Peel Hunt says Vor Biopharma cash call validates Puretech Health's model

Analysts at Peel Hunt reiterated their 'Conviction Buy' recommendation for shares of PureTech Health following a $110.0m funding round for its founded entity Vor Biopharma, arguing that the transaction validated its business model.

Previously, they had pegged the value to PureTech of its 28.1% holding in Vor at 4.0p per share, under the assumption of a "conservative" 5% risk-weighting for Vor's pre-clinical pipeline.

After the above funding round, its stake had reduced to 11.8% but the monies would be used to develop that pipeline, including its lead product, VOR33, against acute myeloid leukaemia.

Peel Hunt also pointed out how Vor's technology platform "enhanced the efficacy of cancer treatments", allowing targeted treatments to be used in conjunction with Vor's cell therapy for "optimal effect".

"This news further validates PureTech’s model, which offers strong optionality for shareholders through exposure to PureTech’s holdings in its founded entities, without burdening PureTech’s equity holders with continual cash calls to fund the pipeline.

"As a reminder, PureTech has said its cash balance (prior to [Tuesday's] announcement) is sufficient to fund the company into Q1 2024."