www.etherapeutics.co.uk
e-Therapeutics is a drug discovery and development company based in Oxford and Newcastle, UK. The Company is a pioneer of network pharmacology, a distinctive new approach to the discovery of medicines.
It has a clinical pipeline of four drugs set to enter clinical trials during 2012. The Company is listed on AIM with the ticker symbol ETX.
e-Therapeutics CEO Young 'stunned' by strong backing for cash call
E-Therapeutics (LON:ETX) chief executive Malcolm Young said today he was stunned by institutional backing he received for the company’s latest cash call.
The Newcastle-based drug developer had been expected to come to the market for £4-5 million. Instead it is raising £17.6 million from six big investors, which will help it develop four drug candidates.
The biggest holder will be Invesco, which will own just under 48 per cent of the company.
Talking about the meetings with its major shareholders, Young said: “We noticed by the middle of the first day something unexpected was happening - everybody we approached was saying yes.
“On the second day we trotted along to Invesco expecting short shrift, and they actually started the bidding a lot higher than we were expecting.
“So what actually happened was people were pegged back quite far from where they actually wanted to be.
“The six that are participating, none of them are getting what they would have wanted. However they appear to think e-Therapeutics is where their money should be.”
The placing will also allow RAB Capital to make an exit – though it is not selling its entire 25 per cent holding. RAB and its founder Philip Richards have been early investors in the company and Young was full of praise for the role the hedge fund has played.
“They are not going completely,” they keep a little corner. “So, almost all the overhang has gone.
“But RAB made e-Therapeutics possible. They invested at the highest risk and have been nothing but exemplary shareholders.
“I am enormously grateful and am glad they have made money on us.”
A total of 67.7 million new shares are being issued at a price of 26 pence each – a 2 per cent premium to last night’s close.
E-Therapeutics will receive £16.6 million after fees and expenses, giving it around £17.5 million of cash in the bank after the loan note repayment.
The company specialises in an area of drug research called network pharmacology. This cutting edge science has the potential to evaluate new compounds for efficacy and safety, which ought to ensure fewer drugs fail in clinical trials.
But even more impressive is the ability to find completely new medical uses for products already out on the market, and to derive medicines for diseases that are currently poorly treated or not treatable at all.
The cash will be used to develop its drugs for depression, C.difficile and cancer. The fourth, an anti-infective, is still the subject of debate on how it should be developed.
“The cancer drug is an all-comers study so no tumor types are excluded,” Young said.
“We are also looking a read on which tumor types look like they are going to give us the best response.”
The e-Therapeutics chief executive said he would look in particular at very difficult to combat cancers where there is no existing treatment, such as brain tumors.
The new injection of cash will also give the company more bargaining power when thetime comes time to sit down and talk to big pharma about collaboration deals, or agreements where the major pharmaceuticals companies might adopt e-Therapeutics’ technology.
“There are things going but I can’t talk about them,” Young said. “I think it would be very surprising if there wasn’t something to boast about in 2011.”
