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e-Therapeutics - FY 2018 Results Show Good Progress

Writen by Riccardo Lowi

e-therapeutics reported results for the full year to Jan 31st 2018; business updates reflect good progress on the main research programs. Cash balance of £9.6mn was slightly higher than we expected, thanks to careful cost management.
 

As discussed in our initiation note of October 2017, we value e-therapeutics using a SOTP approach.
 
We value their leading programs about £60mn and attribute a value of £50mn to e-therapeutics' NDD platform.
 
Taking into consideration the cash balance at the end of January 2018 and the £1.4mn tax credit due in 1H19 (Feb-Jul of calendar year 2018), we get to a valuation of about £120mn.
 
Applying a 30% discount to account for potential future dilution, we reach our intrinsic value of £83mn, about 4x current market cap.

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