Addex Therapeutics H2 2024 Earnings Call Transcript

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April 25, 2025

There are 5 speakers on the call.

Operator

and thank you for standing by. Welcome to the AbEx Therapeutics Full Year twenty twenty four Financial Results and Corporate Update Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be the question and answer session. You will not hear an automated message advising your hand is raised.

Operator

To withdraw your question, please press 11 again. If you wish to ask a question via the webcast, please use the Q and A box available on the webcast link at any time during the conference. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Tim Dyer. Please go ahead.

Speaker 1

Thank you. Hello, everyone. I would like to thank you all for attending our twenty twenty four full year financial results conference call. I'm here with Mikhail Kalinichev, our Head of Translational Science, who will provide an update on our R and D programs. I draw your attention to the press release and the financial statements issued earlier today, which are available on our website.

Speaker 1

I also draw your attention to our disclaimers. We will be making certain forward looking statements that are based on the knowledge we I will start this conference call by giving a quick overview of our recent activities and achievements before reviewing our pipeline. I will then hand over to Misha who will review in more detail our mGluR5 negative allostatic modulator program for brain injury recovery and our GABA B positive allostatic modulator preclinical program for cough. I will then review our 2024 full year financial results.

Speaker 1

Following that, we will open the call for Q and A. In 2024, we launched Neurosterics with a $65,000,000 Series A financing led by Percepta Advisors and secured financing for our platform and preclinical portfolio. As part of this transaction, we received 5,000,000 Swiss francs in cash and a 20% equity interest in Neurosterics. We have made excellent progress in our GABA B PAM program with the completion of the R and D phase delivering multiple drug candidates. Our partner Indivior has selected a compound for development in substance use disorders and has started IND enabling studies.

Speaker 1

We expect to be able to announce results from these studies soon. Under the terms of the agreement, ADX is eligible for payment of up to 330,000,000 US dollars on successful achievement of prespecified regulatory clinical and commercial milestones as well as tiered royalties on the level of net sales from high single digits up to low double digit. Also, under the terms of the agreement, we have the right to select compounds for development in a predefined list of reserved indications. We have selected a compound to advance our own independent GABA B PAM program for the treatment of chronic cough. We have substantially completed the preclinical profiling of our compound for chronic cough and are currently working to secure funding to advance this program into the IND enabling studies.

Speaker 1

Misha will be sharing some of this data with you later in our presentation. We've repositioned dipaglorant, our MgLAR five negative alstatic modulator for brain injury recovery and currently completing negotiations to access intellectual property covering the use of MgLAR five inhibitors in this interesting therapeutic indication. Micha will also talk more about this exciting program later in the presentation. Following the decision last year by our partner Johnson and Johnson to terminate development of ADX seven one one four nine, we have regained the rights to this phase two asset with a high value dataset and significant materials. We have completed the year with 3,300,000.0 Swiss francs of cash, which provides us with the cash runway through mid twenty twenty six.

Speaker 1

I'd like to highlight that the cash burn has been significantly reduced following the NeurosDeric spin out transaction. However, current cash does not fund the progression of our unpartnered programs into the clinic. Now onto the pipeline. We continue to believe in diprogrant and executing our plans to reposition the development for brain injury recovery as mentioned. Our partner, Indivior, has selected a GABA BPAM drug candidate for development of substance use disorders and started IND enabling studies.

Speaker 1

We're advancing an independent GABA BPAM program for chronic cough and expect to start IND enabling studies this year subject to securing financing. And Neurosterics has made excellent progress in advancing its pipeline, including starting IND enabling studies with its m four PAM program. Now I will hand over to Misha who will give you some more details about our exciting portfolio.

Speaker 2

Thanks, Tim. Hello, everyone. I will start by speaking about dipraglutide and our plans for development in brain injury recovery. Following termination of the development of dipragglurant in PD LEAD, we embarked on a detailed evaluation of a number of potential indications of interest for future development. We have completed this exercise and have identified brain injury recovery as an interesting indication for the future development.

Speaker 2

We believe the differentiated profile of tipangra makes it particularly suitable for enhancing the impact of rehabilitation in traumatic brain injury and stroke patients. There is a large unmet medical need in post stroke recovery and rehabilitation. Stroke is among leading causes of chronic, often lifelong disability, as it leads to motor, sensory, cognitive impairment and multiple comorbidities. There are over one hundred million stroke survivors worldwide, and the number is growing at the annual rate of twelve million. A variety of rehabilitation therapies are used with post stroke patients, but the recovery is slow and often inadequate.

Speaker 2

There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by rehabilitation therapies. MGluR5 receptor is a suitable target to address post stroke recovery, as it is densely expressed in the brain, involved in neuroplasticity, and modulates excitatory inhibitory equilibrium. In fact, activation of MOR five has been observed in a range of neurological disorders, including stroke, where it plays a role in maladaptive rewiring of the brain following stroke. Inhibition of MUR five, on the other hand, can facilitate adaptive rewiring of the brain, promoting neuroplasticity and creating of new functional pathways moving the neural network towards the pre lesion state. Exciting new evidence recently published in the journal Brain suggests that the negative allosteric modulator of MgLAR five, MTEP, administered daily in RET following stroke, results in a sustained and growing improvement in sensory motor function in comparison to vehicle treatment.

Speaker 2

Similar improvement in sensory motor function was observed in animals treated with our MWR5Nav dipraglutide. MRI imaging of the resting state functional connectivity in post stroke rodents shows that daily administration of MTAP also stimulates intra and inter hemispheric connectivity in the brain disrupted by stroke. It is important to note that improvement in brain connectivity after stroke is known to correlate with functional recovery and is observed across species. Dipravulurant is ideally suited to be used in tandem with rehabilitation therapies in post stroke patients, as it has a fast onset of action and short half life. It has shown good tolerability in healthy subjects and in Parkinsonian patients, showing only mild to moderate CNS related adverse effects.

Speaker 2

We have a drug product ready and a strong patent position, and believe dipraglutide can become a first in class drug to facilitate post stroke recovery. We can also speculate that dipraglutide mediated adaptive rewiring and facilitation of recovery following brain damage would also be seen in traumatic brain injury patients. Let me now switch to our GABA B positive allosteric modulator program, which is partnered with Indivior. The aim of this collaboration is to deliver a better baclofen for substance use disorders. As a reminder, GABA B receptor activation has been clinically validated in a number of disease areas using baclofen, a gamma b orthosteric agonist.

Speaker 2

Baclofen is an FDA approved drug for treatment of spasticity and is widely used off label to treat numerous diseases, including substance use disorders and others. However, baclofen has a short half life and comes with significant side effects hampering its wider use. Thus, there is a strong need for a better baclofen. We believe this can be achieved with positive allosteric modulator approach and their differentiated pharmacology, having the efficacy of baclofen with longer half life and improved side effect profile. Our partner Indivior has selected agla vipam drug candidate for development in substance use disorders and started IND enabling studies.

Speaker 2

As part of our agreement with Indivior, ADX has exercised its right to select a compound to advance its own independent KAPA B program for the treatment of chronic cough. I will now present this exciting opportunity. There is a strong rationale for developing GABAB PAMs for chronic cough. Chronic cough is a persistent cough that lasts for more than eight weeks and can be caused by a variety of factors, including respiratory infections, asthma, allergies, and acid reflux, but also possibly by an overactive cough reflex. There is a large unmet medical need in novel anti use drugs as current standards of care are ineffective in thirty percent of patients, or only moderately effective in up to sixty percent of patients.

Speaker 2

In addition, the current treatments carry risks of serious side effects. On the next slide, we show that GABA B PAMs are likely to have a superior tolerability profile in comparison to the current standard of care and show no taste related side effects as seen with the newly approved p two x three inhibitor, kefapixant. Supports for using gaba BPAM in treatment of chronic cough comes from the clinical evidence that baclofen is used off label in cough patients, and from the anatomical evidence that GABA B receptors are strongly expressed in airways and in the neural pathway regulating cough. Therefore, we believe that GABA B PAMs could offer superior efficacy in cough patients. The pre ID activities, including in vivo proof of concept non GLP tox and CMC have been completed, and our clinical candidate has shown favorable efficacy, tolerability, and developability profiles.

Speaker 2

Our clinical candidate has demonstrated a consistent minimum effective dose of one mg per kg and ED fifty of six mg per kg in co frequency. No signs of tolerance were seen after subchromic dosing, and more than 30 fold safety margin was demonstrated based on tolerability biomarkers. The IND enabling studies are planned to start this year. The next set of slides describes the in vivo proof of concept studies in models of COF. In a model of citric acid induced COF in guinea pigs, acutely administered compound A delivered a robust anti use of activity profile, reducing the COF number and increasing the latency to first COF.

Speaker 2

The anti use of profile of Bakmov as in the same model was more was more modest as cough latency remained largely unchanged. In the same experiment, compound A was better tolerated than baclofen as there were no marked changes in respiratory rate, body temperature, and plasma concentration of gross hormone at up to 60. In contrast, bucclofen suppressed respiratory rate, reduced body temperature by near two degrees Celsius, and increase gross hormone concentration in plasma starting three mgs per kilo. Thus, we believe we achieved our goal to discover a better baclofen for cough. In a model of citric acid induced coughing guinea pigs, subchronically administered compound A showed signs of improved efficacy and potency, and no signs of tolerance in comparison to an acute treatment.

Speaker 2

As expected, signs related to safety and tolerability of compound A remained largely unchanged on the subchronic versus acute treatment regimens. In the model of ATP potentiated citric acid COF in guinea pigs, in a head to head comparison experiment, acutely advanced on compound A and the p two x three inhibitor had similar efficacy and tolerability profiles. In summary, we have selected a clinical candidate for chronic cough with a robust reproducible antitussin efficacy of one mg per kg and good PKPD. The compound showed a favorable developability profile in non GLP tox studies performed in rats, dogs, and nonhuman primates. We are on track to start start IND enabling studies this year.

Speaker 2

This concludes our prepared remarks on the progress of our RNA programs. Now I hand it back to Tim.

Speaker 1

Thanks, Misha. Now before I move on to the financials, I would like to spend a few moments to speak about the Neurosterics transaction. Due to the excellent progress made by our R and D team in advancing our unpartnered preclinical portfolio, our m four PAM, m two r seven NAM, and m two r two negative allosteric modulator programs reached a stage of development where they needed significant amounts of financing to progress into the clinic. Unfortunately, given the low market capitalization of ADX, raising the amount of capital needed would have been extremely challenging and highly dilutive to our shareholders. So we decided to spin out these programs and our platform into a new private company and raise the necessary capital directly into the new private company.

Speaker 1

We believe this is an excellent transaction for ADX shareholders as it was secured 5,000,000 Swiss francs for ADX and removed the financing overhang on the ADX stock. We have retained a 20% interest in Eurosterics so we can benefit from the upside from advancing the programs into the clinic, which is now secured by the $65,000,000 capital from a high quality investor syndicate led by sector advisers. As part of the transaction, we have divested our allosteric modular technology platform, including the majority of our staff. Have we have entered into a service agreement with Neurosteron to ensure that we can access skills needed to execute on our business strategy. Now for a review of the 2024 financials.

Speaker 1

Following the Neurosteric transaction, we were required under IFRS to identify continuing operations related to our retained business and discontinued operations related to the divested business sold to Neurosteric. All income and expense items related to the discontinuing operations have been reclassed under a specific line of the comprehensive loss called net profit or loss from discontinued operations. Starting with the income statement, which related to continuing operations, we recognized 400,000 of income in 2024 compared to 1,600,000.0 in 2023. The decrease is primarily due to the completion of the funded research phase of our collaboration with Indivior in June of twenty twenty four. Continuing r and d expenses of 900,000.0 remain primarily relate to our GABA B PAM program and decreased by 200,000.0 in 2024 compared to 2023, mainly due to the completion of the research phase of the individual collaboration.

Speaker 1

Continuing r and d, g sorry. Continuing g and a expenses of 2,300,000.0 primarily relate to corporate development activities and decreased by 400,000.0, Swiss francs in 2024 compared to 2023 primarily due to the reduced d and o costs. The finance result result loss in '23 has turned to a small gain primarily due to a significant reduction in Forex exposure as we are now holding most of our cash in Swiss francs. The share of the net loss of associates of 2,200,000.0 relates to the 20% equity interest received as part of the consideration to the divestment of the part of our business to Neurosterix, which is being accounted for using the equity method under IFRS 12. Under IFRS, we are required to recognize our share of their results.

Speaker 1

Now for the balance sheet. Our assets are primarily held in cash, and we completed 2024 with 3,300,000.0 Swiss francs of cash held in Swiss francs in US dollars. Other current assets amounted to 200,000.0 primarily rate prepaid r and d costs. Our noncurrent assets of 7,100,000.0 as of 12/31/2024 primarily relate to the 20% equity interest in Eurostates Group recorded on the balance sheet under the equity method of accounting for associates. Current liabilities of 800,000.0 as of 12/31/2024 decreased by 2,100,000.0 compared to 12/31/2023 and primarily relate to r and d related accruals and payables.

Speaker 1

Noncurrent liabilities 200,000.0 as of 12/31/2024 decreased by 400,000.0 compared to 12/31/2023, primarily due to the reduction in retirement benefit obligations following the transfer of staff to Neurosterics. Now for the cash flow statement. At the end of twenty twenty four, the cash balance amounted to 3,300,000.0 and decreased by 600,000.0 compared to the beginning of the year. The 5,000,000 gross proceeds received as part of the consideration received from the divestment or part of our business was offset by the operating cost of continuing activities. Now to summarize, we have made excellent progress in our GABA v PAM program with our partner Indivior, selecting a compound for development and substance use disorders and starting IND enabling studies in the in the second half of twenty twenty four.

Speaker 1

Neurosethics has made excellent progress with their lead N4 PAM drug candidate starting IND enabling studies in q three of twenty twenty four. Diproglom is ready to restart clinical development for brain injury recovery. Our independent GABA B PAM COF program has demonstrated excellent preclinical efficacy and tolerability with IND enabling studies ready to start. We're validating partnerships with industry, sport of investors, and a strong balance sheet, which puts us on a solid position to deliver on our strategic objectives. This concludes the presentation, and we will now open the call for questions.

Operator

Thank you, dear participants. As a reminder, if you wish to ask a question over the phone, please press 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press 11 again. Alternatively, you can submit your questions via the webcast. Please standby, we'll compile the K and A rule studies.

Operator

We'll take a few moments. And now we're going to take our first question. And it comes from the line of Raghuram Selvaraju from H. C. Wainwright and Co.

Operator

Excuse me, Raghuram, can you hear us? Your line is open for questions. And we have on the line Raghuram Selvaraju from AC Wainwright and Co. Your line is open. Please ask your question.

Operator

My apologies, Rakuram. We cannot hear you. Dear speakers, we'll just give a moment for our participants submit questions. And now we have another analyst. Just give us a moment.

Operator

And the question comes from the line of Peter Ehrlich from AikenSalt. Your line is open. Please ask your question.

Speaker 3

Good afternoon. I would like to know about Neurosterics. I think that's a new company. Do they have other projects other than what you now sold to them? Thank you for an answer.

Speaker 3

Did you hear me?

Speaker 1

Yes. Thank you very much for your question. And yeah. So Neurosterix was actually founded by Adex as a spinout company. So we packaged up our platform, including facilities, people, and, we put it into a, a new Swiss company, which we then sold to a, a US, LLC, which had been capitalized with, the cash and a capital commitment of 65,000,000 from a syndicate of US Investors led by Percepta Advisors.

Speaker 1

And the transaction involved buying the Swiss subsidiary for a mix of cash and equity. So Alex received a 20% interest in the US LLC plus 5,000,000 of cash, and the rest of the 60,000,000 is being deployed into the portfolio that was was contributed into the Neurosteric Swiss sub. And there are four programs. The lead program is a muscarinic m four PAM, and then there is an mVuR seven negative modulator program and also an mVuR two negative allosteric modulator program. And then another program which is undisclosed at the very early stages of discovery.

Speaker 1

And they're all focused on neuropsychiatry, schizophrenia, mood disorders, and cognition, and and an undisclosed CNS indication. Does that answer your question?

Speaker 3

It does. But I guess that means that you have a lot of, additional work just to sort of control the activities of neurosterrics and of your 20% investment there. Is that correct?

Speaker 1

Well, Neurosterics has its own team, and most of in fact, Neurosterics has most of the old ADX team plus new employees that have been recruited. And, you know, my I my you know, I am currently the CEO of Neurosterics and the CEO of ADX. My and my role as CEO of ADX is under a service agreement between Neurosterics and ADX.

Speaker 3

Okay. That explains it. Thank you very much, Tim.

Speaker 1

You're welcome. Thanks, Peter.

Operator

Thank you. Now we'll proceed with other other question, and it comes from the line of Raghuram Selvaraju from H. C. Wainwright and Co. Your line is open.

Operator

Please ask your question.

Speaker 4

Thanks for taking my question. I wanted to ask if it would be possible for you to enumerate how you are seeing the strategic environment and, essentially evolving for depagglurant, particularly within the context of neurorehabilitation? And if you could also comment on the potential ability to deploy depagglurant in neurorehabilitation context not involving post stroke recovery? Thank you.

Speaker 1

Nisha, would you like to take this question?

Speaker 2

Yes. Absolutely. We are dupilagdurant is our clinical asset that has shown very good tolerability both in healthy subjects and in patients with Parkinson's disease. It gives us an opportunity to perform a number of small clinical pharmacology studies aiming to assess improvement and modulation of plasticity in human subjects. We'll probably start with healthy volunteers and look at multiple sites of potential plasticity from motor cortex to sensory to midbrain to spinal cord.

Speaker 2

Also, evaluate what type of treatment conditions is suitable and ideal for modulation, and then move forward with similar study but performed in post stroke patients. So this will be, as we see, two clinical pharmacology studies with specific questions very much focused on neuroplasticity. And we believe these studies will first confirm the modulation of plasticity in humans, in particular in post stroke patients, and will help us in designing proper phase 2a study on rehabilitation approaches. So that's a very overall summary of our clinical strategy.

Speaker 4

And then secondly, if I may, I was wondering if you could comment on the recent developments in the neuropsych field, perhaps most notably the failure of the phase three trial of Cobenci as adjunctive treatment in schizophrenia, and what implications this may have for future directions you pursue with one or more of the neurosterics lead assets? Thank you.

Speaker 2

Yeah. Yes. We we saw the news, of course, and we believe that it has minimal, if any, impact on our strategy. We are pursuing the strategy of monotherapy. We have we we believe in the target.

Speaker 2

We get we believe in the relevance of muscarinic m four for psychosis, so it's not going to alter our plans at all.

Speaker 4

And then lastly, Tim, I don't know if you are in a position to comment on this at this time, but I was wondering if you could offer us some idea of what, if anything, you plan to do with the compound that was returned to ADX from J and J, and if you see any future development path for that asset. Thank you.

Speaker 1

Yes. We are, I mean, we're already discussing with a number of interested parties. We are we are you know, we're doing our own evaluation. As you can imagine, you know, this is a twenty year development in the hands of J and J. It's a very, very high quality compound with, you know, a lot of data, a lot of material, about 280 kilograms of API has been transferred to us.

Speaker 1

And this is significant material for us to, you know, to to play with. So we're definitely looking to, you know, enter a number of collaborations to explore areas that could be pursued with the with the compound.

Speaker 4

Thank you very much.

Operator

You're welcome. Your participants, as a reminder, if you wish to ask a question, please press 1 1 on your telephone keypad. Alternatively, you can submit your questions via the webcast. Dear speakers, we'll just give a moment to our analyst to submit any questions. Thank you, ladies and gentlemen.

Operator

This brings the main part of our conference to close, and I would like to hand back to Tim Dyer for closing remarks.

Speaker 1

Well, thank you, everyone, for attending the twenty twenty four full year results conference call. And I wish you all a very nice day, and we look forward to speaking to you again soon.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.

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Addex Therapeutics H2 2024
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