PureTech got the financial support of a big U.K. investment manager last year. Now the Boston firm wants the backing of a whole other group of London investors too.
PureTech, the creator of a slew of local startups at the nexus of healthcare and technology, this morning filed papers to go public in England. It’s aiming to hold an IPO on the London Stock Exchange, selling at least 25 percent of its outstanding shares in a bid to push forward its various nascent companies—startups like Tal Medical (developing an anti-depression device) and Akili Interactive (therapeutic/diagnostic video games). PureTech expects to raise $160 million in the IPO, and complete the offering in June.
PureTech declined to comment on its rationale this morning, citing regulatory restrictions that bar the firm from talking to U.S. reporters. But co-founder and CEO Daphne Zohar (pictured above) said in a few international reports that PureTech chose London over the U.S. stock exchanges because “investors understand [PureTech’s] model,” and because the U.K. “leads the world in the listed technology-transfer space.”
Zohar is referring to PureTech’s place in a gray area of startup creation. Though PureTech was originally called PureTech Ventures and births new companies, it isn’t a venture firm, and doesn’t raise the massive funds that VCs generally raise. Instead, it’s structured as a large healthcare operating company with the budget to support itself and the startups it seeds, which function as subsidiaries. It also doesn’t have to think about quickly flipping those companies to get a return, which is why, outside of a recent attempt by weight loss startup Gelesis in the U.S., it doesn’t tend to take its startups public. These ventures are designed to be long-term, revenue-generating holdings that appreciate in value. (None of PureTech’s companies sell products as of yet, though it has generated revenue via partnerships and deals secured by companies like Mersana Therapeutics and Vedanta Biosciences.)
PureTech said as much in its London IPO filing; it noted that its goal is to advance its companies to the point that they sell their own products, though it expects “key milestones” might enable those startups to look at some other approaches, like licensing deals or potentially even public offerings of their own.
“PureTech is particularly focused on pursuing development paths that enable those companies to partner directly with industry leaders at the right stage and minimize dilutive sources of capital while retaining control over the strategic direction of the business,” the company said in its filing.
According to the London filing, PureTech has raised about $250 million in financing since its inception. Late last year, it brought in Invesco Perpetual, a firm with $120 billion under management, as a new investor in a $55 million round. Zohar said in the filing that the cash would bring PureTech’s “most advanced product candidates to revenues.”
“With the acceleration of scientific discovery and the convergence of new and disruptive technologies being applied to life sciences, we believe the healthcare industry is on the cusp of a major transformation,” she wrote. “This is an opportune time to leverage PureTech’s expertise in translating science into impactful solutions, to change how we address healthcare problems.”
As I wrote last year, PureTech’s strategy has evolved over the years, from building more traditional life sciences companies to launching inter-disciplinary startups that combine various elements of science and technology. Most recently, for instance, PureTech created The Sync Project, a company exploring music-as-therapy techniques. PureTech currently has a portfolio of 12 such companies, of which it owns an average of some 76 percent. The firm has 10 other “concept phase” initiatives that could become future startups as well, filings show.
The firm has several big names in its ranks, among them: former Sanofi CEO Chris Viehbacher (an independent non-executive director); MIT professor and Nobel laureate Robert Horvitz (a board observer and the chair of its scientific advisory board); MIT media labs director Joi Ito (chairman); former Pfizer executive John LaMattina (independent non-executive director); and MIT professor and startup creator Bob Langer (also a non-executive director).
