Final results for the year ended 31 January 2022

Final results for the year ended 31 January 2022

e-therapeutics plc announces its audited final results for the year ended 31 January 2022.

Operational Highlights

• Strengthened financial position, raising £22.5m before expenses in July 2021
• Three pre-defined milestones achieved in the collaboration with Galapagos NV ("Galapagos") in idiopathic pulmonary fibrosis ("IPF")
• Gene silencing RNA interference ("RNAi") platform development and benchmarking studies successfully completed. Equivalent performance to leading competitor platforms and excellent safety profile seen in lead designs in mice and non-human primates ("NHP")
• Eleven patent applications filed to protect proprietary and novel GalNAc-siRNA silencing construct designs
• Rapid progress in the development of a liver focussed computational platform, including the generation of a hepatocyte-specific knowledge graph
• Developed machine learning ("ML") driven siRNA sequence design and expanded computational therapeutic target identification capabilities
• Significant increase in speed and automation of in silico network biology model construction and analysis. This has resulted in the ability to generate and computationally analyse complex human disease processes in a matter of hours as opposed to months
• Commenced trading on the OTCQX Best Market ("OTCQX") in the United States, under the ticker symbol "ETXPF" in September 2021, to broaden visbility and attract further commercial and investor attention

Post Period Highlights

• Immuno-oncology research collaboration with iTeos Therapeutics ("iTeos") announced on 5 April 2022. The partnership blends with e-therapeutics' computational platform expertise and iTeos' proprietary assays. e-therapeutics will receive upfront and near-term cash payments material to the revenue of the Company. The Company is also eligible to receive undisclosed milestone payments through pre-clinical and clinical development, in addition to regulatory milestones per programme
• Key milestone achieved with Galapagos, resulting in a cash payment to e-therapeutics following the successful characterisation by the Company of the mechanism of action of hit compounds ("hits") identified earlier in the collaboration. The Company has now achieved all pre-agreed near-term milestones and the future of the identified hits and targets will be determined by Galapagos according to its strategic priorities
• Commenced the pre-clinical prosecution of two hepatocyte targets derivsed from the Company's computational platform. Further targets are being evaluated in feasibility studies
• Effective 3 May 2022, the Company's registered office address changed from 7 Blenheim Office Park, Long Hanborough, OX29 8LN, Oxfordshire to 4 Kingdom Street, W2 6BD, London

Financial Highlights

During the period, the Company strengthened its financial position following the successful equity fund raise which was completed in June 2021.

• Revenues of £0.5 million (2021: £0.3 million)
• R&D spend of £6.1 million (2021: £2.7 million)
• Operating loss of £9.6 million (2021 loss: £4.5 million)
• Loss after tax of £8.1 million (2021 loss: £3.7 million)
• £22.5 million before expenses, from placing, subscription and retail offer completed in June 2021
• Cash and short term investment bank deposits at 31 January 2022 of £26.6 million (31 January 2021: £13.0 million)
• R&D tax credit receivable at 31 January 2022 of £1.5 million (31 January 2021: £0.8 million)
• Headcount (excluding Non-Executive Directors) at 31 January 2022 was 35 (31 January 2021: 25)

Ali Mortazavi, Chief Executive Officer of e-therapeutics, commented: "I am extremely pleased with the progress the Company has made in 2021 in all aspects of the business. We are excited to partner with iTeos to help identify highly differentiated immuno-oncology medicines for patients. This collaboration provides further validation of the value of our network-driven, disease agnostic computational platform. At the same time, we have again shown the value of our computational platform with the successful completion of our collaboration with Galapagos where we met every success milestone. Importantly, the same computational tools that are used in these collaborations have been successfully migrated to our hepatocyte-focused computational platform and applied to proprietary hepatocyte datasets.

In October 2021, the Company achieved a major milestone, announcing positive headline results from in vivo studies confirming that our proprietary GalNAc-siRNA platform is competitive relative to peer platforms. This is a material step in the Company's ultimate goal of developing an in-house RNAi pipeline with future scope for early-stage partnering. Eleven patent applications have been filed to protect these innovations.

We believe that e-therapeutics offers a differentiated strategy, with the ability to silence any gene in the liver with extremely rapid pre-clinical timelines, coupled with powerful computational capabilities, including in better understanding human hepatocyte biology. Importantly, the execution of our strategy is well underway and two hepatocyte targets are currently in pre-clinical research, with further feasibility work being conducted across multiple other computationally generated targets."

Chief Executive's Statement

2021 was a transformative year for e-therapeutics against the backdrop of multiple unprecedented global macro challenges. Despite the enormous success of the global vaccination programme to tackle COVID-19, many operational and logistical challenges remained in 2021. By October 2021, the hope for a return to normality was seriously hindered by the emergence of the Omicron variant and we, like many other companies, were forced to delay the return to an office environment. In addition, and at the same time as the emergence of Omicron, the global biotechnology sector saw a dramatic and unprecedented decline.

In spite of these challenges, and thanks to the nimble nature of the Company, it was a landmark year for e-therapeutics which saw significant and material progress across all aspects of the business. It is a testament to the team and our collective ambition to reinvent the drug discovery industry and compute the future of medicine that we were able to achieve so much against such an unforgiving backdrop. Key achievements in 2021 include:

Capital Raise

In June 2021, we strengthened our balance sheet with an equity capital raise of £22.5m before expenses. Importantly, we received significant blue chip institutional support for our strategy which will enable us to release our ambitions to become a world leading company in the field of computational approaches to drug discovery.

RNAi liver platform

A key component of our strategy was to establish a proprietary therapeutic technology platform which is potent, specific, safe, reproducible and gives us the ability to design potential drug candidates as quickly as possible. This would put us in a position of being able to rapidly prosecute novel target genes identified using our computational engine. We focused on liver targeting given the organ's crucial role across a variety of homeostatic biological function, including in complex cardiometabolic diseases. GalNAc-siRNA conjugates are a commercial stage, next-generation therapeutic modality that enables highly specific hepatocyte targeting and potent gene silencing.

In October 2021, we announced significant progress in establishing our proprietary liver-centric RNAi platform. Our in vivo experiments yielded two different GalNAc-siRNA construct designs that showed at least equivalent performance in terms of potency, target gene silencing and duration of action (up to three months) against the best competitor data in the same targets in NHP. These data enabled us to file eleven new patent applications to protect these novel construct designs.

Yet again, despite an extremely unfavourable global logistics background, we successfully completed these critical platform validation experiments on time and on budget. This key validating dataset on our GalNAc-siRNA platform technology firmly places the Company in an area with an extremely high barrier to entry and a very small global peer group, which is in need of better therapeutic targets to unlock further value in areas of high unmet need.

Target identification and computational platform specialisation

Target identification is currently the biggest limitation in GalNAc-siRNA and there is a high degree of overlap in competitive pipelines. An important differentiator for the Company relative to RNAi peers is the ability to leverage its computational platform to identify better, novel therapeutic targets. Our computational platform is also an enabler in the discovery of mechanistic insights, assessment of genetic support and in silico evaluation of target hypotheses ahead of wet lab experiments.

To complement our GalNAc-siRNA capabilities and feed our in-house pipeline, the Company has created a hepatocyte-focused specialisation within its core computational platform. e-therapeutics is also executing on an ambitious data strategy to create the most comprehensive and integrated hepatocyte-centric data resource in the World, tailored to our computational biology approach to drug discovery. We are compiling experimental data at genome-wide scale using bespoke human hepatocyte assays and combining it with our existing state-of-the-art network analytics and artificial intelligence/machine learning ("AI/ML") approaches to create a seamless connection between the computer and the laboratory.

Our assays are guided by our in silico work and our in vitro experimental data feed back into making increasingly better models of human biology. In addition, the Company is building the most complete hepatocyte knowledge graph, integrating its experimental data and its newly created AI/ML enhanced, hepatocyte protein-protein interactome. The knowledge graph already includes data derived from natural language processing of hundreds of thousands of publications and data sources, patient-derived information, patent mining and human expertise.

This knowledge graph is structured to allow it to perform ML-driven mechanistic inference to impute missing links and uncover hidden knowledge around biological mechanisms, the greatest roadblock to efficient drug discovery and development. This integrated resource will provide the Company with an unprecedented foundation from which to derive disease intervention hypotheses, support network model construction, carry out target identification and discover genetic links. It will also provide data and insights to feed into its AI-driven siRNA design workflows, which are another addition to our tool kit. The bases for this data strategy are already in place and providing insights as we continue to grow and enhance our capabilities. Furthermore, the knowledge graph and tailored computational tools we have developed in hepatocytes can be replicated in additional cell types of interest.

Importantly, the Company has expanded its network-aware target identification, MoA (mode of action) elucidation and target deconvolution capabilities. This has been possible via the augmentation of network-based analysis with a suite of proprietary AI/ML approaches. These target-centric approaches continue to complement foundational phenotypic modelling capabilities.

Taken together, the enhanced applications of the e-therapeutics' computational platform that have been developed to date will be a key enabler both internally and for partners. In addition, e-therapeutics continues to streamline its computational platform via increased automation and cloud computing.

Partnerships and Collaborations

Partnering and collaborating around our computational biology platform has been a key component of our strategy during the period. We believe that not only can we derive revenue streams from these collaborations, but partnerships also allow us to learn and enhance our platform under pharmaceutical settings. We are extremely pleased to collaborate with iTeos, a clinical-stage biopharmaceutical company pioneering the discovery and development of a new generation of highly differentiated immuno-oncology therapeutics for patients. The collaboration is focused on the discovery of novel therapeutic approaches and targets in immuno-oncology and e-therapeutics will remain free to explore additional collaborations in the space.

In addition, we have achieved all near-term milestones in our collaboration with Galapagos as we have successfully identified potential therapeutic strategies and targets in a specific area of biology associated with IPF and potentially other fibrotic indications. In keeping with previous e-therapeutics projects, the hit rate in identification of active compounds was several orders of magnitude higher than industry standard, further validating e-therapeutics' robust computational biology methods. The future of the identified hits and targets will be determined by Galapagos according to its strategic priorities and we remain in active dialogue with other potential partners.

Outlook

Despite the challenging macro-operating environment experienced during the period, we have demonstrated great adaptability and focus which has resulted in significant, technological and commercial progress. Our prospects remain favourable, and we are confident that our equity storey is extremely attractive, differentiated and compelling.

We have successfully leveraged and monetised our computational platform and developed a proprietary gene silencing RNAi platform, enabling us to prosecute our discoveries and build long-term value. In addition, we have successfully started the population of our in-house pipeline of RNAi therapeutics with the initiation of experimental work on two gene targets.

I remain extremely confident in the potential of e-therapeutics and believe that your Company is well placed to become a work leading company able to compute the future of medicine.

Ali Mortazavi

Chief Executive Officer

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