Addex Therapeutics Ltd (ADXN) 2025 Q1 法說會逐字稿

Hello, everyone. I'd like to thank you all for attending our Q1 2025 financial results conference call. I'm here with Mikhail Kalinichev, our Head of Translational Science, who will provide an update on our R&D program.

I draw your attention to the press release and the financial statements issued earlier today, which are available on our website. 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 recent activities and achievements before reviewing our top line. I will then hand over to Misha who will review in more detail our mGluR5 negative allosteric modular program for brain injury recovery and our GABAB positive allosteric modulation preclinical program for cough. I will then review our Q1 2025 financial results. Following that, we will open the call for Q&A.

Moving on to the highlights. We have had a great start for the year with several significant value-creating achievements in our pipeline. We've made excellent progress in our GABAB positive allosteric modulator program with our partner Indivior. We successfully completed our IND-enabling studies with the selective drug candidates to substance use disorders. As a reminder, under the terms of the agreement, Addex is eligible for payment of up to USD330 million 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 digits.

Also under the terms of the agreement, we have the right to select compounds for development in a predefined list of reserve indications. We have selected a compound to advance our own independent GABAB PAM program for the treatment of chronic cough. We've substantially completed the preclinical profiling of our selected drug candidate and recently published robust antitussive data, multiple pre-clinical models of cough. Misha will speak about this exciting data later in our presentation.

We also regained rights to our mGluR2 positive allosteric modulator program, including the Phase 2 asset ADX71149 from our partner Johnson & Johnson. We are currently evaluating a number of therapeutic indications for the future development of this program. We've repositioned dipraglurant, our mGluR5 negative allosteric modulator program, for brain injury recovery and recently entered into an option agreement giving us access to an exclusive license to intellectual property covering the use of mGluR5 inhibitors in this interesting therapeutic indication. Misha will talk about this exciting program later in the presentation.

On the financial side, we completed the year with CHF2.8 million of cash, which provides us with a cash runway through mid-2026. I'd like to highlight the cash burn has been significantly reduced following the Neurosterix spinout transaction. The current cash does not fund the progression of our partnered -- unpartnered program into the clinic.

Now, a quick review of our pipeline. We continue to believe in dipraglurant and are executing our plans to reposition the development in brain injury recovery. We've mentioned our partner, Indivior has selected GABAB PAM (inaudible) substance use disorders and the success of the IND-enabling study. We're advancing our independent GABAB program. Chronic cough (inaudible) start IND-enabling studies this year subject to financing. Neurosterix has made excellent progress in (inaudible) pipeline, including starting IND-enabling studies by completing IND-enabling studies in M4 PAM program.

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

Thanks, Tim. Hello, everyone. I will start by speaking about dipraglurant and our plans for development in brain injury recovery. Full [intermination] of the development of the dipraglurant in (inaudible), we embarked on the detailed evaluation of a number of potential indications for future development. We have completed this exercise and have identified brain injury recovery as an interesting indication for the future development.

We believe the differentiated profile of dipraglurant makes it particularly suitable for enhancing the impact of rehabilitation in traumatic brain injury and stroke patients. There is a large number -- 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 service. mGluR5 receptor is suitable targets to address post-stroke recovery as it is densely expressed in the brain involved in neuroplasticity and modulate excitatory-inhibitory equilibrium. In fact, activation of mGluR5 has been observed in range of neurological disorders, including stroke, where it plays a role in so-called maladaptive rewiring of the brain following stroke.

Inhibition of mGluR5 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 (inaudible) modulator of mGluR5 (inaudible) administered daily (inaudible) following stroke results in a sustained and growing improvement in sensory motor function in comparison to vehicle treatment.

Similar improvement in sensory motor function was observed in animals treated with our mGluR5 NAM (inaudible). MRI imaging of the resting state functional connectivity in post-stroke rodents shows that daily administration of MTEP 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 (inaudible). 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 Parkinsonian patients, showing only mild to moderate CNS-related adverse effects.

We have a drug product ready and a strong patent position and believe dipraglurant can become a 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.

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 baclofen for substance use disorders. As a reminder, GABAB receptor activation has been clinically validated in a number of disease areas using baclofen and GABAB [allosteric] agonist. Baclofen is an FDA approved for treatment of (inaudible) and is widely used off label to treat numerous diseases, including substance use disorder. However, baclofen has a short half-life and comes with significant side effects, [comparing] its wider use.

Thus, there is a strong need for a better baclofen. We believe that this can be achieved with positive allosteric modulators and the differentiated pharmacology, having the efficacy that is similar or better than that of baclofen but longer half-life and improved side effect profile. Our partner, Indivior, has selected GABAB PAM drug candidate for development in substance use disorders and has started IND-enabling studies in H2 2024.

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. There is a strong rationale for developing GABAB PAMs for chronic cough. Chronic cough 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-cough 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 treatment carry risks of serious side [effects].

On the next slide, we show that GABAB PAM are likely to have a superior tolerability profile in comparison to current standards of care and show no taste-related side effects as seen with a newly approved (inaudible) inhibitor, gefapixant.

Support for using GABAB PAM in treatment of chronic cough comes from the clinical evidence that baclofen, the GABAB agonist is used off-label in cough patients and from the anatomical evidence of GABAB receptors are strongly expressed in airways and in the neural pathway regulating cough. Therefore, we believe that GABAB PAM could offer superior efficacy in cough patients.

The pre-IND activities, including in vivo proof-of-concept studies, [non-GLP tox] and CMC has been completed. Our clinical candidate has shown favorable efficacy, tolerability, and developability profile. The compound has demonstrated a consistent minimum effective dose of 1 mgs/kg and ED50 of 6mgs/kg in (inaudible) in vivo. No signs of tolerance were seen after sub-chronic dosing and more than (inaudible) was demonstrated based on respiratory (inaudible). The IND-enabling studies are planned to start this year.

The next set of slides describes the in vivo proof-of-concept study in models of cough (inaudible) where we evaluated efficacy and tolerability of our clinical candidate Compound A and also characterize clinically active antitussive drugs: nalbuphine, R-baclofen, codeine, and the P2X3 inhibitor in the same model. In the model of citric acid in [use] cough in guinea pig, administered Compound A delivered a robust antitussive efficacy reducing the cough number dose dependently and achieving 70% reductions at the maximal dose.

The antitussive profile of Compound A was similar to that of nalbuphine, baclofen, and codeine. Compound A also increased the latency to first cough dose dependently, thus delaying the onset of cough. The antitussive profile of Compound A in delaying of (inaudible) was similar or better than that of (inaudible). In the same experiment, Compound A appeared well tolerated as there were no marked changes in respiratory at up to 60 mgs/kg.

In contrast, now baclofen resulted in robust reduction of respiratory rate at their highest dose indicative of sensitive like effects. When evaluation of the antitussive efficacy across compounds was done as the respective high doses free from respiratory effects, Compound A was shown to be superior to reference drugs in both cough number and cough latency measures.

In the chronically administered Compound A showed signs of improved efficacy and potency and no signs of tolerance in comparison (inaudible). In the model of ATP-potentiated citric acid cough in guinea pigs in a head-to-head comparison experiment, acutely administered Compound A exhibited a trend of better efficacy importance in comparison to that of P2X3 inhibitor while showing signs of similar tolerability.

In summary, we have selected a clinical candidate for chronic cough with a robust reproducible antitoxin efficacy of 1 mg/kg and good PK/PD. The compound has the potential to have the best disease efficacy and tolerability profile and growth applications in cough patients. The compound showed a favorable daily profile and non-GLP tox studies performed in rat, dog, and (inaudible). We are on track to start IND-enabling studies this year.

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

Thank you, Misha. Now for a review of our Q1 2025 financials. Following the Neurosterix transaction, we were required under the IFRS to identify continuing operations related to our [retained] business discontinued operations related to the divested business of (inaudible). All income and expense items related to the discontinued operations of (inaudible) under a specific line of the common loss called net loss from discontinued operations.

Now starting with the income statement, which related to the continuing operations, we recognized (inaudible) income in Q1 2021 compared to CHF0.2 million in Q1 2024. The decrease is primarily due to the completion of the funded research phase of our collaboration with Indivior in June of last year. Continuing R&D expenses of CHF0.1 million primarily related to our GABAB PAM program and decreased by CHF0.1 million in Q1 2025 compared to Q1 2024 and again, mainly due to the completion of the research (inaudible) of our collaboration with Indivior.

Continuing G&A expenses of CHF0.5 million primarily related to corporate loan activities and decreased [CHF5.3 million] in Q1 2025 compared to Q1 2024, primarily due to decreased legal fees. The finance result loss in Q1 '25 finally relates to US dollar currency exchange [differences]. The share of net loss of associates of CHF0.8 million relates to the 20% equity interest received as part of the consideration for the divestment of the part of our business in US (inaudible), which is being accounted for using the equity method. Under IFRS, we are required to recognize our share of their results.

Now to the balance sheet. Our assets are primarily held in cash, and we completed Q1 2025 to CHF2.8 billion of cash held in US dollars. Other current assets amounted to CHF0.4 million, primarily related to pre-paid R&D and G&A costs on noncurrent assets of CHF6.3 million as of March 31, 2025, primarily related to the 20% equity interest in (inaudible) group recorded on the balance sheet under the equity method of (inaudible) associates.

Current liabilities were CHF1.1 million as of March 31, decreased by CHF0.3 million compared to December 31, 2024, and it primarily relates to improve expenses and payables, the R&D, and professional fees. Non-current liabilities of CHF0.1 million as of March 31, 2025, decreased to CHF0.1 million compared to December 31, 2024, primarily due to the reduction in retirement both obligations or changes in the financial functions. Now to the cash flow statement on March 31, 2025, the cash balance was (inaudible) compared to the beginning of the year, primarily due to the operating costs continuing operations.

Now to summarize, we've made excellent progress in our GABAB program with our partner Indivior successfully from IND-enabling studies with their select content development of substance use disorders where (inaudible) has made excellent progress with their lead (inaudible) candidate successfully completing IND-enabling study in [Q3 '24]. We have (inaudible) in our mGluR5 program and ready to start clinical brain injury recovery. Our GABAB PAM program has demonstrated excellent preclinical efficacy and (inaudible) start. We have variating partnerships. The industry is (inaudible) and a strong balance sheet on a solid position to deliver on our strategic objectives.

This concludes the presentation, and we will now open to questions.

(Operator Instructions) Raghuram Selvaraju, HC Wainwright.

I was wondering if you could provide us with your updated thoughts on the current competitive landscape in chronic cough. And in particular, if you could comment on the relevance of proceeding programs in terms of guiding what you expect to be in the clinical development pathway for your asset in this indication?

Yes, of course. There are a number of compounds that are in development currently. One that I can mention in particular is now roofing and that was actually the reason we wanted to benchmark it against our compound. So (inaudible) has shown very promising efficacy profile in patients with [IPF-related] cough. But at the same time, there were clear signs that were indicative of (inaudible).

So that tolerability profile will be challenging once you move into the patient population that has (inaudible) that are marketing younger and overall healthy in their early- to mid- instead of early- to mid-70s as in IPF. And their level of tolerability is very different. So that's where we see a significant opportunity to deliver similar efficacy with remarkably improved tolerability profile and have a compound that can be applied those to IPF-related costs and refractory chronic cough. So that would be my answer to your first part of the question.

In terms of our plans for development, we are planning to perform (inaudible) in healthy volunteers and quickly go and perform a so-called [challenge] study, which can be done both in healthy controls and in [chronic cough] patients. That can be done even at the end of (inaudible) or at the end of (inaudible) as [1b]. This offers an opportunity to have a quick and straightforward efficacy readout relatively early in development. This will, of course, followed by a Phase 2 study in clinical patients.

So this will be a refractory [chronic cough] patients. We are also considering to have a more in-depth evaluation of chronic cough in these patients using more advanced technologies that are now being developed and already approved by FDA that allow 24/7 monitoring of cough that gives an opportunity for much more precise monitoring of cough but also better selection of chronic cough patients. So that will be another innovation on our side.

So that's the answer to your question.

So maybe I can just add a little bit to what --

Sorry. Can you also comment on -- go ahead, please.

Yeah, I just want to add to what Misha was saying. So I think what is so exciting about this program about is that we know that P2X3 inhibitors, which are (inaudible) restricted and showing about a 30% reduction in chronic cough and what was really exciting about the (inaudible) data that came out from (inaudible) as they were over 50% reduction in chronic cough patients.

And this really supports our hypothesis that you need to have a molecule with both (inaudible) and peripheral, and that's what we have with our compound A our GABAB what you can clearly see from the data that we've generated preclinically is we have a much better therapy with margin. So we have reason to believe that we're going to see more than 50%. We'll see a sort of an efficacy readout more similar to our (inaudible) but a tolerability profile closer to P2X3 inhibitors, which will give us a very, very (inaudible) competitive advantage over not only standard of care today, but what's coming through in the pipeline.

Can you also comment on the potential applicability of this agent to treatment of chronic painful cough in indications outside of IPF, particularly pulmonary sarcoidosis.

Actually, pay for cost could be another indication in particular based on the large (inaudible) of GABAB activation will be sustained across multiple (inaudible) conditions, including chronic (inaudible). So this could be absolutely one of the very suitable indications for chronic cough is -- reduction of GABAB (inaudible).

Yeah, we are thinking about that indication as potentially a path forward in the Phase 2.

And then with respect to dipraglurant specifically in the post-stroke rehabilitation context, can you give us a little bit more detail on two aspects. The first would be what an appropriate control arm would look like in a potential registration quality study in this setting, what patients in the control arm would likely be receiving in terms of therapy, whether behavioral or physical or otherwise.

And then secondly, if you could talk a little bit about what the efficacy bar might look like in this indication, given the fact that, as far as I'm aware, there are no pharmacotherapies currently approved in this context.

Yeah, it's a very good question. The way we see it now, we are planning to use the dipraglurant in tandem with physiotherapy. Because of its short half-life, it can be given multiple times per day and be well tolerated. We are thinking that we need to perform a few studies, including clinical pharmacology studies to learn more about how dipraglurant modulate (inaudible) in both healthy to start with, and then in patients with stroke. This will really help us in better designing the proper Phase II study.

So this is what we are planning, performing to evaluating measures of plasticity in sensory motor cortex in the [mid] brain and spinal cord. We are also interested in exploring whether it's best to use the compounds before the exercise or immediately after. So there are a few components of the design that can be explored in a dedicated clinical [oncology] study before we move forward into a Phase 2.

Thank you.

(Operator Instructions) Dear, speakers, there are no further questions for today. Thank you, ladies and gentlemen. This brings our main part of the conference to the close. And I would like now to hand back to Tim Dyer for any closing remarks.

Well, thank you very much, everyone, for attending the conference call today, and we look forward to speaking to you again soon. And I wish you a very nice day.