The E-Therapeutics Plc (LSE:ETX) fundraiser of £13.5m has been the highlight of the news since its announcement in September 2022. This newly acquired capital provides E-Therapeutics with the opportunity to generate value and accelerate the next stage of its growth. The company will accelerate the development of its in-house RNAi pipeline through enhanced investment in therapeutic programmes, hepatocyte datasets and computational capabilities.

Key Points

• E-Therapeutics successfully completed a £13.5 million fundraiser.
• E-Therapeutics is entering into a collaboration with genomics firm C4X Discovery with the ambition of discovering novel drugs for Parkinson’s Disease.
• There have been across-the-board cuts to their statutory estimates of the company’s financials.

What does E-Therapeutics do?

E-Therapeutics Plc is a drug discovery and development company focusing on discovering novel therapeutic approaches and mechanisms for the treatment of various diseases.

As per a recent announcement, E-Therapeutics is collaborating with genomics firm C4X Discovery¹. This collaboration has the ultimate ambition of discovering novel drugs for Parkinson’s Disease.

The bull case for the E-Therapeutics share price

E-therapeutics share price enjoyed a prolonged bullish period from July 2019 to May 2021. The stock climbed from a price of 1.8p to 48.4p, representing a whopping 25-fold increase during this period.

Pharma companies usually experience high growth depending on the development stage, and a high cash influx is the result. This can have a positive impact on E-therapeutics share price.

The bear case for the E-Therapeutics share price

The E-therapeutics share price performance has been dominated by a bearish trend since May 2021. From a price of 48.4p, the stock dropped to 11.52p. From here, the stock recovered slightly and last closed at 18.48p. Investors breathed a sigh of relief when the bearish streak came to an end.

One of the key challenges of the biotechnology and pharmaceutical industries is the high competition and the risk of the inability to find financial support and greater resources. In addition, the risk of fast-changing and growing technology is very high. Since the conventional pharmaceutical R&D model takes many years and billions of dollars from discovery to approved medicine, the chances of not keeping up to date can cause huge financial losses.

E-therapeutics share price prediction

Analysts have been clear about the reduction in the statutory estimates for the current year. Considering these reductions there have been mixed feelings about the E-therapeutics share price forecast. Analysts believe the stock to be around 16p in the next 12 months.

However, only time will tell whether these predictions are accurate, as forecasts always have an air of uncertainty. That’s why investors should never base their investment decisions solely on analyst forecasts.

Should I buy E-Therapeutics shares today?

There have been across-the-board cuts to their statutory estimates of the company’s financials. Both revenue and earnings estimates have been downgraded for FY 2023. No doubt, this has a dampening effect on investor confidence. But looking at the bright side, the analysts have been clear about the fact that the company’s revenues are still better than the overall industry. Moreover, the drug company is projected to break even around two years from today.

While this is good news, I will still wait to see some improvement in the company’s financials and the E-therapeutics share price performance before investing my money in this drug company.

Article sources

1. Pharmaphorum. e-Therapeutics and C4XD research Parkinson’s drugs

Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.