Addex Therapeutics Ltd (ADXN) Q3 2025 Earnings Call Transcript
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Overview
The earnings call reflects a mixed outlook. The financial performance remains stable, but with increased liabilities and reliance on partnerships, there's uncertainty. The Q&A reveals concerns about competitive pressures and funding needs. Positive aspects include potential milestone payments and strategic repositioning of programs. However, the lack of specific guidance and increased liabilities weigh down sentiment, leading to a neutral stock price prediction.
Key Financial Performance
Income Income in Q3 2025 remains similar to Q3 2024 and amounted to CHF 0.1 million. This is mainly related to the maintenance of patents licensed to Indivior, which they are funding, and to the fair value of services received from Neurosterix Group at 0 cost.
R&D Expenses R&D expenses of CHF 0.2 million in Q3 2025 are primarily related to the GABAB PAM program and remain similar to Q3 2024.
G&A Expenses G&A expenses of CHF 0.5 million in Q3 2025 remained stable compared to Q3 2024.
Net Loss from Neurosterix Recognized share of the net loss of CHF 0.9 million for Q3 2025, which is similar to the amount for Q3 2024.
Cash Completed Q3 2025 with CHF 2.2 million of cash held in Swiss francs and U.S. dollars. The cash burn has been significantly reduced following the Neurosterix spinout transaction.
Current Liabilities Current liabilities of CHF 1.2 million at the end of September increased by CHF 0.4 million compared to December 31, 2024. This is primarily due to increased payables related to professional services.
Noncurrent Liabilities Noncurrent liabilities of CHF 0.2 million at the end of Q3 2025 are consistent with amounts at the end of December 2024 and are primarily attributable to retirement benefit obligations.
Operating Highlights
GABAB PAM program: Progress in preclinical characterization and selection of a backup compound. IND-enabling studies completed for substance use disorders in partnership with Indivior. Advancing development for chronic cough with a clinical candidate showing robust efficacy and tolerability.
Dipraglurant: Repositioned for brain injury recovery. Progress in preclinical profiling and preparation for clinical studies in collaboration with Sinntaxis and the University of Lund. Potential first-in-class drug for post-stroke recovery.
Neurosterix M4 PAM program: Advancing preclinical programs, including IND-enabling studies for M4 PAM schizophrenia. Phase I dosing expected this year.
Stalicla investment: Proprietary precision medicine platform for neurodevelopmental disorders. Progress in patient stratification study for autism and discussions with pharma for broader applications.
Partnership with Indivior: Eligible for up to USD 330 million in milestone payments and tiered royalties for substance use disorder drug candidate.
Stalicla collaboration: Potential to expand applications of precision medicine platform in neuropsychiatric disorders.
Cash position: CHF 2.2 million cash, providing runway through mid-2026. Reduced cash burn following Neurosterix spinout.
Financial stability: Income and expenses stable compared to Q3 2024. Current liabilities increased due to professional services.
Pipeline focus: Repositioning dipraglurant for brain injury recovery and advancing GABAB PAM program for chronic cough. Evaluating potential indications for mGlu2 PAM program.
Spinout strategy: Neurosterix spinout to focus on advancing its portfolio, including M4 PAM program.
Risk or Challenges
Cash runway and funding limitations: The company has CHF 2.2 million in cash, providing a runway through mid-2026. However, current cash does not fund the progression of unpartnered programs into the clinic, indicating a need for additional financing to advance key projects.
Dependence on financing for IND-enabling studies: The GABAB PAM program for chronic cough and other IND-enabling studies are ready to start but are contingent on securing financing, posing a risk to the timely progression of these programs.
Increased liabilities: Current liabilities increased by CHF 0.4 million compared to December 2024, primarily due to increased payables related to professional services, which could strain financial resources.
Unmet medical needs and competitive pressures: The company is targeting areas with large unmet medical needs, such as post-stroke recovery and chronic cough. While these represent opportunities, they also come with significant competitive pressures and the challenge of demonstrating efficacy and safety in clinical trials.
Regulatory and clinical milestones: The company is eligible for payments from Indivior upon achieving regulatory, clinical, and commercial milestones. However, failure to meet these milestones could impact financial inflows and strategic objectives.
Reliance on partnerships: The company relies on partnerships, such as with Indivior and Sinntaxis, for advancing its programs. Any disruptions or changes in these partnerships could adversely affect program progress and financial stability.
Guidance & Outlook
Dipraglurant for Brain Injury Recovery: The company plans to reposition dipraglurant, an mGlu5 negative allosteric modulator, for brain injury recovery, including post-stroke rehabilitation. Preclinical profiling is being completed in collaboration with Sinntaxis and the University of Lund. The drug is expected to facilitate neuroplasticity and sensory motor recovery, with clinical studies being prepared.
GABAB PAM Program for Chronic Cough: The company is advancing its GABAB PAM program for chronic cough. Pre-IND activities, including proof-of-concept studies and non-GLP toxicology, have been completed. IND-enabling studies are ready to start, subject to securing financing. The clinical candidate has shown robust antitussive efficacy and favorable tolerability in preclinical models.
Neurosterix Spin-Out Progress: Neurosterix, a spin-out company, is advancing its M4 PAM program for schizophrenia. IND-enabling studies have been completed, and the program is on track to dose patients this year.
Stalicla Collaboration: Stalicla is advancing its precision medicine platform for neurodevelopmental disorders, including autism spectrum disorders. The company is progressing with patient stratification studies and discussions with pharmaceutical companies to broaden the application of its technology.
mGlu2 PAM Program: The company is evaluating potential indications for its mGlu2 PAM program, which was recently returned from J&J, with plans to advance it towards clinical studies.
Shareholder Return Plan
The selected topic was not discussed during the call.
Key Q&A
Earnings Word Cloud
ADXN Transcript
The earnings call reflects a mixed outlook. The financial performance remains stable, but with increased liabilities and reliance on partnerships, there's uncertainty. The Q&A reveals concerns about competitive pressures and funding needs. Positive aspects include potential milestone payments and strategic repositioning of programs. However, the lack of specific guidance and increased liabilities weigh down sentiment, leading to a neutral stock price prediction.
Despite some positive elements like debt reduction and service levels, the overall sentiment is negative due to declining sales, margins, and EPS. Inflation, weak consumer sentiment, and higher tariff costs are significant concerns. The Q&A section did not provide clarity, adding uncertainty. The expectation of declining sales in Q2 and lower operating margins further contribute to the negative outlook. The impact of divestitures and foreign exchange headwinds exacerbates the situation, leading to a likely negative stock price movement in the short term.
The earnings call highlights financial and operational challenges, including a limited cash runway, dependency on partnerships, and increased liabilities. The need for additional financing and the company's reliance on external collaborations pose significant risks. Despite some positive developments in the neuropsychiatry space, the Q&A session revealed management's evasiveness on strategic details, further contributing to uncertainty. Overall, these factors suggest a negative sentiment and potential stock price decline.
The earnings call summary reveals several concerns: decreased income, reliance on partnerships, and lack of a clear shareholder return plan. While there are some positive aspects, such as decreased expenses and a small financial gain, the overall sentiment is negative due to the significant decrease in income and the risk factors highlighted in the Q&A section. The lack of strong positive catalysts or new partnerships, combined with the low market cap and dilution risk, suggests a negative stock price movement over the next two weeks.
ADXN Report
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