PureTech Health PLC (PRTC) 2022 Q2 法說會逐字稿

Greetings, and welcome to the PureTech Health 2022 Half Year Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Allison Mead Talbot, Head of Communications. Thank you, Allison. You may now begin.

Thank you for joining us today for PureTech's 2022 Half Year Results Webcast. The press release and report we issued earlier this morning, along with the slides, can be found on the Investor Relations portion of our website at puretechhealth.com. Our half-year report will be filed with the SEC today.

PureTech is led by a proven and seasoned management team with significant experience in discovering and developing important new medicines, delivering them to market, and maximizing shareholder value.

Today, I'm pleased to be joined by the senior team, including Daphne Zohar, Founder, and Chief Executive Officer; Bharatt Chowrira, President and Chief Business, Legal and Operating Officer; George Farmer, Chief Financial Officer; Eric Elenko, Chief Innovation and Strategy Officer; Joe Bolen, Chief Scientific Officer; and Julie Krop, Chief Medical Officer, who will all be available for questions after the presentation.

During today's call, we will be making certain forward-looking statements, and we ask that you refer to our half-year report and our SEC filings for a complete discussion of the potential risks, uncertainties and assumptions associated with these statements that could cause our actual results to differ materially.

I also want to remind you that we refer to certain non-IFRS measures in the presentation. These measures should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS.

A reconciliation of the IFRS to non-IFRS measures that we'll be referring to today can be found in this presentation and is also available on our Investor Relations website at investors.puretechhealth.com and in our SEC filings.

I will now turn the call over to Daphne Zohar, PureTech's Founder and Chief Executive Officer.

Thank you, Allison. The first half of 2022 has been an exceedingly strong period for PureTech as we execute on our mission to change the treatment paradigm for patients with devastating diseases. Today, we are excited to discuss how we are creating value for our shareholders, review our strong financial position and outline the important progress we are making on behalf of patients who currently have limited options for treatment.

Our R&D engine is centered on unlocking new classes of medicines by enhancing on-target efficacy, improving tolerability or enabling oral administration for new medicines that have demonstrated efficacy, but had previously been held back by one of these issues. I'm particularly proud of our strong track record of clinical success, which is approximately 6x better than the industry average as seen on the right side of this slide.

Our R&D engine has now generated 27 therapeutics and therapeutic candidates, of which 17 are clinical stage and 2 have gone from inception at PureTech through successful FDA and EU regulatory marketing clearances, and the third that is expected to be filed for FDA approval soon. Each of these were first of their kind breakthroughs in their respective fields. In some cases, ending decades of stagnated therapeutic innovation for indications that impact tens of millions of patients.

One of our founded entities, Karuna, recently announced positive top line results from its Phase III trial of its lead candidate, KarXT, in schizophrenia. This is a great validation of our successful R&D model. Schizophrenia is a severe and debilitating disorder affecting approximately 21 million people worldwide.

The KarXT program, which was invented by PureTech, demonstrated notable improvements across symptom domains, which include hallucinations, delusions, difficulty enjoying life or withdrawal from others. And KarXT was not associated with the debilitating side effects of weight gain, sedation and movement disorders seen with the existing treatments. KarXT is now poised to potentially be the first new mechanism for patients with schizophrenia in over 50 years. We believe this is truly a meaningful advancement for patients and their families who are suffering.

The results from this trial are important not just for PureTech or founded entity, Karuna, but have been hailed as a paradigm shift in psychiatric medicine and an important positive catalyst for the entire biotech sector. As a co-inventor, in addition to our equity ownership, we have the right to receive royalties, sublicense income and milestone payments from this program. KarXT is just one of many innovations born from our unique approach.

Across our wholly owned pipeline are examples of other programs that we have developed in a similar way to Karuna's KarXT, where we start with an approach or a candidate that has proof of human efficacy, but key limitations have hindered the class from reaching its full potential.

LYT-300, an oral form of natural allopregnanolone, is one of them. We believe that LYT-300 could make a difference for patients with a range of mental health conditions such as depression, where there is a vast and growing need, but the standard of care treatments like SSRIs can have mixed efficacy delayed onset of action, and poor tolerability.

Similarly, we are advancing LYT-100, a deuterated form of pirfenidone to make a meaningful difference in the lives of patients with lung fibrosis and other inflammatory and fibrotic conditions by potentially offering better therapeutic effect without the poor tolerability associated with the current standard of care drugs. Idiopathic pulmonary fibrosis, or IPF, is a terminal condition that affects about 3 million people worldwide, and we are pleased to be advancing this program, which is currently in a late-stage clinical trial on behalf of patients with IPF.

We believe our focus on well-established and validated efficacy and, in many instances, clinically derisked mechanisms has the potential to transform the care of millions of people who have long struggled to find effective treatments. Dr. Julie Krop, our Chief Medical Officer, will dive into more details on our wholly owned pipeline later on in today's presentation. Our work translates into value for our shareholders in multiple ways.

Our primary focus is the development of our wholly owned programs towards commercialization, which could generate future revenue from product sales. We also have the option to spin out, sell or partner certain of these programs, which we assess on an ongoing basis. In addition to the wholly owned programs, we see our founded entities as sources of value to us over time.

We hold sizable equity positions across our founded entities and continue to benefit from their growth, including from events such as M&A transactions, IPOs, and potential royalties from certain product revenues as well as sublicense income in some cases. We are fortunate to be able to consider all of these opportunities from a foundation of financial strength that we continue to build on.

We are one of the few biotech companies in the world that generates cash, and we have generated over $680 million in nondilutive cash in less than 3 years. This gives us an enormous amount of flexibility to look at both the near- and longer-term value drivers for our shareholders. Our Chief Financial Officer will discuss our financial results later in the call. On the top of this slide, you will see the progress we've made across the wholly owned program so far in 2022. We initiated a registration-enabling trial of LYT-100 and IPF, which together with an additional trial could form the basis of an NDA filing for IPF.

We also completed 4 clinical trials for our LYT-100 program, which further strengthened our conviction regarding the improved tolerability profile and potential for higher doses and also importantly, helped us to prioritize the IPF indication so we can focus both our human and financial resources on the most promising indication for this program. Our LYT-300 program also met a key milestone of achieving oral bioavailability and healthy adults. This is exciting because allopregnanolone has proven efficacy but is currently only available for the treatment of postpartum depression as a 60-hour IV infusion.

With demonstration of human oral bioavailability, we think LYT-300 could make a difference for patients with a range of mental health conditions where there is a growing need. Our LYT-200 program also progressed through clinical development, completing the bio monthly monotherapy dose escalation portion of a clinical trial in solid tumors during the first half of 2022.

Across the bottom half of this slide are the many milestones achieved this year by our founded entities, including Karuna's Phase III trial readout, Akili's NASDAQ listing, Gelesis commercial progress with Plenity as well as important data publications and presentations across our founded entities. Akili's listing makes it the fourth of our founded entities to go public, bringing the value of publicly traded founded entities created by PureTech, including Karuna, Gelesis, and more to well over $9 billion.

In addition to our equity holdings across all of our founded entities, we also do royalties on potential product sales from Karuna, Gelesis, and [KarXT]. For Karuna, we also have the right to receive sublicense income and milestone payments in addition to the value of our equity and royalties as a co-inventor of KarXT.

Royalties due to us from each of these programs could be worth as much as or potentially more than our equity in each program, depending on regulatory approvals and the extent of future product sales.

I'm now going to hand over the call to Dr. Julie Krop, our Chief Medical Officer, to walk us through our therapeutic development pipeline and depth, starting with LYT-100, which is a perfect case study for our R&D model.

Thank you, Daphne. LYT-100 is a collectively deuterated form of pirfenidone that is designed to retain the potent and clinically validated antifibrotic and anti-inflammatory activity of pirfenidone, but has a highly differentiated pharmacokinetic profile that is translated into improved tolerability and supported by our data from multiple clinical trials.

Our data to date has shown that we can match systemic exposure of LYT-100 to pirfenidone to preserve the pharmacologic effect while at the same time, achieving a lower Cmax. A lower Cmax for peak concentration has been associated with improved tolerability, which we have demonstrated with our LYT-100 and older healthy overly and [long COVID and lymphedema] patients.

Given these properties, we think LYT-100 has the potential to significantly improve treatment for patients with IPF, both by enabling patients to stay on the approved efficacious dose and also by enabling the potential to treat with higher doses, which could translate into improved efficacy during the dose-response in pirfenidone in prior studies.

LYT-100 has a strong patent position with composition of matter exclusivity up to 2033 and additional patent applications to potentially extend protection through 2040. IPF is a serious condition with a median survival of only 3 to 5 years that is characterized by progressive irreversible scarring of the lung, shortness of breath, and reduced capacity for physical activity.

Despite its proven efficacy in multiple clinical trials, treatment with pirfenidone has been significantly hampered by gastrointestinal adverse events that often require reductions in dose or permanent discontinuation of therapy, both significantly limiting the opportunity for therapeutic benefits.

In fact, approximately half of patients on pirfenidone discontinue treatment, dose-adjust or switch to an alternative treatment due to the tolerability issues. And according to one study, only 26% of patients with IPF are treated with the approved standard of care drugs. This suggests that the vast majority of patients with IPF are currently not being treated and underscores the significant unmet need for new, more tolerable therapies to enable patients to initiate and stay on therapy for this deadly condition.

Despite these drawbacks, pirfenidone and nintedanib, the other standard of care drug currently on the market, also with similar tolerability challenges with pirfenidone each achieve over $1 billion in annual sales. So we believe LYT-100 represents a substantially derisked opportunity for PureTech and has the potential to make a really impactful difference for patients with IPF and has the opportunity to become first-line therapy as well as an important add-on therapy to existing or new therapies that may be approved in the future.

To date, LYT-100 has been studied in more than 400 subjects and has demonstrated a strong safety and tolerability profile. And together with the proven efficacy of pirfenidone, we think could make a big difference for patient outcomes. In a crossover trial and healthy older results with a similar median age to patients with IPF, approximately 50% fewer subjects taking LYT-100, experienced GI-related adverse events compared with subjects taking pirfenidone, and substantially fewer subjects experienced adverse events in general with LYT-100 compared with pirfenidone.

Going into the trial, we have concluded some discussions with pulmonary experts that at least a 30% reduction of relevant adverse events would be clinically meaningful. Therefore, achieving a 50% improvement in this head-to-head trial was a very meaningful and exciting results for this program. This impressive tolerability data was also reaffirmed in our long COVID clinical trial, which showed that LYT-100 was also well tolerated in a patient population with multiple comorbidities and concomitant medications throughout the 3 months of treatment.

In addition, we also recently completed another Phase I trial demonstrating that LYT-100 can also be safely dosed at a higher total drug exposure than the currently approved dose of pirfenidone, which has the potential to translate into improved efficacy compared to that currently observed with pirfenidone. Guided by our data to date, along with regulatory feedback, we recently initiated a dose-ranging registration-enabling trial of LYT-100 in patients with IPF with top-line results expected by the end of 2023.

We also recently completed a Phase IIa exploratory trial of LYT-100 in patients with breast cancer-related lymphedema. We believe the data generated to date is sufficient to evaluate the primary objective of demonstrating safety and tolerability in this patient population and reaffirm the strong safety and tolerability profile of the LYT-100 seen in our clinical trials to date.

As part of our ongoing pipeline prioritization strategy, we will be reviewing the data further, including the exploratory efficacy endpoints to determine next steps for the program and indications beyond IPO. Those other inflammatory and fibrotic conditions include myocardial fibrosis and other organ system fibrosis based on the strength of existing clinical data around the use of pirfenidone in those indications.

LYT-200 is also progressing to a clinical development. As a reminder, LYT-200 is a monoclonal antibody against GALACTAN-9, which is secreted by many tumors to protect them from being destroyed by the immune system. By blocking these immunosuppressive signals, we believe LYT-200 has the potential to treat many solid tumors, including pancreatic, colorectal, and cholangiocarcinoma as well as a range of hematologic lines such as acute myeloid leukemia. Based on our preclinical studies, LYT-200 has the potential to work in combination and amassing efficacy of commonly prescribed chemotherapy and checkpoint inhibitors used to treat these cancers.

LYT-200 is currently being evaluated in a Phase I dose escalation trial of patients with solid tumors that did not respond to previously approved treatment option. In the first half of 2022, we completed the bimonthly monotherapy dose escalation portion of the Phase I program and began evaluating weekly doses of LYT-200 as a monotherapy and will soon begin to enroll patients in cohorts designed to evaluate LYT-200 in combination with chemotherapy. Data from the single agent cohorts are expected by the end of 2022 and data from the combination cohorts are expected in 2023.

Additionally, we have recently generated compelling preclinical data with LYT-200 in multiple leukemia models. Based on these data, we expect to initiate a clinical trial of LYT-200 as a single agent in patients with AML by the end of 2022. LYT-300 is an oral form of natural allopregnanolone that was developed by PureTech as part of our Glyph technology platform. Allopregnanolone is a naturally occurring steroid that is synthesized in the central nervous system and is thought to play a crucial role in the pathophysiology of mood disorders, primarily through positive allosteric modulation of GABA A receptor.

Reduced levels of allopregnanolone have been associated with major depressive episodes in anxiety disorders and other neuropsychologic conditions. Allopregnanolone is currently approved by the FDA to treat women with postpartum depression. However, its widespread use has been hampered by the requirement to administer the drug as a 60-hour IV infusion due to its poor oral bioavailability. Our Glyph platform has enabled us to solve this problem and create a therapeutic that is orally bioavailable as we recently demonstrated in our ongoing Phase I trial.

The data we generated established proof of principle that the novel transport properties of our Glyph technology platform could facilitate drug absorption via the lymphatics, avoiding first-pass liver metabolism and generating clinically relevant concentrations of allopregnanolone in circulation after oral administration of LYT-300. Utilizing our proprietary Glyph technology platform, LYT-300 is designed to capitalize on the validated efficacy of allopregnanolone to potentially offer a new oral treatment option for a range of conditions where there is significant patient need.

We've made great progress towards this goal in our ongoing Phase I trial of LYT-300 and we expect to complete the multi-part Phase I program in healthy volunteers by the end of 2022. And based on the data, a clinical trial in a relevant patient population is planned to initiate in 2023.

Beyond our current clinical-stage programs, our technology platforms are also progressing, and we expect additional preclinical validation of these programs in the near term. We believe these technology platforms will continue to create many derisked therapeutic candidates for our wholly owned pipeline as well as offer us opportunities for nondilutive funding for partnering noncore pieces of the platform, which we have done and expect to do more of.

In summary, as you look across our wholly owned programs and our founded entities, we believe this is going to be another productive year with many key milestones expected.

Across our wholly owned programs, we anticipate at least 2 clinical trial readouts and 1 trial initiation in the remainder of 2022. Across our founded entities, we anticipate at least 3 clinical trial readouts and 2 initiations in 2022. And as noted earlier, we hold sizable equity positions across our founded entities and continue to benefit from their growth, including from events such as M&A transactions, IPOs, and potential royalties and sublicense income from certain product sales.

I would now like to welcome George Farmer, our Chief Financial Officer, to the call, so he can provide a recap of our 2022 half-year results that were announced earlier this morning.

Thank you, Julie. PureTech continues to be in a very strong financial position. At the PureTech level, we ended the first half of 2022 with cash and cash equivalents of $341.4 million compared to a balance of $418.9 million at the end of 2021 and $349.4 million at the end of 2020. On a consolidated basis, our cash and cash equivalents were $365.9 million at the end of the first half of 2022 compared to $465.7 million at the end of 2021 and $403.8 million at the end of 2020.

Based on these results and following our recent monetization of up to $115 million in Karuna shares, which was not included in our cash balances in June because it is a post-period event, our operational runway estimate has been extended to the first quarter of 2026 from the first quarter of 2025.

Our revenues were mostly driven by payments from grant funding and pharma collaborations and are expected to continue to fluctuate from year to year. On a consolidated basis, our revenues in the first half of 2022 were $7 million compared to $5.8 million in the first half of 2021, which were primarily driven by grant revenue and collaboration and license payments.

Our first half 2022 operating expenses were $108.2 million compared to $73.9 million over the same period last year, largely driven by the success in rapid clinical advancement of our wholly owned programs. On a consolidated basis, we reported a net loss of $24 million for the first half of 2022 compared to a net loss of $77.6 million for the first half of 2021. It's important to note that this difference is driven by IFRS accounting rules and reflect certain equity method-based losses, which were incurred in 2021, and certain nonrecurring gains in 2022 that did not exist in 2021.

We have made great progress so far this year and have a lot to look forward to over the ensuing months and beyond. I will now turn the call back over to Daphne.

Thank you, George. I would like to thank the entire PureTech team for their commitment to change the treatment paradigm for patients. I would also like to extend my gratitude to our world-class Board and R&D committee for their strategic counsel and guidance. To our shareholders, thank you for your support of our vision and the continued trust that you place in our team. Above all, I'd like to thank the patients and clinicians who are participating in our clinical trials, you are our motivation and inspiration.

Let me close by saying that the progress we've made so far this year is fueled by our passion to make a difference for patients, and we aim to continue this momentum across our wholly owned pipeline and our founded entities, so we can deliver highly differentiated medicines for patients and generate value for shareholders. Thank you, everyone. We will now take questions.

(Operator Instructions) Our first question today comes from Brian Balchin from Jefferies.

It's Brian here from Jefferies on for Peter. Just 2 questions. Firstly, how are you thinking about LYT-100 and BCRL given uncertainty on endpoints in the context of now having a clear regulatory pathway forward for IPF? And then secondly, how are you seeing the environment currently for in-licensing deals, giving a strong cash balance, and is hard to build out the pipeline?

Thank you so much, Brian. So I'll take the first question, and I'll give the second question to Eric Elenko. So in terms of breast cancer-related lymphedema. We -- the trial was designed to primarily evaluate the safety and tolerability of LYT-100 in patients with BCRL and that's the primary endpoint. While the data is still blinded, we feel we have enough data to reaffirm the favorable tolerability profile of LYT-100 that we've seen to date.

There are many exploratory efficacy endpoints that we're going to look at post-unblinding. And the path forward in lymphedema is not as well defined because there are currently no approved therapies for this condition. So given the exciting data, we now have supporting the favorable tolerability profile of LYT-100 and the real difference that we think we can make in IPF as a result of that, that's become a big focus for us.

It's also an area where we have proof of efficacy with pirfenidone, and that's an indication that's [lethal] where we can get the patients quickly. And in terms of the other indications, we have really an embarrassment of riches in terms of follow-on indications that we could move forward with, including [Halfco] and FSGS, where there's clinical data with pirfenidone join benefit.

So what we're basically saying is we're going to take a look at the data once it's unblinded, but we're also going to look at that in the context of everything else that we could do with this program. So I'm going to hand over the next question to Eric Elenko, who has been -- who's our head of innovation. By the way, it was also one of the first inventor on the Karuna KarXT program. Eric, do you want to take that question about in-licensing insourcing?

Sure, sure. So I would say more generally, we see 2 sources of growth for our pipeline. One is external with in-licensing. And we have continued to identify and review innovative technologies that could potentially grow our fully owned pipeline. And the second source of growth is internal.

We'll continue to also identify new therapeutic candidates from within our technology platforms. For instance, LYT-300 came out of our Glyph technology platform. Likewise, we've had therapeutic candidates come out of our Alivio Technology platform. So we see both external and internal being sources of growth for the pipeline.

Our next question today comes from Thomas Smith from SVB Securities.

Just I guess, first on LYT-100. Can you just talk a little bit about the timing for unblinding the lymphedema data and how you're thinking about disclosing the details here? And is this a top-line data release? Or are you targeting a specific medical meeting for unblinding and disclosing those details?

Yes. Thanks, Tom. Yes, so we're -- we haven't put forth a date yet for unblinding or disclosing those details, but we'll definitely plan to do so as we move forward. Thank you. Do you have any other questions?

Sure. Yes. And then I guess just another on LYT-100. Like based on the early blinded data here, is there any change to the way you're thinking about dosing or any relevant read-through to the IPF program?

Well, one thing that we've learned as a result of some of the studies that we've done is that we believe we can explore LYT-100 at both the current dose, but also go to higher doses. And maybe I'll have Julie just comment on that real quickly.

Sure. Thanks, Daphne. We are in our current dose-ranging study that we recently initiated, we are evaluating not only a dose of LYT-100 that matters the exposure to the currently approved 801 TID dose of pirfenidone, but we also are evaluating a dose with even higher exposure than the currently approved pirfenidone. And the reason for that is based on our Phase I studies where we did evaluate higher doses, we've seen good tolerability.

And I think because of the improved tolerability overall, we're able to do that. And I think that's super exciting because it then gives us the potential to even show better efficacy than pirfenidone. So we're evaluating both doses. I think with the 550 that matches exposure where it's a huge win right there just because not only are we reducing adverse events or improving tolerability, but that really should translate into improved efficacy because what matters in these patients is really the time spent on therapy. So keeping them on therapy is the really critical element.

Got it. Understood. Okay. And just on taking a step back to a higher level, strategy. You have the ongoing share buyback program, the recent Karuna monetization. Can you just give us your latest thoughts on capital allocation, how you're thinking about share buybacks versus internal R&D prioritization versus in-licensing, and some of the other opportunities that may be out there?

Yes, absolutely. So first of all, what we've done is we've extended our guidance regarding runway by 1 year. So we're really excited to be able to do that based on the strong financial position. As we look at the allocation of resources, there are a number of factors that we take into account. The first is obviously our ongoing operations, the growth that could potentially be next with successful studies, we put aside some funding to be able to support the founded entity.

And of course, all of the existing studies that we have ongoing. So we don't fully fund all future success scenarios, but we do fund all the studies that are going on right now. And what we do is on an ongoing basis, we look at what's in front of us, what's the most attractive opportunity. And we're in, I think, a really fortunate position to be able to make those decisions from a position of strength.

We did initiate a capital return strategy, and we started with a buyback, and we think we're going to be able to do both, grow our pipeline, continue to grow the business, and execute and deliver results, but also we think that there's an opportunity to deliver returns to our shareholders given the cash position that we have. So we look at this on an ongoing basis. Our Board is very involved in it. And we're looking at it mostly with perspective of growth and how we benefit our shareholders.

Our next question today comes from Vishal Bhatia and he has asked 2 questions on Karuna. Your current commentary on the royalties sublicense income could in theory be was more than the ex-stake. It doesn't account for the share sales. Are you able to give some more back-of-the-envelope math, i.e., if Karuna generates 1 billion royalties, should it be X amount, etcetera? Secondly, what's the plan for the incremental cash generated from Karuna share sales? Could this be used to extend the buyback given the shares remain depressed despite progress across the portfolio?

Yes. Thank you so much, Vishal. I will ask Bharatt to answer this question. But I'll just say on a high level – I'll just -- Go ahead, Bharatt.

No, sorry, I was on mute. So we are looking at, for example, the agreement that we have, that we licensed to Karuna, the patents, as you know, as Daphne mentioned earlier, Eric is one of the lead inventors on the KarXT and we license that intellectual property to Karuna, which is the foundational IP covering KarXT.

So we have -- they're eligible for royalties as well as some milestones as the molecule progresses towards approval. And then if they were to partner in different geographies and territories on the key regions of the world, we would be eligible for some sublicense income as well in addition to the royalties that we have publicly disclosed, which is around 3%.

Yes. And I'll just add that as we -- when we look at the value being worth potentially more than our remaining equity stake, we think it could be substantially more. But you're right that we're talking about the remaining equity stake.

Our next question today comes from Edward Thomason from Liberum.

If I may, first, focusing on LYT-100, -- so we have the readouts now for lymphedema expected in the second half. It sounds like you're getting pretty close to unblinding that trial. So what does success look like in your view? Clearly, [KarXT] is the primary focus and the primary endpoints, but what you want to see to make decision to progress that trial into late stage for lymphedema?

Right. Thanks, Edward. So what we're really thinking about is where is the greatest impact that we can have in terms of the additional indications. So we're all in on IPF. And in the case of lymphedema, when we started the lymphedema study, we're looking at it as a pilot study. And as we were moving it forward, we learned some things about LYT-100.

So initially, we weren't sure that LYT-100 had the potential to really be a big deal in the area of IPF. But after we got the results that we've gotten in some of the early studies with LYT-100, we've become really excited about the potential for IPF. And therefore, that's our biggest priority. And then as we take a step back and look at lymphedema, that is one of, I'd say, 3 or 4 following indications that we could pursue.

Of the ones that we could pursue, there are others that already have clinical data with pirfenidone. So I would say, in general, we're taking a strategic look at everything we could be doing with this program. And the results once we online, it could make it go up in our estimation.

But right now, we're thinking that it's a lower priority indication, mostly for strategic reasons. But as we unblind some more report the data, we'll definitely consider all the patients that we can use as following.

You had another question, Edward?

I did. That was very clear. This one is for George, just talking about the R&D expenditure for the first half. I was hoping you could give us a bit of a split where that internal segment's R&D expenditure has got what programs that has gone on.

Sure. Thanks, Daphne. Yes. So as with all biotechnology companies, our expenditures are really focused on the development of our clinical pipeline as well as our discovery pipeline. So you can expect that, that ramp is just going to continue as LYT-100 progresses through the clinic. And certainly, as the other programs start catching up like LYT-200 and oncology and 300 in the various depressive disorders that we're considering. So that's probably the best way to think about it.

Our next question today comes from Miles Dixon from Peel Hunt.

And congratulations on the results despite the market. I think, firstly, it is about inefficient markets. I couldn't help but notice the arbitrage that opened up on the Karuna top-line results. Does that change the way that you think about your equity holdings, given the parent doesn't seem to benefit from the listed affiliates?

Yes, it's a great question. I think that there's a significant disconnect between the value if you just take the sum of the parts of all the things that we have in PureTech. And even if you were to just take the public equity stakes and cash, you're already, I think, significantly discounting a lot of other things that we have in our pipeline, including our wholly owned pipeline, which we believe is extremely exciting and builds on the same successes we've had in our track record and then the private founded entities.

And then -- so we think that in general, there's been an ongoing disconnect between the value that PureTech has and the value that's recognized in the market cap. But what's nice is that we -- the value exists, right? So when you have great clinical results, when you have assets or new medicines that could really make a difference for patients, those have value. Whether that's recognized right now in our current share price, is a different story.

And that's one of the reasons why we [look] at capital returns to our shareholders because we've created and generated a lot of value, we want to make sure that our shareholders benefit from it. But what is really important is that this -- the successes that we've had, they haven't become less valuable just because they're not reflected in the share price. There's still value and we're going to be unlocking that and continue to do so.

So yes, you're right. It wasn't fully reflected or even sufficiently reflected in our share price that we had (inaudible) results from a program that we invented and which we have still substantial ownership in multiple ways. So yes, it's something that we're working on and thinking about how do we make that value clearer to shareholders to benefit the ones that are already shareholders.

No. Thanks, Daphne, I'm trying to. But relatedly, on the thinking about the -- well, really the cash or the runway that you've now moved forward another year into 2026. And this follows on from Brian's question earlier that when we think about that number, does it include organic growth of the internal pipeline?

Yes, it includes some growth, but it doesn't set aside all of the cash that we needed in all of the success scenarios. So for example, it doesn't contemplate all future studies on the back of success, but it does contemplate the ones that we see in front of us right now. It does contemplate a certain amount of allocation to research and development of new candidates and things like that. And of course, it does contemplate the founded entity and supporting them should they need support.

So I should say that they've raised a substantial amount of money. They raised about $3.1 billion since July 2018 through the date of this report, of which 95.3% came from third party. So it's not that we have to put aside a huge amount of support for.

Great. Just finally, if I can, I couldn't help but notice on the Akili and the closure of the SPAC. The outside of the $160 million for the pipe and the reduced $250 million from the trust, has that changed the capital allocation priorities of Akili or was that always seen as upside?

Yes. I think they were always looking at a couple of years. So they have at least 2 years of commercial launch cash right now. The stock market has changed significantly. And now basically, the redemptions at that level are pretty much par for the course. So that was one of the reasons why they did raise such a big pipe from 2 really great investors.

Our next question today comes from Rosie Turner from Jefferies asking if there is time, please, can you run through the timeline for LYT-100 in IPF, the numbers of trials that we'll need to run, and timings of those trials and a best case in terms of when you would be able to file with the FDA, assuming positive trial results.

Yes. So I think it's too soon to lay out a path for what would be the timeline for approval. But what we believe is the case is we started this study and the results of the study will come in before the end of 2023. And we believe that one more (inaudible) will be required, a Phase III study following that. So it's difficult at this point without the data in hand and the study design of the next study to give specific timeline, but we do benefit from an accelerated regulatory path. And we think that we'll be doing everything we can to move it forward to patients as quickly as possible.

Thank you very much. It looks like we have run out of time today. So thank you very much, everybody. That does conclude today's PureTech Health 2022 Half-Year Results, and you may now disconnect your line to end.