E-Therapeutics Plc (LON:ETXP) has announced a long-awaited research collaboration with Novo Nordisk (CO:NOVOb) (Novo) on early target discovery in diabetes. This is the first commercial collaboration in ETX’s history and will last for at least a year. The financial terms of the transaction were not disclosed but the deal should be recognised for its validation of ETX’s disease-aware network-driven drug discovery (NDD) platform. This is expected to be the first in an expected series of deals on the NDD platform and the assets generated from it.
The long-awaited first commercial deal
In a continued flurry of good news, ETX has announced a collaboration with Novo – the world leader in metabolic diseases – in type II diabetes (T2D). The collaboration will run for a year in the first instance, during which ETX will be reimbursed for its work. At the end of the period, Novo has the option to license the relevant intellectual property. T2D is a large and commercially significant market where successful new products with novel modes of action can command price premiums. ETX’s share price dropped c 5% on the announcement. The financial terms were not disclosed but we expect ETX to have entered into a transaction with Novo with at least a ‘cost plus’ structure to the first phase and the option for a license exists after a year. The extent of that ‘plus’ will likely be made clearer at ETX’s FY19 results in March. This development highlights the NDD platform as a springboard for further transactions in other therapy areas.
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