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E-Therapeutics has 'buy' rating reiterated by Panmure ahead of interims

Published: 10:27 18 Oct 2011 EDT

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Broker Panmure has reiterated its 'buy' recommendation on drug discovery and development specialist e-Therapeutics (LON:ETX) ahead of the release of the firm's first half results tomorrow.

The company applies the science of complex systems to discover new drugs. It analyses the network of proteins important in a particular disease, then proceeds to identify means of disrupting that network.

Four drugs are now in clinical development.

"As ever with development-stage biotech companies, the only financial metric worth considering is the cash balance, which we forecast to stand at £15.2 million," said analyst Savvas Neophytou in a note.

"e-Therapeutics successfully recapitalised itself with a £15.8 million rights issue during full year 2011, providing the company with sufficient cash runway to proceed with key pipeline assets Clostriban and Dexanabinal as well as expand its platform operations," he added.

The analyst said the primary reason to invest in the stock was the firm's platform technology.

"The 2011 recapitalisation enables the company to pursue development of its pipeline assets until a value inflection point, at which time the company hopes to secure a licensing deal to maximise the commercial potential," he said.

Panmure targets a price of 76 pence (current price: 25.5 pence) for the shares, derived entirely from its "conservative assumptions on Clostriban use in the US and Europe, in addition to Dexanabinol in Europe alone".

The company restarted its discovery effort in July, with new work focused on cancer and degenerative diseases of the nervous system. At the time, the firm also outlined plans for clinical development of four candidates resulting from earlier discovery projects.

e-Therapeutics present at the Proactive One2One Investor Forum - October 26th

Ali Mortazavi, CEO of e-Therapeutics PLC (AIM:ETX, OTCQX:ETXPF), addressed the challenges of traditional drug discovery, emphasising its high risk, extensive timeline, and considerable cost at the Proactive One2One Investor Forum. Underlining the inefficiencies of this model, Mortazavi posed...

on 11/01/2023