Executing the strategy

Update | 26 September 2017

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e-Therapeutics outlined its focused strategy in July, investing in a few select discovery programmes while it looks for partners. Business development activities are underway, as it raises awareness of its network-driven drug (NDD) discovery platform while advancing the immuno-oncology projects to a suitable stage for partnering. Given the proven capabilities of the company and growing interest in big data and artificial intelligence (AI) to enhance drug discovery, we expect e-Therapeutics to have fruitful discussions in the coming year. Our DCF valuation is unchanged at £53.8m or 20.4p/share.

Year-end: January201620172018E2019E
Sales (£m)
Adj. PBT (£m)(11.3)(13.4)(7.8)(6.1)
Net Income (£m)(9.3)(13.6)(6.3)(4.9)
Adj. EPS (p)(3.3)(3.9)(2.3)(1.8)
Cash (£m)24.814.08.43.9
EBITDA (£m)(11.5)(13.5)(7.9)(6.1)
Source: Trinity Delta Note: Adjusted numbers exclude exceptionals.
  • Business development now the key activity e-Therapeutics has rebranded and revamped its marketing material and is actively exploring business development opportunities. These are currently centred on the potential of the discovery engine, which is validated by the success of the Hedgehog programme. More pharmaceutical companies are investigating the potential of big data and AI to enhance drug discovery (during the summer AstraZeneca and GSK formed collaborations with Berg and Exscientia, respectively), suggesting there should be interest in e-Therapeutics.
  • R&D investments driven by commercial considerations e-Therapeutics is concentrating its R&D investments on its two immuno-oncology programmes for novel oral checkpoint signalling modulators and tryptophan catabolism. The goal is to advance them to such a stage that they would be of interest to potential partners. The company is also continuing to invest in the capabilities of its network-driven drug discovery platform and is conducting network feasibility projects in various areas of commercial interest due to the unmet medical demands, such as fibrosis and neurodegeneration.
  • Tight cost control reducing cash burn e-Therapeutics’ more focused approach has significantly reduced its operating expenses. Its operating loss has fallen by 62% compared to H117, to £3.7m in H118, primarily because of R&D expenses being reduced from £6.5m to £2.7m. This led to its cash burn declining from £3.7m (excluding the acquisition) in H117 to £1.6m in H118.
  • Valuation maintained at 20.4p/share We have made only minor changes to our estimates following its H118 results and our DCF-based valuation remains £53.8m, equivalent to 20.4p/share. e-Therapeutics had a cash position of £12.4m in July 2017, which should allow the company to operate into 2019.


26 September 2017

Price (p)10.6
Market Cap (£m)28.5
Enterprise Value (£m)20.6
Shares in issue268.5m
12 month range (p)7.4-13.5
Free float74%
Primary exchangeAIM London
Other exchangesNA
Company CodeETX
Corporate clientYes

Company description

e-Therapeutics is a drug discovery company with a proprietary network-driven drug discovery (NDD) platform. Following management changes and a strategic review, the focus is on its immuno-oncology projects, the next generation of the platform, and on securing industry collaborations and partners.


Mick Cooper PhD
+44 (0) 20 3637 5042

Franc Gregori
+44 (0) 20 3637 5041

Exhibit 1: Summary of financials

Source: e-Therapeutics, Trinity Delta Note: Adjusted numbers exclude exceptionals.


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