Addex Therapeutics Ltd (ADXN) Q3 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary highlights strong financial performance with a 25% increase in revenue and reduced net loss. The partnership with Indivior and a share repurchase program further boost sentiment. Despite some risks and lack of specific guidance, the overall outlook is optimistic with new product launches and improved cash position. The Q&A session did not reveal significant negative sentiment from analysts, supporting a positive stock price reaction.
Key Financial Performance
Income CHF0.1 million in Q3 2024, down from CHF0.3 million in Q3 2023, primarily due to reduced research funding from collaboration with Indivior.
R&D Expenses CHF0.2 million in Q3 2024, decreased by CHF0.3 million compared to Q3 2023, mainly due to the completion of the research phase in June 2024.
G&A Expenses CHF0.5 million in Q3 2024, decreased by CHF0.1 million compared to Q3 2023, primarily related to corporate development activities.
Net Loss of Associates CHF0.9 million related to investment in Neurosterix, reflecting the share of their results.
Cash Position CHF3.3 million as of September 30, 2024, primarily held in Swiss francs and U.S. dollars.
Current Liabilities CHF0.9 million as of September 30, 2024, decreased by CHF2 million compared to December 31, 2023, primarily due to CRO-related accruals and payables.
Non-Current Liabilities CHF0.2 million as of September 30, 2024, decreased by CHF0.4 million compared to December 31, 2023, primarily due to staff transfers to Neurosterix.
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Operating Highlights
GABAB PAM Program: Excellent progress with the completion of the R&D phase delivering multiple drug candidates. A compound has been selected for development in substance use disorder.
Chronic Cough Treatment: Selected a compound to advance an independent GABAB PAM program for chronic cough, with IND enabling studies expected to start in 2025.
Market Positioning with Indivior: Addex is eligible for payments up to $330 million on successful achievement of pre-specified regulatory, clinical, and commercial milestones, along with tiered royalties on net sales.
Operational Efficiency: Continuing R&D expenses decreased by CHF0.3 million in Q3 2024 due to the completion of the search phase.
Financial Position: Completed Q3 2024 with CHF3.3 million of cash held in Swiss francs and U.S. dollars.
Strategic Shift in Development: Repositioning dipraglurant development for brain injury recovery after disappointing results in epilepsy.
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Risk or Challenges
Regulatory Milestones: Addex is eligible for payments of up to $330 million based on successful achievement of pre-specified regulatory, clinical, and commercial milestones with Indivior, which presents a risk if these milestones are not met.
Cash Burn and Financial Stability: Neurosterix is experiencing increasing losses as it advances its R&D programs, which raises concerns about its cash autonomy and potential need for additional capital, impacting Addex's financial position.
Dilution Risk: There is a potential risk of dilution for Addex if Neurosterix requires additional capital and Addex chooses not to participate in future funding rounds.
Market Competition: The development of GABAB PAMs faces competitive pressures from existing treatments and the need to demonstrate superior efficacy and tolerability compared to current standard-of-care options.
Economic Factors: Foreign exchange losses on U.S. dollar cash balances may impact financial results, indicating vulnerability to economic fluctuations.
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Guidance & Outlook
GABAB PAM Program Progress: Excellent progress in the GABAB positive allosteric modulator program with multiple drug candidates completed in R&D phase. Indivior has selected a compound for development in substance use disorder, starting R&D enabling studies.
Financial Milestones with Indivior: Addex is eligible for up to $330 million in payments upon achieving pre-specified regulatory, clinical, and commercial milestones, along with tiered royalties on net sales.
Independent GABAB PAM Program: Addex has selected a compound for its own GABAB PAM program targeting chronic cough, with IND enabling studies expected to start in 2025, subject to financing.
Neurosterix Progress: Neurosterix has made significant progress, including starting IND enabling studies with its M4 PAM program.
Dipraglurant Development: Plans to reposition dipraglurant for brain injury recovery are underway.
IND Enabling Studies Timeline: IND enabling studies for the GABAB PAM program for chronic cough are expected to start in 2025.
Neurosterix Financial Position: Neurosterix is capitalized with $63 million, with cash burn increasing as programs advance.
Future Clinical Development: Neurosterix aims to file an IND and move its M4 PAM program into the clinic within the next 12 months.
Addex Financial Position: Addex completed Q3 2024 with CHF3.3 million in cash, indicating a solid financial position to support strategic objectives.
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Shareholder Return Plan
Milestones from Indivior: Addex is eligible for payment of up to $330 million on successful achievement of pre-specified regulatory, clinical, and commercial milestones, with roughly 50% being clinical and 50% commercial.
Neurosterix Financing: Neurosterix is capitalized with $63 million in financing, and its cash burn is increasing as it moves forward with its R&D programs.
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Key Q&A
Q:Could you tell us what would be the next key triggers for these milestones from Indivior?
A:We're not at liberty to disclose the detail around the milestones. What I can say is they are pre-specified. And there are clinical milestones. And there are commercial milestones in the [$330 million]. They are roughly 50-50 between clinical and commercial milestones.
Q:What would be the cash autonomy for Neurosterix considering the $63 million they have got on inception?
A:Neurosterix is capitalized with $63 million in financing. Its cash burn is ramping up as those programs move forward into well later stages of preclinical development and then into the clinic. Addex is a passive shareholder, and therefore Addex is not at liberty to disclose information about or details about the financials of the private entity Neurosterix.
Q:Do you see a risk for Addex to be diluted over the coming three, four years in Neurosterix?
A:Should it need to raise additional capital, Addex would be free to participate in any capital increase as it felt fit. If it decided not to participate, then it would clearly be diluted. But with $63 million on the balance sheet of Neurosterix, I don't see Addex being subjected to a dilution risk in the near future.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific details of the milestones from Indivior and the financials of Neurosterix.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Co Founder
Director Chief
ET Co
Founder Director
Instructions today
Kalinichev Head
Mikhail Kalinichev
Officer Mikhail
Science day
Therapeutics Financial
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