US technology firm seeks IPO as sign of UK digital health market growth

A US healthcare technology firm which invests in digital start-ups – including one which has used computer games to diagnose and treat neurological disorders – is to seek an initial public offering (IPO) on the London Stock Exchange.

As a signal of the growing digital healthcare market in the UK, PureTech, is looking to secure $160million in a flotation next month, reports the Financial Times.

The Boston-based company, whose board will include former Sanofi CEO Chris Viehbacher and ex-Pearson head Dame Marjorie Scardino, becomes the second US-based life science company to float in London this year after Verseon, a California-based company that uses computer algorithms to discover drugs, raised £66m on the junior Aim exchange this month. Its business model involves investing in a portfolio of early-stage science and technology and helping turn the intellectual property into commercial businesses.

PureTech joins several other high-profile companies listed on the LSO, with similar business models, including  IP GroupAllied Minds and Imperial Innovations, which have a collective market capitalisation of more than £3bn.

Daphne Zohar, PureTech’s co-founder and chief executive, told the FT: “We realised the UK was the best place for us because investors understand the model.”

PureTech’s investment portfolio has thus far included 12 companies, all still in the development phase. They have focused on unconventional approaches to healthcare problems ranging from obesity and hair loss to autism and schizophrenia.

Akili Interactive Labs is developing a video-game platform for diagnosing and treating cognitive disorders, supported by PureTech. Another of its digital healthcare ventures has included a company which uses voice-monitoring technology to identify changes in a patient’s health.

“We are looking for different approaches to problems that have not been tried before,” she said. “We screen everything that’s going on, look at what has failed in the past and think what we could do differently,” said Zohar.

PureTech has built a network of 50 expert advisers, who screen around 650 technologies a year, primarily from the academic sector, a handful of which have been taken further.