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e-Therapeutics - Capital Network: Undervalued Stock with a Unique Approach to Drug Discovery

e-Therapeutics - Capital Network: Undervalued Stock with a Unique Approach to Drug Discovery
  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.

Our model doesn't include any recurrent or non-recurrent income from potential licensing agreements that e-Therapeutics may sign over the coming months or years.
 
We focus on the ongoing operating expenses necessary to support the generation of further drug candidates, which we expect to be in the £7-8 million range in the next few years.
 
Our cash flow projection also take into account that the company receives cash tax credits worth approx. 1/3 of their R&D expenses.
 
As such, based on our forecast, e-Therapeutics has sufficient funds to support their ongoing discovery activities into the first half of calendar year 2019 (fiscal year ending Jan. 2020).

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

CN Video
March 28 2018

Related Researches

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April 16 2018

KEY INVESTOR MESSAGES

  • Faster than expected development of the second immuno-oncology (I-O) program, a LAG3 inhibitor, allows company to evolve its lead program into a more ambitious LAG3/PD-L1 bispecific aiming to enter the clinic in 2020
  • Good progress of the ongoing external collaborations in two key areas: gene delivery (Moderna, OncoSec, FIT Biotech) and drug conjugates (Glythera)
  • Expect further licensing deals for Affimer reagents, based on multiple on-going evaluations
  • Stock price weakness reflects in our view uncertainty around a likely capital raise before year end rather than the company's strong fundamentals

 

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November 30 2017

WideCells Group PLC ( LON:WDC) was originally set-up in 2012 in Portugal, as a provider of stem cell storage services for the Portuguese and Spanish markets. In 2016 the company was listed on the London Stock Exchange, raising £1.7mln - net of fees, largely used to establish a new research and storage facility in Manchester, UK and to support the ongoing international expansion.

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September 03 2018

Legendary Investments (LON:LEG) creates value through privately held and pre-market investment opportunities with the potential for outsized returns. The company has a strong track record with:

  • Total investments valued at of £6.2mln (from zero in 2011)
  • Out of 12 investees in total, five are exhibiting multiple returns from 1.3x to 35x
  • Two crystallised with exits at a multiple of the initial investment

We believe this is an interesting time to revisit the investment case, as the shares are currently trading at a discount to net asset value (NAV), which has not been the case in the past.

N.B. Legendary plans to change its name to Eight Peaks Group (LON: 8PG) in the near future.

 

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