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e-Therapeutics - FY 2018 Results Show Good Progress

e-therapeutics reported results for the full year to Jan 31st 2018; business updates reflect good progress on the main research programs. Cash balance of £9.6mn was slightly higher than we expected, thanks to careful cost management.
 
e-Therapeutics - FY 2018 Results Show Good Progress

As discussed in our initiation note of October 2017, we value e-therapeutics using a SOTP approach.
 
We value their leading programs about £60mn and attribute a value of £50mn to e-therapeutics' NDD platform.
 
Taking into consideration the cash balance at the end of January 2018 and the £1.4mn tax credit due in 1H19 (Feb-Jul of calendar year 2018), we get to a valuation of about £120mn.
 
Applying a 30% discount to account for potential future dilution, we reach our intrinsic value of £83mn, about 4x current market cap.

Full report is available via Capital Network website
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e-Therapeutics plc Timeline

CN Video
March 29 2018

Related Researches

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April 03 2018

- Key inflection point: topline data readout from the PhaseOut DMD phase 2 trial in Duchenne (DMD) expected in 3Q 2018
- Imminent start of a pivotal phase 3 study for ridinilazole in C. difficile infections (CDI)
- Recent Discuva acquisition reinforces novel antibiotics discovery capabilities 
- Current valuation (market cap of c. $165 mln) undemanding given the stage and commercial potential of Summit's lead programs

 

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March 21 2018
  • Genedrive's PLC (LON: GDR) HepC test just entered the commercial phase as partner Sysmex launched in EMEA and APAC territories  in recent weeks
  • Re-design of the mTB test in progress, launch date to be announced in the next fiscal year
  • Discussions for the disposal of the Services business entered an exclusivity period, expect an update by the end of June
  • Careful cash management with a £3.9mln cash balance at the end of February, we would expect a capital raise in the second half of calendar year 2018

 

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October 25 2017
  1. e-Therapeutics (LON:ETX) focuses on the discovery of  new drugs in a more efficient and effective way and aims to be a valued partner to address the productivity challenge that the pharma industry faces.
  2. e-Therapeutics (LON:ETX) has developed a novel and unique in-silico approach to drug discovery: starting from the analysis of complex interactions between proteins in biological systems (networks), they apply advanced computational techniques to identify new drug candidates.
  3. This approach was labeled Network-driven Drug Discovery (NDD) and has been validated across several therapeutic areas (cancer, central nervous system, auto-immunity, infectious diseases) and molecular pathways.
  4. e-Therapeutics (LON:ETX) discovery platform has generated three drug candidates for multiple cancer indications which are ready to be out-licensed to pharma partners for their further development.
  5. We estimate e-Therapeutics intrinsic value to be roughly 3x higher than current market capitalisation. The latter doesn't reflect the commercial potential of e-Therapeutics' most advanced drug candidates and of the platform itself.
  6. e-Therapeutics ability to finalise a co-development or licensing agreement in the near term will represent a key inflection point for its stock re-rating.

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