Addex Therapeutics Ltd (ADXN) 2024 Q2 法說會逐字稿

Hello, everyone. I'd like to thank you all for standing by and attending our half-year 2024 financial results conference call. I'm here with Mikhail Kalinichev, Head of Translational Science who will be providing an update on our R&D programs. I draw your attention to the press release and the financial statements issued earlier today, which are available on our website.

Unfortunately, there has been a technical issue with loading the presentation to the webcast system, so please use the download button in order to download the presentation. We will be indicating slide numbers so that you will be able to follow hopefully.

So on to slide 3, the disclaimer slide. I also draw your attention to our disclaimers. We will be making certain forward-looking statements, that are based on the knowledge we have today.

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 Mikhail who will review in more detail some of our clinical and preclinical programs. I will then speak about the recent launch Neurosterix before reviewing our half year 2024 financial results. Following that, we will open the call for Q&A.

So moving to slide 4 highlights. We launched new direct for the Series A of USD63 million led by Perceptive Advisors. This is an innovative financing transaction that provides us with the resources needed to advance our preclinical portfolio without diluting our shareholders' interests now clinical-stage assets and partnered programs.

As part of the transaction, we receive CHF5 million and a 20% equity interest in Neurosterix, securing the balance sheet and retaining significant upside in the program for our shareholders. I will speak more about this innovative financing transaction later in the presentation.

We have made excellent progress in our cavity pump program and our partner in Indivior has selected a compound for development in substance use disorders, and we'll now take over operational responsibility for development.

As a reminder, under the terms of the agreement, Addex is eligible for payments of up to $330 million on successful achievement of pre specified regulatory, clinical and commercial milestones, as well as tiered royalties on the level of net sales from high single digit up to low double digits.

Under the terms of the agreement, we have exercised our right to select an independent compound to advance our novel GABAB PAM program for the treatment of chronic cough. We have some exciting data in cough with our lead compound, which Mikhail will be sharing with you later in our presentation.

Janssen Pharmaceuticals, discontinued development of ADXM1149 in epilepsy. Our partnership remains ongoing while the full dataset from the Phase 2 study as an adjunctive epilepsy treatment is analyzed.

Now moving on to slide 5, the pipeline side now for a quick review of our pipeline. As mentioned, our partner Indivior has selected the GABAB PAM drug candidate for development and substance use disorders and expect to start IND-enabling studies in the first half of 2025.

We are advancing an independent GABAB PAM program, chronic cough and expect to start IND-enabling studies in 2025, subject to securing financing. We continue to believe in Dipraglurant and are executing our plans to reposition the development for brain injury recovery. Neurosterix has made excellent progress in advancing its pipeline, including starting IND-enabling studies with M4 PAM program.

Now I will hand over to Mikhail, who will give you some more details about our exciting portfolio.

Thanks, Tim. Hello, everyone. I will start by speaking about the project around in our plans for development in brain injury recovery. Following termination of the development of Dipraglurant in PD-LID, we embarked on a detailed evaluation of a number of potential indications for Addex for future develop. We have completed this exercise and have identified brain injury recovery as an interesting indication for the future developed.

We believe the differentiated profile of Dipraglurant makes it particularly suitable for enhancing the impact of rehabilitation in traumatic brain injury and stroke patients.

Please move to slide 7, 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 100 million stroke survivors worldwide and the number is growing at the annual rate of 12 million, a variety of rehabilitation therapies are used with post-stroke patients, but the recovery is slow and often inadequate. There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by rehabilitation therapies.

Slide 8. And the five receptor is a suitable target to address post stroke recovery as it is densely expressed in the brain involved in Neurosterix and modulate decisively inhibitory equilibrium. In fact, activation of mGlu5 has been observed in a range of neurological disorders, including stroke, where it plays a role in mall adaptive rewiring of brain folding stroke.

Inhibition of mGlu5 on the other hand, can facilitate adaptive rewiring of the brain, promoting neuroplasticity and creating of new functional pathways. Moving the neural network towards pre-vision state.

Slide 9, exciting new evidence recently published in the journal brain suggests that the negative allosteric modulator of mGlu5 and MTEP administered daily interest showing stroke results in a sustained and growing improvement in sensory motor function in comparison to vehicle-treated. Similarly, improvement in sensory motor function was observed in animals treated with mGlu5 NAM dipraglurant.

Please move to slide 10. MRI imaging of the resting state functional connectivity in post-stroke rodents shows that daily administration of MTEP also stimulated intra and inter hemispheric connectivity is a brain disrupted by stroke. It is important to note that improvements in brain connectivity. Often stroke is known to correlate with functional recovery and is observed across species.

slide 11, the dipraglurant 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 Parkinson’s patients showing only mild to moderate CMC route related adverse effect.

We have a drug product ready and a strong patent position and believe dipraglurant can become as first-in-class drug to facilitate post stroke recovery. We can also speculate that the dipraglurant mediated adaptive rewiring and facilitation of recovery following brain damage would also be seen in traumatic brain injury patients.

Please move to slide 12, let me now switch to our GABAB Positive Allosteric Modulator program, which is partnered with Indivior. The aim of this collaboration is to deliver a better backlog than for substance use disorder.

Slide 13, as a reminder, GABAB receptor activation has been clinically validated in a number of disease areas, including Baclofan, a GABAB agonist. Parkinson is FDA approved for treatment of spasticity and is widely used off-label to treat numerous diseases, including substance use disorders.

However, Baclofan has a short half-life and comes with significant side effects hampering its wider use. Thus, there is a strong need for better Baclofan. And we believe this can be achieved with positive allosteric modulators and the differentiated pharmacology having the efficacy of Baclofan, but longer half-life and improved side effect profile.

Our partner Indivior has selected the GABAB PAM drug candidate for development in substance use disorders and expects to start IND-enabling studies in H1 2025.

Please move to slide 14, as part of our agreement with Indivior, Addex has exercised its right to select a compound to advance its own independent GABAB PAM program for the treatment of chronic cough. I will now present this exciting opportunity.

slide 15, 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 overactive coffee.

There is a large unmet medical need in novel anticancer drugs as current standards of care are ineffective in 30% of patients or only moderately effective in up to 60% of patients. In addition, the current treatments carry risks of serious sizes.

Slide 16, on the next slide, we show that GABAB PAMs are likely to have a superior tolerability profile in comparison to the current standard of care and showed no taste related side effects seen with newly approved P2X3 inhibitor Gefapixant.

Please move to slide 17. Support for using GABAB PAM in treatment of chronic cough comes from the clinical evidence that Parkinson and GABAB agonist is used off-label in cough patients and from anatomical evidence that a GABAB receptors are strongly expressed in airways and in the neuronal pathways regulating cost. Therefore, we believe that GABAB PAMs could offer superior efficacy in cough patients.

Slide 11, the pre-IND 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.

Our clinical candidate has demonstrated a consistent Minimum Effective Dose of 1 mg/kg and ED50 of 6 mg/kg in cough frequency. No signs of tolerance were seen after sub-chronic dosing and a tenfold safety margin was demonstrated based on tolerability biomarkers. The IND enabling studies are planned to start in 2025.

Slide 19, so next set of slides describe the in vivo proof-of-concept studies in models of cough, in a model of citric acid induced cough, [Induces] acutely administered compound A delivered a robust antitussive activity profile, reducing the cost number and increasing the latency to the first call, the antitussive profile of 5% the same model was more modest as cost latency remains largely unchanged.

Slide 20, in the same experiment compound A, there was better tolerated busulfan as there were no marked changes in respiratory rate, body temperature and plasma concentration of growth hormone at up to 16 mixed protein.

In contrast, our percent suppressed respiratory rate reduced body temperature by year 22 degrees Celsius and increase growth hormone concentration in plasma starting at three 3 mg/kg. Thus, we believe we achieved our goal to discover a better Baclofen for chronic cough.

Please move to slide 21, in a model of citric acid and just cough in Guinea Pigs, sub-chronically administered compound A showed signs of improved efficacy and potency and no signs of tolerance in comparison to an acute treatment.

Slide 22, as expected, fines related to safety and tolerability of compound A remained largely unchanged on the sub-chronic versus acute treatment rates.

Slide 23, in the model of ATP potentiated citric acid calls in Guinea Pigs in a head to head comparison experiment. Acute administered compound A and the P2X3 inhibitor had similar efficacy and tolerability profile.

Please move to slide 24, in summary, we have selected a clinical case candidate for chronic cough with a robust reproducible antitussive efficacy 1mg/kg and a good PK/PD. The compound showed a favorable developed ability profile in non-GLP tox studies performed rats, dogs and non-human primates. We are on track to start IND-enabling studies early H1 2025.

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

Thanks, Mikhail. Slide 25, now before I move on to the financials, I would like to spend a few moments to speak about the Neurosterix transactions. Slide 26, due to the excellent progress made by our R&D team in advancing our un-partnered preclinical portfolio, our M4 PAM and mGlu7, and mGlu2 NAM programs reached a stage of development where they needed significant amounts financing to progress into the clinic fortunately, given the landmark capitalization about Addex 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 a new private company. We believe this is an excellent transaction for our shareholders as it has secured CHF5 million and removes the financing overhang on the Addex stock.

We have retained a 20% interest in Neurosterix, so we can benefit from the upside from advancing the programs into the clinic, which is now secured by CHF63 million of capital from a high-quality investor syndicate led by Perceptive Advisors.

As part of the transaction, we have divested our Armistice modulator technology platform, including the majority of our stock. However, we have entered into a service agreement with US direct to ensure that we can access the skills needed to execute on our business strategy.

I'm moving on to slide 27, financials now for a review of our half year and Q2 2024 financials. Following the Neurosterix transaction, we were required under IFRS to identify continuing operations related to our retained business and discontinued operations related to the divested business sale of Neurosterix.

All income and expense items related to the discontinuing operations have been reclassed under a specific line of the comprehensive loss call net profit or loss from discontinued operations.

Slide 28, starting with the income statement, which related to continuing operations. We continue to recognize CHF0.1 million of income in Q2 2024 compared to CHF0.6 million in Q2 2023. The primary source of revenue is research funding from our collaboration with Indivior, which is recognized that the associated research costs are incurred.

Continuing R&D expenses primarily relate to our GABAB PAM program and remained stable at CHF0.3 million in Q2 compared to Q2 2023. Continuing operations in G&A expenses, primary rate corporate development activities have remained stable at CHF0.7 million in Q2 2024 compared to Q2 2023.

The finance result in Q2 2024 is primarily related to foreign exchange losses, but to a lesser extent, to interest income on US, the cash deposit.

Slide 29, now to the balance sheet. Our assets are primarily held in cash, and we completed Q2 2024, with CHF3.8 million of cash held in Swiss francs and USD. Other current assets amounted to CHF0.9 million primarily relate to prepaid retirement benefit annuity paid at the beginning of each year due to the new static transaction, we expect CHF0.6 million to be reimbursed in the short term.

Current liabilities of CHF0.9 million as of June 30, 2024, decreased by CHF1.9 million compared to June 30, 2023, primarily relate two accruals and payables related to clinical research organizations and other outsourced service providers.

Non-current liabilities of CHF0.1 million decreased CHF5.5 million compared to December 31, 2023, primarily due to stock transferred to Neurosterix.

Now on to slide 30, I'll summarize. I hope you have understood how transformative the Neurosterix relates to Addex. We have strengthened the balance sheet and secured the financing to execute on the development of our preclinical portfolio, including the very exciting M4 Positive Allosteric Modulator program for schizophrenia.

We have made excellent progress in our GABAB PAM program with our partner Indivior selecting a compound for development in substance use disorders with IND-enabling study expected to start in the first half of next year.

The dipraglurant is ready to restart clinical development for brain injury recovery and our independent GABAB PAM cough program has demonstrated excellent preclinical efficacy and tolerability with IND-enabling studies ready to start, we are validating parts to the industry supported 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 Instructions)

Raghuram Selvaraju, H.C. Wainwright & Co.

Thanks so much for taking my questions and congratulations on all the progress on so many fronts. Firstly, I wanted to ask if you have and some sense of the specific clinical indications in which you expect chronic cough program to proceed, you know, with the highest probability, clearly chronic cough is a serious symptomatic hallmark of many different respiratory, pulmonary and inflammatory diseases, but wanted to know which ones you consider to be particularly attractive and what we might expect to be the clinical path forward, for example, would you be considering advancement in COPD or sarcoidosis or related indications, please?

We haven't finalized the clinical patient population to aim at, currently, we are considering refractory and unexplained chronic cough as one possibility, but we are open to the ideas also aiming at COPD or IPF related chronic cough. So this is still a big part to discuss.

Also just from a clarification standpoint, I wanted to know whether you use the terms MED and ED50 interchangeably or not,

No, I mean ED is a minimum effective dose, ED50 effective dose is a dose that reaches 50% of this.

The confusion stems from the fact that sometimes they use that the MED abbreviation to mean Median Effective Dose, which is the same as ED50. But if you use minimum effective dose, and that explains how you are using both that.

And also, I wanted to see if you had any commentary regarding what you expect to be the most appropriate comparator or competitor molecules that have historically been tested clinically in chronic cough that you would look to be the benchmarks for your chronic cough program, you know, in the clinical context?

We can consider baclofen and label for alcohol those two have been tested in the clinic. Their clinical studies and they are GABAB agonist. So we'd like to achieve similar if not better efficacy with improved tolerability. So that will be our aim.

But not Guinea Pigs, is that correct?

Well, I think clearly, we're expecting Guinea Pigs to be standard of care by the time we get to later stage development. So we will be definitely looking to compare our compound with Guinea Pigs absolute.

And we aim to cut to issue of efficacy in a broader population of patients. As you know, up to 25% of patients do not respond to Guinea Pigs and will be aiming to have a higher percentage of responders based on the mechanism that we are using.

I think probably many of the folks listening today will remember last year's transaction in which the developer of [Gefapixant] was acquired for $2 billion. So clearly, if you show broader efficacy, then Gefapixant, and you know, that's potentially a very high-value program.

Just wanted to ask also about some recent developments in the neurology neuropsychiatry space that may have applicability to the prospects of the Neurosterix spin out, in particular, the label that was granted to Cobenfy, formerly known as KarXT, which was developed by Karuna Therapeutics and which subsequently was acquired by Bristol.

So I was wondering if there are any takeaways you got from looking at the label for Cobenfy that may provide more of an opportunity within the schizophrenia context and particularly with regard to the prospects for the M4 Positive Allosteric Modulator.

While we haven't yet had a chance to have a good look through the label, so what we do know is that it's quite a broad label and therefore, this bodes very well for other and four compounds that are going to come up for regulatory approval.

And in that context, you, I believe have also previously indicated that the Pharmacother question that you folks are working on with regard to M4 modulation is distinct from the Expert Opin Pharmacother for that?

Yeah, it's correct, it's novel chemistry completely different from any described M4 chemistry. And that's out there, whether it's the member activity and program or any of the other M4 PAM programs without our chemistries is different.

Can you just refresh my memory with respect to when you anticipate the first of the Neurosterix portfolio compounds to potentially complete IND-enabling studies?

Yes, we are on track to complete the IND-enabling studies middle of next year and rapidly file the IND so that we can move into a Phase 1 at the second-half of 2025.

Not sure if you're in a position to speculate at this juncture regarding the prospects for a public listing of Neurosterix itself.

I'm certainly not at liberty to talk about the strategy of Neurosterix on this conference call. I'm afraid.

Thank you very much for taking my questions. Appreciate it.

Thanks.

(Operator Instructions)

Ladies and gentlemen, this brings the main part of our conference to a close. And I would now like to hand back to Tim Dyer for closing remarks.

So thank you, everyone, for attending our half-year 2024 conference call, and we look forward to speaking to you again soon.