Raising relatively large amounts of money appears to be turning into a regular event for UK company e-Therapeutics. Following on from its £16.7m fundraising in 2011, the group today announced that it would be adding a further £40m ($62.7m) to its coffers from a new share issue in order to progress its most advanced candidate.
If everything goes to plan preliminary data from a US phase I trial of brain cancer drug ETS2101 will be available by the end of the year, an event that will provide the start of validation of e-Therapeutics' network pharmacology technology platform and its whole business model.
Carrying on down the road
Speaking to EP Vantage, Daniel Elger, chief financial officer, said that the £40m cash injection, in the form of a share issue to institutional investors, would allow the group to achieve its two main goals: “Take our cancer drug right through an efficacy programme to a potential partnering deal in 2017 and to make a real play of extracting value from our network pharmacology platform over the same sort of period.”
As such, the additional funds will essentially cement the strategy of returning to drug discovery, a process that was started in 2011. What is slightly newer is the narrowing of the group’s efforts to focus on just oncology and degenerative disorders of the nervous system.
When e-Therapeutics first announced its new direction it unveiled a mixed bag of clinical pipeline products that included ETS2101, phase II major depressive disorders drug, ETS6103, ETX1153a in MRSA andC. difficile drug, ETX1153c. Since then ETX1153a has been abandoned in order to focus resources and ETX1153c has returned to preclinical studies and a go-no-go decision on the drug is expected in the third quarter. But the result that most investors will be looking for will be the initial data readout at the end of this year for ETS2101.
e-Therapeutics network pharmacology business model is based on the application of network analysis to identify proteins involved in disease progression and then finding molecules capable of targeting those proteins using chemical biology. The technology also looks at potential drug and target interactions, accelerating development by reducing the risk of failure on either efficacy or safety grounds.
This does mean, however, that if e-Therapeutics was to experience failure of its products the blame could be laid at the feet of the technology, undermining investors’ confidence in the group’s ability to conduct drug discovery. This is why so much will ultimately hang on what results ETS2101 achieves in its phase I brain cancer US trial. The drug is also being studied in the UK in a number of solid tumour trials and results are expected in the first quarter of 2014.
If the US results from ETS2101 are positive the drug will then move into a randomised, controlled, phase IIa proof-of-concept study, with the aim of obtaining data to start partnering talks in 2017.
Strings to the bow
The long time horizon should be covered by today's fundraising, but e-Therapeutics is also hoping to strike strategic partnerships with big pharma companies over its network pharmacology (NP) technology and share the downstream value of collaborations.
One thing that might, however, upset this dual income stream strategy is the increasing number of big pharma companies looking at developing their own NP programmes to help them speed up drug discovery and trim R&D costs.
Whether e-Therapeutics can maintain its first mover advantage is hard to predict given the resources big pharma could throw at developing internal systems.
There is the possibility that rather than build a NP division, a pharma group could instead decide to buy e-Therapeutics, but again it is unlikely anyone will take a punt before results from ETS2101 or at least one other drug are produced.