A UK company revolutionising drug discovery

Network pharmacology - finding alternate uses for existing drugs - is a growing area of medical research. Tom Bulford looks at one small-cap pharma that could be about to make an exciting breakthrough.

Sometimes that eureka moment happens when you least expect it. Take the example of Alexander Fleming. It's 1928, and Fleming is arriving back from holiday. He goes into his study, where he had been researching bacteria called staphylococcus and he notices a fungus has sprouted in one of his cultures.

The colonies of staphylococci that surrounded the fungus have been destroyed. And this accidental discovery, first named mould juice' by Fleming, would later be released as penicillin one of the most important lifesaving drugs of the 20th century.

Today, I am going to tell you about a UK company primed to a "distinctive new approach to the discovery of medicines". It's called network pharmacology'. And it has a great deal to do with making the most of this chance element in drug discovery.

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Professor Malcolm Young is the leading practitioner of network pharmacology and is not only a complex systems scientist, but is also chief executive of e-Therapeutics (AIM:ETX).

Professor Young believes that many more existing drug compounds could be efficacious against targets for which they were not originally designed, and that these can be found by reworking old data.

Where researchers have failed in the past

Hitherto, researchers have tried to identify one faulty protein responsible for a disease. They will then look for a molecule that can bind itself to this protein and either correct its function or shut it down altogether. Many successful drugs have been delivered by this process, but far more have failed and been rejected.

The fact is that things are not so simple. When we have a disease it is not because just one protein is malfunctioning. There are likely to be other faulty proteins as well, all inter-reacting in a network. Equally, when we apply a drug molecule it may have an impact on the target protein, but it will most likely have impacts elsewhere.

Essentially, one complicated and unpredictable force is attacking another complicated and unpredictable problem. The chance of a neat solution is slim, which is why so many promising drugs ultimately fail.

Researchers reject these drugs, but they do not discard the results. What Professor Young has understood is that there is a huge amount of information about drug processes and consequences, and also a huge amount of information about the causes of disease. By sifting through the former and matching it against the latter, he believes that new treatments can be found.

Three advantages of e-Therapeutics' approach

First, there is a huge amount of raw data from historic work. Next, drug compounds that have been researched in the past have already passed safety trials, which need not be repeated. Drug researchers who have generated this data and are now just sitting on it, will be only too happy if somebody else can find some value in it.

Finally, while single-target drugs aimed at one protein often need to be used at relatively high doses, drugs that attack multiple targets across a network can be delivered in lesser quantities and so cause less collateral damage.

A whole new avenue for drug research

At e-Therapeutics over the next year, we will start to see whetherits approach can be successful. The first compound going into trials is ETS2101. This was originally targeted at severe brain injury, and, although it failed in this aim, it turned out to kill cancer cells.

One reason why cancer is so deadly is that it has a way of evading apoptosis, the process by which damaged cells normally commit suicide'. E-Therapeutics believes ETS2101 could block the ability of cancer cells to evade apoptosis.

After successful trials in the laboratory, patients with a variety of solid cancerous tumours are being recruited for a phase-one trial in the UK. And in the US, a trial will enrol patients with primary or secondary brain cancers. First data from these trials should be available by the end of this year. E-Therapeutics has three other drug candidates that should also commence trials over the next 12 months. These are for the hospital acquired C. difficile infection, a major depressive disorder, and the superbug', MRSA.

If the results are good, then not only will they hold out hope for treatment of these specific diseases, but they could also demonstrate that network pharmacology can open up a whole new avenue of drug research. They could also bring e-Therapeutics renewed funding and go some way to justifying its generous looking stock-market value. Valued at £54m, clearly there are investors who think network pharmacology is the way of the future. The next year should be very interesting.

This article is taken from Tom Bulford's free twice-weekly small-cap investment email The Penny Sleuth. Sign up to The Penny Sleuth here.

Information in Penny Sleuth is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Penny Sleuth is an unregulated product published by Fleet Street Publications Ltd.

Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.