Trellus Health (LSE:TRLS) — Interim Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the TRELLUS HEALTH PLC Interim Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged. Please submit at any time via the Q and A tab situated on the right hand corner of your screen. Just click q and a, scroll to the bottom, type your question, and press send. Company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today, and we'll publish responses where it's appropriate to do so. These will be available via investor me company dashboard, and you'll be notified once they're ready for your review. I'd also

0:31 like to remind that this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Monique Fred, CEO Selim Hamir, CFO and Mala Dubinsky, cofounder of Trellis Health PLC. Good afternoon. Hi. Good afternoon, and thank you. Good afternoon, everyone, and and welcome to Trellis Health's maiden interim results presentation, as an AIM listed company. I'm Monique Fayad. I'm the CEO of TRELLUS HEALTH. And today, I have the pleasure of presenting to you with our cofounder, TRELLUS HEALTH cofounder, Marla doctor Marla Dubinsky, who's a professor of medicine and codirector at the Mount Sinai IBD Center. We also have Saleem Hamir, who is our CFO. Many of you are familiar with TRELLUS HEALTH from our AIM IPO in May, and we're delighted to share the details of the tremendous progress that we've made in just three short months since the listing. You know, for those of you who are new to the TRLS story, thank you for joining today's call. And we hope that the current and potential new investors will find the call informative, regarding our midyear performance as well as extremely positive outlook for the next twelve to twenty four months as we launch and scale our business globally.

1:38 So, if we'd like to now please proceed to the presentation. Great. So, again, just a quick overview for those who are new to the story. TRELLUS HEALTH is a resilience driven connected health solution for chronic conditions that is revolutionizing the treatment and delivery of whole person care. As a quick refresher and for those who are new, our company is developing and commercializing, the provision of digital chronic condition management solutions for employers and health plans. We utilize a scientifically validated approach. It's a resilience driven approach called the GRIT methodology, which we've licensed exclusively from Mount Sinai. Our initial focus is on inflammatory bowel diseases, and that's an umbrella term for two chronic incurable diseases called Crohn's disease and ulcerative colitis.

2:25 But our license from Mount Sinai, again, it allows us to actually apply this methodology and our business to seven broad disease categories beyond IBD, and those include things like heart disease, kidney disease, oncology, COPD, etcetera. So there there are a lot of other, diseases that we can utilize our approach for. Over the last year, we've developed and now launched our proprietary highly secure technology platform, which is called TRELLUS HEALTH and that's to coordinate and deliver personalized care remotely via telehealth to our patients. So our tech in our tech enabled care management solution is not regulated by the FDA. We expect, to recognize revenue this year through a combination of b to b value based contracts with health plans and and payers, employers, as well as through direct to consumer, through patients, and in partnership with their GI providers.

3:18 So one of the most important things I wanna emphasize about, Trellis Health before we dive in is that we are the first and only digital health company that's taking this resilience driven approach to health care. We focus on the intersection of mental and clinical, chronic disease, which represents a massive, and growing market in The US. It's over $3,400,000,000,000 in spend in US health care spend. So we're really focusing on addressing that, managing that, and, reducing that cost while improving the quality of care. So we can proceed to the next slide, please. If we could proceed to the next slide, please. Thank you. We developed TRELLUS to address some major issues that are facing The US healthcare industry, not just the incredible spend associated with these chronic diseases, but as you can see here on the right, lots of different issues that are challenging our health care constituents.

4:13 You know, the vision of TRELLUS HEALTH is to provide all chronic disease patients with access to gold standard whole person care, the same type of care that's being delivered at the Mount Sinai IBD Center currently through this GRIT methodology. So everything we do is enabled by technology, but we are, absolutely more than an app. You know, we have built an extensive secure, care coordination platform, which is our TRLSS Elevate platform, which does have an app component, but it really is the infrastructure that enables us to coordinate care between a licensed clinical care team, our patients, and their GI providers. Over the last, you know, after the over the last year, we've actually digitized all of the assets that we've licensed from Mount Sinai in terms of the GRIT methodology.

4:58 Actually, we could go back one slide. Sorry. I haven't finished yet. And so as you can see here in these three these three, colorful leaves are really the components of our business. We have a connected integrated care team of licensed health care professionals who work with our patients via telehealth interactions. We have this very robust, technology infrastructure that takes, the GRIT resilience assessment, care coordination, remote patient monitoring, And we also have underneath it a very, we'll be building a very robust longitudinal data database of patient reported outcomes and biomarkers for predictive analytics and also for informing real world evidence. So, again, it's a very comprehensive solution. No other digital health company integrates all three of these components while leveraging a scientifically validated approach and using connectivity to eliminate the silos and inefficiencies associated with our fragmented epic episodic care system.

5:51 You can move on to the next slide, please. How we do what we do, it's quite easy. It's a three step process, with our patients. Again, I'm just going to focus on IBD to start. That's where we're starting. So first, we do our GRIT, our resilience assessment, where we assess our potential patients over five psychosocial dynamics generating quantitatively validated score that assesses whether or not they're resilient. And again, important to emphasize that that score has been proven to have an 80% predictive validity about whether or not these patients will need to utilize unplanned care over the next twelve months. So we identify those patients who are at risk, are, you know, low resilience, and we also put together a personalized care plan for them. So this is a behavioral, behavior on clinical care plan, that we work with our patients over a six to eight month period. So that's where we're moving into the coordinated whole purse care, component of this. We manage care via convenient telehealth interactions and through utilizing our TRELLUS Elevate platform to schedule with them, to message with them, to monitor patient reported outcomes, as well as we stay in touch with their provider to get updates every time the patient has a care event, you know, an episode that we understand what, what their care plan is and if their, medications have been updated.

7:04 So lastly, our TRELLUS Elevate platform constantly monitors patient biomarkers and patient reported outcomes to alert us if they're, you know, patients or providers, if there's any indicators of rising risk. And we assess all of our patients after six months. We reassess, resilience to see if they've graduated, so if they've achieved resilience. And we continue to monitor our patients to achieve resilience for any indicators of inflammation or decreased resilience that could lead to unplanned care events. Really about keeping patients happy, healthy, and out of the hospital. Can you move on to the next slide, please? This just gives you a quick, snapshot of what the TRELLUS HEALTH looks like and how we work with our you know, between our care team and the centers. Our our trained licensed clinical care team, which consists of a licensed clinical social worker, a registered dietitian, and a nurse practitioner, are using the TRELLUS Elevate platform constantly to manage and coordinate our patients. We communicate via the app or the web with the patients.

8:03 You can see some of the screenshots here with the care coordination touch points that we have. And then we communicate with our our providers in a number of different ways depending on their their preferences in terms of communication technology and workflow. So we can integrate with their electronic medical record systems. We can send secure, email and text, and sometimes we just use good old fashioned phone calls. It's really up to the doctor how they want us to communicate what's happening with their patient and how to best coordinate with them. Moving on next, please.

8:33 So now I'd like to shift our attention to performance highlights for the first half of twenty twenty one. And as I mentioned in our introduction, we have we completed our AIM IPO in May, secured approximately $40,000,000 in capital in an oversubscribed round. So while we've invested heavily over the last six months, in the building out of our TRLSS Elevate platform and hiring the talents that we need to execute, as of June 30, we still have, nearly $40,000,000 in cash on the balance sheet, which we believe will provide sufficient, capital to achieve our cash flow breakeven, in 2023. So upon completion of the financing, we did pay Mount Sinai a $500,000 license fee for the GRYT, intellectual property. And, at at the end of the period, the company had an EBITDA loss of 1,360,000 after capitalization of intangibles.

9:26 And it's important to understand, that although we're, we're moving out of build mode and into rapid launch mode, We are balancing ourselves, to make sure that our cash will last us more than two years depending on the timing and the implementation of our b to b contracts. So we can move on to the next slide, please. We've achieved significant operational progress in the first half, in terms of commercialization, technology, and product development. We've hired and established our business and clinical operations, And our b to b sales pipeline, really includes a robust mix of health plans, employers, and we've entered into discussions with with pharma as well and with health systems about extending our business and our GRIT methodology into other chronic diseases beyond GI and IBD.

10:14 We beta launched the TRELLUS Elevate platform in June and conducted end user research to identify any immediate issues or areas of improvement, and that's really enabled us to have a very, a very smooth launch of our of our actual TRLSYS Elevate platform, which happened in July. So we can move on to the next slide, please.

10:35 Post period end, you know, we've achieved several critical milestones as outlined in our AIM admission document. Last month, we executed our first demonstration contract, demonstration program contract with Mount Sinai Hospital with their employee health plan, And we recently announced a managed services organization agreement with Connected Health Medicine PC that will enable us to deliver our care management services using licensed health care professionals. We market launch TRELLUS Elevate in July. It's now available via the web and download on the, on the App Store or via Google Play. And at the time of launch, we have already built a library of over a 150 digital education modules that can be accessed by our patients twenty four seven via, Trellis Elevate to educate and reinforce them on many of the behavioral modification, concepts and health education concepts that we review with them live over telehealth.

11:30 So following our IPO, we announced, the appointment of Aled Stevenson as our UK managing director, and Aled has over nineteen years of experience in, UK health care having worked for AstraZeneca. He will lead our geographic expansion initiatives through, r and d activities in The UK. So moving on, please. So this gives you a quick, quick overview of the the competitive landscape, and we we really do believe that TRLS is superiorly positioned, to to deliver value to all health care constituents as no, competitor offers the same combination of expert developed scientifically validated approach, a licensed multidisciplinary care team, and a robust, technology set of capabilities that we provide in terms of tracking, monitoring our patients, and predicting unplanned care events.

12:21 So there there have been a few, recent entrants into the GI space. You can see these near the bottom.

12:28 Know, they none of these players, as you can see, have a scientifically validated approach that's been utilized on patients and proven in patients. Most of them are focusing really just on the, you know, biomarker tracking and monitoring, which pretty much any digital health company could do. So, if we could move on, please.

12:50 So, you know, in terms of our outlook, we're very pleased with the rate of progress we've made since IPO. We remain confident in our ability to, deliver against key operational milestones, according to our plans. Our b to b pipeline is robust and growing as more health plans adopt value based population health strategies to, and we're expecting to announce several of these contracts in the coming months. In addition to, beginning to manage the employees, the Mount Sinai, employees through that demonstration program, we'll also be licensing our clinical operations in October for direct to consumer telehealth in New York, New Jersey, and Connecticut, and we expect to be licensed in several more states before the end of this year. Our goal is to expand our licensed tele telehealth care operations, to, you know, more than 20 states by the end of next year and then to reach broadly most of The US in the following year.

13:45 Our commercial pipeline is very diverse. It includes advanced discussions with several pharma companies, and we expect these contracts to, emerge and and be solidified in the near term. And we'll also be versioning our our business and platform into other, chronic conditions, including those in GI, functional GI diseases, as well as non GI diseases. And once we've collected, several months of real world evidence, we can expect to analyze and publish these results about the, you know, the positive outcomes, the health outcomes, and the health economic outcomes of utilizing our resilience driven connected care approach. So in summary, the outlook's very positive. We as we officially market launch our business and platform to begin to scale our technology and operations. So I would now like to turn it over to Saleem Hamir, our CFO, and he will walk you through TRELLUS HEALTH's financial performance for the first half of the year. Take it away, Saleem. Thank you, Monique. Good afternoon, everybody.

14:40 Again, these financials are pretty straightforward. Again, there's nothing complex in these numbers, so hopefully, we'll quickly wisdom wisdom to them very quickly. So we floated in AIM and did our fundraising end of May. So only one month of of trading has has occurred in in respect to these in this period. However, the reporting is for six months from January 1 to June 30. As our business is is mainly based in in states, the the reporting currency is is dollars. So, you know, obviously, we are a UK based parent company, but businesses in America's functional currency is dollar, so reporting will be in dollars.

15:27 We raised 28.5, which is equivalent of $40,400,000. Turning into p and l, we've we've incurred a loss of $1,570,000, EBITDA loss of 1,400,000. As as Monique highlighted to you that, you know, for the last six months, it's very much build and develop. So three key areas of expenditure has occurred in the in in the last six months. Very much building a team, personnel cost, having a a software development company assisting us with the developing of the TRLS elevate platform, and and we've incurred costs in relation to legal and professional, in relation to legal regulatory compliance, and any contractual matters, whether it's employee, customer negotiation, and all that. So those are the costs we've incurred the last six months.

16:22 Obviously, I've highlighted under under the the EBITDA loss how the figures are made up. It it comes around $2.42500000, of which I had to capitalize as per the accounting standards, 1,050,000 as as development cost. So the loss comes to 1.35, and and we have a a development cost of 1.5 1,050,000 capitalized. And at at end of June, we had around $660,660,000. So all in all, we have spent 1,700,000 in development cost. Moving on to the balance sheet. Again, only two areas which I would like to highlight. The the first one is the intangible, which is $2,214,000 of 1.7 is development cost, and the $0.5500000 dollars is is is the license cost we paid to Mount Sinai, 500,000.

17:23 This is again highlighted in the admission document as well. The license fee to Mount Sinai was based on on successful AIM fundraise, and that's what we have done. Obviously, the company has not has no revenue, so we haven't provided any amortization. But I believe in you know, once the revenue starts in in 2021, at the year end, we'll have amortization on these intangibles going forward. And the next item is is at the end of thirty June, we have 39,700,000 sitting in our bank account still. So that's that's the financials pretty straightforward. Nothing complex straight, and and that's what it is. Anyway, I'll I'll leave it at that, and I I give back to you, Monique. Thank you very much. Great. Thank you. Thanks so much, Salim. Wonderful.

18:13 Great. So I guess this, that concludes the formal portion of our presentations. Now we'd like to move into a q and a with our investors who are on the call or investors or interested investors. What's interesting, I just took a look at the poll and saw that about 20% of the folks on the call are not are not currently investors, but we do have 80% are investors. So it's great that we have, you know, a mix of those who are currently invested and those who are potentially interested in in becoming shareholders of TRLS. Looking at the question first question here, from Andy. He had a question of, do you own all the data, and how does that work commercially? And what should we be looking for milestone wise to demonstrate your progress? So that's a couple questions in one. So let me let me walk through it very quickly. We do own all of the data that we, you know, that we collect in managing our patients. So, when we're collecting, whether that's biomarker data, patient reported outcome data, any any data that we have on our patients. When they register with our program, they consent to allow us to have access to their data, to, you know, to utilize it in a de identified way for research purposes. If they don't want to do that, they can opt out of the utilization for research purposes. So that's all part of the initial consent process.

19:26 We do, you know, we do own the data, so we can utilize it for our own predictive analytics purposes and then also for publications and publication public publishing our outcomes. In terms of how it works commercially, again, that just it helps us the data we own. So we don't need to license patient data from anyone. The only thing that we've licensed, from Mount Sinai is the GRIT methodology, which we can utilize for IBD and and seven other broad disease categories. We can utilize the data and the predictive analytics, and public and publications of that data and the outcomes of that data any, you know, any way we like in accordance with privacy standards, of course. And what should you we'd be looking for milestone wise to demonstrate progress? Well, clearly, it's gonna be signing of, additional, b to b contracts.

20:14 We expect one contract with a New York State health plan to be signed very soon, as well as some additional health plan contracts within the next three to six months. We also expect that we'll see some, contracting with pharma, within the next three to six months based on our advanced discussions and pipeline with with pharma. So that that would demonstrate progress getting, patients engaged, enrolled, is important, of course, so we can demonstrate that real world evidence and and gain those testimonials that'll enable us to grow and and convince both our our payers, our b to b payers, and our patients of the great care that we're providing. I believe that's, that's the answer to Andy's questions. Let me look here, Nick.

21:01 Are all costs to launch sunk, and what is left to do? Celine, do you wanna answer that? Yeah. Again, it's a very broad question. Are all costs to launch sunk? What's left to do? I think currently, we're still developing. And and the areas we are developing, it's not just one chronic disease, we'll be developing to other chronic diseases. So there's a lot of development work required And and as Monique highlighted, we're talking to pharma. So there's a lot of development cost around, you know, developing the great methodology and and technology to other areas as well. So you have those two side of it. At the same time, as you progress with IBD, you need to update, you need to change the methodology, you need to expand the services to patients so that they there will be a lot to do.

21:57 It's it's not just we have done once and that's it. It's not like that. Yeah. So with the yeah. Just to, expand on that. With the proceeds of the AIMRAYS, we actually are investing in a very, robust interoperability platform that will enable us to, directly in, you know, speak and exchange data with, electronic health record systems, with lab systems. So that's all being built out currently. As Salim said, we're building out and versioning the platform for other chronic conditions. We're starting out with functional, GI, and then we're also expanding into non GI. And and we'll continue to evolve our capabilities for tracking and monitoring. So we are looking closely at at integrating wearables for passive data monitoring. That's clearly something that we could add in, you know, and and are looking to add in over the next year. So there are a lot of tech enhancements.

22:46 And and, of course, we'll hear feedback both from our patients and from our payers and from pharma about enhancements that they would like to see, to make the, the experience better for the patients and for those, paying for the the access to the service. Question. There is a question in here about what currency the cash is held. All of our all of our figures are reported in dollars and US Dollars. I don't know, Salim, if you wanna expand. I I get this mixture of dollars and and pounds. We had a the, you know, the fundraise, you know, was a mixture of dollars and pounds. So that's what we have. However, majority of it is in pounds, but we are converting as we go along, into dollars.

23:34 Okay. And next question, how long will your initial contracts be? So what we're seeing with our initial contracts, if you look at the details of, say, Mount Sinai demonstration agreement and also, the terms of the agreement that we're we're currently negotiating with the New York state payer health plan, should I say. These are contracts for around six to nine months, and they're really primarily around assessing feasibility. You know, does the platform work? Does the technology work? Are the patients engaging? Are they satisfied? Are there, are there, resilience scores increasing over a three month period? So they're they're looking at these as more short short term feasibilities assessments, to determine whether or not things are working. This is positive. We demonstrate progress. We'll move into longer term negotiations about multiyear contracts with these with these payers.

24:24 So that's that's how we're structuring our initial demonstration programs. But as we enter, into longer term, our our goal is to enter long term multi year multi year recurring contracts with, with health plans and employers. The contracts with pharma will be structured differently because their projects they're based on projects. Some of them do affect you know, address providing access to coordinated care, But some of them also, you know, address using you know, applying the resilience, metrics to, you know, clinical trial effectiveness assessments and things like that. So those are more analytical. Those would be structured and priced differently. Fantastic. Think you've covered all those questions we've had come through. Perhaps we'll give you a couple of moments to see if any further questions do come through. Of course, if if further questions do come through, you will have the ability to review those.

25:13 But just perhaps while we wait a moment for that, if I may, Monique, just a few final words just to conclude. And if we have any further questions, we can pick those up on the way through. Sure. So, you know, in closing, thank you again for taking the time to, to come and and visit our our interim results. We're, you know, we're very, positive on the outlook for continuing to achieve all of the milestones that we'd addressed in our IPO admission document. We have a lot of great, you know, great news flow that's gonna be coming up in the next three to six months, so we hope that you'll continue to follow us and and ideally invest, and help us, join us on this journey as we, transform health care through resilience driven connected health. Thank you very much. Thank you. That's absolutely fantastic. Monique, Selim, Marla, thank you indeed for updating, investors today. Could I please ask investors not to close the session as you'll be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations.

26:08 This will only take a few moments to complete and be greatly valued by the company. On behalf of the management team of TRLS Health PLC, we'd like to thank you very much for attending today's presentation. That concludes today's session. Thank you and good afternoon. Thank you. Good afternoon. Thank you. Thank you.