Enosi Life Sciences is valued at just over $25 million. As the company has not entered clinical trials for its product, and consequently has no revenue, this valuation is very overpriced. Therefore, Enosi receives a very low price score.

Globally, the autoimmune disease drug market is just over $109 billion with a compound annual growth rate (CAGR) of 4.2%. The tumor necrosis factor (TNF) pathway drug market is large and developing. In 2019, the market reached $40.7 billion globally. Though the market declined to $39 billion in 2020 due to COVID-related operational challenges, it’s expected to rebound to $42.9 billion by 2023. After 2020, the market is expected to grow at 3.2% per year. 

According to the American Cancer Society, unhealthy habitats such as poor diet, alcohol use and tobacco use, alongside the overall aging of the population, means that by 2040 the world will experience 27.5 million new cancer cases and 16.2 million cancer deaths. 

With a growing number of cancer cases, the market presents potential for new cancer treatments and, therefore, a large opportunity for Enosi Life Sciences. TNF therapies are still novel, however, and the growth rate for the market reflects the unproven nature of these technologies. Overall, Enosi receives a slightly above average market score.

Enosi Life Sciences CEO and co-founder Dr. Michael Shepard has impressive research and development and startup experience. Dr. Shepard was awarded the Warren Alpert Award from Harvard Medical School and the Lasker-Debakey Clinical Medical Research Award for his work on Herceptin/trastuzumab monoclonal antibody therapy, commonly referred to as chemotherapy. 

Dr. Shepard joined Genentech, a biotechnology company, in 1980 and carried out his revolutionary work on Herceptin/trastuzumab treatments. Genentech merged with the Roche Group, a Swiss multinational healthcare company, in 2009 and combined pharmaceutical operations with Roche in the United States. Dr. Shepard also served as the Chief Science Officer of Halozyme Therapeutics, which went public in 2004. Dr. Shepard’s impressive medical experience and extensive business experience make him a valuable member of the Enosi team. 

Dr. Marc Feldmann serves as the director and co-founder of Enosi. He is scientifically renowned for his leading developments in autoimmune diseases and inflammation treatments. Dr. Feldmann has also been recognized with the Lasker Prize for Clinical Research and acknowledged for his contribution of anti-tumor necrosis factor (TNF) therapy to treat rheumatoid arthritis and other autoimmune diseases. 

Like Dr. Shepard, Dr. Feldmann also has experience starting businesses and working in public pharmaceutical companies that have experienced exits, including IPOs and mergers. Dr. Feldmann used his anti-TNF treatment development expertise to found 180 Life Sciences in 2013, which went public in 2020. The founders’ extensive research and development experience and business success makes the Enosi team score one of its highest. That said, the rest of the team appears lean at this time and is composed primarily of advisors and board members. As the founders make strides in product development, they will need to build out a bigger team. 

Though Enosi Life Sciences’ products have not undergone preclinical trials, should its drugs work as claimed, they would be massively differentiated. 

Current therapies for anti-tumor necrosis factor (TNF) treatment include Humira and Enbrel, drugs that block both harmful and beneficial TNF receptors. Enosi’s EN1001 antibody drug seeks to differentiate against these competitors by blocking only TNF Receptor 1 to halt an inflammatory response while allowing TNF Receptor 2 to produce a beneficial anti-inflammatory effect. 

Enosi’s second offering, EN2001, works to reduce cell invasion and tumor growth by targeting several families of receptors while competitors can only address one receptor. Currently, the FDA has approved seven products, including Herceptin, that target one receptor at a time. If approved, Enosi’s technology will be significantly differentiated from available treatments. As such, Enosi receives a high differentiator score.

Enosi Life Sciences does not have a completed product. Its drugs have not undergone testing or clinical trials and need to receive regulatory approval. Enosi also has no revenue and is unlikely to generate any for a number of years. The company still needs to conduct research to develop its products, approximately a two-year effort, then carry out laboratory proof-of-concept studies, which it says could take three years. Only then can Enosi begin clinical trials. This timeline does not include any potential delays, which could expand the timeline even further. 

Enosi’s EN1001 and EN2001 products are not far along in testing. Enosi tested the EN1001 prototype molecule with a mouse collagen-induced arthritis (CIA) model of rheumatoid arthritis. The company tested the EN2001 prototype molecule in an CIA model as well as multiple cancer models. EN2001 is farther along in testing, but Enosi is prioritizing the development and production of EN1001. Enosi has begun filing two patents for the EN1001 antibody compositions of matter based on animal studies for the antibody blocking TNF Receptor 1 without impacting TNF Receptor 2. 

Overall, Enosi’s lack of revenue and need for further product development, clinical trials, and FDA approval — all of which will take years to achieve, if at all — give the company a low performance score.

An investment in Enosi Life Sciences comes with very high risk. Elevated risk factors include financial risk, time risk, and legal or regulatory risk. 

Because Enosi needs to raise at least $12.5 million to begin clinical trials, time is a major risk factor. The company has not yet developed a completed drug or treatment. Enosi believes it will need two years for further development and three years for laboratory proof studies before it undergoes clinical trials. Because Enosi will not be able to produce revenue from its drugs for years, it will need to continue to raise money and take on debt to eventually produce a sellable product. So the preclinical nature of its drugs contributes directly to product, time, and financial risk.

Finally, the FDA and other regulatory agencies need to approve Enosi’s treatments. FDA approval is costly, time-consuming, and extensive. Enosi will also need approval for the manufacturing process of its drugs. Even if Enosi is able to raise enough funds to produce a treatment and proceed efficiently through development and trials, the FDA may not approve its treatment. In this case, Enosi would need to make changes, undergo more testing and trials, then reapply for FDA approval. These changes would also require further funding.

The risks associated with Enosi Life Sciences are substantial. The company is also overvalued for its stage at $25 million. The company needs further development, clinical trials, and significantly more funding to begin to sell its product and generate revenue. Even if Enosi jumps through these hurdles, it must also gain FDA approval. 

If Enosi’s drugs do not gain FDA approval, the company could fail. Additionally, if its products do not initially gain FDA approval, investors may quickly lose faith in the company. That could endanger the funds the company would need to reiterate and reapply for approval. And because the company has not completed a product that has undergone clinical trials, the actual effectiveness of its treatments are not known.

Despite Enosi Life Sciences’ risks, the company does have a few things working in its favor. If clinical trials are carried out and its EN1001, EN2001 and any other treatments are proven effective, these treatments would strongly stand out against competition. No other products block TNF (tumor necrosis factor) Receptor 1 and not 2. And no other products block several cytokines causing inflammation and promoting cancer growth all at once. Proof of these treatments could be instrumental in inflammatory disease control. Additionally, Enosi’s market is very large, as millions around the world suffer from cancer and autoimmune diseases. 

Founders Dr. Marc Feldmann and Dr. Michael Shepard are also a boon to the company. The Lasker Foundation awarded the Lasker-Debakey Clinical Medical Research Award to both founders for their independent developments in inflammation and cancer treatment. And both founders have monetized their research and developments with widely successful companies. Dr. Feldmann founded 180 Life Sciences in 2013 and took the company public in 2020. Dr. Shepard developed many treatments for Genentech and brought the company to merge with the Roche Group in 2009. The founders’ entrepreneurial success mitigates some of the risk typically associated with an early stage pharmaceutical startup.

Enosi Life Sciences is a drug development and research company with a focus on treating symptoms associated with cancer and other autoimmune diseases. The company is developing drugs to mitigate inflammatory response and related symptoms by targeting only harmful cells.

An investment in Enosi Life Sciences carries enormous risk. Both drugs are still preclinical and will have to undergo trials and receive FDA approval. The company’s valuation is steep and with no sign of revenue in the near future, Enosi will have to continually raise money to propel its research forward and ease its burn rate. It will be a long time before its drugs are proven effective — and even then regulatory hurdles may cause further delays.

Should Enosi’s technology work as predicted, however, its drug advancements would be revolutionary. No existing treatment appears to target only harmful cells the way Enosi’s EN1001 drug does. Similarly, no drug blocks several cytokines causing inflammation and promoting cancer growth all at once like EN2001 does. This gives Enosi double the chance at success. Overall, the KingsCrowd investment team has rated Enosi Life Sciences a Neutral Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Sofia Pedrelli.