Trinity Delta New insights from Parkinson’s disease collaboration

New insights from Parkinson’s disease collaboration

Update / 6 December 2018

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Promising early results from the C4X Discovery (C4XD) collaboration, initiated in May 2018, highlight the flexibility of e-therapeutics’ network-driven drug discovery (NDD) approach, and its applicability to drug discovery for complex diseases. NDD analysis of Parkinson’s disease (PD) associated genes identified both known and potential new biological mechanisms. This is a first demonstration of the ability of the NDD platform to extract insights from genomic data and link them to potential new targets and pathways for drug discovery. While further work is necessary to explore this more fully in PD (and other diseases), it could provide another facet to e-therapeutics’ business development discussions. We continue to value e-therapeutics at £53.8m (20.4p/share) and anticipate one or more NDD-based deals in the next 12 months.

Year-end: December	2017	2018	2019E	2020E
Sales (£m)	0.0	0.0	0.0	0.0
Adj. PBT (£m)	(13.4)	(6.7)	(5.4)	(4.4)
Net Income (£m)	(13.1)	(5.4)	(4.3)	(3.6)
Adj. EPS (p)	(3.9)	(2.0)	(1.6)	(1.3)
Cash (£m)	14.0	9.6	5.2	2.1
EBITDA (£m)	(13.7)	(6.7)	(5.4)	(4.4)

Source: Trinity Delta Note: Adjusted numbers exclude exceptionals.

Important validation for the NDD approach e-therapeutics’ NDD analysis of c200 PD-associated genes (identified by C4XD’s Taxonomy3 genomics platform) has successfully identified both known and novel biological mechanisms underlying PD. As neurology was not a focus for e-therapeutics prior to May 2018, these new findings underscore the flexibility and broad applicability of its NDD platform.
Another string to the NDD bow? While early, these initial results are meaningful, suggesting that NDD can extract actionable insights from complex genetic data (known and novel mechanisms), and employ this understanding to predict which drug-like small molecules could be used as the starting point for drug discovery. It could also be used to understand, from genetic data, which disease mechanisms may be most important. Further confirmatory data are needed, but there is a rationale in applying the NDD platform to other complex polygenic diseases in neurology and beyond.
Focus remains on business development The H119 results statement confirmed detailed discussions are ongoing with several potential large biopharma partners for NDD-based programmes and projects, including with over half of the top 25 global pharma companies. The new findings in PD should augment its commercial offering and may interest potential partners. Broader corporate development opportunities are also being evaluated, including non-dilutive sources of capital (risk-sharing deals to progress discovery projects), and prospects for inorganic growth.
Sufficient cash to operate into 2020 We have updated our forecasts to reflect the ongoing tight cost control (while still investing in the core NDD platform) shown in H119. Management have guided that end-July 2018 cash of £7.6m is sufficient to operate into 2020 (FY21). We would view additional funding from a deal or other sources positively as it would enable optimal investment in its platform and discovery assets. We maintain our valuation at £53.8m or 20.4p/share.

Update

6 December 2018


Price	6.625p
Market Cap	£17.8m
Enterprise Value	£10.2m
Shares in issue	268.6m
12 month range	5.8p-10.4p
Free float	28%
Primary exchange	AIM London
Other exchanges	NA
Sector	Healthcare
Company Code	ETX

Corporate client	Yes

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 in 2017, the focus is now on optimising its discovery processes and platform, and securing industry collaborations and partners for its projects.

Analysts

Lala Gregorek
lgregorek@trinitydelta.org
+44 20 3637 5043

Mick Cooper PhD
mcooper@trinitydelta.org
+44 (0) 20 3637 5043

Exhibit 1: Summary of financials

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

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