A semi-thorough DD on $ETTX - 03-03-2021
Ticker: ETTX
Company Name: Entasis Therapeutics Holdings Inc.
Trading @ 3.11
CNN Money Analysts Link: https://money.cnn.com/quote/forecast/forecast.html?symb=ETTX
Price Target: $5 - $9
- SULBACTAM-DURLOBACTAM (ETX2514SUL) - A multidrug resistant Acinetobacter infections — Phase 3
- ZOLIFLODACIN - uncomplicated gonorrhea — Phase 3
- ETX0282CPDP - Complicated UTIs (Enterobacteriaceae including ESBL-producing and CRE) — Phase 1
- ETX0462 - Gram-negative infections (Initially multidrug-resistant Pseudomonas) - Preclinical
Revenue 2020 = $0
Total operating expense 2020 = $41,484
Cash equivalents = $61,190
Shares outstanding: 27,615,381
From 10-Q
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, laboratory and related supplies, manufacturing development costs, legal and other regulatory expenses and general administrative costs.
The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the clinical development of our product candidates and obtain regulatory approvals. We are also unable to predict when, if ever, net cash inflows will commence from product sales. This is due to the numerous risks and uncertainties associated with developing drugs, including, among others, the uncertainty of:
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the unpredictable duration and economic impact of the COVID-19 pandemic;
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successful enrollment in, and completion of clinical trials;
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performing preclinical studies and clinical trials in compliance with the FDA, the European Medicines Agency, or EMA, or any comparable regulatory authority requirements;
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the ability of collaborators to manufacture sufficient quantity of product for development, clinical trials or potential commercialization;
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obtaining marketing approvals with labeling for sufficiently broad patient populations and indications, without unduly restrictive distribution limitations or safety warnings, such as black box warnings or a risk evaluation and mitigation strategies program;
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obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our product candidates;
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making arrangements with third parties for manufacturing capabilities;
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launching commercial sales of products, if and when approved, whether alone or in collaboration with others;
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acceptance of the therapies, if and when approved, by physicians, patients and third-party payors;
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competing effectively with other therapies;
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obtaining and maintaining healthcare coverage and adequate reimbursement;
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protecting our rights in our intellectual property portfolio; and
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maintaining a continued acceptable safety profile of our drugs following approval.
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate.
We will not generate revenue from product sales unless and until we or a collaborator successfully complete clinical development and obtain regulatory approval for our current and future product candidates. If we obtain regulatory approval for any of our product candidates that we intend to commercialize on our own, we will incur significant expenses related to commercialization, including developing our internal commercialization capability to support product sales, marketing and distribution.
As a result, we will need substantial additional funding to support our continuing operations and to pursue our growth strategy. Until such time, if ever, when we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license and development agreements. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to a third party to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Our failure to raise capital as and when needed would compromise our ability to pursue our business strategy.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
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