Addex Therapeutics Ltd (ADXN) Earnings Call Transcript & Summary

Thank you. Good day and thank you for standing by. Welcome to the ADX Therapeutics' 2026 Half Year Financial Results and Corporate Update Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press *1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *1 and 1 again. To ask a question via the webcast, please access the Ask a Question tab. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to thank the conference with your first speaker today, Timothy Dyer, CEO of ADX Therapeutics. Please go ahead.

Thank you. Hello everyone. I'd like to thank you all for attending our half-year 2026 Financial Results Conference Call. I'm here with Mikhail Kalinichev, our Head of Translational Science, to 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 disclaimer. 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 our GABA B-PAM programs, SUD and cough. I will then review our 2026 half-year financial results. Following that, we will open the call for questions. Since our last update, we have seen several important achievements. Firstly, we have strengthened the balance sheet with $2.8 million raised through our ATM facility, which provides us with cash runway into Q4 2027. We also regained rights to our GABA B-PAM program, which we had previously licensed to Indivior. This is a significant value creating event for ADX, we will speak more about later in this presentation. As a reminder, we spun out our portfolio of preclinical neuropsych assets in 2024 to create NeuroSterics, raised $65 million from a syndicate of investors led by Versant Ventures. We retained 20% equity interest in NeuroSterics, the value of which is unfortunately not being properly reflected in our current share price, but we hope that will change. NeuroSterics has made excellent progress in advancing its pipeline, including its lead drug candidate, NTX253, a highly selective brain penetrant M4 positive allosteric modulator for schizophrenia. We're excited to expect this program to complete Phase 1 very soon. Now for a quick review of our pipeline. We continue to believe in Diproglurant, and I've repositioned this proprietary mGlu5 negative allosteric modulator for brain injury recovery. As a reminder, in 2025, we entered into an option agreement giving us access to an exclusive license to intellectual property covering the use of mGlu5 inhibitors in brain injury recovery, including stroke and traumatic brain injury. Included in the agreement is a research collaboration under which we are working with Syntaxis and Lund University to preclinical profiling Diproglurant and prepared clinical studies. As previously reported, we have regained the rights to ADX71149 from our partner J&J, value data set and significant GMP material. We're currently evaluating a number of therapeutic indications for future development and in parallel we're discussing with potential partners for the asset. As already mentioned, we have recently regained all rights to the GABA B-PAM substance use disorder program from Indivior and are now free to develop all drug candidates in any indication. We plan to continue the development of both the substance use disorder and the cough programs. The next milestone for the SUD program is the filing of an IND and for the cough program the start of IND enabling studies. Also presented on this slide is the portfolio of our spin-out company, NeuroSterics. We're expecting Phase 1 data from NGX252 program Q4 this year. Backup M4PAM NGX529 has been selected for IND enabling studies, which should start shortly. The mGluR7 NAM program has selected NTX819, a highly selective first-in-class compound, which has demonstrated robust preclinical anxiolytic and antidepressant-like activities, supporting its development as a potential next-generation therapy. We expect NTX819 to complete IND enabling studies in the coming months. Now let's speak about the GABA B-PAM platform. A bit of history for you. We started this program 20 years ago with the idea that we could use positive allosteric modulation pharmacology approach and a novel chemistry effort to come with better baclofen compounds. Baclofen is a short-acting generic GABA-B agonist which is registered for the treatment of spasticity. However, it has been used to demonstrate the efficacy of GABA-B activation in several disease areas such as SUD, cough, pain, overactive bladder, neurodevelopmental disorders amongst others. Therefore, in addition to our activity programs in cough and substance use disorders, we plan to explore the development in some of these additional indications with potential partners. Now on to the termination of our agreement with Indivior. As a reminder, we entered into a research collaboration license agreement with Indivior in 2018 and executed a funded research effort at ADX to deliver novel candidates. In late 2024, Indivior selected a drug candidate for research and entered IND enabling studies in 2025. As part of the collaboration, we received approximately $20 million in funding and the right to select our own drug candidate for development in a restricted set of disease areas. Now that Indivior has terminated the license as part of their announced merger with Suvenness, we're not only getting back the licensed drug candidate for SUD. We have full freedom to develop all other candidates. This gives ADX the broadest portfolio of drug candidates targeting GABA B-PAM in the industry and the opportunity to pursue collaborations with industry partners. Now I will hand over to Mikhail, who will give you some more details about the GABA B-PAM for SUD and chronic cough programs.

Thank you, Tim. Now let me speak about why we are so excited about the opportunity of our GABA B-PAM Substance Use Disorder Program. Starting with unmet medical need. SUD, which includes opioid, alcohol, cocaine, and other use disorders, is described as uncontrolled use of a substance despite its harmful consequences and is characterized by development of tolerance and withdrawal. There is high unmet medical need for treatment of SUD as nearly all SUDs are chronic relapsing diseases. 17% of the U.S. population is affected by this disorder, and nearly 90% of patients remain untreated. There is a limited selection of approved drugs for SUD, which includes methadone, buprenorphine, naltrexone, and acamprosate. Furthermore, there are no approved drugs for cocaine, or psychostimulant use disorders. Novel approaches for pharmacotherapy of SUD include mGluR5 negative allosteric modulator mavoglurant, mGlu2,3 positive allosteric modulators, kappa opioid receptor antagonists, GLP-1 inhibitors, and ketamine. So, why GABA B-PAM? GABA-B receptor activation is a clinically validated target for SUD, as baclofen is used off-label for alcohol use disorders. Also, GABA B-PAM ADX71441 has shown to attenuate alcohol self-administration and relapse in rats and alcohol consumption in mice. Also, ADX71441 reduced cocaine self-administration in non-human primates. The mechanisms mediating anti-SUD effects of GABA-B activation include reductions in firing of mesolimbic dopamine neurons, dopamine release in the nucleus accumbens, incentive reward value of the drug, and stress anxiety that leads to craving and ultimate relapse. The GABA B-PAM drug candidate has successfully completed IND-enabling studies and is ready for IND filing and Phase 1 clinical trials. Also, there are several differentiated leads and backup compounds, all with robust novel IP potential. Now our GABA B-PAM program for the treatment of chronic cough. There is strong rationale for developing GABA B-PAMs for chronic cough. Chronic cough is a persistent cough that lasts for more than 8 weeks and can be caused by a variety of factors, including respiratory infections, asthma, allergies, and acid reflux, but also possibly by cough hypersensitivity. There is a large unmet medical need in novel antitussive drugs as current standards of care are ineffective in 30% of patients and only moderately effective in up to 60% of patients. In addition, the current treatments carry risks of serious side effects. Support for using GABA B-PAM in treatment of chronic cough comes from the clinical evidence that baclofen, a GABA-B agonist, is used off-label in cough patients. And from the anatomical evidence that GABA-B receptors are strongly expressed in airways and in the roto pathway regulating cough. Therefore, we believe that GABA B-PAMs could offer superior efficacy in cough patients. 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 mcg per kg and ED50 of 6 mcg per kg in cough frequency in a guinea pig model of cough. No signs of tolerance were seen after subchronic dosing and more than 60-fold safety margin was demonstrated based on respiratory depression as sedation biomarker. Recently, we confirmed that antitussive efficacy in the non-human primate and are currently evaluating the compound in the rabbit. The IND enabling studies are planned and ready to start subject to securing finance. Now to the data. In the model of citric acid-induced cough in guinea pigs, acutely 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, or remifentanil, baclofen, and codeine. Now to cough latency. Compound A increased the latency to first cough dose-dependently, thus delaying the onset of cough. The antitussive profile of compound A in delaying cough onset was similar or better than that of reference drugs. As a reminder, our objective in this program is to design a GABA B-PAM 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 and 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 mcg. In contrast, nalbuphine, or remifentanil, baclofen, and codeine resulted in robust reduction in respiratory rate at doses required to achieve maximal efficacy, indicative of sedative-like effects. When we evaluated the antigen-sever efficacy across compounds at the respective highest doses, free from respiratory effects, compound A was shown to be superior to nalbuphine or remifentanil, baclofen, and codeine, both cough number and cough latency measures. In the model of ATP potentiated citric acid cough in guinea pigs, in a head-to-head comparison experiment, acutely administered compound A and the P2X3 inhibitor had similar efficacy and tolerability profiles. As a reminder, P2X3 inhibitors are antitussive activities peripherally mediated, which explains their lack of sedative activity, but also the reason more than 30% of cough patients do not respond to treatment. In the citric acid-induced cough model, subchronic administration of compound A for 7 days showed no signs of tolerance, neither in cough frequency nor in latency to first cough. Also, there were no changes in the respiratory rate, body temperature, and growth hormone released in animals treated subchronicly with compound A. Compound A was also assessed in the IPF-related exacerbated chronic cough model in guinea pigs. Here is the study design. On day 0, animals received a single oropharyngeal administration of bleomycin or were left intact. Bleomycin-exposed animals were then treated with compound A, at 10 mg per kg, or vehicle, orally once daily for 28 days. Intact animals received vehicle. On days 7, 14, 21, and 28, animals were exposed to low concentration of citric acid to stimulate cough. On day 28, at the end of the experiment, lung tissue was collected for histopathological analysis. The total number of coughs was significantly higher in bleomycin exposed vehicle treated animals than in healthy control. The difference between the groups grew progressively larger over time, indicative of exacerbated cough in IPF-like condition. Chronic treatment with compound A resulted in robust and enduring reduction in the number of coughs with 40% to 60% reduction magnitude. The latency to first cough showed significant reductions in bleomycin-exposed vehicle-treated animals versus intact controls starting day 14. Chronic treatment with compound A reversed the effect of bleomycin throughout the testing period, returning the latency to day 14 to the levels of intact control animals. Histopathology 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-treated animals. This suggests that compound A administered over 28 days reduced lung fibrosis. Now to the non-human primate data. Similar to what we saw in the guinea pig, in the model of citric acid induced cough in non-human primates, Compound A demonstrated a more than 60% reduction in number of coughs at 2 mics per kg. In summary, we have selected a clinical candidate for chronic cough with a robust reproducible antitussive efficacy at 1 mcg per kg and good PK/PD. The compound showed a favorable developability profile in non-GLP tox studies performed in rats, dogs, and non-human primates, to have the best disease efficacy and tolerability profile and broad application in chronic 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 program.

Now I hand it back to Tim. Thank you, Mikhail. Now for a review of our 2026 half-year results. Starting with the income statement, the operating loss amounted to $1.1 million in H1 compared to $1.3 million in H1 2025. The decrease of $0.2 million between both periods is primarily due to reduced outsourced R&D on our GABA B-PAM program. As a reminder, on April 2, 2024, we received an equity interest of 20% in NeuroSterics, U.S. Holdings LLC as part of the NeuroSterics spin-out transaction. Under IFRS, we are required to account for the investment using the equity method of accounting and recognize our share of their results in our income statement. For the 6 month period ended June 30, 2026, our share of net loss of NeuroSterics amounted to $2.3 million compared to $2.1 million for the 6 month period ended June 30, 2025. The net loss remained stable, around $3.4 million, in both H1 of 2026 and H1 of 2025. Now to the balance sheet. We completed H1 with $0.8 million cash held in Swiss francs and U.S. dollars compared to $1.6 million as of December 31, 2025. The decrease of $0.8 million is primarily due to operating costs partially offset by the sale of treasury ADSs. Other current assets amounted to $0.3 million as of June 30, primarily related to prepaid retirement benefits and D&O insurance annually paid at the beginning of the year. Our non-current assets of $2.4 million as of June 30, primarily relate to our investment in NeuroSterics accounted for using the equity method and to a lesser extent our investment in Spiling Club. Current liabilities increased by $0.2 million to $1.4 million at the end of June 2026 compared to December 31, 2025, and primarily relate to accruals and payables from outsourced R&D and professional service activities. Non-current liabilities primarily relate to the retirement benefit obligations calculated in accordance with IAS 19, an amount of $0.2 million at the end of June '26 compared to $0.4 million at the end of December '25. Now to the cash flow statement, we started the year with $1.6 million. During the 6 month period, we used $1.2 million operations primarily and we received $0.4 million from the sale of Treasury ADSs resulting in a balance sheet at the end of, balance sheet cash at the end of period of $0.8 million. I'd like to highlight that we successfully raised $2.8 million in Q3 through our ATM facility and now have a cash runway through into Q4 of 2027. So to summarize, our spin-out company, NeuroSterics, continues to advance its portfolio with their M4PAM program on track to complete Phase 1 in Q4. NIDA is working closely with NIDA to advance its Phase 3 program, Mavoglurant, into Phase 3 for cocaine use disorders. We've regained all rights to our GABA B-PAM platform, providing multiple programs with a focus on SUD and chronic cough. We can continue to plan recovery in collaboration with the Lund University. We are looking forward to completing the evaluation of potential indications for our mGluR2-PAM 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.

Thank you. To ask a question, you will need to press *1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press *1 and 1 again. If you wish to ask a question via the webcast, please type it into the box and click submit. We'll now go to our first question. One moment please. And our first question today comes from the line of Raghuram Selvaraju from H.C. Wainwright & Co. Please go ahead.

Thanks so much for taking our questions. Can you please comment on the patent expiration with respect to the composition of matter patent claims as these refer to the compound portfolio that you have reobtained rights to?

Hello Ram and thanks very much for the question. We filed 5 patents in the GABA B-PAM program in 2024 and they are progressing towards being granted. Two of them had been licensed to Indivior, and two of them have come back, and the other three were never covered by the license. So we have 5 very young patents. The compound of Indivior sits within one of them, the other compound which has a differentiated profile and which we're developing for the cough indication is sitting in one of the other patents and there are other clinical candidates sitting in separate patents.