Press Release: 27 July 2009

e-Therapeutics plc (AIM: ETX), the drug discovery and development company, is pleased to announce the preliminary results of the Company and its subsidiaries (“the Group”) for the year ended 31 January 2009.

Corporate highlights
• Positive clinical results for the antidepressant and oral asthma medicine with Phase III trials in India due to commence shortly
• Three drug candidates licensed for pharmaceutical development and distribution in India
• Positive preclinical results for the cancer treatment, MRSA treatments and C.difficile treatment in laboratory testing
• Proven track record of translating discovery process drug profiles into predicted clinical performance
• Eight candidates proceeding in development in line with plan

Financial highlights
• The net cash outflow from operating activities down 32% to £1.5 million (2008: £2.2 million)
• Rapid advance up the ranking of UK Aim biotechnology companies
• A financial position on target and expenditure below forecast levels
• Successful fundraising of £1.9 million

Commenting on the results, Chairman Oliver James said: “This has been a very pleasing year for e-Therapeutics. The out-licensing of three candidate drugs is very exciting and we are pleased with their rapid clinical development. We are also encouraged by positive pre-clinical data from the other candidate drugs in the Company’s pipeline. Our continued strategy to reposition drugs, which are already known to be safe, will put us in good stead to exploit opportunities in the coming years as pharmaceutical companies look to biotech’s like e-Therapeutics to provide them with promising new drug candidates to fill their pipelines.”


For more information:

e-Therapeutics plc www.etherapeutics.co.uk

Malcolm Young
malcolm@etherapeutics.co.uk
+44 (0) 191 233 1317

Nominated Advisor & Broker:
Canaccord Adams Ltd www.canaccordadams.com

Robert Finlay
Henry Fitzgerald-O’Connor
Robert.Finlay@CanaccordAdams.com
+44 (0) 20 7050 6500

Media enquiries:
Abchurch Communications www.abchurch-group.com
Heather Salmond / Stephanie Cuthbert / Simone Alves
simone.alves@abchurch-group.com
+44 (0) 20 7398 7728



Notes to Editors

e-Therapeutics plc is a systems biology drug discovery company. It has developed proprietary computational systems to swiftly and accurately analyse and predict how medicines interact with cells in the body. This optimises the probability of identifying drug candidates with desirable efficacy and low toxicity. The Company 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 novel antibiotics that have been shown to kill the “superbug” MRSA, and a novel cancer chemotherapy that has been shown to kill malignant cells at safe doses in a very short time. Other candidate therapies in development are targeted at atherosclerosis, asthma and depression. The Company is currently in negotiation with a number of pharmaceutical companies, and is progressing the preclinical and clinical development of these products.

For further information on e-Therapeutics visit www.etherapeutics.co.uk.

Chairman and Chief Executive’s statement

Overview
This has been another successful year for e-Therapeutics. The Company has delivered excellent progress on the product pipeline, two successful Phase II clinical trial results, the out-licensing of three of its drug candidates, several strategically important new partnerships, successful fundraising in challenging financial market conditions and strong development of the drug discovery platform.

e-Therapeutics’ goal, to become a principal player in the discovery and development of a new generation of high-value medicines, has been brought closer by the successful development of our leading products, licensing agreements for them and the successful fundraising completed in March 2009. The clinical and laboratory achievements this year have also provided considerable validation that the Company’s drug discovery platform technology will continue to generate effective and safe medicines in areas of unmet medical need.

Clinical success
Over the course of the year, e-Therapeutics announced positive data from two clinical programmes. The most recent of these was the completion of a Phase II study with its antidepressant, ETS6103, which is now in development in India with KLAB under the brand name ‘Viotra’. The data demonstrates the drug is safe and well-tolerated and that it is faster-acting and more effective over a 12-week period than a standard-of-care tricyclic antidepressant (amitriptyline). This result offers exciting opportunities to deliver strong efficacy with potentially fewer side effects in depression, which would be a beneficial new treatment option. KLAB, the Company’s
licensee in India, is preparing for a Phase III registration trial, and expects shortly to apply for regulatory marketing approval.

In addition, we successfully completed a Phase II study with ETX9101, our oral asthma treatment, which is designed to reduce the likelihood that asthmatic tightness will worsen into exacerbation. The results demonstrate that the medicine is well-tolerated, that it successfully headed off exacerbations and made patients feel significantly more comfortable at night. Patients taking this drug consumed less inhaled relief medication during the trial. We believe that these capabilities from an oral medicine in asthma are unique. These results offer the prospect of treating a wide range of asthmatic patients with the convenience and safety of an oral tablet, which would be a widely beneficial new treatment option. KLAB, which also holds the license for this drug in India, is preparing for both a Phase III registration trial and to apply for regulatory marketing approval.

Laboratory developments
The ETX1153 family of anti-infective drug candidates has continued to show pleasing properties in the laboratory. Indeed, these properties were sufficiently strong that KLAB sought and obtained the license for India for the topical variant of this MRSA-killing antibiotic. KLAB is now formulating the topical medicine as ‘Mersanex’, and expects to gain approval for an important clinical trial in the period covered by the next Annual Report. The intra-venous variant, which is designed for systemic acute hospital-based bacteraemia, and the orally dosed C.difficile variant, are being evaluated in vivo at present.

e-Therapeutics is pleased to report continued successful performance in the laboratory of ETS2101 for the treatment of cancer. Laboratory testing shows that the compound is a promising selective apoptotic, which causes cancer cells to terminate themselves (apoptosis) but does not affect normal cells. The tests showed the drug was significantly more effective at causing apoptosis across a range of melanoma cell lines than a standard-of-care chemotherapeutic (cisplatin), and did so at concentrations well below the “no obvious adverse effect limit” for this compound. Testing in vivo showed that a single injection caused long-lasting benefits in tumour growth and size. These results provide a good basis for proceeding into clinical trials of ETS2101 in the next period.

People
e-Therapeutics’ talented employees are crucial to its success and the Company is committed to the development of a motivated and professional workforce. It is their skill and expertise which have enabled e-Therapeutics to achieve its progress to date, and there is a very capable team to help the Company as it moves closer towards approval of some of its late-stage products. On behalf of the entire Board, we would like to thank our staff for their hard work and their continued support, energy, insight and commitment.

Capital position
In these challenging markets, it is important to secure an appropriate financial basis for the Company. In March 2009, the Company received an important investment from Octopus Investments, and its related investment funds and investors, based in London. The investment was structured as an equity investment, a loan note and warrant. The Company was also encouraged that e-Therapeutics is one of only a few publicly listed UK-based biotechnology companies that have raised new investment during this turbulent period for the markets.

e-Therapeutics adjusted running costs downward during 2008/2009, to de-risk the Company against the difficult capital markets and so generated cash savings in excess of our forecasts from last year. Biotechnology companies typically take several years to reach a sustainable cash-generative position, but e-Therapeutics remains confident that it will achieve this goal, aided by substantial milestones and royalties from our partners as our late-stage programmes are filed and come to market.

Strategic positioning
The dynamics of the global pharmaceutical industry have become clearer during the last year, with a number of large-scale mergers and acquisitions aimed at mitigating the effects of patent expirations and relatively weak pipelines in the major companies. However, these developments have not changed the position that the ethical part of the industry as a whole is predicted to suffer a revenue gap as the most valuable drugs go off-patent and too few good new premium drugs come to the market. Sector analysis shows this revenue gap will be particularly pressing by 2013. Major companies are expected to be unprecedentedly keen to find premium drug candidates capable of coming to the market quickly. This industry-wide phenomenon continues to influence e-Therapeutics’ near-term strategy which is to develop repositionable drugs. These drugs are potentially capable of gaining market approval quickly enough to exploit the dynamics of the industry’s revenue gap. Hence, e-Therapeutics plans to continue its emphasis on discovering and developing repositionable drugs with a robust patent estate into potentially important areas of unmet clinical need, where premium pricing is appropriate, and to bring a substantial number of these candidates to New Drug Application (NDA) filings by 2013. Repositioning is not easy, but our continuing success in discovering surprising new clinical uses for molecules that are known to be safe is fundamentally made possible by the power of our discovery technology.

Outlook
e-Therapeutics has a broad and innovative clinical pipeline that combines mid- and late stage pharmaceutical products with earlier stage opportunities addressing important market sectors, and an increasingly validated discovery platform we believe will continue to deliver valuable products into the future. Our efforts over the coming year will be focused on: delivering our drug development programmes, seeking out-licences to strategically important pharmaceutical partners, and refilling our pipeline with exciting new drug candidates as some molecules are out-licensed to partners who will take over their development.

It is an exciting time in the Company’s trajectory as we look forward to the commencement of registration trials with the asthma and antidepressant programmes, partnered with and resourced by KLAB. The markets that e-Therapeutics targets provide the Company with huge opportunities and are significant value-drivers for e-Therapeutics.

e-Therapeutics has a healthy pipeline of products in development and it will continue to drive these forward in a focused manner, whilst maintaining a prudent eye on expenditure. The Company will explore partnering one or more of our proprietary programmes. The Board is pleased to be able to report a successful year, in which the Company delivered what we stated in last year’s annual report and we are confident that we can achieve our goal of becoming a cash-generative business and provide valuable returns for our shareholders.

Malcolm Young – CEO
Oliver James – Chairman
24 July 2009

Full Report

For the full report (including the consolidated Income Statment, Group Balance Sheet, Cash Flow Statment, and Changes in Equity) please click on the following link:

Preliminary Results for the Year Ended January 2009