Addex Therapeutics Ltd (ADXN) Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining the H.C. Wainwright 2021 Global Life Sciences Conference. My name is Muz Saleem, and I'm an associate health care equity researcher here at H.C. Wainwright. While we are virtual this year, we're confident we can provide value to you with over 425 companies presenting at the conference as well as via your interactions through one-on-one meetings. H.C. Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. We have a total of 18 publishing senior analysts and 493 companies covered across all sectors. Please visit hcwco.com for more information. From a logistics standpoint, we -- please make sure to reference your virtual conference online portal that provides your individual links to your meetings and all presentations. Panels and all presentations are live and on demand online from March 9 to the 10. With that said, have a productive and enjoyable day, and I'd like to introduce our first presenter. I'd like to welcome Tim Dyer, CEO of Addex Therapeutics, who are focused on the development and commercialization of an emerging class of novel orally available small molecules known as allosteric modulators for the treatment of neurological disorders.

Thanks, Muz, and good morning, good afternoon, ladies and gentlemen, wherever you may be. So it's a pleasure to be here. I'm Tim Dyer. I'm the CEO of Addex, And I'm very much looking forward to introducing the Addex story to those of you who are new to it and updating you those who are up to speed on the story. So we are a public company in -- on Nasdaq and on the Swiss Stock Exchange. So I draw your attention to the disclaimer. So Addex has 3 clinical programs, dipraglurant which is scheduled to start its first pivotal study in this half of 2021. Dipraglurant is also being scheduled to start a blepharospasm Phase II study also in the first half of this year. And our partner, Janssen, is planning to start an epilepsy Phase II in Q2 of this year. The company is based on a leading allosteric modulator technology platform. This is a validated and differentiated pharmacological approach looking at high-value drug targets. In essence, what has Addex built? Well, we've built proprietary biological screening assays and an in-house built library of over 70,000 starting points, which are biased towards allosteric modulation. And of this technology platform, we've built a pipeline of novel drug candidates. And a number of these will be entering clinical candidate selection, and we are hoping to enter IND-enabling studies in -- by the end of this year or around the end of the year. We've also got a number of partnerships. The 2 active partnerships ongoing at the moment is the one with J&J. And so we are scheduled to get $109 million in milestones and double-digit royalties on net sales. We've also got another collaboration, which is very active, the Indivior collaboration. So we are currently conducting a funded research program in the clinical candidate selection stage and we are eligible for $330 million milestones and royalties up to double digits. We've got top-tier investors. We're listed, as I said, on the Swiss Stock Exchange and also on the Nasdaq with an ADS program. And we finished the year with cash of CHF 18.7 million. And in the first week or second week of January this year, we raised another $11.5 million. So here is the pipeline. So in addition to the 3 clinical programs, we have 4 programs in late preclinical developments. These 4 programs are scheduled to deliver candidates that enter IND-enabling studies around the end of this year. And then we've got 2 other early-stage programs in the beginning of lead-optimization. All these programs were discovered in-house and are owned 100% by Addex, apart, of course, those ones that have been outlicensed to our partners. So the team, we've built an experienced team of drug developers in-house who've had success. I'd like to just draw attention to the fact that Robert Lütjens and Jean-Philippe Rocher were here right from the beginning of the company and built the technology platform and the pipeline. When [indiscernible] has joined us in 2016. Roger came to join us from Acadia, where he developed pimavanserin. So Roger has a lot of experience in the Parkinson's disease area, and NUPLAZID is now selling for $500 million of sales last year, I believe. And we've also built Scientific Advisory Board with the likes of Darryle Schoepp as our Chairman, who's been leading the neuroscience at Eli Lilly and Merck in his career before he retired. So we've built an experienced team with a track record of success behind them. So on to dipraglurant, which is being developed for Parkinson's disease dyskinesia. There's a compelling rationale to develop dipraglurant in this area. So it's an underserved -- a large underserved patient population in need of improved treatments, so significant commercial opportunity. And there's more than 1 million Parkinson's patients, of which 170,000 of dyskinesia. Pricing is very attractive with Gocovri pricing of 34,000 per annum and NUPLAZID $45,000. So these are 2 treatments in Parkinson's -- symptomatic treatments in Parkinson's. And we see this as very much the surrogate for the market potential. Based on this, we are estimating the U.S. lead market of $4 billion, of which, we could imagine that dipraglurant launch would get about 1/3 of it. So a significant market opportunity for dipraglurant in the PD-LID space. Strong mechanistic rationale for blocking mGluR5. And we've got supportive preclinical data and Phase II clinical data, which I'll share with you in the coming slides. We also have a very interesting PK profile, which is ideally suited to it. And I'll say a little bit more about that. And dipraglurant is also active on the same biological pathway as amantadine which is the only approved therapy for LID in the United States, i.e., we're basically both decreasing [indiscernible] to show the efficacy. But unlike amantadine, dipraglurant restores synaptic plasticity, and it's highly selective for target and therefore has limited off-target activity. In addition, Novartis was developing an mGluR5 mavoglurant and did generate data in PD-LID. And this is very supportive this data of the mGluR5 approach and in particular, supportive of the dipraglurant PK profile. So PD-LID, it's associated with the long-term use of L-Dopa. However, it's not caused by L-Dopa treatment. It's really driven by the progressive neurodegeneration within the Parkinson's disease. Symptoms include dystonia and chorea and a highly disabling and very impactful on the patient leading to social withdrawal and an increased burden on the caregiver. Prevalence is very much related to the disease duration. And at the moment, apart from amantadine, the standard of care is really to reduce the L-dopa dosing in order to balance the treatment of the underlying PD and limit the disabling effects of dyskinesia. And therefore, the treatment physicians are very much playing a balancing act requiring constant management of the L-dopa dose to limit the these unwanted side effects, including the dyskinesia. So huge unmet medical need in the space with limited competition. So the mechanism of action. So I won't go into too much of the detail here. I think the take home is -- I mean it's complicated, but I think the take out message is we understand how dyskinesia is occurring, and we understand how dipraglurant and blockade of mGluR5 works to basically switch off the dyskinesia. So on to the PK profile. So dipraglurant is a short-acting compound, which is given with the L-dopa dose. And as you can see from this graph, most of the dyskinesia is -- the unwanted dyskinesia is occurring around the peak plasma concentration of L-dopa. So what we're doing with dipraglurant is we're giving a similar PK profile to L-dopa, very much switching off the dyskinesia by having the drug on board when it's needed. So we are following a sort of a PK matching profile. And we would imagine -- we would expect in clinical practice dipraglurant would be given with each L-dopa dose where the patients suffered from troubles in dyskinesia. So it's very much a PK matching concept here, which differentiates dipraglurant from other treatments and also is key to having this effect on the dyskinesia. So the study -- the Phase II data, so the study design is here. So it was a 76 patients, 2:1 randomized. It was a 28-day study. There was a dose titration up to day 21, which was not ideal. So we went from a 50 mg dose to 100 mg dose, and then there was a 1-week fixed dose of 100 mg. We were measuring the midday dose on day 1, day 14 and day 28. The dyskinesia, we were measuring it using the modified abnormal involuntary movement scale, AIMS. So the data we got. So on one, we saw an immediate effect of the 50 mg dose by a 20% reduction against 4.1% plus placebo. So we're statistically significant. On day 14, we saw an increase in the reversal of the dyskinesia using AIMS scores, and the placebo response did increase, but we still had separation with statistical significance. And on day 28, you can see we maintained the 30% reduction. But unfortunately, placebo went marching on and we lost statistical significance. We very much believe that this was due to -- some extent due to the trial design, because of the 2:1 randomization but also the dose titration. And also, there were no placebo mitigating factors introduced. So going forward into the next study, we will be very much looking to implement placebo mitigating techniques. Today, we know that Parkinson's patients are particularly prone to placebo response. And I'll talk a little bit later in the presentation about that. So while we lost statistical significance, we also looked at the responder analysis. And what was very encouraging with the responder analysis was that on day 28 and when we looked at the 30% responders, which was considered to be clinically meaningful, we saw a statistical significant separation between active and placebo as you can see. So that was very encouraging, very much supported the robustness of the antidyskinetic effect of dipraglurant. We also looked at the CGI and we have statistical significance here. And CGI is quite a simple scale, but it's very much the assessment by the physician of the patient between the beginning and the end of the study. And as you can see, when we looked at improvement versus no change or worsening, and we have statistical significance between the dipraglurant and the placebo. So the safety profile. So as I said, it's highly selective. There's no off-target activity, and it's overall very well tolerated and safe drug. And the AEs that we did see, so worsening dyskinesia was -- there's no -- was not statistically significant from placebo, once we adjusted for the AEs that were picked up in the follow-up period, which were nondrug-related. And dizziness and nausea are very much related to the drug. But again, they're short lived and they're mild and well tolerated. I think the acid test was really the low dropout rate in the study. So only 2 patients discontinued, and the study saw a very low dropout rate in this patient population. So the UDysRS is the approved regulatory scale. So in the next study, we will not -- we'll be moving from the AIMS to UDys, and the UDys is recommended by the Movement Disorder Society and there's a precedent regulatory pass with the FDA with Gocovri. And it contains anchored objective clinician evaluated measures in dyskinesia. It also includes both patient and physician assessments of impairment and is much less prone to a placebo response as compared to the AIMS. And it's validated, and it was developed in 2019, specifically for dyskinesia in PD unlike the AIMS. So the take-home message here is the move to this new scale is very much going to be in favor of the drug. Now the other thing that we will be doing is we'll be very much focused on introducing techniques to manage the placebo response. So the first thing is use of the UDysRS, which is more sensitive to change in LIDs. And as I said, less prone to placebo response. We will also be using raters who are qualified by the MDS and expert rate reviews to further ensure quality. And we're going to be very diligent about requiring a moderate to severe symptom scores [indiscernible] and baseline. We're also going to implement a nonpharmacological intervention for the [indiscernible] in order to pull out some of the placebo response ahead of screening [indiscernible] that placebo response at the beginning -- at the beginning of the study. And the other thing which is actually going to be in favor of the -- of managing placebo is the fact that the study is going to be longer. So it's going to be a 12-week study instead of a 4-week study. And placebo response does tend to be back towards baseline as longer the study is. So these are some of the techniques. There are a number of other things we will be implanting as well. So we're confident that in the next study, we should be able to manage the placebo response. And so going forward, we're in a pivotal registration program. Study 301 is expected to start this half and data readout is expected at the end of 2022. As I said, the end point is UDysRS. We're also kicking off a 12-month open-label study. And so that will be starting in parallel to Study 301. And so that's going to be a 6- and 12-month safety data being captured there. And there will be a second pivotal registration study, which will follow on after 301 has read out. So that's the key parts of the development of the pivotal program that we are currently executing. The design of the first 301 study, so it's going to be 140 patients, moderate to severe PD-LID. It's a 3-month study that will be 1:1 randomized and will be 1 single dose, 100 mg. We'll be catching -- in addition to the primary endpoint, we'll be catching a number of -- capturing a number of secondary endpoints. So CGI and we'll be looking at the MDS-UPDRS Part III and we'll be capturing some data in the [indiscernible] aspects in on and off time. So that was dipraglurant. Now on to the blepharospasm study. So blepharospasm is a type of dystonia affecting the eyelid muscle. So it's an involuntary movement of the eyelid muscles, which results in functional blindness. There are 50,000 blepharospasm patients in the U.S. and with 200 new patients diagnosed annually. The current treatment -- approved treatment is botulinum toxin injections, which are given about every 2 to 3 months. And other approaches -- surgical approaches are invasive and frequently not beneficial. And we are planning a Phase II feasibility study with dipraglurant-IR and that will start in the first half of this year and is supposed to read out by the end of 2021. It's a relatively small study. And dipraglurant in parallel developing dipraglurant extended-release formulation, because we will then do a much larger Phase II study with the ER form in 2022 following the readout [indiscernible] the first Phase II study. And then we will also be expanding into other dystonias because blepharospasm is very much the first part of dystonia. We believe that the mechanism is appropriate for all the forms of dystonia, including some of the big unmet medical needs in generalized dystonias. So the mechanism of action, again, a very complicated busy slide here, and I think the take-home message, we understand how it works. And we've got some good supporting preclinical data in different forms of dystonia. We've also got some clinical data from the PD study, not enough patients to actually do any stats, but we did see anti-dystonic effects within the PD patient population. So very supportive of developing dipraglurant mGluR5 in dystonia and in -- more particularly in blepharospasm. So the study we're going to perform is a short study. So 2 days, 15 patients which have moderate to severe blepharospasm and are regularly taking botulinum toxin. It's a single-center, randomized, double-blind placebo-controlled study. We're going to look at 50 mg, 100 mg in placebo. The efficacy end point is going to be measured using the computational mode to objective rater. And we're also going to look at typical rate of scale, patient-reported outcomes as well. So on to the J&J program. So very briefly, large unmet medical need within epilepsy. Keppra is the market leader and 2.2 million patients on Keppra. It's making nearly $1 billion of sales. There is a large underserved patient population in need of improved treatments. And maybe except 1174 and there's an [indiscernible] positive allosteric modulator. There's a clear mechanism of action to support epilepsy as an indication. We've shown a 35-fold increase in Keppra efficacy in preclinical models. This is potentially the first rational polypharmacy in epilepsy. It's a true synergistic effect. And this is a pharma development that's been done by J&J. There's extensive preclinical and clinical data. And Janssen is expected to start dosing in this study in Q2 this year, and we will read out the top line data in the first half of 2022. As I said, Addex is eligible for some significant milestones and royalties on this program. So the data that was generated, you can see here with levetiracetam, which is Keppra. You can see the 35 bottle shift in this preclinical model. So this is the 6 Hertz model. And when you keep ADX71149 before Keppra, you had a 14% shift in the efficacy of 71149. So it's a true synergistic effect we've seen, and we're very much hoping to see this in the study. And so this is the study that J&J is planning to run. So it's 20 patients in both arms 1:1 randomized. They're looking for partial onset seizures and the suboptimal response to levetiracetam. So there will e a 6-day baseline in order to get the 28-day seizure count, going to be double-blind, placebo controlled and the primary endpoint is going to be time to baseline count. So on to the financials. So we -- as I said, we've got 18.7 million of cash at the end of the year. We've raised further money, so $11.5 million in the capital increase that we did. We've got no debt, dual listed, got some high-quality investors, and we've got some limited analyst coverage as well. And so the milestones, dipraglurant will start in the first half of this year. It's going to read out around the end of 2022. Blepharospasm will start also in this half and will read out at the end of this year. The epilepsy study is going to start in Q2 this year, and it will read out in the first half of 2022. And on the GABAB PAM program, which is partnered with Indivior, we're expecting to complete clinical candidate selection in 2021 and start IND-enabling studies in Q1 2022, both with the Indivior program in addiction, but also our own program in [indiscernible] So I think you can see, it's -- Addex is now entering a phase with some significant clinical news flow, admissibly the start of a number of clinical trials, which will lead to the readout of a number of clinical trials starting at the end of 2021 through -- into the end of 2022. So an interesting story to watch, I think. And so in summary, 3 clinical programs, as I said, starting clinical trials this year. We've got technology platform. We've got an experienced team. We've got all the capabilities in place to successfully run these clinical trials. We've got a solid foundation around the partnership to the industry, top tier U.S. investors, dual listing. The U.S. listing in place as well. And I think a promising outlook with rich news flow starting in 2021. So thank you very much for your attention, and I will hand back to your moderator.

Thanks very much. It's Tim Dyer, CEO of Addex Therapeutics. Very informative presentation. I want to thank all of our presenters for taking part in what's been a very productive and informative series of presentations. We appreciate the time and the effort that went into preparing them. And hopefully, our next conference will be one that we can hold in person rather than virtually. In the meantime, we're very grateful for your flexibility and your presence online this year. Thanks again from the H.C. Wainwright team.