Addex Therapeutics Ltd (ADXN) Q2 2025 Earnings Call Transcript
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Overview
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.
Key Financial Performance
Cash CHF 2.3 million at the end of H1 2025, providing a cash runway through mid-2026. The cash burn has been significantly reduced following the Neurosterix spin-out transaction.
Income CHF 0.1 million in Q2 2025, a decrease of CHF 0.1 million year-over-year due to the completion of the funded research phase of the collaboration with Indivior.
R&D Expenses CHF 0.2 million in Q2 2025, a decrease of CHF 0.1 million year-over-year, mainly due to the completion of the research phase of the collaboration with Indivior.
G&A Expenses CHF 0.5 million in Q2 2025, a decrease of CHF 0.1 million year-over-year, primarily due to decreased legal fees.
Share of Net Loss from Neurosterix Group CHF 1.2 million in Q2 2025, an increase of CHF 0.7 million year-over-year, as required under IFRS to recognize the share of their results, which is a net loss.
Current Liabilities CHF 1.1 million at the end of June 2025, an increase of CHF 0.3 million compared to December 2024, primarily due to increased payables.
Noncurrent Liabilities CHF 0.1 million at the end of June 2025, a decrease of CHF 0.1 million compared to December 2024, primarily due to the reduction in retirement benefit obligations following changes in financial assumptions.
Operating Highlights
GABAB PAM program for substance use disorders: Successfully completed IND-enabling studies with a selective drug candidate in collaboration with Indivior. Addex is eligible for payments up to USD 330 million upon achieving regulatory, clinical, and commercial milestones, along with tiered royalties.
Independent GABAB PAM program for chronic cough: Selected a compound for development, completed preclinical profiling, and published robust antitussive data in multiple preclinical models. IND-enabling studies are ready to start, subject to financing.
mGlu2 positive allosteric modulator program: Regained rights from Johnson & Johnson and evaluating therapeutic indications for future development.
Dipraglurant repositioning: Repositioned for brain injury recovery and entered into an option agreement for exclusive intellectual property rights.
Investment in Stalicla: Invested in a clinical-stage neurodevelopmental disorder-focused company with a proprietary precision medicine platform for patient stratification, applicable to autism spectrum disorders and other diseases.
Cash position: Completed H1 2025 with CHF 2.3 million in cash, providing a runway through mid-2026. Cash burn reduced following Neurosterix spin-out.
Financial performance: Income decreased by CHF 0.1 million in Q2 2025 compared to 2024, primarily due to the completion of the funded research phase with Indivior. R&D and G&A expenses also decreased.
Neurosterix progress: Neurosterix completed IND-enabling studies for their M4 PAM program, with plans to dose patients this year.
Partnership validation: Focused on validating partnerships with industry-supportive investors to deliver on strategic objectives.
Risk or Challenges
Cash runway and funding challenges: The company has CHF 2.3 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.
Dependency on partnerships: The company relies heavily on partnerships, such as with Indivior, for advancing its programs. The completion of the funded research phase with Indivior has already led to a decrease in income, highlighting the risk of dependency on external collaborations.
Regulatory and clinical development risks: The company’s programs, including GABAB PAM for chronic cough and other pipeline assets, are at preclinical or early development stages. These programs face inherent risks of failure in regulatory approval or clinical trials.
Market competition and unmet needs: The chronic cough market has a large unmet need, with current treatments being ineffective or moderately effective for many patients. While the company’s GABAB PAM program shows promise, it will face competition from existing and emerging therapies.
Operational and financial risks from Neurosterix investment: The company’s 20% participation in Neurosterix Group has resulted in a share of net loss amounting to CHF 1.2 million in Q2 2025, reflecting financial exposure and operational risks associated with this investment.
Guidance & Outlook
GABAB PAM Program for Chronic Cough: Addex has selected a clinical candidate for chronic cough with robust antitussive efficacy and favorable developability profile. IND-enabling studies are planned to start this year, subject to securing financing. The compound is expected to have best-in-class efficacy and tolerability profile.
GABAB PAM Program with Indivior: Indivior has successfully completed IND-enabling studies for a GABAB PAM drug candidate for substance use disorders. Addex is eligible for milestone payments and royalties upon successful development and commercialization.
mGlu5 NAM Program (Dipraglurant): Dipraglurant is being repositioned for brain injury recovery, with plans to restart clinical development.
Neurosterix M4 PAM Program: Neurosterix has completed IND-enabling studies for their M4 PAM drug candidate and plans to dose patients this year.
Financial Outlook: Addex has CHF 2.3 million in cash, providing a runway through mid-2026. However, additional financing is required to progress unpartnered programs into the clinic.
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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