sciencedirect.com/science/article/pii/S0168365921000717?via%3Dihub)
supporting the Glyph platform's capabilities.

 

About Seaport Therapeutics

Seaport Therapeutics is a clinical-stage biopharmaceutical company advancing
the development of novel neuropsychiatric medicines in areas of high unmet
patient needs. We have a proven strategy of advancing clinically validated
mechanisms previously held back by limitations we overcome with our
proprietary Glyph(TM) technology platform. All the therapeutic candidates in
our pipeline of first and best-in-class medicines are based on the Glyph
platform, which is uniquely designed to enable oral bioavailability, bypass
first-pass metabolism and reduce hepatotoxicity and other side effects. We are
led by an experienced team that was involved in inventing and developing KarXT
and other neuropsychiatric medicines and are guided by an extensive network of
renowned scientists, clinicians and key opinion leaders across neurological
specialties. For more information, please visit www.seaporttx.com
(http://www.seaporttx.com) .

 

About PureTech Health

PureTech is a clinical-stage biotherapeutics company dedicated to giving life
to new classes of medicine to change the lives of patients with devastating
diseases. The Company has created a broad and deep pipeline through its
experienced research and development team and its extensive network of
scientists, clinicians and industry leaders that is being advanced both
internally and through its Founded Entities. PureTech's R&D engine has
resulted in the development of 28 therapeutics and therapeutic candidates,
including two that have received both U.S. FDA clearance and European
marketing authorization and a third (KarXT) that has been filed for FDA
approval. A number of these programs are being advanced by PureTech or its
Founded Entities in various indications and stages of clinical development,
including registration enabling studies. All of the underlying programs and
platforms that resulted in this pipeline of therapeutic candidates were
initially identified or discovered and then advanced by the PureTech team
through key validation points.

 

For more information, visit www.puretechhealth.com
(http://www.puretechhealth.com/)  or connect with us on X (formerly Twitter)
@puretechh.

 

Cautionary Note Regarding Forward-Looking Statements

This press release contains 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 our expectations around our therapeutic candidates
and approach towards addressing major diseases, and our future prospects,
developments, and strategies. 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, those risks, uncertainties and other important factors
described under the caption "Risk Factors" in our Annual Report on Form 20-F
for the year ended December 31, 2022 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.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via a Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

Contact:

PureTech

Public Relations

publicrelations@puretechhealth.com (mailto:publicrelations@puretechhealth.com)

Investor Relations

IR@puretechhealth.com (mailto:IR@puretechhealth.com)

 

UK/EU Media

Ben Atwell, Rob Winder

+44 (0) 20 3727 1000

puretech@fticonsulting.com (mailto:puretech@fticonsulting.com)

 

US Media

Nichole Bobbyn

+1 774 278 8273

nichole@tenbridgecommunications.com
(mailto:nichole@tenbridgecommunications.com)

 

 i  (#_ednref1) Seaport's business and assets are described in more detail in
the press release issued by Seaport.

 ii  (#_ednref2) Includes participation by top tier biotech investors ARCH
Venture Partners, Sofinnova Investments and Third Rock Ventures alongside
PureTech's $32 million cash contribution. Following the Series A financing,
PureTech will hold equity ownership in Seaport of 61.5 percent on a diluted
basis. Additionally, as the founder of Seaport, PureTech also has a right to
royalty payments on a percentage of net sales of any commercialized product as
well as the right under the terms of the license agreement with Seaport to
receive milestone payments upon the achievement of certain regulatory
approvals and a percentage of sublicense income. As at 30 June 2021, the value
of the gross assets contributed by PureTech to Seaport was $18.7 million and
the losses for the year ended 31 December 2020 were $32.2 million. Seaport
will be consolidated in PureTech's future consolidated financial statements as
a Controlled Founded Entity.

 iii  (#_ednref3) As of 22 March 2023, PureTech has sold its right to receive
a 3 percent royalty from Karuna to Royalty Pharma on net sales up to $2
billion annually, after which threshold PureTech will receive 67 percent of
the royalty payments and Royalty Pharma will receive 33 percent.

 iv  (#_ednref4) SPT-300, formerly known as LYT-300

 v  (#_ednref5) SPT-320, formerly known as LYT-320

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