e-therapeutics PLC (LON:ETX) is in late-stage discussions regarding a number of exciting potential collaborations, Ali Mortazavi, the executive chairman has revealed.
Mortazavi, the former chief executive of Silence Therapeutics, took the helm last month and revealed in his first full-year results statement with the company that he did due diligence for more than three months before purchasing his stake in the drug discovery company.
He said that his main concern was that the company, which listed in 2007, “would be a typical company that had once been at the forefront of its industry but had lost its place to new entrants”.
After doing his due diligence, Mortazavi said he felt that the group's technology is still ahead its time.
The core technology of e-therapeutics is based on the concept of network-driven drug discovery (NDD), and this technology has led to a new product, genome associated interaction networks (GAINs) that has seen particularly strong interest from partners, the company’s executive chairman reported, leaving the company at an important inflexion point.
“Our technology, know-how and products are in strong demand,” he asserted.
Revenue recognised during the year ended 31 January 2020 was £456,000, up from £44,000 the year before, and came from a collaboration with Danish drugs giant Novo Nordisk.
Research and development (R&D) spend in the year declined to £2.1mln from £3.7mln the year before, which fed through to a narrowing of the loss before tax to £2.9mln from £5.1mln the previous year.
Cash at the end of the financial year was £3.8mln, down from £5.9mln a year earlier. After adjusting for the R&D tax credit received during the year, of £1.1mln (2019: £1.4mln), the underlying cash burn of £3.2mln (2019: £5.1mln), was broadly in line with the operating loss.
Given the reduced R&D spend during the year, e-therapeutics is anticipating a lower R&D tax credit of around £600,000 to be received in the coming financial year.
Subsequent to the financial year-end, the company raised £1.6mln and the company reckons it has enough cash to continue operating “for at least the next two financial years”.
“This budget includes prudent revenue assumptions, although we are in late-stage discussions regarding a number of exciting potential collaborations and we are looking forward to working closely with business development opportunities in defining how we could help partners better understand their chosen area of biology,” Mortazavi said.