PureTech Health Cash Runway Extended

PureTech Health(NASDAQ:PRTC) reported its second quarter 2025 earnings on Aug. 28, 2025, highlighting a cash balance of just under $320 million at the end of the first half of 2025, a reduction in consolidated operating expenses to $50 million from $66.7 million year-over-year in the first six months of 2025, and a sharpened focus on three core spinout entities: Seaport Therapeutics, Gallop Oncology, and Celea Therapeutics. Management disclosed the external Series B valuation for Seaport Therapeutics of $733 million, presented third-party forecast modeling for future Cobenfy (KarXT) royalty revenues, potentially totaling $300 million through 2033 based on consensus analyst projections; this figure is a non-IFRS (non-GAAP) measure, and detailed progress on clinical milestones and financing plans across the portfolio.

PureTech Health accelerates spinouts, operational streamlining deepens cash runway

Following the spinout of Seaport Therapeutics in April 2024 and ongoing structural changes, the majority of operating and research and development (R&D) spending in the first half of 2025 is directed toward Celea Therapeutics and Gallop Oncology, which remain 100% owned but are actively moving toward independent external funding. Actual consolidated cash, cash equivalents, and short-term investments fell from $367 million at fiscal year 2024 (ended Dec. 31, 2024) to just under $320 million at the end of the first half of 2025 (as reported under GAAP), driven primarily by R&D spending on these two entities.

"the majority of the R&D spend, obviously, is attributed to Celea and to Gallop. So as we've indicated, I think, obviously, priority at the moment is looking to get those 2 assets funded with external capital. As they formally spin out, that will remove the majority of that spend from our balance sheet and from the sort of PureTech level P&L. So from that perspective, we would expect that as we go forward to have a further reduction on our R&D overhead as we move into 2026."
-- Robert Lyne, Interim Chief Executive Officer

The transition of R&D and operating expenses off the parent balance sheet is expected to extend PureTech Health’s cash runway beyond its current guidance of well into 2028, depending on the timing of external funding for portfolio entities, reducing future dilution risk.

Seaport Therapeutics valuation and economics clarify PureTech Health portfolio upside

PureTech Health retains a 35.1% equity stake and tiered (3%-5%) royalties in Seaport Therapeutics as of Aug. 2025, which recently closed a $733 million post-money Series B led by top venture investors including ARCH, Third Rock, and T. Rowe Price, as confirmed by management on the second quarter 2025 earnings call. Seaport Therapeutics is advancing three novel neuropsychiatric drugs via the proprietary Glyph platform that facilitates oral delivery of challenging therapeutics, a technology initially developed within PureTech Health.

"We have often had many questions on Seaport about the post-money valuation of that business. We still own just over 35% of the equity in Seaport Therapeutics. We also have tiered royalties on the drug products within that company because they were developed within PureTech originally. In terms of the valuation of Seaport, we have a valuation in our accounts, which is available publicly, but we have been asked in the past about the Series B valuation. And so we thought it would be helpful today to confirm that there was a $733 million post- money valuation on Seaport at the Series B, so a fairly recent financing, which was led by absolutely top-tier validated venture capital investors."
-- Robert Lyne, Interim Chief Executive Officer

This data point unlocks greater transparency for investors to model future PureTech Health value realization, benchmarks institutional appetite for the platform, and evidences management’s ability to crystallize significant off-balance sheet portfolio assets.

Cobenfy royalty stream de-risked with third-party forecasts

Cobenfy (KarXT), originally developed at PureTech Health and now licensed and marketed byBristol Myers Squibb(NYSE:BMY) afterKaruna Therapeutics(NASDAQ:KRTX)'s $15 billion acquisition, is expected to generate approximately $300 million in milestone and royalty payments for PureTech Health through 2033, based on consensus external analyst sales forecasts. The 2% royalty applies to annual sales exceeding $2 billion, and upside is linked to additional regulatory indications, notably pending pivotal Alzheimer’s psychosis data.

"We've been listening to shareholders very carefully about their feedback on the Cobenfy economics. We have repeatedly been asked whether we can give some indications around potential value by reference to third-party analyst forecasts. We'll be talking about that today, and we've taken the opportunity to do some indicative modeling around what those economics could look like against consensus analyst forecasts, and it's coming out as a value of around $300 million over time,"
-- Robert Lyne, Interim Chief Executive Officer

Providing third-party forecast modeling for Cobenfy royalties offers investors a more objective basis for valuing PureTech Health’s future cash flows and highlights the potential for further upside if additional indications are approved.

Looking ahead

Management indicated that an end of Phase II U.S. Food and Drug Administration (FDA) meeting for Celea Therapeutics’ deupirfenidone is expected in late third quarter 2025 (calendar year), with Phase III initiation targeted for the first half of 2026 (calendar year), subject to regulatory feedback. Top-line efficacy results from Gallop Oncology’s LYT-200 Phase Ib acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS) study are expected in the fourth quarter of 2025, with additional survival and efficacy updates expected in the first half of 2026. Seaport Therapeutics’ near-term milestones remain undisclosed but are well funded following the $325 million capital raise as of Aug. 2025. No concrete new product pipeline timelines were provided beyond these disclosed milestones, and current cash runway extends into 2028, with further extension expected upon external funding of Celea Therapeutics and Gallop Oncology as of the second quarter of 2025.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,049%* — a market-crushing outperformance compared to 185% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of August 25, 2025

This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.