Addex Therapeutics Ltd (ADXN) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Addex Therapeutics First Quarter 2026 Financial Results and Corporate Update conference call and webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tim Dyer, CEO. Please go ahead.

Hello, everyone. I would like to thank you all for attending our Q1 2026 Financial Results Conference Call. I am here with Mikhail Kalinichev, our Head of Translational Science, who will provide 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. I also draw your attention to our disclaimer. We will be making some 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 Misha, who will review in more detail our mGLu5 negative modulator program for brain injury recovery and the GABAB modulator program for cost. I will then review our 2026 Q1 financial results. Following that, we will open the call for Q&A. So starting with the highlights. Q1 has seen several important achievements across our pipeline. We have made excellent progress in our GABAB positive modulator cost program as we continue to complete preclinical characterization of our selected compounds. We recently announced robust antitussive activity in a nonhuman primate cost model as well as solid antitussive activity in an idiopathic pulmonary fibrosis model in Guinea pigs. These data further demonstrate the potential of our selected compound in this important unmet medical need. In parallel to completing the preclinical profiling, we are working to scale funding to advance the program into the IND naming studies. Mikhail will be sharing some of the data with you later in our presentation. We've repositioned Dipraglurant, our mGLu5 negative allosteric modulator of brain injury recovery and have made good progress in preparing the program for clinical studies in post-stroke recovery patients. In 2025, we entered into an option agreement, giving us access to an exclusive life to intellectual property covering the use of mGLu5 in brain injury recovery, including stroke and TBI. Included in the agreement is a research collaboration under which we are working with [ Syntaxin ] and the University of Lund in Sweden to complete preclinical profiling of Dipraglurant and prepared clinical studies. Again, Misha will talk more about this exciting program later in the presentation. As a reminder, we spun out our portfolio of preclinical neuropsychiatric assets in 2024 to create rosters and raised CHF 65 million for sinister at [indiscernible]. We retained a 20% equity in Neurosterix, the value of which is unfortunately not being properly reflected in our current share price. Neurosterex has made excellent progress in advancing its pipeline, including its M4 PAM and NGA7NAM programs. The lead drug candidate in the M4 PAM program, NTX 253 is in Phase I, and we expect data in Q3 this year. On the financial side, we completed the quarter with CHF 0.9 million of cash and have successfully raised CHF 0.3 million in Q2. Given that our cash burn is extremely low following the Neurosterix spin-out, this provides us with cash from way through into Q4 of 2026 on a going concern basis. However, current cash does not fund the progression of our unpartnered programs into the clinic. So now for a quick review of our pipeline. As mentioned, we continue to believe in Dipolarence, and we are executing our plans to reposition the development for brain injury recovery. As a reminder, we have regained the rights to ADX-71149 from our partner, J&J, with a high-value data set and significant GMP materials. We're currently evaluating a number of therapeutic indications for future development. And in parallel, we are discussing with potential partners for the asset. For our GABAB PAM collaboration with [indiscernible] has selected a compound for development in substance use disorders and a successfully completed IND-enabling studies. As a reminder, under the terms of the agreement, [indiscernible] is eligible for payment of up to $33 million of successful prespecified regulatory commercial milestones as well as tiered royalties on the level of net sales from high single digits up to low double digits. As mentioned earlier, we are advancing an independent GABAB program for cough and expect to start IND-enabling studies this year subject to securing financing. Also presented on this slide is the portfolio of our spin-out company Neurosterix. We are expecting Phase I data from NTX-253 program in Q3. Backup M4 PAM compound NTX-529 has been selected for IND-enabling studies, which should start shortly. The [ mGlu7-NAN ] program has selected NTX-819, a highly selective first-in-class compound, which has demonstrated robust preclinical anxiolytic an antidepressive like activity which supports its development as a potential next-generation therapy. We expect NTX-819 to complete IND-enabling studies in the coming months. Now I will hand over to Micha, who will give you some more details about our exciting portfolio.

Thanks, Tim. Hello, everyone. I will start by speaking about depletion and our plans for development in brain recovery. The [indiscernible] an orally available, highly selective mGlu5 negative outstanding modulator, which we believe could improve the outcome of rehabilitation for patients suffering from traumatic brain injury or stroke. The mechanism of action of [indiscernible] targets neuroplasticity, early in rehabilitation to promote the building of neuronal connections and sensory motor recovery. . The unmet medical need and commercial opportunity in post-stroke and TBI recovery is undisputed. Stroke is among the leading causes of chronic orphan lifelong disability as it leads to motor sensor recoritive 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 postal 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. Now to why [indiscernible] is such a great target for this indication. MGlu5 receptor is a suitable target to address post-stroke recovery as it is densely expressed in the brain involved in neuroplasticity and modulate excitatory inhibitor equilibrium. In fact, activation of MRV has been observed in a large range of neurological disorders, including stroke, where it plays a role in so-called maladaptive rewiring of the brain following stroke. Inhibition of mGLu5, on the other hand, can facilitate adaptive rewiring of the brain promoting neuroplasticity and creation of new functional pathways moving the neural network towards the pre-leasing state. Now to the data. I would like to refer you to the left-hand figure, which shows exciting new evidence recently published in the journal brain. These data show the negative asteric modulator of mGLu5 and tap administered daily rent following strong results in a sustained and growing improvement in sensory motor function in comparison to vehicle treatment. In the right-hand figure, we can see a similar improvement in sensory mobile function that was observed in animals treated with our mGLu5 NAM department. We are currently working with our collaboration partner, Syntaxis, to complete the preclinical profile of dopamine in this animal model. In addition to the compelling in vivo data, MRI imaging or the resting state functional connectivity in post-stroke products. show 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. The [ pragluent ] is ideally suited to be used in conjunction 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 the proteins can become a first-in-class drug to facilitate post-stroke recovery. We can also speculate that the [indiscernible] adaptive rewiring and facilitation of recovery following brain damage would also be seen in traumatic brain injury patients. The next step in clinical development is to perform an imaging study in stroke patients to show the intra and inter hemispheric connectivity in the brain disrupted by stroke. Now I would like to update you on our GABAB positive altering modulator cough program. As a part of our agreement with [indiscernible], Addex has exercised its right to select a compound to advance its own independent governing and program for the treatment of chronic cough. I will now present this exciting opportunity. There is a strong rationale for developing GABAB PAM for chronic cough. Chronic cough is a persistent call that lasts more than 8 weeks and can be caused by a variety of factors, including respiratory infections, asthma, allergies and asset reflex, but also possibly by a cough hypersensitivity syndrome. There is a large unmet medical need in novel [indiscernible] drugs as current standards of care are ineffective at 30% of patients or only moderately affected in up to 60% of patients. In addition, the current treatments carry risks of serious side effects. Support for using GABAB PAM in treatment of chronic cost comes from the clinical evidence and baclofen and GABAB agonist is used off label in core patients and from the anatomical evidence that cabo receptors are strongly expressed in airways and in the neuronal pathway regulating core. Therefore, we believe that GABAB PAM could offer superior efficacy in cost patients. The pre-IND activities, including in vivo proof of concepts, 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 per kg and ED50 of 6 mg per kg frequency in a kinetic model of care. No signs of tolerance were seen after subchronic dosing and more than [indiscernible] safe margin was demonstrated based on respiratory depression and sedation biomarker. Recently, we confirmed the [indiscernible] efficacy in the nonhuman primates and our currently and now currently evaluating the compound in revenues. IND-enabling studies are planned and ready to start subject to securing financing. Now to the data. In the model of [indiscernible] assets induced cost in Guinea pigs, acutely administered compound A delivered a robust [indiscernible] efficacy, reducing the cost number dose dependently in achieving 70% reductions at the maximal dose. The [indiscernible] profile of compound A was similar to that of [indiscernible] Baclofen and Codyn. Now to cost latency, compound A increased latency to first cough dose dependently thus delaying the onset of cough. The antigens profile of compound A in delaying cost onset was similar or better than that of reference drugs. As a reminder, our objective in the program is designed [indiscernible] with the efficacy of reference compounds, but without the CNS side effects, such as sedation. In the same experiment, where the compound A showed efficacy, we monitored respiratory rate, a biomarker of sedation. As you can see from the slide, Compound A was well tolerated as there were no marked changes in respiratory rate at up to 60 mg per kg. In contrast, now [indiscernible] baclofen and Codyn resulted in robust reductions of respiratory rate at doses required to achieve maximal efficacy indicative of sedative like effects. When we evaluated the additive of efficacy across compounds at the respective highest doses free from respiratory effects, compound A was shown to be superior to now [indiscernible] baclofen and Codyn in both cough number and cough related measures. In the model of ATP potentiated citric acid, cough in GDP in a head-to-head comparison experiment. Q3 administered compound A and the P2X3 inhibitor had similar efficacy and tolerability profiles. As a reminder, P2X3 inhibitors as activity is peripherally mediated, which explains the lack of sedative effects, but also the reason for more than 30% of patients do this response to treatment. In the citric acid induced cough model, subchronic administration of compound A for 7 days showed those signs of tolerance, neither in cough frequency nor in latency to first call. Also, there were no changes in the respiratory rate, or the temperature and growth hormone release in animals [indiscernible] compound A. Compound A was also assessed in the IPF-related exacerbated chronic care model in Guinea pigs. Here is the study design. On day 0, animals received a single oropharyngeal administration of [indiscernible] or well left intact. [indiscernible] exposed animals were then treated with compound A or [indiscernible] orally once daily for 28 days [indiscernible] animals received vehicle. On day 7, 14, 21 and 28, animals were exposed to low concentrations of citric acid to stimulate cough. On May 28 at the end of the experiment, the lung tissue was collected for histopathological analysis. The total number of coughs was significantly higher in bleomycin exposed vehicle-treated animals than in healthy controls. This difference between the group grew progressively larger over time, indicative of exacerbated cough in IPF like condition. Chronic treatment with compound A resulted in robust and enduring reductions in the number of coughs with 40% to 60% reduction in magnitude. The latency to first cough showed significant reductions in bleomycin exposed vehicle through these animals versus intact control starting day 14. Chronic treatment with Compound A reversed the effects of bleomycin throughout the testing period, returning the latencies to the levels of intact control animals. A histological analysis of the lung tissue collected on day 28 revealed that chronic administration of Compound A was associated with markedly lower [ Ashcroft ] scores and lower percentage of affected lung in comparison to bleomycin exposed vehicle resides. This suggests that Compound A administered over 28 days reduced lung fibrosis. Now to the nonhuman primate cost data. Similar to what we saw in Guinea pigs, in the model of citric acid induced cough in nonhuman primates, Compound A demonstrated more than 60% reductions in number of costs at 2 mg per kg. In summary, we have selected a clinical candidate for chronic cough with a robust reproducible [indiscernible] efficacy at 1 mg per kg and good PK/PD. The compound showed a favorable developability profile in non-GLP tox studies, performed interacts, dogs and nonhuman primates. The compound has the potential to have the best in disease efficacy and tolerability profile and broad application in chronic cough patients. Subject to raising financing, we are ready to start the IND-enabling studies. This concludes our prepared remarks on the progress of our R&D programs. Now I hand it back to Tim.

Thanks, Micha. Now for a review of our Q1 2026 financials. Starting with the income statement, the operating loss amounts to CHF 0.5 million in Q1 2026 compared to CHF 0.6 million in Q1 2025. Decrease of CHF 0.1 million between both periods is primarily due to reduced outsourced R&D. As a reminder, on April 2, 2024, we received an equity interest of 20% in Neurosterix as part of our [indiscernible] transactions. . Under IFRS, we are required to account for the investment using the equity method of accounting and recognize cost and recognize our share of their results in our income statement. For the 3-month period ended 31st of March 2026, our share of the net loss of Neurosterix amounted to CHF 1.3 million compared to CHF 0.8 million for the 3-month period ended March 31, 2025. This increase is primarily driven by the move of NTX-253 into clinical development by Neurosterix. The net loss amounted to CHF 1.7 million during the first quarter compared to CHF 1.5 million during the same period ended March 31, '25, again, strongly driven by the increase in our share of the Neurosterix net loss compensated by a reduction in our own in turn on that loss, which reduced by 23%. Now to the balance sheet. We completed Q1 with CHF 0.9 million of cash held in Swiss francs and to a lesser extent, U.S. dollars compared to the CHF 1.6 million held at the end of 2025. The decrease of CHF 0.8 million is primarily due to our operating loss of CHF 0.5 million and an increased net working capital of CHF 0.3 million, driven by one-off annual payments made at the beginning of the year such as retirement benefit contributions and insurance premiums. Our current assets amounted to CHF 25,000 primarily related to increased prepaid and retiree benefits, our noncurrent assets of CHF 3.5 million at the end of March, primarily relates to our investment in Neurosterix accounted for using the equity method and to a lesser extent, our investment in Stalicla. Current liabilities remained steady at CHF 1.2 million at the end of March compared to December and primarily relate to accruals and payables from outsourced R&D and professional service activities. Noncurrent liabilities primarily relates to the retirement be applications calculated in accordance with IAS 19 and amounted to CHF 0.3 million. at the end of Q1 compared to CHF 0.4 million at the end of December. Now to the cash flow statement. We started the quarter with CHF 1.6 million. We used [ CHF 766,000 ] for operations, primarily R&D and gun activities. We received CHF 65,000 from the sale of treasury shares and completed the year with CHF 935,000 -- sorry, completed the quarter with CHF 935,000. As mentioned in the highlights, we have been active with our ATM facilities, both on the NASDAQ and the SIX Exchange and a very small amount of capital in Q2 to strengthen the balance sheet while we [indiscernible]. Now to summarize. We have made excellent progress in balancing our GABAB PAM program for cough and our [indiscernible] post-stroke recovery program. I'll spin-out company Neurosterix continues to advance this portfolio with their M4 PAM program on track to complete Phase 1 Q3. We are very pleased by the progress [indiscernible] making in advancing on its business strategy and pipeline. We are looking forward to completing our evaluation of potential indications for our MGA program and securing the financial resources to advance our portfolio into clinical studies. This concludes the presentation, and we will now open the call for questions.

[Operator Instructions] And now we'll go and take our first question, and it comes the line of Raghuram Selvaraju from H.C. Wainwright.

We have 4 of them. Two of these relate to the chronic kraft program. Firstly, I was wondering if you could provide us with some assessment of the relative positioning of your lead candidate, the GABA B PAM against [indiscernible] extended release. And also, I was wondering if you are thinking about potential dosing formulations that may reduce dosing frequency and therefore, improve patient convenience as you look towards advancing this into the clinic? And then the second question on that front is related specifically to the Guinea pig model. I was just wondering how you typically measure the cost intensity in that context? And to what extent you rely on those measurements relative to the assessment of the lung tissue?

Yes, happy to answer the question. Let me start with the first, which is comparison of [indiscernible] with our candidate, Compound A. As you saw on the slide that I shared, the overall profile is very, very similar. Compound appears to be more potent. We see minimal effective dose at 1 where was not roofing, 1 needs to adviser 3 in exactly the same model in Guinea, cough simulated by citric acid inhalation. And in terms of maximal efficacy, both deliver approximately 70% reduction. The difference comes from the tolerability aspect of [indiscernible] versus GABAB PAM. Here at the top dose, mix for key significant reductions in respiratory rate, and it's nicely aligned with what we know on the tolerability profile in our [indiscernible] trials where it showed CNS-related side effects even at the dose which was lower to the 1 -- corresponding notes to the 1 we tested in animals. Even at the efficacious dose, which roughly aligns to 3 to 5 mg per kg in Guinea pig, if we use 75-kilo calculation for a human body weight. So based on that, we expect similar efficacy to now be booting but markedly wider therapeutic margin. And regarding your second question on the formulation, our current formulation is expected to deliver once-daily compounds. So there will be no need for extended release unless we will aim for something that is once weekly or once monthly. But once daily formulation is believed to be achieved with the current simple formulation that we have. And that contrast was now moving very well as it was now boosted even extended release formulation requires twice daily administration. So that shows another advantage of GABAB PAM clinical candidate over [indiscernible]. There was also a question on intensity. We use plenty [indiscernible] chambers that deliver cough frequency and of latency. There is no way of measuring cost intensity with that setup. The of intensity is even challenging to measure in human patients. But there are some technical advances that may deliver intensity measures, but it's still in development. .

Okay. And then with respect to the Neurosterix equity holding, I was just wondering, maybe, Tim, you can comment on this, what strategically your outlook is for long-term management of this equity position? And if you have any thoughts around how Addex might ultimately assess the disposition of this or potential monetization of it? And how you're thinking about this specifically in the context of the pole future public listing of Neurosterix. I was also wondering if from a scientific perspective, you could comment on the complex interplay between [ muscularinic ] receptor signaling pathways. And in particular, if you could talk a little bit about this doesn't necessarily have to be solely in the context of what neurosterix is doing, although I presume that is probably the most relevant aspect. But if you could talk specifically about M1 M4 receptor modulation relative to M4 and M7 receptor modulation and how these aspects might potentially have differing therapeutic applicabilities within the context of schizophrenia versus depression?

Okay. So let me take the first 1 about the equity holding. And thank you very much for the questions. So -- yes. Let's just rewind. I mean, look, we found in Neurosterix really as a financing vehicle for some of our preclinical programs and if you remember back and you dig into the press release is back in 2024, Neurosterix raised CHF 65 million, Addex received a 20% equity holding. And if you run the numbers, the 20% equity interest that Addex received was valued based on the post-money valuation of neurotic at about CHF 20 million. Clearly, with a market cap of CHF 8 million today, there seems to be a little bit of a disconnect. And -- now what we know about Neurosterix is that Neurosterix has advanced in the last 2 years an M4 PAM from clinical candidate selection substantially through Phase 1, and we're expecting Phase I to complete very soon with data coming out in Q3. It's also identified backup compound in the M4 program called NTX529, which is ready to go into IND-enabling studies. It's advanced the [indiscernible], which is a first-in-class compound with a battery of preclinical data, showing its potential in neuropsychiatry, in particular, the anxiolytic effects and antidepressant effects. So we believe that our equity holding is not being correctly reflected. Now the question is really, do we try and monetize it today and we have had some inbound interest. One strategy could be to monetize the Neurosterix interest and sell it and to then use the proceeds to invest in our cost program. Alternatively, Neurosterix at some point will be executing a Series B whether that's in the private arena or whether it's part of a public offering, I'm not in a position on this call in the context of [indiscernible] to comment on that. However, we are evaluating all opportunities regarding building value for our shareholders and with that equity position. Now what I would like to do is hand over to Misha, who will talk at length because he is very knowledgeable about the [indiscernible] space.

Thank you, Tim. So we believe that the contribution of M1 into antipsychotic efficacy of [indiscernible] which is administration of [indiscernible] is speculative. There is -- still this is being discussed, but there is no robust data that support that M1 component is necessary or is contributing significantly into its efficacy, either in cognition or in psychosis reduction. As you know, there were multiple companies that were developing M1 [indiscernible] selective compounds for [indiscernible] improvement and all those clinical trials show lack of activity. Some also showed a range of [indiscernible] cholinergic side effects, which also brought additional aspects to consider. If we look at [indiscernible] that evaluated antipsychotic like profile was anomaly in rodents. It was very clear that the main bulk of activity, if not exclusively in [indiscernible] hyperactivity model is driven by muscarinic M4 receptor with virtually no contribution from M1. So -- and then, of course, we have positive IB clinical trial with [indiscernible]. So putting all together, we believe that having a selective M4 post modulator we'll be able to deliver clinical efficacy in which we see with [indiscernible]. That was the main question. Then you mentioned receptor VII. I believe you had in mind [indiscernible], am I correct?

Yes, [indiscernible], the interplay between that and M1 and M4 systems, yes?

Well, there is no direct evidence of interaction between muscarinic and M4. And [indiscernible], there is some evidence of interaction between MGLOR7 and MGLOR8, they may create heterodimers and their coadministration can have an impact on the outcome. But I'm not aware of any functional interaction between these 2 receptors.

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

Thank you. Thank you, everyone, for attending this call. We look forward to speaking to you again soon, and we wish you a very nice end of your day and your week. Thank you.

Thank you for participating. You may now all disconnect. Have a nice day.