Trellus Health (LSE:TRLS) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen. Welcome to the TRLS Health Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review your questions submitted today, and we'll publish those responses on the Investor Meet company platform. Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation.

0:31 I'd now like to hand over to cofounder and CEO, doctor Marla Dubinsky. Good afternoon. Wonderful. Good afternoon, and thank you everybody for attending attending this meeting. And I'm delighted to be presenting our interim results for the period ended 06/30/2023. And accompanying me today is our new CFO, Joy Besinger, who I'm delighted to be part of the exec team. And, we're here today to, update you on where we are. Alright. So here we have the disclaimer, and let's move directly into a company overview. So, you know, we've met for those of you we've met before, hello again. Those that we haven't met, we're excited to share with you an overview of TRLS, just a reminder of sort of what our focus is and what our key assets are. So we're a digital health company, first focusing in GI chronic condition management. We're really focused on those individuals who have chronic incurable physical GI conditions and the overlap in those who have a comorbid mental health condition, which accompanies a lot of patients, unfortunately, who are diagnosed young, and need chronic condition management and and, medication.

1:46 And there's a high mental health burden that comes along with that, and we're really focused on that connectivity because we know when individuals who have both a chronic physical and a chronic mental health condition, the costs, compared to patients without a comorbid mental health condition are significantly higher. And really, our deliverable is to go in, improve patient outcomes, and lower the cost of care for whoever is paying for that health care. The key real assets we have which distinguish ourselves from other individuals who are just delivering, for example, an app for someone with anxiety or depression, we really have sort of a dual pronged, authority. And the first area is we have a scientifically validated assessment, a way of going in and letting, our b to b clients know who exactly are the individuals that are costing them the most, money in terms of their health care utilization, but give them a reason why. So we can go in. We can say these are the individuals that have cost you based on claims data because we know that there's been a medical claim, but we can go in and explain to you using our validated assessment why. What are the health behaviors? What are the resiliency behaviors that an individual is exhibiting that led to that health care utilization?

3:03 In addition, we can actually take those individuals at the population of that health, plan, for example, and say, not only are we gonna focus on those individuals who cost you a lot of money last year, but give us the entire population because we're gonna actually tell you who's gonna cost you a lot of money next year. So that is really an important asset that many of our, potential clients are really, wanting to hear more about because they don't have that capability. Right? Because they just know what the spend was. Not only that, once we actually identify someone's resiliency behaviors and their levels of resilience, we can then go in and personalize these behavior change strategies and personalize the condition management specifically to that individual's limitations in their behavior as opposed to one size fits all digital, app that people can go regardless of your level of resilience. So that's really important differentiator that I always like to highlight, and you've maybe heard that, you know, when I've described sort of what it is that we're actually, discussing with our with our potential partners.

4:08 The features or how we do it is we have a platform, and on that platform, there's engagement with members, with our resilience team, as well as delivery of these digital behavior modules and skills and lessons that actually go ahead and change the behavior. We deliver our assessments through the platform as well, and we follow their progress and deliver that reporting back because the platform is also, scaled and ready to deliver reports back to our potential, b to b customers. And, again, focused on what are our customers. Essentially, there's sort of two two different groups. One is those that are paying for health care, which is the health plans, in The US, as well as the employers who also provide health benefits to their employees.

4:53 Remember that in The US, about 60% of individuals receive their health plan benefits through their employer, not directly to a health plan. Benefit consultants, are groups or insurance brokers such as, there's many big benefit consultants that are actually looking to partner with solutions and bring them to employers as they're deciding on their health benefits. And the other, of course, potential customer would be a pharmaceutical manufacturer who are looking to brought to bring innovative solutions to help the impact the quality of life of individuals who are on their specific medication and also have them impact and be better self managers. The highlights to date, which are really important to sort of think about is, you know, what has actually happened since we last spoke and really the highlights to date. So, again, I've already introduced Joy and, Steve Young, who, we're very grateful was a part of TRLSUS from, the new leadership sort of, realigning the the business strategy in the company back in July 2022 when he joined the leadership team and now has moved on, and we're very grateful for his, for his commitment to TRLS. And now we're, really excited to bring on Joy who really brings this sort of BD strategy CFO facing role to us. So that's a a great partner for me specifically, but also for the direction of the company. We also, expanded

6:24 beyond IBD and, developed and, impact enhanced the platform to also be able to deliver to another GI condition. What we found is depending on the client, whether it was an employer, a benefit consultant, or a health plan, they have different, populations that they want these programs to target. And what we know is for these benefit consultants, they're looking at GI conditions in general. They're looking for those two conditions that have a high depression and anxiety rate. And the two that rise to the top are inflammatory bowel disease and irritable bowel syndrome, and that represents, you know, about ten percent of the population at large have IBS and about one percent of the population have IBD. So to make a much more comprehensive GI condition management solution, we did that, in early twenty twenty three. And that was important because as we, brought on one of our b two b clients who specifically was delivering it to a labor union in New York, they wanted to be able to have both an IBD and an IBS solution.

7:26 We also, we had spoken before that part of the discussions in the early days of when we were interacting with, potential b to b customers was really about, well, does TRLSS work outside of Mount Sinai? Meaning, those that weren't physically in front of the physicians at the Mount Sinai IBD Center or in front of our psychologist and cofounder Lori Kiefer, does it actually work outside of that? And in order for us to progress our discussions with the BDBs, it really did matter what the data that we were showing them. So we did in para parallel where while we were reengaging and ensuring we were having meaningful impactful discussions with potential b two b clients, we were in parallel conducting what we call our early adopter, d to c program where we brought, individuals in to actually look at data and ensure that people engage, that the team is engaging correctly through the platform, that we're measuring outcomes correctly, and that members are actually enhancing their resilience.

8:26 Those were, like, really important facts that we needed to bring into, to advance the b to b discussions, and we did. And we provided, some positive data, and and I'll show you that on the next slide. We continue to have ongoing very meaningful, collaborations with very key strategic partner channels, one of them being the largest patient advocacy group in, The US, which is where members go to get validation around what are solutions out there. And I've heard this company called TRLS, is this something that I should be trusting, or is this just another solution that people think would be helpful for IBD patients? Getting their commitment to, trust us and the credibility around that was was also important, but also the providers who are managing these potential members, which is when they come and say, I've got this flyer or I saw it in my Instagram feed, this company, TRLS Health, that is helping me that says that it's committed to me as a patient, an IBD or an IBS patient. Is this something that I should be engaging in? And therefore, getting the commitment from the American College of Gastroenterology to say, stamp of approval, this is a solution that we trust, has great academic, credibility and integrity, and this is something that we would get behind for these 16,000 GI providers, is the national provider society, for example, that all of us belong to.

9:52 Probably most importantly is I sort of started a dialogue when I was here in May and October, I actually said our goal will be to realign and reengage with large b to b health plans, which was originally what we raised on, and then also came in May and sort of said we were in late later phase discussions. We continue in later phase discussions with, a large health plan, and we'll walk you through sort of what we've done to the platform to make this, operationally successfully scaled so that we are ready to deliver as our discussions progress and be able to ensure that we launch correctly with this very important, potential customer. And, also, most importantly, we've continued to achieve operational readiness while maintaining a cash runway into 2025, which is really also that cash discipline, which we'll walk you through, in a moment, as well.

10:49 So this is just a highlight at sort of some of the data, and this is probably the most important data is that we wanna show that, members who engaged in our early adopter, d to c real world evidence program that I noted, that those that enrolled actually had improved self management, self efficacy, which are key markers of improved resilience. That's how we measure it. These are validated assessments. That's the beauty of what I was telling you about the way that we assess someone's resilience. So from baseline to repeat measure, which is within a three to four month period, which is when we remeasure, resiliency. Not only did we see a rise in resiliency, which you with a digital application to get a 65% improvement in someone's behavior in just a three to four month period is really an impressive, analytic statistic because at Mount Sinai, in our original data, we didn't see these kind of improvements till eight months. Why?

11:48 Why was it able to be seen earlier? It's because it's digital, and we're taking our method to their home and where they get their care rather than relying on them to make it to the Upper East Side Of Manhattan and wait for an appointment. This is more immediacy delivering their tools at their fingertips, ability to actually, follow their training that we're providing digitally. And probably an important and, I think, very impressive data point in my opinion because measuring anxiety and depression and showing nearly a three quarter drop in measures of depression and anxiety in a three to four month period is also it was a critical data point because we know once someone is depressed and anxious, that's really where the costs accrue. And what's important about our proactive approach to this in this population is that we don't wait for people to get depressed and anxious. We measure risk behaviors that willing will increase the risk of them getting depressed and anxious and come in and avert that. And this was proof that we can actually do that by increasing someone's resilience.

12:52 So this was in keeping with what we showed at Mount Sinai. It was important to show that it actually worked outside of the Mount Sinai clinic. Just to hone in, sort of recap sort of where our focus is, and this is just putting it in. Pictorially. And we are gonna hear the common themes of of our messaging today, which is we continue to progress, focus, and discipline. And I think those are, like, really key messages that we want to, sort of hone in on. One is we will continue to get data, whether it's from our community, testing strategies where we take members, that are in the community that wanna come in to be testers and give us real time feedback so that we can improve and enhance any engagement immediately without needing to test it on a b to b client. Right? The key is while we're in parallel, testing new things and enhancing our delivery, we can test it with our community testers, get data, and then take that and apply it to directly to our ongoing, b to b clients. I think that's a message that's important.

13:54 The other is, obviously, to advance our discussions, which they have and continue to progress with a, larger scale pilot with health plans, expand access to pharma, which is where patients or mem potential members are also because they're receiving a therapy through a specific pharmaceutical industry, and they're looking to bring resources to those members, that are outside of just a copay assistance card as an example, and optimize the strategic partnerships both on the advocacy side as well as on, the provider side. In terms of our current, pilot programs, just to recap, because in October, we had way back a year ago, we had talked about them coming on board. And then since we last met, and in the time frame between January and June, we've actually, you know, continued to enroll and have progress in enrollment in three key,

14:53 sort of flagship types of programs. One is a managed care health plan, which is like public or state or federal insurance in The US. This is not a private, insurer. This is more federal or state. And, unfortunately, a lot of these, individuals don't have access to sort of the gold standard of even even medical and or for sure behavioral sort of a holistic approach to their chronic conditions. So this is a really important, program for us because almost all plans have Medicaid, for example, managed care, and being able to show that we can save money in these, patients who often rely on the ED as primary care because not all of them, have access to sort of, as I noted, gold standard care. We're gonna see, cost reduction. That's an important milestone for us to make. Similarly, the health system employer agreement is a way to partner with VPs of HR, for example, and show that we can actually deliver part of their mental health or behavioral health benefits to their employees, such as myself, would have access if I had inflammatory bowel disease to this additional, behavioral health benefit in addition to the usual health plan benefits that I get through my, benefit plan.

16:11 And then the health system itself, which was Mount Sinai itself as a health system, partnering with TRLS and saying for anyone who's part of a labor union. So there's a a labor union called thirty two b j, which is a large labor union in New York, to be able to actually say if you and when you receive care at Mount Sinai GI care for either IBS or IBD, Mount Sinai will actually cover the cost of TRLS for those 32 BJ members who are actually receiving their care at Mount Sinai. So, again, three key sort of pilot agile programs to show that our model works in different ways. Same model, but depending on the outcome or the KPI that is requested as part of the agreement, we're able to deliver on whatever the outcome of measure is.

17:01 Whether it's savings, whether it's work productivity, whether it's positivity, we, are able to provide that to, the clients. This is, like, a really, I think, signature slide for us because I think it really highlights where we last left off, which is when the end of the presentation in May talked about what are the things we need to do to be ready for, a large health plan. And now I'm showing that we've con successfully completed and put that into play. And there's a reason for it because these are all elements of the operation that we needed to do to be more of an enterprise solution for a large health plan. So this sort of gives you some insight into how we've updated the operation to be as we progress with discussions.

17:49 And as these discussions progress, we very much look forward to updating you in the coming weeks or months around the progress of and outcomes of these discussions. But this gives you an element of what goes into becoming ready. Probably most important point, which Joy will, I think, put an exclamation mark around, is the idea despite us creating an infrastructure and operational scale to deliver to a large health plan, we it did not impact the spend rate. And I think that was really a disciplined move that was important. And, you know, if you followed us from when leadership changed last July, there was significant improvement in our spend and just showing you that we've continued the discipline despite enhancing the deliverable and becoming much more of an enterprise type solution without increasing the spend. So that was, like, a really important message. I've sort of honed in on two messages so far that you're gonna continue to hear.

18:44 This slide, I actually showed that the this was a a breakdown of illustration of what our pricing model is and how it actually happens. And the idea that

19:00 we would partner with a health plan, we would understand your analytics knowing that there's an annual spend of x. Here, I use an example of 25,000 per year. We then go to the next layer of negotiation, which is what's the savings that they would like and we agree to doing. This is an example. This is not, typical of any specific agreement, but I'm giving you an example of what it typically looks like in any initial phase with these large health plans. We then next level of negotiation is what's the ROI and what's a realistic ROI and what we can deliver on, realistically and be able to create the savings that, we are being, you know, held accountable for and deliver. And then in typically expansion phases of any type of, in agreements with health plans, then you really get into and the far right is the upside. Right? That far right slide is saying, once we prove in our initial agreements with large health plans that we could save and deliver and increase resilience and deliver on our KPIs, and that's based on a 1,252 to one ROI, where they pay us $12.50 a year to save 2,500.

20:14 That's that two to one ROI. So realistically, at the end of the day, if we save more than that, the goal would be really where the significant upside as noted to the far right in the blue box is that then you actually share in those savings. Because if we're saving more than the original negotiated agreement is, then it's a win win for both the b to b client as well as TRLS. And that's really this was to map out sort of the path. Right? This is to show in our initial phases, this is how we get paid. There's a screening fee. There's a monthly management fee. Relies on us to keep members engaged, and then there's an annual fee, per member, per year fee based on what our agreed upon, savings is. And that's sort of the business model that we will take forward.

21:01 Joy. Thank you, Marla. So net cash of 15,900,000 at the end of June compared to 19,000,000 at the end of December last year. Our loss was 3,200,000 versus 4,600,000 for the same period last year and then 8,100,000 for all of 2022. So as Marla had said, we have been able to really focus continue to focus our burn with intent, building on what Steve and Marla had managed to achieve last year after they took over. And then we're but we're still able to really scale up this business and be ready as soon as a large partner is signed to go forward, and we were able to do that without cutting into our burn.

21:52 So our strategic focus remains on our large b to b partners. We are continuing to develop and scale with the resources we have in hand, and we have a large health plan that's very far along the path. We also have earlier stage talks at various levels with all of our target groups. Alright. So, again, key messaging has noted the bottom line. It says it all. We have the operational foundation strategic framework in place to deliver and sort of these are sort of the goals as we set out in terms of traction. Our goal is as we head towards later, stages, we showed you what we've done to elevate the platform to be,

22:35 scaled and ready to deliver. Really, these are the ways that we, deliver on traction. Right? We need to enroll, specifically focus on those members that would be most likely to participate, engage them with the team and the platform, the technology, and make sure that we're creating that stickiness because we know that we're a monthly man you know, we're being paid monthly as individuals stay on the platform. So a big focus, obviously, will also be to ensure that the technology meets the needs of the business. Obviously, demonstrate and execute the health care cost savings in these initial phase programs. And then with that, expand to and not only expand the total addressable market, but also, move the business model towards revenue growth that allows for revenue generation, not just beyond just the monthly management and knowing what I sort of gave you an example of per year, what what it actually is gonna result in from revenue, but really get into the shared savings thereafter. And that's sort of the path, that we've laid out, in front of you today. So in in sort of summary of as we progress, it really is, and has been the focus to really build that foundation and framework to meet partners' goals while managing costs efficiently.

23:56 Basically, almost every bullet sort of says it in the same way, but just really emphasizing we derisk our operation without impacting operational readiness. If anything, we've been more ready than really we were before. So I think that really as

24:11 puts, you know, some emphasis on the way that we've managed our operation as well as being prepared to scale as noted as we really get into a new stage of development while extending our Cash Runway, which is really important. Mhmm. Okay. And, actually, apologies. I'm a little jet lagged, but our Cash Runway takes us into 2025. So, you know, moving forward with ongoing discussions with large b two b partners as well as discussions at various stages for others. You know, what we understand is we know what the denominator is. We understand where potential members are. A regional health plan, an employer, they're with a pharmaceutical company. We could go after many different angles, and the ability is we have the agility and

24:59 the operational readiness to do that. So I think, you know, it's it's we understand that data begets business begets data begets business. It's just once you start really getting that traction, which is what we're going to be doing, that really that's where, we continue to grow and continue to have our path to revenue, and I think that's really sort of unimportant. And we also noted that we have our early adopters that we got the data, and we're gonna continue to keep these engaged members who are already were paying for the program, for example, as a DDC member. They're already invested. So what we've done is we said, thank you. Your data's great. Very important data that we're able to take in parallel to our b to b discussions, get us where we are today, but also be able to continue to keep them engaged so they can really be part of our community community testing, strategy.

25:56 And I think I don't know if you have anything else to add. Nope. Nope? Alright.

26:01 That's great. Marla, Joy, thank you very much indeed for updating investors this afternoon. I will bring your camera back up as promised. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab just situated on the right hand corner of your screen just by Marla and Joy. Take a few moments to review your questions submitted already. I'd just like to remind you the recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

26:26 Marla, Joy, you've received a number of questions from investors. Thank you to everybody for your engagement this afternoon on a rainy on a rainy Monday. If I may hand back to you, Marla, if I could ask you to read out those questions and just give a response, of course, where it's appropriate to do so, and I'll pick up from you at the end. Yeah. So I just wanna talk a little bit about when we say investment in the platform because I think we've talked a lot about operational skill, scalability, and what that means. You know, what when we say investment, we really mean that it's intentional

26:54 and that what we've done right now is without, again, spending more than we need to. We've actually been able to actually specifically spend and build the platform based on what our client needs. It isn't just building an app anymore or building a web based browser. You know? That's really not what we're doing. And I'd have to say that the biggest you know, if you had to say what once you get people in and you actually progress to your you know, to actually launch and execute, we need to keep people on the platform. So that doesn't require a lot of a lot of investment. That's the

27:28 good news. Notifications, push notifications. There are things in technology that you can't do in human interactions that actually allow you to continuously engage. So a big important focus is that we are engaging and keeping people progressing through their curriculum so that we can get the data to deliver back to our b to b partners and grow and continue to, go down that path. So I think I just wanted to emphasize that always technology, that's the thing. You have to constantly be relevant and stay up to date. But because we have a really great CTO, and we've got a great team that are actually very astute to what the technology needs are in this particular space, it's different. Right? When you're doing condition management, it's different than a general calm app as an example. So it is important for us to have that knowledge, which allows us to be more strategic in our investment. I don't know if you have any other thoughts around it. No. I think it's just we are making our investment with intention.

28:29 And on the technology platform, we have actually been able to scale up and have a solid platform based on the feedback we've gotten from potential partners. And so going forward, we probably will not be making that same level of capital investment on a regular basis. Yep. So, you know, in terms of there's a couple questions around your milestones and what we can expect. So I don't know if you wanna talk to that and I can pop in. So, actually, I think what we have we've not

29:00 really guided beyond what we've presented, but we have we can say that we feel that in the next twelve months, we'll definitely deliver at least one large b to b client. The first, as Marla pointed out, and you might wanna touch on this, we we are our initial programs with each of these clients are gonna be, you know, thousands of patients, not tens of patients, but they will still be pilots with a built in if we meet certain expectations, there's a chance, there's an opportunity to move into a rev the cost savings share, which will actually be the point when revenues will ramp up. Yeah. So I think that addresses because, obviously, there's a lot of questions around it. Totally appropriate and and understood. And I think, you know, a big distinction because the word pilot Joy and I talk about this a lot. The word pilot has certain implications in my clinical trial world. It's, like, 30 patients, which isn't obviously where we need we wanna be as TRELLUS. So I I think understanding that worst I showed you numbers in tens or hundreds, we're talking, you know, towards the thousand.

30:08 So I think that is an important distinction for us to note that that's the potential addressable market, which makes it quite distinct from even the current b two b's that we have. But in the current b two b's, the other thing that's important is we're already discussing ways to expand that, right, and ways to improve even getting more people on the platform. So I think what we've understood is that it's important to make progress, show data so that people are interested in actually even thinking about what other phases can exist. And I think the same way with these kind of natural health plans. I don't know if you have anything, else to add. No worries. Okay. So in terms of the success of engagement, because I think that's an important Mhmm. Actually, maybe now you've come in, you were a consultant, you've seen the way that partners engage, and maybe what is what's different about TRLSUS and how we present ourselves and maybe what we bring that is different to strategic partners such as our science or our you know, what we bring to the table as a as a company.

31:11 Mhmm. Yeah. Well, I think partly, Marla and her cofounder Lori have such a high profile in the community that when we are meeting with pharma, with large health plans, they're already familiar with Lori and Marla as thought leaders in their in their fields. And I think that has made we already come to the table because of that with a lot more credibility. So we find that our the questions that are being asked are focused. There's real engagement, and I think we're getting better feedback than you normally do in a lot of the earlier stage business development meetings. So I think it's it's encouraging, and we look forward to being able to update you in the coming weeks and months. Yeah. I think also recognizing, you know, how is this different, for example, from the past where last October came and said, we're refocused and our focus is back on b to b.

32:12 Came in May, said we're making, progress, and now we're sitting here sort of saying we're continuing to make progress. And I think that that is the message, but I think what is very important is what we've done to become ready for. So we've we very much are confident. I'd say we are confident that we will have an update to share, and we look forward to sharing the outcomes of these discussions in the next couple, next upcoming weeks to months. I think that's where we are right now. So I think, you know, the understanding of although on a slide deck, it doesn't always execute the progress, and recognizing that these sales cycles with these health plans are actually quite long. Usually, you're looking at about twelve to fifteen months. Mhmm. And so one thing that we can say is because of the operational scale up that we've done to be an enterprise solution, really, and be able to deliver to larger US health plans, I think what's important to note is the sales cycles will decrease Mhmm. Because we're ready. And we understand what it takes, and we've invested already into it without actually increasing our overall burn rate. That's absolutely correct. Okay. And I guess I would also add that as we you know, the first plan and then the second partner comes in, our our sales cycles will continue to shorten a bit, but it is still it is still the amount of due diligence these very large companies have to do and

33:43 the process, amount of departments we have to speak to to even get to the negotiation stage is still a bit unwieldy. Yeah. And you can't predict, and you can never predict the exact timing. But I think the fact that we've progressed in terms of readiness, I think, which is different than in May where I was talking about what you will need to do most likely to be ready, the fact that we're ready we've done it. I think that was really an important that's why Mhmm. I know, you know, and I'm we're looking at, all of the comments and trying to address them because there's a lot of wonderful, comments and feedback. It's really about establishing the fact that we've indeed made progress actually. And, as our discussions advance and progress, we're actually ready to launch. And I think that is a difference than where we were before and definitely definitely different than where we were in terms of our our ability to deliver back in May when I was here last.

34:37 So, Mark, I think that's it, actually. We've addressed, I believe, almost everybody's, comments. So thank you all. Yes. That's great. Marla, Joy, thank you very much indeed. And, of course, we'll present any further questions to you post today's meeting if any do come through. Marla, I know investor feedback is important to you and to the company, and I'll shortly redirect those on the call, to give you their thoughts and expectations. But if I may, Marla, just come back to you for a few closing comments, and then I'll redirect investors for feedback. Yeah. I think our message, you know, is really clear, and we continue to say that we are super laser focused. We know what we need to do, and we very much look forward to updating you, shortly on our on the progress of our discussions. That's great. Marla, Joy, thank you once again for updating investors this afternoon. Could I please ask investors not to close these sessions? We'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations.

35:34 Will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of TRELLUS HEALTH PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.