Setting the stage

Update | 6 March 2019

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e-therapeutics ended its FY19 (year-ending 31 January 2019) on a high, securing its first commercial collaboration with Novo Nordisk in December (see Update note). Business development and cost control were the focus areas for FY19. The Novo deal in Type 2 diabetes marked a first success on the former, providing important validation for e-therapeutics’ proprietary Network-Driven Drug Discovery (NDD) platform. Prudent cost management means end-FY19 cash of £5.9m, coupled with an anticipated £1.1m tax credit, provides a two-year runway on our estimates. The goal is to now capitalise on ongoing, and new, business development discussions covering the full range of e-therapeutics’ assets and capabilities, to help progress NDD-derived projects and further exploit the NDD platform. Our valuation is £57.8m (21.9p/share).

Year-end: December201720182019E2020E
Sales (£m)0.0 0.0 0.0 0.5
Adj. PBT (£m) (13.4)(6.7) (5.4) (3.9)
Net Income (£m)(13.1) (5.4) (4.3) (3.1)
Adj. EPS (p)(3.9)(2.0) (1.6) (1.1)
Cash (£m)14.0 9.65.2 2.6
EBITDA (£m)(13.7) (6.7) (5.4) (3.9)
Source: Trinity Delta Note: Adjusted numbers exclude exceptionals.
  • Many irons in the business development fire The breadth of e-therapeutics’ assets and NDD capabilities means that active business development interactions are ongoing with multiple potential partners. The Novo deal is an exemplar of the application of the NDD platform in the potential discovery of novel biological mechanisms and therapeutic approaches for a specific complex disease area. Further collaborations of this type are sought; other possible transactions under consideration range from cost-sharing deals for internal NDD-derived assets (Tryptophan Catabolism and Immune Checkpoint Modulation) to M&A.
  • GAIN-ing new opportunities Ongoing investment in core technology has generated potentially powerful innovative network-related tools. A prime example is GAINs (Genome-Associated Interaction Networks), which emerged from insights gleaned from work associated with the C4X Discovery Parkinson’s disease collaboration. GAINs can interrogate genomic data and link this to an underlying disease mechanism and phenotype – a key challenge in AI approaches to drug discovery. We anticipate e-therapeutics will begin marketing this tool imminently and expect it to be of interest to many large pharma companies.
  • Careful cost control continues FY19 results marked the third year of narrowing half-year losses. FY20 guidance is for a more modest reduction in operating loss. End-January 2019 cash of £5.9m, plus a £1.1m tax credit, provides funding through   Extension of the Novo deal beyond the initial 12-month period, potential payments from new partners/cost-sharing deals, or M&A could extend this further.
  • Valuation maintained at £57.8m (21.9p/share) We have broadly maintained our forecasts based on commendable cost control and spending priorities, which results in no changes to our underlying valuation assumptions. Upside would come from progression of the Novo Nordisk diabetes collaboration into a licensing agreement, and from new deals with large pharma or other partners.


6 March 2019

Market Cap£18.1m
Enterprise Value£10.5m
Shares in issue268.6m
12 month range5.8p-10.4p
Free float28%
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 in 2017, the focus is now on optimising its discovery processes and platform, and securing industry collaborations and partners for its projects.


Lala Gregorek
+44 20 3637 5043

Mick Cooper PhD
+44 20 3637 5042

Exhibit 1: Summary of financials
Source: e-therapeutics, Trinity Delta  Note: Adjusted numbers exclude exceptionals.


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