E-THERAPEUTICS PLC

(“e-Therapeutics” or the “Company”)

e-Therapeutics plc (AIM: ETX): Upon the completion of Ray Barlow’s first three months as CEO of e-Therapeutics, the Company outlines below the conclusion of the strategic review for its investors and other stakeholders.

  • A systematic review of the technology confirms the novelty, utility and productivity of e-Therapeutics’ Network-Driven Drug Discovery (NDD) platform
  • Internal discovery efforts will focus on the Company’s two immuno-oncology programmes, and all other programmes will be used for platform validation purposes and/or immediate out-licensing
  • Investment in the NDD platform will continue to develop its functionality and capabilities, including in genomics and artificial intelligence/machine learning
  • Costs continue to be managed prudently, and the Company confirms receipt of £2.8m tax credit
  • The prime focus will be on business development, external collaboration and partnership

Ray Barlow, CEO of e-Therapeutics, said:

“Based on a detailed, systematic review of the business and its technologies, we are firmly of the view that we have created a unique and sophisticated computer-based drug discovery platform which is significantly more rapid and productive than other approaches available to the industry.

“Our network-driven view of biology and disease is gaining more and more attention in literature and the industry. Furthermore, results we have generated show that our approach has the potential to discover new and better drugs with potentially novel mechanisms of action (MoAs).

“While exercising keen cost control, we will continue to invest in the development of the platform and also carefully deploy our own resources to progress selected internal programmes. Our internal discovery efforts will now focus on our two novel, small molecule, immuno-oncology programmes in checkpoint signalling modulation and tryptophan breakdown (catabolism).

“Our business model is directed to external collaboration and partnership, including the out-licensing of our assets at a pre-clinical stage. We will now take our Hedgehog signalling modulation programme out to the industry.

“We can apply our approach to a range of complex diseases, and hope that our platform will be of interest to a range of traditional biopharmaceutical companies as well as to a new generation of companies looking to disrupt drug R&D. We believe there is potential to enter into several different types of collaborative partnerships and agreements to create sustainable mutual value.”

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

ADDITIONAL INFORMATION & BACKGROUND ON THE STRATEGIC REVIEW

A ‘root and branch’ review was undertaken by the CEO, including a panel composed of leading commercial and scientific experts working for (or with background in) big pharma (AstraZeneca, Pfizer and Merck & Co.) and successful biotechs (Piramed, Mission Therapeutics, Benevolent AI).

The various areas of the review with further information are summarised below:

Review confirms utility and productivity of e-Therapeutics’ network-driven drug discovery (NDD) platform in creating new and potentially better drugs

  • Confirmation that e-Therapeutics’ approach is unique and productive, and should have advantages in terms of time, cost, novelty and quality over other approaches to small molecule drug discovery
  • NDD approach has now been used to identify small molecule hits in 12 discovery programmes in diverse areas of biology, including oncology, immunology and neurodegeneration
  • The process is rapid: identifying drug-like molecules takes nine months or less from original concept to initial hits. This compares to 24 months or more for standard approaches
  • The process is highly productive: potent, selective and novel drug-like molecules identified at a level of productivity several orders of magnitude higher than typical high throughput or phenotypic approaches
  • The approach can be used to identify potentially novel mechanisms of action (MoAs) and first-in-class candidates

Review confirms market dynamics favourable towards e-Therapeutics’ approach, model and business plan – pharma industry is focusing more on a network view of genomics and disease

  • There is a growing interest by the industry in focusing drug R&D on a network view of biology and disease, as described in a recent BioCentury Innovations article (see link: HERE)
  • e-Therapeutics’ drug Discovery Engine is a unique way to approach this increasingly important area of drug discovery:
    • A combination of large-scale, proprietary databases and a suite of powerful computational tools that employ data mining, machine learning, artificial intelligence, optimisation, and network analysis

Review confirms two immuno-oncology programmes should be the focus for incremental investment

  • Confirmation follows a systematic assessment of the status of all programmes, including data generated, investment required, competitive landscape and potential of programme to meet unmet clinical and commercial need
  • Checkpoint signalling modulation and tryptophan breakdown (catabolism) programmes continues to be the focus for further internal investment. These programmes address gaps in available treatments and have potential to provide novel, first-in-class drugs
  • Actions for other programmes:
    • Hedgehog signalling modulation and anti-influenza programmes validate the NDD approach and will be taken out to the industry as potential out-license opportunities
    • TNF alpha suppression and Telomerase projects underpin the scientific foundation of the NDD approach and data will be submitted to scientific and industry publications

Review confirms utility of approach which enables e-Therapeutics to work in areas of biology with high unmet clinical and commercial need

  • e-Therapeutics now has significant expertise in the application of its specialised approach to network biology to a broad range of complex diseases
  • New network feasibility projects in triple negative breast cancer, tumour microenvironment and other complex disease like neurodegeneration and fibrosis
  • Intention to approach industry to work with them on using NDD on disease areas of clinical and commercial interest

Positive outcomes generated from programmes to date, encourage further investment in the platform

  • Review confirms e-Therapeutics has created a unique and sophisticated computer-based drug discovery platform which is significantly more rapid and productive than other approaches available to the industry
  • Plan to continue:
    • Refinement of current, user-friendly interface
    • Regulatory network construction and analysis (“drugging the undruggable”)
    • Application of networks to personalised medicine and disease segmentation based on genomics
  • Expansion of the use of artificial intelligence (AI)/machine learning for data augmentation
  • Work on elucidating novel MoAs via a network-driven approach

Cost control will be applied to maintain cash resources

  • A thorough financial review of all elements has been undertaken
  • The number of active, self-funded discovery programmes reduced from six to two, with capacity to initiate new projects
  • External funding sought for other programmes

Focus on business development

  • Prime focus of the business is now firmly on business development activities and on external validation of the platform and programmes
    • Active marketing of Hedgehog and anti-influenza programmes
    • Partners also sought for new NDD projects utilizing the drug discovery platform
  • Business rebranded and new website and marketing material created
  • Sponsorship of AI Pharma Innovation Summit (July 2017) in Boston to showcasee-Therapeutics’ technologies to Chief Technology Officers (CTOs) and heads of informatics of major industry players

Further points of note

  • R&D tax credit of £2.8m received in late June 2017
  • Full financial update as part of our half-year announcement, scheduled for 26 September 2017

FURTHER DETAIL ON PROGRAMMES

Checkpoint signalling modulation

The aim of this programme is to create novel, small molecule disruptors of checkpoint signalling that can increase the anti-tumour activity of immune cells and directly overcome T-cell anergy and reverse T-cell exhaustion.

e-Therapeutics has identified compounds that are active in a panel of challenging orthogonal assays. The Company also appears to have novel MoA (not A2A or CTLA-4 or PD-1 antagonist). Whilst relatively early, this programme is in a rapidly developing space with high industry interest. The Company will continue to invest in this programme to build on the exciting and encouraging data it has generated to date.

Tryptophan Catabolism (degradation)

The aim of this programme is to create novel, small molecule agents that can reduce the catabolism (degradation) of tryptophan which, in turn, should prevent the suppression of T-cell responses in cancers as a monotherapy or in combination.

This programme has been highly productive, and the team has identified novel, picomolar potent, drug-like compounds with activity greater than agents currently in the clinic, such as epacadostat (Incyte), indoximod (New Link Genetics) and BMS-986205 (BMS/Flexus). In addition, data suggests that a novel MoA (not IDO or TDO inhibitors) has been found which will be explored further.

Hedgehog signalling modulation

The aim of this programme is to create novel, potent and selective Hedgehog pathway modulators with reduced tendency to induce SMO resistance and activity against tumours resistant to the existing agents vismodegib and sonidegib.

This programme has been a good validation of e-Therapeutics’ approach. The Company has identified molecules with single-digit nanomolar potency in cellular assays, some of which have no (or some limited) binding to SMO, superior efficacy in vismodegib-resistant cells and activity in a mouse xenograft model, equivalent or superior to the established agents. The Company will now take this programme out to the industry to see the level of interest as an out-licensed asset.

-Ends-

Notes to Editors

About e-Therapeutics plc

e-Therapeutics is an Oxford-based company with a unique and powerful computer-based drug discovery platform and a specialised approach to network biology.

Its novel methodology and Discovery Engine allow the Company to discover new and better drugs in a more efficient and effective way.

For more information about the Company, please visit www.etherapeutics.co.uk

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors readers are cautioned not to rely on any forward-looking statement.

For further information, please contact:e-Therapeutics plcRay Barlow, CEOSteve Medlicott, Finance DirectorTel: +44 (0) 1993 883 125www.etherapeutics.co.ukorNumis Securities LimitedMichael Meade / Freddie Barnfield (Corporate Finance)James Black (Corporate Broking)Tel: +44 (0) 207 260 1000www.numis.comorInstinctif PartnersMelanie Toyne Sewell/Alex ShawTel: +44 (0) 207 457 2020Email: e-therapeutics@instinctif.com

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