Progress in all areas, and a longer cash runway

Lighthouse | 4 October 2018

Share this note

  • e-therapeutics’ operational update for H119 (six months to July 2018) highlighted progress in strengthening the NDD (network-driven drug discovery) platform; business development activities; and drug discovery programmes.
  • NDD platform enhancements include the addition of new modules for patient segmentation and informatics-based mechanism of action.
  • Incorporation of technology from the partnerships with Intelligens (neural networks) and Biorelate (natural language processing) has bolstered e-Therapeutics’ AI (artificial intelligence) capabilities.
  • A collaboration with C4X Discovery was signed in May to identify novel cellular mechanisms for Parkinson’s disease to assist in development of new treatments.
  • Importantly, the company is in detailed discussions with many potential large biopharma partners for NDD-based programmes and projects, having had in-depth discussions with over half of the top 25 biopharmaceutical companies.
  • It has also been shortlisted as preferred partner by a number of these as part of their AI/machine learning/in silico technology selection exercises, as more companies look to use the various technologies to bolster their productivity.
  • Internal immuno-oncology (IO) programmes (tryptophan catabolism and checkpoint signalling modulation) are advancing well, and a new generation of commercially attractive NDD-derived projects have been created in fibrosis, IO and neurodegeneration.
  • Careful control of costs, while still investing in the core NDD platform, resulted in a reduced operating loss of £2.8m during the six months to July 2018 (vs £3.7m in the same period last year).
  • Cash of £7.6m at H119 (vs £9.6m at end-January 2018) will, management now believes, enable the company to operate into 2020.

Trinity Delta view: e-therapeutics’ remains focused on its goal of securing business development deals on its NDD platform and assets, and appears to have made significant progress towards securing a partnering deal with a major pharmaceutical company. We believe that if it signs a significant collaboration agreement with one of the big pharma companies, this could lead to further deals being secured. 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.

Tight cost control and extension of the cash runway into 2020 strengthens e-therapeutics’ negotiating position, making it more likely that the company will secure lucrative strategic deals. Cash inflows from a deal or other sources would enable optimal investment in its platform and discovery assets.

The underlying operating cash burn (before tax credits) of £3.4m was lower than our forecast, so are reviewing our estimates, taking into account management’s guidance that e-therapeutics could operate into 2020 (FY21) without raising additional cash.



4 October 2018

Price (p)7.40
Market Cap (£m)19.88
Primary exchangeAIM London
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

Lala Gregorek
+44 (0) 20 3637 5043


Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publically available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at www.fisma.org. TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.

Copyright 2018 Trinity Delta Research Limited. All rights reserved.