7:38 PM
Jan 10, 2019
 |  BC Innovations  |  Product R&D

PureTech turns inward

How PureTech is transitioning from the affiliate model to an internal pipeline

Editor's Note: This article was updated on Jan 14, 2019 at 12:16 PM PST

After a 15-year run of spinning out technologies into affiliate companies, PureTech Health plc is stepping away from that model in favor of an internal pipeline to advance its new platforms.

Behind the structural shift is a convergence of new leadership, complementary technology platforms involving the brain-immune-gut axis and a strong financial position.

The internal pipeline brings together three nascent platforms focused around the lymphatic system, plus two immuno-oncology programs: one targeting a subset of γδ T cells, and the other against a novel target that modulates the immunosuppressive activity of macrophages.

PureTech also unveiled a deal last year with Roche to use milk-derived exosomes to deliver the pharma’s antisense oligonucleotides, underpinning the biotech’s new approach.

PureTech CSO Joseph Bolen said a major driver for the shift to an internal platform was the synergy between the exosome platform and the two other lymphatic programs, one of which involves lymphatic-based drug delivery, the other of which modulates brain lymphatics.

“What’s been clear to everyone is that solutions to the problems we’re working on now require multiple technologies to be brought together for the best chance of making a medicine. When you have to bring multiple technologies together, it’s difficult to do that in an affiliate model,” he said.

PureTech was founded in 2001 and since 2004 has operated an affiliate model that involves finding innovative biology, creating an entity around it, and managing the company until it was advanced enough to seek external financing. PureTech would contribute about $100,000 to perform “killer experiments” before approaching outside investors.

“When you have to bring multiple technologies together, it’s difficult to do that in an affiliate model.”

Joseph Bolen, PureTech

Several VCs involved in company formation have similar methods, but PureTech founder and CEO Daphne Zohar said the main difference is in the type of hands-on involvement.

“VCs contribute mostly financial resources. We contribute mostly human resources. We establish the companies, initiate the programs and run them from an operational perspective,” said Zohar. “We’re not a company that invests in other people’s companies. We’re a company developing medicines. The structure of our company is less important than the approach we take to create new medicines.”

PureTech raised £108.2 million ($196 million) in its 2015 IPO on the London Stock Exchange, and had a cash position of $416.9 million after the first half of 2018, $196.7 of which is held by the parent company and the remainder by its affiliates. But Zohar said the model was poorly understood in the U.S. market.

“The concept of the affiliate structure is a bit of a hybrid model that doesn’t exist as a publicly traded entity in the U.S. In London, there are a handful of publicly traded companies that are not exactly like us, but that have a parent company and operating subsidiaries,” said Zohar.

PureTech owns 34% of its only public company, ResTOR bio Inc., and holds a majority stake in eight of its ten private companies...

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