What is the genesis of PureTech Health and what inspired you to start this company?

DZ: As an entrepreneur, I was interested in how academic breakthroughs get translated from basic science to the point where they impact patients. There was an existing ecosystem in place and usually it entailed an entrepreneur or scientist advancing one specific idea. The most compelling entrepreneurs and scientists get funding and there is attrition along the way. What occurred to me was that at the beginning of the process, those individuals were advancing their own ideas but not necessarily looking broadly and asking what the best idea is. The approach at PureTech was that we were going to look at a landscape of the most exciting scientific breakthroughs together with leading experts and do that through the lens of a specific disease. That process forces you to look at a number of different approaches one can take in a modality agnostic way.

PureTech started with limited resources and there was a question of what funding model we would pursue. We decided that we would fund the new medicines that we develop by putting them into subsidiaries (Founded Entities). That way we could share the cost of development with investors to advance those medicines. As those programs progressed and we developed a track record of multiple clinical successes, that generated more resources and we were able to keep the ownership of new programs and develop those internally.

BC: Because of the model that we had, those Founded Entities are very well funded and have excellent independent management teams. We see them as partnered programs that are generating value for us but don’t require a great amount of our resources at this point. For example, we brought in about US$347 million from the sale of equity in Karuna in 2020. We are still a major shareholder in Karuna and we still have equity and royalties, but that gave us flexibility that many biotech companies do not have. We do not have to go out and always tap the capital markets for funding.

PureTech’s programs have breakthrough potential but are also risky. How do you help mitigate these risks?

BC: Across both our Wholly Owned Pipeline, and our Founded Entities we have diversification of risk because our pipeline does not rely on one platform or program and our value is underpinned by a significant group of de-risked assets to counter some of the more risky, earlier stage programs.

If you are a biotech entrepreneur what are some of the issues in the earliest phases?

DZ: There is a tension between elements that don’t exist when one is starting a business, such as funding, people, and a great technology. All of those elements are drawn to each other, so if you do not have money it is really hard to attract great people. If you do not have great people it is hard to attract money, and if you do not have either of those it is hard to get the technology in place and licenses. The job of an entrepreneur is to overcome that inertia and find a way to bring in those pieces when they do not exist. Biopharma is an industry that is somewhat risk averse and pattern recognition oriented, so whenever you have a different business model, you often need to prove that it works before you get a lot of credit for it.

What goals do you wish to achieve over the next 2-3 years and how might this strategy reward shareholders taking a long-term view of PureTech?

DZ: We will not look like Merck or Pfizer, because we are set up in a more entrepreneurial way. However, we think that as we move forward and drive our internal pipeline through advanced clinical development and commercialization, we are building a major biopharmaceutical company. Shareholders that are joining us today have the opportunity to benefit from our fulfilling that mission. It has to do with making a difference in the lives of millions of patients, and we are proud of the fact that PureTech has 24 product candidates that we invented or initiated. 13 of these are in clinical testing, and two have received FDA clearance. We feel that our model also protects downside for investors, because we have multiple modalities along with our Founded Entities that are a source of value for us.