Puretech Health (LSE:PRTC) Q2 2026 Earnings Call

0:00 greetings and welcome to the pure tech health 2026 half year results conference call at this time all participants are in a listen-only mode after the speaker's prepared remarks there will be a question and answer session and instructions will follow at that time as a reminder this conference is being recorded it is now my pleasure to introduce your host Allison Mead Talbot senior vice president of communications thank you Allison you may begin

0:26 Thank you and thank you everyone for joining us for PeerTech 2026 half-year results webcast. Our half-year report is available on the investors page of our website at peertechhealth.com. I would like to remind you that during today's call we will be making certain forward-looking statements. These statements are subject to various risks, uncertainties, and assumptions that could cause our actual results to differ materially and we ask that you refer to our half-year report for a complete discussion of these items. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. I also want to remind you that we will be referring to certain non-IFRS measures in this presentation. The presentation of this non-IFRS financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with IFRS.

1:13 A reconciliation of the IFRS to non-IFRS measures that we will be referring to today can be found in this presentation and is also available on our investor relations website at investors.puretechhealth.com. I'm joined today by members of our management team, Robert Lyne, Chief Executive Officer, Eric Elenko, Co-Founder of PureTech and Acting Chief Executive Officer of GALA, and Greg Zugate, Vice President of Research and Innovation. With that, I'll turn the call over to Rob.

1:44 Thank you Allison. Welcome everyone and thank you for joining us today. We have made significant progress in 2026 and meaningfully executed against the refined strategy that we outlined last year. Today, I'll discuss that progress and how we are evolving the PureTech model to create value with greater capital efficiency and translate that value more directly to shareholders. Across the portfolio, Seaport completed a successful IPO on NASDAQ, raising $260 million. Thalia secured $180 million in external financing and initiated its phase three and Gallup received fast track designation validating the exciting potential of its treatment for rare blood cancer. We also continue to retain potential future economics from Coventry as part of our model and are advancing our innovation engine.

2:35 We entered the first half of 2026 with pure tech level cash, cash equivalents and short-term investments of 220 million dollars and we continue to expect our operational runway to extend at least through the end of 2028. Together this progress demonstrates the significant values embedded across our portfolio and the strength of our oven spoke model. For those newer to our story, PureTech is a Boston-based, LSE-listed biotherapeutics company operating a hub-and-spoke model with a proven clinical and financial track record. At the center of our model is an innovation engine focused on areas where PureTech has a proven ability to create value, those opportunities grounded in validated pharmacology.

3:20 We generate and de-risk these programs internally and then seek to scale them through founded entities or our spoke companies, backed by external capital. This approach also improves how we allocate capital. By bringing in external capital at the founded entity level, we can preserve our PureTech balance sheet while retaining long-term upside through equity, milestones and royalties. Historically, the timing of external financing has varied. Going forward, we intend to seek external capital earlier in the development stage than we have done with our most recent founded entity, Thalia Therapy Importantly, because we develop programs internally, we typically begin with full ownership of the assets and proprietary intellectual property, which allows us to retain meaningful equity even after dilution, as well as the potential for non-dilutive economics in the form of royalties and milestones, reflecting our role in creating these programs.

4:18 The result is a model designed to generate attractive overall returns while limiting risk concentrations. This model has produced three FDA-approved therapeutics, including Coventry, and has generated sufficient evergreen capital through opportunistic monetization of founded entities to advance our portfolio without the need for dilutive raises at the pure tech level. Slide 7 provides a snapshot of our portfolio and the distinct components of value it contains. Equity interest in our founded entities, royalty and milestone payments, and our innovation engine, which is designed to generate future opportunities. CELIA is our most recent spin-out. It is a phase 3 pulmonary company of dantam-2-prothenadone, which follows our model of validated pharmacology, aiming to transform the treatment paradigm for iPS patients by taking FDA-approved prothenadone and dramatically improving its efficacy through deuteration.

5:17 Following the significant clinical and regulatory work from CTF PureTech, Thalia secured $180 million from leading healthcare investors and immediately initiated the global phase 3 surpassed OPS trial. The financing provided external validation of the program and delivered on our commitment to establish an independently financed path for its continued development. Today Fiotech holds a 35.4% equity interest and retains meaningful long-term economics through royalties, milestones and sub-licensed income rights. Gallup Oncology is a phase two ready oncology company that is well positioned to attract external capital. We have successfully shepherded the company through the completion of its end of phase one meeting with the FDA and secured fast-track designation in relapsed refractory high-risk MDS. We currently own 100% of Gallup and intend to leverage external capital before initiating the Phase 2 Stride MDS trial.

6:17 Seaport Therapeutics is a Phase 2 CNS company that we launched in 2024, having developed its platform at PureTech. Following its oversubscribed private raises in 2024, Seaport Therapeutics, led by PureTech founder Daphne Zohar, successfully IPO'd on NASDAQ in May, raising $260 million in gross proceeds. His proprietary GIF platform is designed to unlock the therapeutic potential of clinically validated mechanisms by addressing limitations that have historically constrained them. We hold a 31.2% equity stake in Seaport, valued at approximately $360 million as of September 18, 2026, and also retain royalty and milestones in this company.

7:02 The fourth component is our remaining economic interest in Kazemsi. and SDA Improved Treatment for Schizophrenia marketed by Bristol-Myers Squibb. CureTech invented Cabempi using our approach of building on clinically validated pharmacology and housed the program in our founded entity, Caruna Therapeutics. Through Caruna's development and subsequent acquisition by Bristol-Myers Squibb, we have generated more than $1 billion from our collective Caruna and Cabempi economics and we retain potential Cabempi-related royalty and milestone payments which is a fundamental and differentiating element of the pure tech model. Based on analyst consensus as of mid-August, we estimate approximately $50 million in potential future proceeds to pure tech from our remaining competitive economic rights.

7:50 Because this estimate is based on analyst consensus rather than our own forecast, it may change as consensus evolves. While the current estimates represent a material downgrade in potential economics from our last update at the full year, they also reinforce the value of our de-risking transaction with Royalty Pharma in 2023, which has delivered upfront cash of $100 million into PureTech and allowed us to realize significant value before Perventi reached commercial maturity, while still retaining participation in future upside. We will continue to provide updates on our full and half-year results on PureTech's economic outlook in safety sales based on evolving market consensus. Turning to cash flows, we do not factor any potential inflows from founded entities into our runway assumptions, such that any monetization events represent pure upside.

8:43 In line with our refined strategy, we are increasingly committed to ensuring that shareholders participate more directly as the value across our portfolio is realized. In practice, this means that we will prioritize maintaining an appropriate operational runway, selectively deploying capital where we see compelling risk-adjusted opportunities across the portfolio and returning capital to shareholders. As of June 30th, PureTech level cash, cash equivalents and short-term investments worth $220 million, which continues to provide operational runway at least through the end of 2028. I will discuss financial updates in more detail later on. I would now like to welcome Eric Elenko, Puretex co-founder and Gallup's acting CEO to discuss the latest developments of our wholly-owned founded entity, Gallup Oncology.

9:32 Thank you, Rob. Gallup Oncology is our latest wholly-owned founded entity, and I'm excited about the first-in-class mutation agnostic approach we are advancing for patients with relapsed or refractory high-risk MDS. Our lead candidate LYT200 is a phase two ready monoclonal antibody targeting galactin-9, an oncogenic driver and prone to immunosuppressor that plays a role in some of the most difficult to treat cancers. LYT200 has the dual mechanism of action. It is designed to directly kill cancer cells while also restoring anti-tumor immune function. By addressing both tumor intrinsic and tumor mediated pathways, this approach is differentiated from existing therapies and has the potential to drive meaningful responses while maintaining a favorable safety profile.

10:32 High-risk MDS is a serious blood cancer associated with poor outcomes, with patients typically surviving less than two years following diagnosis. Frontline treatment typically involves a hypomethylating agent or HMA. However, the vast majority of patients do not respond or eventually stop benefiting. Once disease relapses or becomes refractory, survival is often limited to only a few months. Treatment options in a relapsed refractory setting are extremely limited. Only one therapy has been approved specifically for relapsed refractory high-risk MDS in the past two decades and it targets a mutation found in only approximately three percent of patients.

11:21 There is therefore a significant need for new treatment options that can benefit the broader patient population. Positive phase 1b results established a compelling clinical foundation for LYT200 We complete the successful end of phase one meeting with the FDA, which highlights the compelling clinical efficacy and consistent safety profile of LYT200 in high-risk MDS patients who have relapsed or become refractory to prior treatment with an HMA. The FDA meeting provided clarity on the Phase II Stride MDS trial and fast-track designation further strengthens Gallup's position as we seek external capital to support the next stage of development.

12:13 Stride MDS will be a randomized, double-blinded, placebo-controlled Phase II trial enrolling approximately 125 patients with relapsed or refractory high-risk MDS. Patients will be randomized two to two to one to receive LYT200 at a dose of 12 milligrams per kilogram plus an HMA. LYT200 at 7.5 milligrams per kilogram plus an HMA or placebo plus an HMA. The trial will assess the efficacy of LYT200 based on the rate of complete and partial responses and support dose selection. The goals of STRIDE MDS are to confirm the efficacy of LYT200 that was previously observed in the Phase 1b study, and the inclusion of two doses is intended to fulfill the dose selection requirement in accordance with FDA's Project Optimist.

13:08 The purpose of Project Optimist is to ensure that the sponsor companies prioritize the optimal biological dose over the maximum tolerated dose in oncology. We intend to initiate StrideMDS following the completion of external financing. The amount of capital we will be target raising would support Gallup through the readout of the StrideMDS trial. As Gallup reaches this important financing and development inflection point, I am pleased to have taken on the role of Gallup's acting CEO as I will be dedicating significant time and focus to its advancement. At the same time, I'll remain actively involved in SureTech's innovation activities, working closely with the team as we advance the next wave of opportunities.

13:54 With that, I'd like to introduce Gregg Sue Gates, SureTech's Vice President of Innovation and Research. Gregg and I have worked together at SureTech for more than a decade, and he has been instrumental in refocusing our innovation engine around the areas where SureTech has historically demonstrated the greatest ability to create value. He has been leading our innovation efforts on a day-to-day basis, and I'm pleased to have him walk through our innovation framework today.

14:22 Thank you, Eric. As Rob noted, our innovation strategy is now firmly centered on validated pharmacology. CareTech's greatest successes have come from identifying mechanisms or molecules that have already demonstrated meaningful activity in humans, understanding the limitations that have prevented them from reaching their full potential, and designing differentiated solutions to overcome those limitations. We call this framework our life model, launching innovation from existing pharmacology. As shown on this slide, our life model begins with a focus on patients by identifying areas with significant unmet medical needs. We then identify mechanisms or molecules with demonstrated clinical efficacy that have been otherwise held back from reaching their full potential due to reasons unrelated to efficacy.

15:12 Using this clinically validated framework, We design novel therapeutic concepts that are specifically intended to preserve efficacy while overcoming those limitations. We evaluate each solution using focused proof of concept experiments, which are preclinical studies designed to determine if our therapeutic concepts meet key predefined success criteria and overcome the previous limitations. We also require each opportunity to support the development of a strong intellectual property portfolio and offer a compelling proposition for physicians and payers with blockbuster potential. By building on pharmacology that has already been validated in humans, we believe that this approach can enable us to innovate with greater speed, lower technical risk and greater capital efficiency than traditional de novo drug discovery.

16:05 Each year, we aim to advance at least three opportunities to the concept stage with the goal that these may form the foundation of future development candidates. We expect to share additional detail on our progress in the first half of 2027. The approach within our LIFE framework emulates the same innovation principles that produced Karuna Therapeutics and Kobensky, Secor Therapeutics and Thalia Therapeutics. Each began with a significant patient need and clinically validated pharmacology whose potential has been constrained by a specific limitation. The PureTech team then designed a novel solution to address that limitation, generated proprietary intellectual property, and conducted focused proof-of-concept experimentation to substantially de-risk the concept.

16:56 These programs have generated compelling clinical data, and in the case of Covampi, ultimately led to FDA approval in a new medicine for patients suffering from debilitating mental illness. They provide important validation of the capabilities and approach we are now applying systematically I'm proud of the work we have underway, and I look forward to sharing more about our progress next year. With that, I'll hand the call back to Rob.

17:24 Thanks, Eric and Greg. The work they have described represents two important sources of future value for PureTech, advancing Gallup through its next inflection point and applying a focused, capsule-efficient approach to generate the next wave of opportunities for patients and shareholders. Turning to our financial highlights, PureTech remains in a strong financial position, supported by our business model and continued focus on capital discipline. At the PureTech level, we ended June 2026 with cash, cash equivalents and short term investments of approximately $220 million, compared to cash, cash equivalents and short term investments of $277.1 million at year end 2025. On a consolidated basis, our cash, cash equivalence and short-term investments were $220.1 million at the end of June 2026, as compared to cash, cash equivalence and short-term investments of $277.3 million at year-end 2025. From this $220 million cash figure, I know that the balancing 17-hour Thank you for joining us today. We're going to start with a brief overview of what we're going to be discussing today.

19:04 on a consolidated basis, operating expenses were $55.9 million in the first six months of 2026 as compared to $49.8 million in the same period in 2025. The increase between these two periods reflects higher R&D spend in the first half of 2026 associated with the preparation of the phase three trial of Dupre-Ferratae. Importantly, the majority of OPEX in this first half is attributable to Celia and Gallup, heavily skewed towards Celia. As future expenses related to Dupathenadone have now shifted to Celia, Geotech expects a significant reduction in overall operating expenses moving forward. Looking ahead, based on our existing financial assets as of June 30th, 2026, we reiterate our operational runway at least through the end of 2028.

19:58 This runway excludes any inflows from potential future monetization events and assumes full deployment of the additional $70 million that PureTech has reserved for potential future investments in Saleer. To close, the progress made in 2026 so far demonstrates both the value embedded across our portfolio and the meaningful execution underway against our strategy. Saleer has entered phase three with the backing of leading external investors, People has completed a successful IPO on NASDAQ. Gallup has achieved important clinical and regulatory milestones and is positioned for external financing and phase two development. And our innovation team is applying our proven approach to innovation to generate the next wave of opportunities.

20:44 At the same time, we are substantially reducing the capital required at the pure tech level and taking an increasingly disciplined approach to how we deploy future proceeds. We will prioritize maintaining an appropriate operational runway, investing selectively where we see compelling risk-adjusted opportunities, and looking to return capital to shareholders. With significant value embedded across our portfolio, a strong financial position, and a repeatable innovation engine, we believe PureTech is well positioned to create meaningful long-term value for patients and shareholders. With that, I'll turn the call back to the operator, and we would be pleased to take your questions. Thank you. We will now begin today's Q&A session. To ask a question, please press star followed by one on your telephone keypad now.

21:32 If you change your mind, please press star followed by two. When preparing to ask a question, please ensure your device is unmuted locally. Our first question comes from Sean Conroy from Shore Capital. Go ahead, Sean. Your line is now open.

21:46 Hi there. Thanks for taking my question. Just a couple. I'll start on the planned design of STRIDE-MDS. I appreciate there's clearly a benefit to the steward-aimed mutation agnostic approach in this setting, but has the FDA or are you planning to look at any specific biomarkers in this study? and then sort of second question and just thinking about sort of the next wave of programs that you've guided to that they've guided you will unveil next year I mean how should we be thinking about that I mean obviously you've said clinically validated targets but in terms of disease areas and willingness to be

22:44 Thanks, Sean. I'll ask Eric just to speak to those Stride MDS trial designers acting CEO.

22:52 Hi, Sean. Thanks so much for the question. And you're right that the approach here is a mutation agnostic one.

23:00 And that really is what the need is in this space. It's a lab for practice. KRAS Pathway, B Corp, PNTP.

23:43 So what we do feel is, although as you sprout the number of mutations, The sampling and mutations was more representative of what we might see in a subsequent study. and so that made us feel quite good about the approach. The FDA was fine with a mutation agnostic approach and did not require any type of biomarker selection and as of this time we don't have plans for biomarker selection.

24:28 Perfect thanks a lot.

24:30 Super and then Sean just on your other question I believe around in terms of our areas of focus for future innovation are

24:37 all great to speak in a moment very high level um they are generally agnostic but you know we do have a little bit of a bias particularly in areas where we've had success before but i'll just ask and great to say a few words for that yeah thanks for the question sean um so far this year we have multiple opportunities we've identified that potentially fit our model um it includes opportunities based on validated pharmacology as you you've noted i mean it can form the basis for developmental candidates in the future These opportunities, as Rob mentioned, continue to expand in areas that have been historically successful for pure tech, and that includes a continued focus on small molecule-based therapeutics. And also, CNS is a therapeutic area for identifying additional indications.

25:22 Specifically within CNS, we had success with Kobensky and Seaport in looking at opportunities in neuropsychiatry, and that's an area we're continuing to explore. That said, as you also discussed, we do remain somewhat agnostic indication to an extent because we believe our model is broadly applicable and could bring impactful therapies to patients suffering from disorders outside of CNS and still have blockbuster potential. So we're happy to provide more details in 2027.

25:48 Perfect. Thanks for that.

25:52 I'll jump back in the case. Thank you. Our next question comes from Miles Dixon from Peel Hunt. Miles, your line's open. Please go ahead.

26:03 thank you good morning hopefully you can hear me um if i could just follow up on the um strident mds trial for my i appreciate you're not guiding for um a kind of cost window for that but can you just help me understand what the the timeline for that trial might look like is it similar in format at least or in for the time um for tib sogo and then secondly rob if i can ask the broader question on um perhaps on Talia first. I mean obviously since that's now spun out you guys have a smaller control holding of that. Now Seaport obviously has phenomenally successfully built out its programs and platform offering. Is there any plans at Talia to do a similar thing or is it a pure play idea? Anything?

26:52 Thanks Miles. I'll speak to the Celia question first and then hand over to Eric on Gallup. So yeah, as you say, obviously, you know, Seaport, you know, has really done great things in terms of building out their pipeline of programs. At the moment, Celia has probably stated it has its single asset, the IPF asset, which is obviously now in phase three. I would note, of course, that is now a pivotal registrational trial. So to some extent, you know, they have a different stage of development there at that business and they are, you know, now have line of sight through to readout, which we hope obviously will be registrational. Today there hasn't been any disclosures from Solia about additional assets that they may or may not bring in or develop but obviously that is something that the company will consider as it matures. We have previously guided that obviously we're pleased with the raise they did in the summer raising enough cash due to year end but you know it is inevitable that they will need to raise additional money in order to complete the phase three you know that may bring opportunities for them to consider other programs that they may wish to advance but even when that's something they wish to do you know Solia will make announcements of that and in the future.

28:03 In terms of the Gallup program I'll just hand over to Eric just to talk on that piece.

28:08 uh thanks so much Miles for the question so uh you know the Gallup trial will commence following receipt of external capital so uh just also uh to make that part of any timing clear the uh initial projections which are on the more conservative side so just you know want to get that caveat is this would be probably somewhat under three years uh to complete the study is uh currently contemplated and again those are using somewhat more conservative projections in terms of recruitment rates now of course what's going to happen is the actual timeline you know is that more around 30 months or 33 months will depend also ultimately on the number of sites that are selected as well as the ultimate recruiting rates that are observed in those sites but as we think about it go forward we like to think about things on the more conservative side.

29:15 Great, thank you.

29:16 Perhaps I can just follow up on Gallup specifically. You've had a variety of formats but how are you thinking about financing? Is that more partnership or syndication, strategic partnerships with pharma?

29:29 and then lastly Rob if I can on um capital allocation most you've got a phenomenal amount of let's call it resources that dwarf the market cap how are you thinking about capital allocation moving forward thank you yeah so um on that point uh miles so yes uh you know we're looking at a range of options um for Gallup at this stage um you know we believe both the indication the data we have you know are exciting enough that it opens so what we're looking at really in this maybe links even a little bit into your question on cash allocation the way we do really think about it it's all about the relative cost of capital so different funding structures whether it's equity whether it's a farmer partnership whatever it may be they all come with different costs to them whether it's equity dilution whether it's capping upside and some of them can come with upfront cash so we want to remain open-minded about that as we think about the relative cost of capital of the different options to help gain external cash in order to take that forward and obviously Adam when we complete any arrangements there you know we will make that known we've guided that we really want to complete that financing by the first half of next year and part of the reason for that timing is to give us Thank you for joining us today.

30:58 more broadly as you say yes we do see multiple pockets of value across the business in terms of resources that we have which we think about in terms of capital allocation as I think we indicated in some of the remarks this morning you know our focus really is we want to make sure that we have operational runway within the business we don't want to be holding too much cash notwithstanding raises in rates at the moment obviously we are not generating great returns in terms of cash pile that isn't where we create value we create value by putting those dollars to work and in other instances where we can by returning them to shareholders so that shareholders can reinvest them as they see fit So we are focused on not holding too much cash, but we want to make sure that we have sufficient cash runway without any pressure or concern about any dilute abrasive at the pure tech level. When we then think within the portfolio, one of the advantages of our model is that we have different opportunities to provide capital.

31:56 and these can range really from you know very late stage opportunities for example we've reserved 70 million dollars for future cilia financing which will be um if needed to help that company get through to a typical file readout all the way at the other end of the spectrum to the early stage Thank you very much for joining us today. and whilst we cannot control obviously where the share price trades we recognize that capital returns are a mechanism to ensure that shareholders directly benefit from the cash that we and value that we generate within ProTech so we do think about those different components and we look to balance them but we feel that we're in a good place now with where things are in terms of the assets in the company to have choices ahead of us on those decisions.

33:09 great sounds good Rob and yeah Greg look forward to the first half next year hearing about some of those new programs thank you thank you thank you the next question comes from Kristen Glennie from Stifle your line is now open please go ahead hi morning guys thanks for taking the question I guess just follow up another one on Gallup and stride trial I guess just some you know set the case I guess is this largely a best case sort of trial design as you could have imagined it sort of running in on those discussions you had with the FDA as you then think about the potential presumably this is supportive of the financing potential partnerships that presumably have had some discussions already that it sort of ticks those boxes and then in terms of the The trial itself, obviously, the objective here, you know, dose selection, secondary on response.

34:09 But given the unmet need, and if you do get a very strong response, is it potentially a pivotal trial or is that probably a bit of a stretch too far at this point? Thanks.

34:20 Thanks, Richard. I'll ask Eric just to speak to those points.

34:25 Thanks so much, Christian, for the question. Yeah, we were happy with the results of the FDA meeting which provided a very clear direction forward. and you know the goals of the trial really are twofold one is to confirm the efficacy that was observed in the phase 1b study and the other is to satisfy the FDA's project optimist requirements in terms of dose as you indicated that's one of the key goals Project Optimus really being the idea that instead of driving towards the maximum tolerating dose, one's driving towards a biologically meaningful and active dose.

35:12 and so we feel the FDA meeting was a very important step in terms of getting clarity and we are happy with the trial design and of course we're also very happy with the fast track designation which the FDA granted which validates the view that LYT200 in fact is an active drug. And so, you know, in terms of the implications of this trial, what differs from the phase one B versus the phase two stride MPS study is not only the greater number of subjects, but also the fact that it's a double blind randomized study. and so the idea is to not only confirm what we saw before but do it in the context where there will be this very clear discernment of the contribution of effect of LIQ200 in the context of combination with HMA which is very important and so what would be the implications of that we think that if in fact we're able to show you know similar results and in fact show efficacy and confirm efficacy of LYT200 coming out of stride MDS particularly if it had a similar safety profile that was observed in the phase 1b which was excellent We think that will put Gallup in

36:46 a very good position in terms of optionality. That optionality is both, we think, commercial and financial, kind of what I think you're getting at. And then it could offer the possibility of more streamlined next steps in terms of development. Of course, that would depend on the data and discussions with the FDA. and just to be very explicit about the third part of your question we are not guiding that this is a pivotal study and so but having said that the data that would come out of this we would view it's extremely meaningful.

37:27 Thanks that's helpful and then if I can on the you know the overall sort of development strategy just a bit more in terms of how many I mean you talk about the three concepts upstage programs sounds like you're going to you're going to be announcing maybe one new specific development candidate in in in early next year first half of next year i mean you know typically how many how many of these things are sort of running in parallel um at any one time you have the bandwidth to run in parallel and then um what's the sort of decision what's in the mix in terms of decision points about identifying that candidate thanks

38:08 Yeah, thanks, Christian. So I'll hand over a minute to Greg to talk about some of the factors we take into account when we're considering how to advance those programs. But, you know, overall, as you say, we've guided that we want at least three concepts stage programs per year. You know, we're currently running ahead of that, I'm pleased to say, and so we've been I'm certainly surprised by both the quantity but also quality of the opportunities we have there. As you said, Christian, we aren't planning to talk about any of those in detail until next year. but I think as and when we are able to speak about them I think many people who follow the pure tech story will certainly recognize the pure tech hallmarks on those programs in terms of having come from the life model and we'll see a lot of similarities with the success that we've had with Karuna Kabemfi and more recently with Seaport and Solia but I'll just hand over to Greg to talk a little bit just about some of the factors we take into account when we're considering whether to advance or deprioritize these programs internally

39:09 yeah thank you for the question you know we go through a very rigorous process you kind of outlined it here and I would say broad strokes give you a sense for how we approach these these opportunities but I It starts with an analysis of the unmet clinical needs. We progress through and look for molecules and mechanisms that have validation, and we look for their limitations. But specifically diving in a little bit more, we really pressure test that clinical data and really discuss it with leading clinicians in the field and really understand the weight of the clinical evidence that's behind it. As we advance programs through preclinical stage, we have a set of predefined criteria for our pre-clinical experiments that we'll look for. And so, yeah, we advance them throughout the key proof of concept experiments that are really designed to see if we've addressed the underlying limitation.

40:01 And once we do that, that can then form the basis for a developmental candidate that we would advance forward.

40:09 Great. That's helpful. Thank you. Thank you. Our next question comes from Carl Kagan who asks, You flagged that shifting LYT100 cost to Celia should contribute significantly. To lower OPEX going forward, can you quantify that, even directional?

40:28 Sure, absolutely. So yes, quite right. You know, one of the key drivers for spinning out Solia is obviously these late stage clinical programs require very significant operational capital spend to continue advancing them. And so a priority for us was to ensure that we could externalize that spend and take it away from PureTech's P&L. as that completed just over the half year we're now expecting that to significantly benefit Piotek cash flows in H2 this year. In terms of go forward cash burn we're looking at the moment on a clean basis to be having cash burn including overhead but also crucially our innovation spend and somewhere between 30 and 40 million dollars a year that is obviously a significant reduction from the roughly 90 million dollar a year cash burn we had when we were Thank you. We have a follow-up question from Carl which is you've targeted at least three concept stage programs progressed per year.

41:34 How many are currently in that pipeline today and what would you need to be true for one to be named as a new founded entity candidate?

41:44 they were a very good question but I think we've probably addressed that earlier to saying that as Greg outlined there's a really rigorous process that we go through and again that's informed not just by you know the innovation team and the work they're doing but also the broader corporate knowledge and history we have at Pure Tech. you know there are many people working hard in the in the field of drug development but within pure tech we really do have the benefit of having taken programs all the way through to registration approval and dosing to patients and really for us that benefit of having that institutional knowledge of what it means to take a program all the way through ideation through to benefiting patients that is a really valuable perspective that we can bring to these early stage programs when we're thinking about whether to green light them, how far to take them forward and what the best way is of advancing this program.

42:41 Thank you. We have a next question from Julie Simmons from Panmure Librium. Your line is open Julie, please go ahead.

42:49 Thank you very much. Just more on the innovation pipeline. Just wondering when you're going to tell us about these programs, at what stage are they going to be? Is that sort of where you've still got more preclinical work to do or is it going to be so they're actually going into the clinic in your format first time?

43:10 It's a good question, Julie. So I think really where they will get to, there may still be a degree of pre-clinical work that's being done. But I think the key thing is, as Greg was outlining earlier, that we will have done some of the really key de-risking experiments. So, you know, the great advantage of our life model is that we know what problem we're trying to fix. And, you know, we feel that even the preclinical studies that we do can be very meaningful in indicating whether or not we've really fixed that problem. You know, a big advantage was moving to the clinic, of course, is that the phase one studies then are significant. Thank you. That's all we have time for today. Thank you all for joining and you may now disconnect your lines.