Trellus Health plc

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

Preliminary Results for the Full Year ended 31 December 2023

Pivotal commercial progress and cash runway further extended into mid-2025

LONDON, U.K. AND NEW YORK, U.S. (23 April 2024). Trellus Health plc (AIM: TRLS), a health services company delivering innovative, scientifically validated programs and technologies designed to facilitate the management of chronic conditions, improve health outcomes and lower the costs of care, announces its unaudited preliminary results for the year ended 31 December 2023.

Operational highlights (including post-period end)

Financial highlights                                                                     

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

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

"The past year represented great progress for Trellus Health. Following the successful completion of our direct-to-consumer model, which provided us with data to further validate the Trellus Elevate™ program, our strategy has been focused on securing and maturing larger B2B2C contracts in our core IBD offering.

"Our early-stage pilots signed and then extended during the year provided valuable insights for us. These learnings have enabled us to secure larger B2B2C agreements with a focus on healthcare cost savings as well as improved outcomes. Post-period end, we signed a pivotal contract and established an important partnership with a large US health plan, which is making Trellus Elevate™ accessible to more people than ever before. We launched the program in mid-March and are very encouraged by the early adoption trends."

"Our content licensing agreements with two large pharmaceutical companies, signed post-period end, illustrate the effectiveness of our go-to market strategy as well as demonstrating a new revenue source.

"Alongside our commercial progress, our team has continued to enhance our platform, and our disciplined cash management has extended our cash runway further into mid-2025. Our focus in 2024 is to continue to build commercial traction at scale. I firmly believe that we now have the foundations in place to achieve long-term success and help as many people living with IBD as possible to improve their lives."

Trellus Health will be hosting a live online presentation open to all investors on Wednesday 24 April at 4.00pm (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 (AIM: TRLS) is a health services company providing value-based innovative solutions and services for chronic condition management that prioritises improved outcomes and member experiences while managing costs of care.

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 meets each individual's unique needs and empowers them to master their physical and emotional health. Trellus Elevate's™ clinically proven solutions result in relieving disease burden, building self-management skills and promoting positive health behaviours that improve outcomes and enables thriving in the face of a chronic condition.

The Company's proven whole person approach recognises the interconnectedness of various aspects of a person's life and aims to address the whole spectrum of factors that influence behaviour, to promote comprehensive well-being and human flourishing in a way that aligns with value-based care. Trellus Health's approach enables better health outcomes in a member-centric, personalised and comprehensive holistic solution.

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 have been innovators for whole-person healthcare for a combined 50 years.

The Company is initially focusing on chronic costly GI conditions that have high mental health burden, such as inflammatory bowel disease ("IBD") which includes the chronic incurable conditions of Crohn's Disease and ulcerative colitis. 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 seven 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 and health systems. 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 outcomes^1.

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

¹Source: 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.

CHAIR STATEMENT

2023 saw continued progress for Trellus Health, with the key foundations laid to enable future growth in the business. The Company made significant steps in commercialising the delivery of its resilience-based methodology, and ensured that its resources and world-leading expertise can be used at scale to help people living with inflammatory bowel disease (IBD) and to generate value for all our stakeholders.

Overview

At the Company's interim results in September 2023, we announced that Trellus Health had concluded offering its direct-to-consumer ("D2C") model for the delivery of Trellus Elevate™. This model has allowed the team to utilise valuable data gained from those early adopters to drive negotiations forward and deliver larger-scale business-to-business-to-consumer ("B2B2C") agreements, where the most significant commercial opportunity lies.

During the year, we made progress on the Company's core B2B2C model, which targets employers, regional and national health plans, and pharmaceutical companies with the activation of our first early-stage B2B2C pilot contracts. As previously indicated, these initial, smaller-scale agreements were designed primarily to demonstrate the improvements in patient outcomes and healthcare economics in order to capture larger B2B2C pilot and demonstration projects.

Post-period end, the Company signed a key B2B2C agreement with a large US health plan, where its members with IBD that are receiving care in two US states will be eligible to receive Trellus Elevate™. The contract demonstrates the headway made with its commercialisation strategy, and that the continued emphasis on its core B2B2C model is the best approach to make Trellus Elevate™ more widely available in order to build value for the Company and its shareholders.

At the start of 2024, I was also pleased to see the initial delivery of licensing agreements with two large pharmaceutical companies; one for the use of proprietary resilience-based assessments in the setting of a clinical trial and the other for the use of whole-person wellness content. These agreements illustrate the effectiveness of our go-to market strategy and shows a diversification of revenue while the partnership with the large US health plan matures. It also highlights the value of Trellus' proprietary methodology, developed and championed by our co-founders, and demonstrates how other companies in the healthcare sector can benefit from understanding the impact of an individual's resilience on a number of outcomes.

A full summary of our progress and achievements made during the year, as well as further detail on the Company's strategy, are covered in the Chief Executive Officer's Review.

Board and Senior Management Team

In February 2023, I was appointed Non-executive Chair, following Julian Baines' appointment as Executive Chairman of EKF Diagnostics Holdings plc ("EKF").

In September 2023, the Company 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. Joy has proven to be a very strong addition to the Trellus Health team, and was instrumental in helping to advance and execute our commercial strategy to secure key partnerships while keeping disciplined control over the Company's finances, which has extended our cash runway to mid-2025.

Post-period end, the Company also announced that Christopher Mills had stepped down from his role on the Board as a Non-executive Director.

I would like to once again place on record my thanks to Julian, Steve and Christopher for their significant contributions to the Company.

Outlook

I have been pleased to see the progress made by the entire Trellus Health team during 2023 that has been translated into visible commercial traction in 2024. Despite the challenging market conditions, the Company has delivered and evolved its core strategy, not least securing its most significant commercial contract to date with a large US health plan, while managing its expenditure and resources to sharpen its focus on the largest commercial opportunities and to extend its cash runway to mid-2025.

Our current B2B2C agreements - particularly our most recently signed contract - are critical as we scale the business, both through expanding existing agreements and by utilising data from our pilot programmes to secure new partnerships. Trellus Health's resilience-based methodology is increasingly being recognised by potential partners as a valuable tool, and as we build the real-world evidence base, I am confident that the Company will be able to achieve further commercial traction and build value for our stakeholders.

I would like to thank the team for their tireless hard work over the course of the year, and our shareholders for their continued support.

Dr. Daniel Mahony

Non-executive Chairman

23 April 2024

CEO STATEMENT

In 2023, Trellus Health underwent a significant transformation, marked by the achievement of numerous key milestones. We advanced substantially with our business-to-business-to-consumer ("B2B2C") model and successfully implemented and completed our direct-to-consumer ("D2C") approach. These advancements culminated in the signing of a pivotal B2B2C agreement with a prominent US health plan post-period end, establishing a solid initial partnership. This collaboration will expand the accessibility of Trellus Elevate™ to more individuals than ever before, providing essential support for managing inflammatory bowel disease ("IBD"). Our continued disciplined cash control has also ensured that we remain well-funded to pursue commercial traction into mid-2025 with our existing resources.

Commercial progress

Successful Implementation and Completion of D2C

We launched our D2C model in July 2022, enrolling early adopters through our D2C partner channel agreements, including the Crohn's and Colitis Foundation, and GI OnDemand, with the main objective of validating the use and outcomes of our proprietary methodology and supporting B2B2C engagement, whilst also driving awareness and demand.

Following the completion of our initial D2C program we made the strategic decision to prioritize our B2B2C model, where the Board believes the biggest growth opportunity exists. We migrated our paying D2C members into a community testing group, whereby they continue to receive access to Trellus Elevate™ free of charge and provide member feedback to help us further enhance the platform, enabling us to deliver member-centric improvements faster for our B2B2C partners.

B2B2C

Our B2B2C model continues to focus on executing agreements with regional and national health plans, employers, health systems, gastrointestinal ("GI") provider networks and pharmaceutical manufacturers to make TrellusElevate™ available at no cost to individuals diagnosed with IBD.

We made strong progress during 2023, with our first two pilot B2B2C contracts with the Mount Sinai Health System becoming active for enrollment in early 2023, and a further contract being signed with a New York-based health insurer in February 2023 These three pilots have now concluded and have provided valuable insights into the optimal framework for larger agreements with prospective B2B2C partners.

Despite their modest scale, these pilot agreements played a pivotal role in scaling up, enabling us to showcase TrellusElevate™ to potential partners and illustrate its delivery within a B2B2C model. Collaborative efforts allowed us to identify strategies for successful implementation of agreements while maximizing cost efficiencies and enhancing outcomes. Concurrently, dedicated efforts were directed towards refining the Trellus Elevate™ platform, ensuring its readiness to meet the demands of expanded partnerships and deliver an unparalleled user experience.

In February 2024, Trellus Health signed an agreement with a large US health plan, focused on inflammatory bowel disease ("IBD") condition management. The agreement is intended to run for up to 21 months, during which time members of the health plan with IBD that are receiving care in two US states will be eligible for participation in the Trellus Elevate™ IBD program. This agreement makes Trellus Elevate™ available at a greater scale than it ever has been before, and will also enable us to continue to demonstrate the patient benefits and economic savings that can be delivered using our methodology.

The initial six months of the agreement are the enrolment phase, during which we will be prioritizing the onboarding of eligible members onto the platform while collaboratively fostering sustained engagement among the health plan members enrolled in our program. In March 2024, the health plan sent out its first of multiple marketing materials to its providers and members, highlighting Trellus Elevate™ as a complimentary health benefit resource. Concurrently, we are directing our own digital marketing efforts via geotargeting toward the two states covered by the agreement, to broaden awareness of this program which is being made available at no cost to eligible health plan members. Both our partner and Trellus Health are encouraged by the early adoption trends.  Engagement and other key milestones are reviewed during our joint weekly steering committee calls.

The active marketing and focus on establishing multiple touchpoints with eligible members and their health care providers demonstrate a strong commitment from the health plan. Our partner has recognized the benefits that Trellus Elevate™ can have for individuals with IBD, with a focus on improved health outcomes and reduced total costs of care. I am confident that we will be able to demonstrate a clear and substantial return for our partner, potentially within twelve to eighteen months. Ideally, strong early data will lead to the expansion of our agreement make Trellus Elevate™ more widely available, and further validate the value to prospective partners.

Licensing agreements

Post-period end, we signed our first two licensing agreements with pharmaceutical industry partners for elements of our resilience-based methodology.  One agreement is for the use of proprietary resilience-based assessments in the setting of a clinical trial and the other is for the use of whole-person wellness content. Both agreements show the increasing value that B2B2C partners are placing on our scientifically validated methodology to assess resilience, which can be applied to many areas beyond chronic condition management, such as how resilience affects the subjective and objective way people respond to different therapies.

These revenue-generating agreements, whilst modestly sized at this stage, are an encouraging sign of both the growing understanding of resilience in the healthcare world, as well as a potential additional and diversified revenue stream at little to no additional resource cost to the Company.

Enhancing the user and partner experience

During 2023, we have made investments to enhance the Trellus Elevate™ engagement platform on both our member and provider-facing apps.

Our team, under the leadership of our CTO Jamey Hancock, has optimized the member registration portal, allowing for seamless and efficient onboarding and registration of eligible members, providing each B2B2C partner with a customized portal. Additionally, significant improvements have been made to the Trellus Elevate™ self-curriculum, including new and updated courses, skills and lessons, all aimed at driving resilience and facilitating behavioral change. Moreover, substantial progress has been made in gamifying the platform, enhancing user engagement, and encouraging continued interaction with Trellus Elevate™. Leveraging our proprietary algorithms, we have increased automation in various areas such as symptom, biomarker and medication tracking, further enhancing the platform's effectiveness. We have also updated our provider app, whereby members can share their progress with their own IBD provider in real time and the Trellus Team can communicate directly with the provider in real time to optimize member outcomes.

Post-period end, we secured SOC 2 Type 2 designation for Trellus Elevate™, which is considered the gold standard accreditation for a service organisation in relation to its security, processing integrity and privacy controls and practices.

In 2024, we are set to enhance our technological capabilities as planned, enabling us to scale more efficiently through structuring and tailoring our solution for specific populations. Given our previous level of technology investment, this can be done effectively at modest spend. This strategic approach will broaden our appeal to a wider range of potential B2B2C clients.

Financial position and current trading

As of 31 December 2023, Trellus Health's net cash position was $12.2m (31 December 2022: $19.1m). Through our disciplined cash management and prioritization of resources, we have been able to extend our expected cash runway until mid-2025, even on more conservative growth and revenue assumptions than we hope to achieve.

Our adjusted EBITDA loss for the year was $5.8m (FY 2022: $8.1m), in-line with management expectations.

Our efficient management of resource has been pleasing to see, and I am confident that we are in a good position to deliver further commercial progress and revenue growth using the runway that we have, in both our core offering as well as through other avenues such as licensing agreements for existing proprietary content.  Due to our capital investment over the last several periods, we have built a highly scalable large enterprise platform and technology which was ready at time of launch with the large health plan. We anticipate further reducing our expenditure this year, partly due to these prior investments in establishing a go-to-market strategy and platform tailored for major partners.

Strongly positioned for future growth

We have made significant strides throughout the past year, and this momentum has continued in 2024. Witnessing the launch of our initial B2B2C contracts and the successful execution of our D2C model has been particularly gratifying. The insights gleaned from our D2C program, and our earlier small scale B2B2C programs, played a pivotal role in securing our recent partnership with a prominent US health plan, a collaboration that the team and I can be immensely proud of. The commitment displayed by our health plan partner in ensuring the success of our venture and the positive impact on their eligible members has been very encouraging.

Our effort to enhance the platform underscores our commitment to provide both users and partners with an unparalleled experience aimed at improving outcomes and fostering behavioral change, ultimately leading to better outcomes and reduced healthcare costs.

The strategic prioritization of our B2B2C core offering in IBD, coupled with the extension of our cash runway into mid-2025, mark significant milestones for us. By channelling our resources toward achieving meaningful commercial traction in our B2B2C offering, I firmly believe we have laid the groundwork for long-term success. We look forward to updating you on our progress as projects are implemented and others added.

Dr. Marla Dubinsky

Chief Executive Officer and Co-Founder

23 April 2024

Consolidated Income Statement and Other Comprehensive Income

for the year ended 31 December 2023

The results reflected above relate to continuing operations. The comparative period reflects the year ended 31 December 2022.

​

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2023

Consolidated Statement of Financial Position

as at 31 December 2023

Consolidated Statement of Cash Flows

for the year ended 31 December 2023

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2023

1. General information and basis of presentation

Trellus Health plc is a public limited company incorporated in the United Kingdom (Registration Number 12743489), whose shares are admitted to trading on the AIM market of the London Stock Exchange. The address of the registered office is Avon House, 19 Stanwell Road, Penarth, CF64 2EZ.

The principal activity of the Company is the delivery of resilience-driven care for complex chronic conditions.

These preliminary financial statements of the Group have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006. The financial information included in this preliminary announcement does not include all the disclosures required in accounts prepared in accordance with UK adopted International Accounting Standards (IFRS) and accordingly it does not itself comply with UK adopted International Accounting Standards.

The audit of the statutory accounts for the year ended 31 December 2023 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement.

Statutory accounts for the year to 31 December 2022 have been delivered to the Registrar of Companies.

Certain statements in this announcement constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company's future expectations, operations, financial performance, financial condition and business is a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this announcement and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this announcement should be construed as a profit forecast.

2. Material accounting policies

Going concern

The Group is in the development phase of its business and has only generated revenues related to implementation services and early patients in pilot scheme. At 31 December 2023 the Group has available cash resources of $12.2m.  

The Board has considered the impact of the ongoing Russia/Ukraine war and rising inflation. There has been minimal impact on the Company to date and the Board anticipates minimal on-going impact, due to the nature of the business.

The Directors have prepared cash flow forecasts for the Group for a review period of over 12 months from the date of approval of this financial statement. These forecasts reflect an assessment of current and future market conditions and their impact on the Group's future cash flow performance.

The forecasts have been sensitised for additional costs which may be incurred in the review period. In the sensitised scenario, the forecasts indicate the Group would still have sufficient cash to continue as a going concern.

Having considered the points above, the Directors remain confident in the long-term future prospects for the Group, and their ability to continue as a going concern for the foreseeable future. They therefore adopt the going concern basis in preparing the historical financial information of the Group and the Company.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRSs. The Company will publish its full annual report containing audited financial statements for the year ended 31 December 2023 before the end of May 2024, together with a notice to shareholders of the Company's Annual General Meeting ("AGM") which will be available on the Company's website at www.trellushealth.com and at the Company's registered office at Avon House, 19 Stanwell Road Penarth CF64 2EZ. The AGM will be held in June 2024, with further information to be notified at the time of the availability of the full annual report.

3. Tax expenses

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:

The unrecognised deferred tax relates to two elements: the unrecognised deferred tax arising on share-based payments of US $225,000 and unrecognised deferred tax on taxable losses of US $4.8m million (2022: US $4m), based on total taxable losses carried forward of US $25m (2022 - US $19m). No deferred tax asset is recognised for these losses due to early stage in the development of the Group's activities. The losses do not expire but can only be used against trading profits from the same trade.

4. Loss per share

The Company has one category of potential ordinary share, being share options (see Note 8). The potential shares were not dilutive in the period as the Group made a loss per share in line with IAS 33.  

5. Property, Plant and equipment

All assets are equipment

6. Intangible assets

The licence was acquired from Icahn School of Medicine at Mount Sinai on 19 August 2021 for rights to intellectual property and data to support the GRITT technology. 

Capitalised development costs in relation to the Group's software platform has been reviewed for indicators of impairment. An impairment charge of $241,000 (2022 - $122,000) was recognised in the period in relation to specific aspects of capitalised expenditure considered to have no value in use.

7. Share capital

8. Share-based payment

On 1 January 2021, the Board adopted the Share Option Plan to incentivise certain of the Group's employees and Directors. The Share Option Plan provides for the grant of both EMI Options and non-tax favoured options. Options granted under the Share Option Plan are subject to exercise conditions as summarised below.

The Share Option Plan has a non-employee sub-plan for the grant of Options to the Company's advisors, consultants, non-executive directors, and entities providing, through an individual, such advisory, consultancy, or office holder services and a US sub-plan for the grant of Options to eligible participants in the Share Option Plan and the Non-Employee Sub-Plan who are US residents and US taxpayers.

The options vest equally over twelve quarters from the grant date or 25% after twelve months and over eight quarters equally thereafter. If options remain unexercised after the date one day before the tenth anniversary of grant such options expire. The options are subject to exercise conditions such that they shall, subject to certain exceptions, vest in instalments over the three years immediately following the date of grant, which vesting shall accelerate in full in the event of a change of control of the Company.

The exercise price of options outstanding at 31 December 2023 ranged between 20 US cents and 77 cents and their weighted average contractual life was 2.3 years. 

The weighted average fair value of each option granted during the year was $Nil (2022: $0.05).

The fair value of each share option granted in 2022 has been estimated using a Black-Scholes model and ranges from 1 US cent to 10 US cent. The inputs into the model are a share prices of 17 US cent, 23 US cent, 26 US cent and 43 US cent, exercise prices of 48 US cent, expected volatility of 50%, no expected dividend yield, contractual life of between 2.9 and 1.9 years and a risk-free interest rate of 1.25% and 2.25%.

The Group received £nil (2022 - $10k) reimbursement from Mount Sinai Hospital during 2023 for member set up in connection with the related party contracts announced in October 2022. There has been no revenue received in 2023 and 2022 in connection with these two related party contracts, with or via Mount Sinai Hospital. The amount owed as at 31 December 2023 is $0 (2022: $0). The Group also paid £Nil (2022 - $100k) management fee to Mount Sinai Hospital during 2023, the amount outstanding at 31 December 2023 is $0 (2022: $0).                                                    

10. Events after the reporting date

There have been no events subsequent to the period end that require disclosure in these financial statements.

11. Dividends

There were no dividends paid or proposed by the Company in either year.