Trellus Health plc

("Trellus Health", the "Company" or the "Group")

Half-year Results

LONDON, U.K. AND NEW YORK, U.S. (28 September 2023). Trellus Health plc (AIM: TRLS), which is commercializing a scientifically validated and clinically proven personalized resilience-driven self-management solution for chronic health conditions at their intersection with mental health, announces its interim results for the period ended 30 June 2023.

Operational highlights (including post-period end)

·    Launched a pilot program with a New York-based health insurance company with more than 1.8 million members to make Trellus Elevate™ IBD program available as a health plan benefit to certain members under its Medicaid managed care plan.

·    Launched the Trellus Elevate™ program for IBS (irritable bowel syndrome).

·    Expanded existing IBD agreement with Mount Sinai Health System to include the newly launched Trellus Elevate™ IBS for members of a large New York State labor union that offers health services and benefits to its members through Mount Sinai.

·    Continued focus on B2B2C contract development, with ongoing engagement with existing DTC customers as described in detail below, and planned partnerships with provider organisations.

·    Appointed Dr Daniel Mahony, Senior Independent Non-executive Director, as Non-executive Chairman, and Joy Bessenger as Chief Financial Officer.

Financial highlights

·    Net cash of $15.81m at 30 June 2023 (30 June 2022: $23.97m, 31 December 2022: $19.09m)
- reflecting continued effective cash management and providing an extended runway into 2025.

·    Adjusted EBITDA* loss of $3.16m, in line with expectations (30 June 2022: $4.61m loss, 31 December 2022: $8.09m).

* Earnings before interest, tax, depreciation and amortisation adjusted for share-based payments

Dr. Marla Dubinsky, Chief Executive Officer of Trellus Health, said:

"The first six months of 2023 showed great progress for Trellus Health, with our business-to-business-to-consumer ("B2B2C") model continuing to develop with a new contract, and the expansion of our initial agreements. We also expanded Trellus Elevate™ to include IBS with an existing partner.  We are actively engaged in late-stage discussions with a large national health plan which we are confident will lead to Trellus Elevate™ being available at a greater scale.

"We have also gained the required data from our D2C model to further validate the Trellus Elevate™ approach. This data has enabled us to progress discussions with prospective B2B2C partners and further validate the Trellus Elevate™ platform.

"I would like to thank our team, shareholders and partners for their support and collaboration during the period and look forward to updating the market in due course."  

A copy of the investor presentation is available here: https://trellushealth.com/investors/annual-interim-reports/

Trellus Health will be hosting a live online presentation open to all investors on 2 October at 17.00 BST, via the Investor Meet Company platform. Investors can sign up to Investor Meet Company for free and add to meet Trellus Health via:  https://www.investormeetcompany.com/trellus-health-plc/register-investor

For further information please contact:

About Trellus Health plc (www.trellushealth.com)

Trellus Health (LSE: TRLS) is the first resilience-focused digital health company targeting the intersection of chronic illness and mental health. Trellus Health integrates its proprietary resilience-based methodology with the technology, tools, and expert coaching and educator team to deliver Trellus Elevate™, a whole-person technology-enhanced experience that empowers individuals to master their health and results in relieving disease burden, building self-management skills and promoting positive health behaviours that improves outcomes and enables thriving in the face of a chronic condition.

The Company was founded by Mount Sinai faculty members Marla C. Dubinsky, MD and Laurie Keefer, PhD, both experts at treating and healing both the physical and emotional impacts of IBD and IBS and have been innovators for whole person healthcare for a combined 50 years. 

The Company was initially focused on inflammatory bowel disease ("IBD"), which includes the chronic incurable conditions of Crohn's Disease and ulcerative colitis but has expanded its offerings to include Irritable Bowel Syndrome ("IBS"). Given the common emotional and mental health struggles often experienced by individuals suffering from a variety of chronic conditions, Trellus Health considers its approach to have potential utility and demand across many conditions.

The Trellus Elevate™ program incorporates the GRITT™ methodology and learnings on resilience from clinical research and practice conducted at the Mount Sinai IBD Center for more than five years. This proprietary, resilience-driven methodology has been scientifically validated to demonstrate meaningful improvements in patient outcomes, 71% reduction in Emergency Department (A&E) visits, and 94% reduction in unplanned hospitalisations, which the directors of the Company believe indicates the potential for significant cost savings for healthcare payers. Patients with IBD managed with the proprietary resilience methodology also experienced a 49% reduction in required opioid use and a 73% reduction in corticosteroid use 12 months following starting the program which is a major indicator of improved health outcomes¹.

Shares in Trellus Health were admitted to trading on AIM in May 2021, under the ticker TRLS. For more information on Trellus Health, visit:  www.trellushealth.com

¹ Source: https://www.sciencedirect.com/science/article/pii/S1542356521012258)

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.

CEO STATEMENT

The first six months of the year have represented excellent progress for Trellus Health, delivering further business-to-business-to-consumer ("B2B2C") progress, with the Company already reaching many more people living with chronic conditions than at the start of the year. Our focus on cash control has also ensured that we are well-funded to pursue commercial traction and revenue growth.

Commercial progress

B2B2C

We have seen positive momentum in our B2B2C model during the course of H1 2023, focused on regional and national health plans, employers, health systems, gastrointestinal ("GI") provider networks and pharmaceutical companies. Our first two B2B2C contracts were signed with the Mount Sinai Health System ("Mount Sinai") in late 2022. Both became active for enrollment in early 2023.

The first contract has seen Trellus Elevate™ made available to all Mount Sinai Health System employees, focusing initially on IBD. The second contract was to make Trellus Elevate™ available to people living with IBD and IBS, who are members of a large NY state labor union, which provides health services through Mount Sinai.

In February, Trellus Health signed an agreement and launched a pilot IBD program with a New York-based health insurer with more than 1.8 million members, providing a significant potential opportunity to onboard more people with IBD over time. This B2B2C partnership makes Trellus Elevate™ available as a health plan benefit to certain members under its Medicaid managed care plan. Running for an initial 12-month term, the agreement can be extended by mutual agreement.

As previously disclosed in our 2022 preliminary results issued in May 2023, Trellus Health is in advanced discussions with a major health plan for a large-scale pilot study. Talks have continued to progress well and are now at a late stage, and we have completed the process of enhancing the Trellus Elevate™ platform to ensure that it can meet the requirements of the health plan's members. While there is never complete certainty as to the timing or outcome from such negotiations, nor as to the speed of implementation following contractual agreement, we are optimistic that the discussions will lead to Trellus Elevate™ being offered at a greater scale than it has been previously. Such a contract would enable the Company to begin to demonstrate in a real-world context, to its partner customers, the scope of patient benefits and economic savings that the Trellus Elevate™ methodology can deliver. Accordingly, a key focus of management is to execute larger scale pilot agreements such as this successfully, as a primary driver of the Company's growth.

D2C update

We launched our direct-to-consumer (D2C) model in July 2022, running alongside the B2B2C model to enroll early adopters, with the main objective of validating the use and outcomes of our methodology and supporting B2B2C engagement, whilst also driving awareness and demand.

Our two D2C partner channel agreements, with the Crohn's and Colitis Foundation, the largest patient advocacy group for IBD in the US, and GI OnDemand, a leading GI virtual integrated care platform, provided the broadest possible reach into the US gastroenterological community. The data obtained from our D2C early adopters has been key to our discussions with B2B2C prospective partners, and we now have a dataset that demonstrates the value of Trellus Elevate™ to support the establishment of scalable B2B2C agreements.

We are in discussions with these partners to expand existing agreements to include the development of co-branded condition management tools that embody the Trellus Elevate™ whole-person approach. This approach will allow Trellus Health and its partners to jointly support the GI provider and patient community and enable a broader referral funnel for users of the modules towards the full Trellus Elevate™ platform via our higher-margin B2B2C agreements as we continue to sign and scale them.

We are prioritizing the pursuit of additional B2B2C agreements, as we believe this is where the most significant opportunity lies. Feedback from larger potential B2B2C customers has led us to migrate our D2C members, who are currently paying directly for access to Trellus Elevate™, into a community testing group. As part of the group, this very engaged community of users will receive access to Trellus Elevate™ free of charge, thereby negating potential pricing issues for B2B2C customers, and will continue to provide feedback to help us further enhance the platform, enabling us to deliver patient-centric improvements faster for our B2B2C partners.

Expansion into Irritable Bowel Syndrome (IBS) and beyond

In February 2023, we launched the Trellus Method for IBS, ahead of schedule, using existing resources, adding to our offering in IBD. IBS is another chronic GI condition that has significant similarities with IBD from a symptom burden and emotional perspective, with a much higher prevalence than IBD, impacting c. 10% of the US population (c. 30m patients for IBS compared to c. 3m for IBD). Trellus Elevate™ for IBS is currently being delivered through the expansion of our Mount Sinai labor union contract.

I am proud that we now offer a comprehensive GI solution covering both IBD and IBS and have the scope to improve the lives of many more patients. We believe our solution can be used across many other chronic conditions to deliver meaningfully improved healthcare outcomes whilst reducing costs, and this expansion into IBS has represented the first step.

Continued investment in Technology and User Experience

We have continued making investment to enhance the Trellus Elevate™ Platform to further scale its functionality for our large B2B2C partners. Our goal is to create a fully integrated and seamless workflow with a specific focus on efficient member onboarding as well as increased member and GI provider engagement.

Our team, led by our CTO Jamey Hancock, has built a proprietary structure that gives Trellus Health a competitive advantage with inherent value as a health management platform, as opposed to simply being a telehealth or behavioral health mobile app. We are unique in this space by integrating coordination, communication, and analytics in one end-to-end platform. This provides expandability, flexibility, scalability and control for our team, allowing us to integrate new features and adapt much faster than our peer group, and enabling us to scale to other GI and non-GI conditions.

Trellus Health also importantly secured SOC 2 Type 1 designation for TrellusElevate™, which certifies our data security and privacy protocols at a certain point in time. We are working towards receiving the SOC 2 Type 2 designation, which assesses those protocols over a period, and is considered the gold standard accreditation for a service organisation in relation to its security, processing integrity and privacy controls and practices.

Board and Senior Management Team structure

In February 2023, Dr. Daniel ("Dan") Mahony, Senior Independent Non-executive Director, was appointed Non-executive Chair, following Julian Baines' appointment as Executive Chairman of EKF Diagnostics Holdings plc ("EKF").

Dan, who also chairs the Board of the BioIndustry Association (BIA), the industry trade association for UK life sciences, has over 25 years of experience within global healthcare covering biotechnology, medical technology, and healthcare services. This wealth of experience is already proving invaluable to Trellus Health in our commercialisation journey.

Earlier this month, we also announced the appointment of Joy Bessenger as Chief Financial Officer, following the appointment of Steve Young, Interim Chief Financial Officer, as full-time CFO of EKF. With over 20 years with both privately and publicly held life sciences and healthcare companies, I am confident that Joy will be a fantastic addition to the Trellus Health team as we look to further execute our commercial strategy and secure additional partnerships.

I would like to again thank Julian and Steve for their significant contributions to Trellus Health and wish them the best in their new roles.

Financial position and current trading

During the period, we continued our focus on ensuring careful cash management and the reduction of cash burn, without impeding our growth strategy. As of 30 June 2023, Trellus Health's net cash position was $15.81m (30 June 2022: $23.97m, 31 December 2022: $19.09m), providing a runway into 2025 on conservative growth assumptions. Our adjusted EBITDA loss for the period was $3.16m, which compared to the corresponding period last year ($4.61m loss), further emphasises the importance that we have been placing on prioritising cash management in line with the pursuit of our near-term objectives.

With early revenue generation having begun, we are confident that we are well funded to deliver further commercial progress and revenue growth through larger B2B2C contracts, with our current resources. 

Summary and outlook

I have been pleased with the progress that we have made in the first half of this year, which has seen the launch our first B2B2C contracts and our first generated revenues, driven by our original D2C model and the data obtained from it. This progress, coupled with the differences that we can see being made to our users' lives through our methodology, strengthens my belief that we are well-positioned to drive further adoption of Trellus Elevate™.

Whilst our resilience-based solution for chronic conditions has been scientifically validated, given the early stage of commercialisation, B2B2C partners need to see the return on investment ("ROI") through smaller pilot studies first, before expanding our agreements. Therefore, our current active B2B2C projects, though expected to provide modest users and revenues at this stage, are critical to our ability to secure larger scale agreements in future. Initial data from our early user base has been highly encouraging, and we are confident that the full data from our users will demonstrate a clear and substantial ROI to our B2B2C partners and lead to the expansion of our agreements.

We are in late-stage negotiations with one major health plan for a large-scale pilot study which we are optimistic will lead to TrellusElevate™ being offered on a larger scale than it has been previously, and we will also continue discussions with other potential large B2B2C partners. We look forward to updating the market on the outcomes of these discussions in due course.

I firmly believe that with a cash runway extending into 2025, we have the resources to achieve further commercial milestones and demonstrate the ability of Trellus Elevate™ to change the lives of the many people living with chronic conditions. I would like to thank our shareholders for their continued support and look forward to providing further updates on our progress.

Dr. Marla Dubinsky

Chief Executive Officer and Co-Founder

28 September 2023