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Clinical progress from PureTech

After securing a major drug approval, the advanced biopharmaceutical company has more developments to come
April 24, 2019

Following its “most ambitious year yet”, advanced biopharmaceutical specialist PureTech Health (PRTC) saw its operating loss narrow by 9.9 per cent to $104m (£80.3m) for 2018.

IC TIP: Buy at 179p

PureTech has advanced its research and clinical activities across its pipeline. Partnerships with two major pharmaceutical companies, Roche and Boehringer Ingelheim, signal validation of the group’s own internal, non-affiliate pipeline. Relating to the oral administration of complex oligonucleotides (short DNA or RNA molecules), the Roche deal involves $36m in upfront payments and is potentially worth more than $1bn if any products reach the market, by no means a given.

Activity in the internal division is one of the drivers behind the 8.0 per cent increase in research and development costs to £77.4m. However, despite increasing operating expenses, a strong cash position – including $177.7m held by the parent company and $274m raised by affiliates – has extended the group’s cash runway, providing sufficient funding for operations to the first quarter of 2022.

With seven clinical-stage and three preclinical programmes, the group believes six affiliates “have the potential for monetisation over the next 12 to 18 months”. Following clearance from the US Food and Drug Administration (FDA), Gelesis’ weight-loss product Plenity is expected to be launched in the second half of 2019.

Analysts at Peel Hunt forecast adjusted pre-tax losses of $136.3m this year, giving a loss per share of 21.4¢, with losses rising to $156m and 24.2¢ in 2020.

PURETECH HEALTH (PRTC)  
ORD PRICE:179pMARKET VALUE:£506m
TOUCH:176-179p12-MONTH HIGH:190pLOW: 135p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:0.98¢*NET CASH:$251m
Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
20142.2-76.2-51.0nil
201511.8-56.3-21.0nil
20164.4-83.2-21.0nil
20172.5-70.711.0nil
201820.7-68.4-16.0nil
% change+728---
Ex-div:na   
Payment:na   
*Includes intangible assets of $3.1m, or 1¢ a share   £1=$1.29