E-therapeutics Regulatory News (ETX)

28 Nov 2007 08:00

e-Therapeutics plc28 November 2007 Press Release 28 November 2007 e-Therapeutics plc ("e-Therapeutics" or "the Company") First Day of Dealings on AIM e-Therapeutics, the systems biology drug discovery company, today announces thefirst day of trading of its Ordinary Shares on the AIM market of the LondonStock Exchange ("AIM"). WH Ireland is acting as Nominated Adviser and CornhillAsset Management as Broker. The market epic code is ETX. A placing of 1,985,075 Ordinary Shares at 67 pence each has raised £1.33 million(gross) for the Company. The total issued share capital of the Company is55,710,103 and the market capitalisation of the Company at the Placing Pricefollowing Admission will be £37.33 million. Commenting on the Placing and Admission, Professor Malcolm Young, ChiefExecutive Officer of e-Therapeutics, said: "We are delighted by the response ofinvestors to the flotation of e-Therapeutics. The funds raised will enable us todevelop and broaden our drug development pipeline, and will significantly raisethe profile of e-Therapeutics with potential licensing partners. I would like tothank all of our investors for recognising the exciting opportunity that liesahead." Terms used in this announcement have the same meanings as the defined terms inthe Company's Admission Document dated 22 November 2007, which is available onthe Company's website (www.etherapeutics.co.uk). Placing and Admission Statistics Placing Price 67 penceNumber of Placing Shares to be issued pursuant to the Placing 1,985,075Number of Ordinary Shares in issue on Admission 55,710,103Placing Shares as a percentage of the enlarged issued share capital of the Company 3.56%Gross proceeds of the Placing £1.33mEstimated net proceeds of the Placing receivable by the Company £760,000Market capitalisation of the Company on Admission at the Placing Price £37.33m e-Therapeutics uses proprietary systems biology technology to discover potentialnew treatments for diseases where there are either no existing treatments orcurrent treatments are unsatisfactory. Conventionally, drug discovery has beendone by identifying a single "target" protein and screening a large number ofcompounds against it to see whether they have affinity for the target protein.Unfortunately, drug compounds rarely bind to just a single protein and theirbinding to other proteins often results in unpredicted and adverse effects.e-Therapeutics has a computer-based drug discovery platform that can predict thebiological effects of interaction of drug candidates with one or many proteins,thereby enabling it to quickly identify drug candidates and also their likelyside effects. The Company's drug discovery platform can be used to discover new drug compoundsand to find alternative indications for existing compounds, and combinations ofcompounds. The platform has been validated in testing on several disease statesby successfully identifying drugs known in the scientific literature to have hadeffects on that disease, and also identifying novel compounds that havesubsequently been shown to be active in that disease in laboratory tests. Overthe last two years, the Company has built a diverse portfolio of five drugcandidates, for which it has 10 product patent applications pending. The drugportfolio is outlined in the table below: Therapeutic need Candidate StageAsthma ETX9101 Phase II trials have commencedDepression ETS6103 Regulatory permission granted for Phase II trials. It is possible that may out license prior to Phase II trialsMalignant melanoma ETS2101 Preclinical in vivo efficacy and safety studies have commencedAtherosclerosis ETS6107/ ETS6114 Due to be tested in preclinical in vivo efficacy and safety studiesAntibiotic for MRSA/VRSA/VRE/ ETX1153 Reformulation is required before it can enterC.difficile/S.epidermidis clinical trials e-Therapeutics' discovery platform offers enormous potential for reducing thecosts and enhancing the productivity of pharmaceutical discovery anddevelopment. The Company has entered into commercial licensing discussions witha number of large pharmaceutical companies, who have recognised the value of theCompany's platform and pipeline. For further information: e-Therapeutics plc www.etherapeutics.co.ukMalcolm Young +44 (0)191 233 1328malcolm@etherapeutics.co.uk WH IrelandRichard Lindley +44 (0)113 394 6628richard.lindley@wh-ireland.co.uk Cornhill Asset ManagementTom Whitehead +44 (0) 207 645 8327tomw@cornhillassetmanagement.comAndrew Houchin +44 (0) 207 743 6468andrewh@cornhillassetmanagement.com Media enquiries: Abchurch www.abchurch-group.comHeather Salmond Tel: +44 (0) 20 7398 7704heather.salmond@abchurch-group.comStephanie Cuthbert Tel: +44 (0) 7843 080 947stephanie.cuthbert@abchurch-group.comAshley Tapp Tel: +44 (0) 7944 570 387ashley.tapp@abchurch-group.com Notes to Editors e-Therapeutics plc is a systems biology drug discovery company. It has developedproprietary computational systems to swiftly and accurately analyse and predicthow medicines interact with cells in the body. This optimises the probability ofidentifying drug candidates with desirable efficacy and low toxicity. TheCompany applies its novel, systematic approach to three areas of activity: • discovery of new drugs; • discovering novel uses for existing drugs; and • analysis of the interactions between different drugs. Amongst e-Therapeutics' pipeline of compounds in development are novelantibiotics that have been shown to kill the "superbug" MRSA, and a novel cancerchemotherapy that has been shown to kill malignant cells at safe doses in a veryshort time. Other candidate therapies in development are targeted atatherosclerosis, asthma and depression. The Company is currently in negotiationwith a number of pharmaceutical companies, and is progressing the preclinicaland clinical development of these products. For further information on e-Therapeutics visit www.etherapeutics.co.uk. History and background e-Therapeutics was founded on the results of research in neuroscience andcomplex systems science in the laboratory of Professor Malcolm Young. Thisresearch programme commenced in 1991 and received more than £10 million inexternal research grant support, initially at Oxford and then at Newcastleuniversities. The analytical tools developed in the research were spun out ofNewcastle University into the Company in 2003. The Company has developed itscore discovery team in Newcastle and it has a bioinformatics team in Ahmedabad,India, taking advantage of the availability of very experiencedbioinformaticians, some of whom were formerly involved in the development of thehighly influential Human Protein Reference Database. The task of drug discovery is that of finding a specific chemical compound thatbinds to a specific protein or proteins in order to have a beneficial medicaleffect, while ensuring that the compound does not have excessive undesirableside effects by interacting with other proteins. The Company's system representsproteins, and other key elements of a biological system, as nodes withinnetworks and maps their varying interactions. Computational methods developed bythe Company applied to these networks have been shown to predict biologicaleffect accurately. e-Therapeutics has developed proprietary computationalsystems biology tools that can predict the biological effect of interferencewith one or many proteins. This allows e-Therapeutics to rapidly identify drugtargets and to predict not only the effects of lead compounds but also thelikely side effects. The strongest validation for e-Therapeutics' methodology is that, using onlyinternal data resources and analyses, it finds drugs known in the scientificliterature to have effects on a particular disease. For example, in an analysisof 97 bacterial pathogens, the e-Therapeutics system successfully identified allknown antibiotic classes, including 103 known and secondary-effect antibiotics.It also identified several new antibiotic candidates, which have sincedemonstrated antibiotic effects in the laboratory. The probability of findingthis result by chance has been calculated as extremely low. Corporate strategy and business model The primary objective of e-Therapeutics is to develop intellectual property inthe form of a portfolio of patents for drugs, drug combinations and drugtargets. The Directors believe that the intellectual property produced will becommercialised through the licensing of drug candidates to pharmaceutical orlarger biotechnology companies. The pharmaceutical and biotechnology industries are facing specific challenges,including declining R&D productivity and the significant impact of drug patentexpiry and generic competition rapidly eroding the revenue of such drugsthereafter. e-Therapeutics' strategy is to lower drug development risk as far aspossible at the start of the development process as follows: • lower intellectual property risk by examining a wider range of mechanisms than usual by which a pharmacological effect may be brought about; • lower efficacy risk through "predictive de-risking" using its systems so that candidates are only tested where there is very good reason to believe that the molecule will be effective in the indication; and • lower the safety and side effect risk of drug candidates by only testing when there is very good reason to believe that the molecule will not deleteriously affect non-target systems and tissues. Effective lowering of these risks is expected to increase the probability ofe-Therapeutics' drug candidates progressing successfully through developmentstages to registration. The core competence of e-Therapeutics lies in utilising its technology platformand surrounding processes to discover and develop drugs. The Company alsodesigns and manages clinical trials and outsources the conduct of such trials toclinical research organisations. The Company intends to operate within theseareas of competence and has no plan at this juncture to expand into themarketing or manufacturing of drugs. Commercialisation has begun with the current portfolio of developmentcandidates. The Directors expect the Company's drug discovery and developmentactivities to be undertaken in future in a broader range of high valuetherapeutic fields, but with a focus in cancer, anti-infectives and systemicdisorders. Revenue model The Company expects to receive payment predominantly through up-front payments,milestone payments and royalties as a result of licensing transactions. Thisframework reflects the way in which biotechnology companies and pharmaceuticalcompanies typically interact in this area. At present, licensing in thepharmaceutical industry frequently takes place at one of two points in thedevelopment cycle: either following pre-clinical results, or upon completion ofPhase II studies. The size of up-front and milestone payments for licensingdeals typically reflect this, usually being larger the later the stage ofdevelopment. For this reason, the Company intends to utilise its drugdevelopment capabilities to advance compounds to these later stages ofdevelopment, subject to having sufficient funds to do so. Market The pharmaceutical industry has enjoyed a period of sustained growth with globalrevenues of more than $600 billion in 2006. The industry now faces a majorproblem in delivering further growth. The historic growth has largely beenachieved by efficient commercialisation and there is limited scope for furtherimprovement. Against this background, research and development productivitycontinues to decline, despite substantial increases in expenditure. Declining R&D productivity is a consequence of several factors, which have madeit increasingly difficult for the industry to address the three fundamental R&Dchallenges which, in the Directors' opinion, are: • Complexity: there are millions of possible biological targets and millions of potential compounds to act on them. Given the complexity of biological systems, it has been hard to predict clinical efficacy or toxicity from the information that is typically available early in the discovery and development process. • Speed: there is tremendous value in increasing the speed of the flow of compounds through the R&D process to maximise the period of post-launch patent protection • Unpredicted failure: failure, and particularly late stage failure, is extremely expensive. These write off costs must be borne by the drugs that successfully reach the market. e-Therapeutics believes that its discovery platform offers enormous potentialfor reducing the costs and enhancing the productivity of pharmaceuticaldiscovery and development. The Company has entered into commercial licensingdiscussions with a number of large pharmaceutical companies, who have recognisedthe value of the Company's platform and pipeline. Directors Professor Oliver James (aged 64), Non-executive Chairman Oliver has been a non-executive director of BUPA since 1999 and was anon-executive director of Goldsborough Health Care plc from when it floated onthe main market in 1995, until it was acquired by BUPA in 1997. He has also beena non-executive director of the Newcastle upon Tyne Hospitals NHS FoundationTrust since 2006. Oliver qualified as a physician in 1975 and practised until2004 when he became head of the medical faculty at Newcastle University. He wassenior vice president of the Royal College of Physicians from 1997 to 1999 andhas also been a member of a number of national and governmental medical relatedboards and committees. Oliver joined the Company as a non-executive director inOctober 2007. Professor Malcolm Young (aged 47), Chief Executive Officer Malcolm joined e-Therapeutics in 2003. He led the Company through its firstround of funding in 2005 and became its full-time chief executive in 2006. Aschief executive, Malcolm is responsible for developing the Company's strategyand overseeing the operation of the business. Until 2006, Malcolm was Pro-ViceChancellor for Strategic Development at Newcastle University. Prior to that hehad been the Provost of the Faculty of Science, Agriculture and Engineering;director of the Institute for Neuroscience; and director of the Complex SystemsGroup at Newcastle University. The research expertise of his group lay incomplex systems analysis and informatics and its outputs included fivepublications in Science and Nature and 10 in Proceedings and PhilosophicalTransactions of the Royal Society. His research funding exceeded £11 millionbetween 1992 and 2007 and included programme and project grants for research oncomplex systems from the Wellcome Trust (the world's largest medical researchcharity), the Biotechnology and Biological Sciences Research Council and theEngineering and Physical Sciences Research Council, through the UK's NationalCore e-Science Initiative. He is one of 18 scientists worldwide nominated by theSunday Times as the "Brains behind the 21st Century". John Cordiner (aged 41), Commercial and Finance Director John is a chartered accountant and was formerly an investment banker and achemist. He has over 15 years' international business experience, having workedin a variety of roles in the financial services and other industries, togetherwith specialised consulting roles for Deloitte, KPMG, andPricewaterhouseCoopers. As an investment banker with Noble & Co, he specialisedin the life sciences and oil and gas sectors. John has also been involved inadvising venture capital funds in technology investment, including lifesciences. John joined the Company in late 2004 as commercial and financedirector and is responsible for commercial strategy and all financial aspects ofthe Company's business. Royston Drucker (aged 54), Medical Director Roy qualified as a physician at Cambridge University in 1977. He is a fellow ofthe Faculty of Pharmaceutical Medicine, a founder and honorary member of theAssociation for Human Pharmacology in the Pharmaceutical Industry, a fellow ofthe Royal Society of Medicine, a member of the British Association ofPharmaceutical Physicians and a member of the Securities Institute. In 1984,following an eight year clinical career, he joined the research and developmentdivision of Sterling-Winthrop Limited, becoming a senior departmental manager ofits department of biochemistry, with responsibilities for clinical pharmacology,drug metabolism and bioanalysis in Europe. In 1985, he joined the pharmaceuticalresearch laboratories of The Upjohn Company and was appointed European head ofclinical pharmacology. He was also appointed an honorary research fellow inclinical pharmacology at Guy's Hospital, London in 1985. He became executivedirector and subsequently corporate vice president of drug development at TheUpjohn Company, based in the US. From 1996 until 2005, he was general manager ofTechnomark Consulting Services Limited, a London based specialist servicecompany to the pharmaceutical and biotechnology sectors, with corporate finance,venture capital and management consulting arms. Roy joined e-Therapeutics in2005 and is currently the medical director, with responsibility for organisingand overseeing clinical trials for the Company's drug candidates. This information is provided by RNS The company news service from the London Stock Exchange