Newron Pharmaceuticals S.p.A. (NWRN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Newron Full Year 2024 Results and 2025 Outlook Conference Call. I'm Sandra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Weber, CEO. Please go ahead, sir.

Thank you, Sandra, and welcome, everybody, to this call on the 2024 financials, key highlights and the '25 expectations. I'm here today with Ravi Anand, who is live from Chicago, where he has attended the SIRS, which is the Schizophrenia International Research Society Conference from March 29 to April 2. And I understand from him that evenamide has been getting a lot of attention by attendees, and he will have a chance when he takes over the presentation to report to you live. We also have Ravi Anand -- we also have Roberto Galli, our CFO, on the line from Milan. It's my pleasure to introduce you to the, what I would call, highly successful year 2024, and if only by financial dimensions, this is the first time that Newron has reached revenues of more than EUR 50 million, and indeed, we have collected proceeds of EUR 66 million, that's more than in the year of the IPO, and that is the royalties that we collected on our sales on Xadago. This is the down payments for our Phase III compound, evenamide, and that on top was EUR 15 million that we collected from investors to extend our runway and to negotiate the best possible deal. All that money will be spent into taking evenamide to its true potential because we have a unique asset here. That being said, I hope you had a chance to download the slide deck. We are guiding you through that deck. It is available on our website, and we start with Slide #4. And we have this year chosen the title Building On Success because we believe that with the results, the outstanding results from our Study 014/015 that we disclosed in January of 2024 and then the confirming results of the pivotal study 008A in poor responding schizophrenia patients, we have laid the ground for success. And with all the other activities of the last year and this year, we are going to build on that success. What we saw in those studies was significant and increasing efficacy of evenamide as an add-on therapy when it was added to each and any available schizophrenia drug on the market, including clozapine, importantly, including clozapine, patients who are treatment-resistant, who are poorly responding, which, by the way, is the vast majority of all schizophrenia patients. Not only did we see that ever-increasing efficacy up to 1 year in the Study 014/015 and the confirmation highly statistically significant at 4 weeks in study 008A, we also saw a confirmation that evenamide is absolutely safe and tolerable, well tolerated by patients when added to each and any of the currently available medications. What we take from this is that the mechanism, which is truly unique, it is the one and only drug with a glutamatergic mechanism, modulating only the excessive release of glutamate in patients' brains, offers a unique and innovative therapeutic option to schizophrenia patients who are either treatment-resistant or poor responders. And again, this is the vast majority of today's patients. Now given that evenamide, we are moving to Slide 5, has a number of unique selling points, so it's the only glutamatergic mechanistic drug, it is the only drug under development for treatment-resistant schizophrenia as the regulatory indication that we will submit. And it is so far the only add-on therapy working on each and any of the available drugs. We felt it needed some validation by a top 10 pharma company in some part -- in some relevant part of the world, I should say. And on top of the validation, we wanted that such party, who would take some local or regional rights, would contribute substantial amount of cash in order to pay for the upcoming Phase III study that we plan to perform. And also, we wanted that, that deal would show to the world and our shareholders a first validated number about the intrinsic value of evenamide when we compare to our peers, be it Cerevel, Karuna or Intra-Cellular. And just keep in mind that now Newron and evenamide are probably the most advanced and one of the very few independently controlled schizophrenia assets under development. So we should aim for those peers who were acquired for $9 million, $14 million and $15 million. So the deal we got after a thorough due diligence by Eisai Group was the deal for about 10% of the global market. And we got the total up to EUR 117 million of payment, of which EUR 44 million as an upfront, further EUR 11 million for milestones, which are connected to the next pivotal study. Additional milestones payments for submitting the NDA in Japan, first, second indication and approval of the drug and tiered royalties up to double digit. The total value, risk-adjusted and discounted, was found to be more than EUR 100 million. So, again, doing the math, times 10 to the global potential that tells you that already now, we have a player who seriously estimates the value of evenamide at EUR 1 billion. As we have gone through the process, we had Myung In Pharm coming back saying that they would want to collect the rights for South Korea. And given that they were the #1 CNS specialty player in South Korea and that they offer to contribute 10% of the total patient population that we intend to perform our Phase III study in and they offered on top of standard licensing terms, we felt it was appropriate to take that second deal into account as well and to execute it. If we move to Slide 6, there has also been some progress on the corporate events. And part of that includes that when you talk about a public company, you need to present it on the best criteria for corporate governance. That means you should have a fully independent Board. And as a matter of fact, our Board hadn't seen change for some years, and some Board members were no longer qualifying as independent under the strict rules. So it all started when 2 years ago, Gillian Dines joined the Newron Board for the independent and taking on the Chairwoman position of the R&D Committee. And in 2024, we saw Margarita Chavez join as an independent non-Executive Director and taking on the Business Development Committee. And then finally, just a few weeks ago, we were informed by Dr. Köstlin that after 12 years being in the Chairmanship of Newron that he would want to step down after the upcoming shareholders meeting now that Newron is on safe ground again. And I will say that, Ulrich had considered leaving like 2 years before for personal reasons, but he decided to stay on Board because he wanted to be absolutely sure that when he leaves Newron is on safe ground. And so we very much appreciate it and value the fact that he has stayed on Board. Very importantly, we have been able to propose what we believe is a successor that matches all the search criteria, Dr. Chris Martin, you've seen [ SCD ] in the press release for -- to our shareholders for the election as Independent non-Executive Director and Chairman of the Board. And last year this time, we had announced an equity fund raise with an institutional investor, which gave him up to 2.05 million shares, of which 750,000 immediately and the rest via an auction. And we were criticized for doing the deal at that time. And our argument was that the up to EUR 15 million that we hope the transaction would raise, and in fact, we have collected exactly the EUR 15 million that we aimed for. Our argument was that we should have that cash in the bank because after the expected positive results in April and May of last year, we needed sufficient runway to negotiate a first-class partner in deal without being under pressure for cash out and in the best case to sign such a deal in a competitive environment. Well, I can say we have fully succeeded, as reflected by the deal terms that you have seen from Eisai, as we did raise the full EUR 15 million, which gave us exactly the runway that we wanted. And at the same time, last year this time, we have negotiated with the European Investment Bank an extension of the near-term tranche payment days so that, again, we were not in any cash crunch and we could negotiate in all due time the best deal that we could find for the Asian rights. So that all said, what should you expect from 2025? Well, the strategy is simple. We want to build the value of evenamide with all the means that we have at our disposal. By third quarter next year, we will be able to present to you the results from the 1-year landmark study in treatment-resistance schizophrenia. What should happen between now and that time is that we will sign additional partnering agreements, collect additional funds, get additional validation and use those funds to prepare evenamide in the best possible way for the submission of a new drug application with the U.S. FDA in the first quarter of 2027. Any work that we can fund and support in that time will be welcome to make our submission stronger. Any partnership should cover territories, in our perspective, excluding the U.S., because that is 50% of the world market. And in the best of all worlds, in Q3 next year, when we get the results from the 1-year landmark study, we will still be the owner of the U.S. rights and our shares would be uplisted to NASDAQ. And why is that? Because the NASDAQ is the ultimate marketplace with the highest liquidity, the best access to all critical shareholders and it is the one marketplace where the price of an asset is fairly described. And all our peers, that I mentioned before, have been listed on NASDAQ, and so we should be. We will not give up our Swiss listing. That's not the intention, but there will be an ADR program, which will allow shares to be sold or acquired wherever the demand is. That is why, today, we have invited to a shareholders meeting for April 23, and we ask all our shareholders to please register and to please vote and support our motions because the only interest is to take evenamide to its full value potential. That's our objective, and we hope that we get the full support by our shareholders. Moving on to Slide 8. So in a nutshell, what is evenamide about? We believe this is an opportunity to change the treatment program in schizophrenia, a space where we have not seen any true innovation for 40 years, and some might agree that also the lately approved Karuna compound, now Bristol-Myers Squibb, might not be as much innovation as people had hoped for. It's a large market opportunity. We are talking about 1% of the global population, and the vast majority of the patients are either treatment resistant or poorly responding, and they have no treatment alternative. There is no add-on therapy in schizophrenia because as per the regulator's assessment, all drugs today work by the same mechanism of action, all by dopamine, and also, Karuna's compound, now BMS, indirectly targets dopamine. So what everybody is looking for is a new mechanism of action. And, again, here we go, evenamide is the first drug targeting the excessive release of glutamate in the brain. We need a safe add-on drug, which helps doctors to evade relapses, hospitalization and increased suicidality. And that is exactly what evenamide is about. The clinical evidence we have, and Ravi will guide you through, for patients suffering from treatment in schizophrenia, we have highly exciting results from the 1-year pilot study called 014/015 in 161 TRS patients, which showed the potential of the drug. Then in April, May last year, we had in non-TRS patients positive results from a pivotal Phase II/III study called 008A, highly statistically significant on all the end points, and I will tell you that the most prevalent side effect was nasopharyngitis in 3% of patients. Compare that to the side effect of today's current treatments, pound weight gain per week; sexual dysfunction, men and women; hormonal changes; [indiscernible] like symptoms or now a new set, like the GI side effects like 40% of nausea, vomiting, constipation and diarrhea. So which are our next steps? We will soon. That is a question more of weeks than of months. In the second quarter, we will initiate a 1-year landmark study in patients suffering from treatment-resistant schizophrenia. We will go for the approval in TRS because this offers the opportunity to get the drug approved based on one study. It also offers the chance for an early market access. And there is no competition in TRS at all. In fact, 95% of U.S. patients who are treatment resistant in schizophrenia are treated off-label. Importantly, we have a strong IP position. Our composition of matter, including the extension, takes us to 2034 in the United States, 2033 in the rest of world. And don't forget in Europe, we benefit from a 10 years exclusivity post-approval. We have additional patents under review on the production process on polymorphs, which are either pending or already approved, which could take us to 2044. And we have the validation lately of all what I have described to you now by EA Pharma, Eisai Group. That all said, I hand over to Ravi. And Ravi, feel free to describe your personal impressions from SIRS, the conference, first.

Thank you, Stefan, and good morning to everybody. What a difference a year makes? Last year, I think we have had some excitement because we had positive results in the 014/015 study. But then we got the 008A placebo-controlled study done in 11 countries with very low p-values, showing the likelihood that this effect is due to chance is very low. But then also, during the year, we got some new data on mechanism of action. And the mechanism of action data together with the clinical data has completely not changed our belief in the uniqueness of evenamide, but further made it evident to everybody else. Why is evenamide unique? Firstly, it was never discovered as a part of an antipsychotic screening program. As we have mentioned before, this came as a European Union sponsored program to look for more potent antiepileptic drugs. And, therefore, the focus was on identifying compounds with that, that are selective and have a very potent for sodium channel modulation. This turned out to be so unique that this compound, actually, we have now tested on over 150 by now, CNS, the neurotransmitters, receptors, transporters, and it does not interact with any one of them. The only thing it does is inhibits sodium channels, is highly selective for sodium channels and does not affect anything else. But because of its short half-life, this drug is not ideal for epilepsy. But in the paradigm that we are using, this is exactly what we need for schizophrenia. In the schizophrenia paradigm, where it will be used as an add-on treatment, that will be ideal. So before I go much further, let me point out why is this compound unique. On the left-hand panel, you can see rat cortical neurons. And here, they are in the resting stage, which means normal stage. We need a concentration of 25 micromolar to produce an effect. 25 micromolar would mean buckets of drug. But then below you see the inactivated state of the channel, where the channel has been firing abnormally, like would happen in epilepsy, for instance, or in schizophrenia, where you have abnormal firings. There, suddenly, the drug becomes very active, a 0.4 micromolar concentration is enough to produce an effect. So you can see how the drug becomes active when it's needed and not always. If you look at the middle, we show the high-frequency firing neurons and the low frequency firing neurons. The high-frequency firing neurons are when you see epileptic states, abnormal states, brain injury and 1 micromolar concentration basically completely wipes out this high-frequency firing. But all our brains are mainly working on the basis of low frequency firing neurons, and that is shown on the right-hand side. These are the neurons we need for locomotion, governing movements, governing cognition. And here, you can see 1 micromolar has no effect. Again, telling us the same thing, the drug is active when it needs to be. What is the importance of this? Based on the fact that it has no effect on low frequency-firing neurons, evenamide will never produce neurological side effects. It will not produce dizziness. It will not produce extrapyramidal symptoms and so forth. But then how does it act? Sodium channels govern the release of glutamate. And in the last panel, what you're seeing is an experiment, which we call as in vivo microdialysis. And this probe is put into the brain to measure the amount of glutamate. You can see in the first part, basically, it's flat, evenamide has no effect on basal glutamate. We then inject veratridine, which opens the sodium channel pores, glutamate comes rushing out, that's the black line going up. And then you can see blue and red, different concentrations of evenamide, significantly reduced glutamate levels. This is the only action of this drug that it reduces glutamate levels. But if you go to the next slide, which is Slide 10, how this is important is very difficult to describe, except by the work done by the University of Pittsburgh from Dr. Anthony Grace. It is now recognized that the abnormal firing that we see in patients with schizophrenia results from dopaminergic hyperactivity, which is initiated by the hippocampus, mediated through the ventral tegmental area and the ventral pallidum, whereas most antipsychotics are acting at the very end where you see dopamine receptors. What evenamide does? It acts as a hippocampus. The hippocampus does not only decide where the disease appears to be initiated, it is also the site which controls emotion, it controls cognition, it controls behavior. By acting here, what you're seeing is that with evenamide, you will never see the dopaminergic hyper firing that you see with current antipsychotics. And, therefore, this is truly remarkable. This would mean that if this drug was used early in the disease, it could prevent the progression of schizophrenia. And this is really exciting news, together with the data that we have produced, which shows a significant benefit, clinically significant, statistically benefit in different domains of schizophrenia, but also that is achieved without any toxicity. If you go to the next slide, Slide 11, this is the MAM model. MAM is a DNA-altering chemical. In this, what we do is we inject this into pregnant rats on day 17 of their pregnancy. Why day 17? Because that corresponds to the second trimester of pregnancy in humans. The second trimester of pregnancy in humans is a period of maximum risk. If something goes wrong there, the likelihood that you will have children born who will later develop schizophrenia is very high. The findings that you are listed out here is what happens in the brains of patients with schizophrenia. And what we see now, when you have the MAM animals born, they show the same kind of deficits as I listed out here. A very interesting finding, which we are not really able to explain fully at the moment, but is exciting and which at the Schizophrenia International Research Society meeting has really gripped the audience is the finding that despite the drug having a half-life of only about 20, 25 minutes, in the brain firing from glutamatergic neurons is inhibited up to 1 hour, which is not too unexpected. But then, when we measured it at 2 hours, it is significantly more inhibited than at 1 hour. And when we go to 3 hours, it's more inhibited than 2 hours. How is that possible? The drug only has a short half-life. There's no active metabolite. It does not accumulate. This means that basically, the drug is associating some plasticity changes in the brain. And that means it has the potential for modifying the disease. We need to do more work on this, but this would be a unique finding. No drug to this date has shown any plasticity changes in the brain. This will be the unique first. In these animals, cognition is normalized by evenamide, and negative symptoms, which we never really expected to see, are also significantly improved by evenamide. So all together, the package of these preclinical results and the clinical results is dramatic and has really led to -- I have had 2 presentations here, the rooms have been completely full of people, even sitting on the floor, the cell phones clicking away, the posters have been swarmed. Nobody is really talking at this meeting in our sessions any more about Karuna and the anomaly in combination, but really it's about evenamide. If you go to Slide 12, this is the first study that we reported the year before last, but it was a first study ever done in patients with treatment-resistant schizophrenia in which a glutamate inhibitor was added on. This study was done in treatment-resistant patients. They must have failed 2 different antipsychotics. They had to be on another antipsychotic. They were psychotic because their scores on the Positive and Negative Syndrome Scale was between 70 and 90. They were adjudged to be moderate to severely ill. The patients had the first part of the study at 6 weeks, and then, subsequent to 6 weeks, they could choose to continue or not continue. Unfortunately, at the time when we did the study, COVID hit, so we were greatly restricted to doing this study in India, Italy and Sri Lanka. Why is the study results so dramatic? First of all, let me tell you, not shown on this slide, if you go to Slide 14 -- sorry, Slide 13, is the retention rate in this study. Usually, in schizophrenia, 20% to 30% of patients drop out within 6 weeks. Here, we had 95% of patients completing the study. At the end of 1 year, we have about 80-plus percent patients completing the study. During COVID period, coming back for visits, can only mean 2 things, the drug must be very well tolerated; otherwise, nobody would come back, and it must be producing a benefit. Why would anybody come back, otherwise? When we look at the data, the week 6 data shows a reduction of 12%, which is not massive, but these are treatment-resistant patients, and they're also taking an antipsychotic. But then something dramatic happens when we go to 6 months. We see a further improvement and a further improvement in 1 year. Why is this so important? Because in schizophrenia, especially in treatment-resistant schizophrenia, improvement is usually at 4 weeks to 6 weeks, maybe by 8 weeks, not after that. After that, it plateaus out, and then, begins to go down. What we are seeing here is a pattern where the effect is increasing over time, not reported for any drug till now, including for clozapine. So that's the uniqueness of this finding, but is it only because of a chance, because of 1 or 2 patients improved by a lot and the rest didn't? So if you go to Slide 14, I show you now the responder rate. The responder rate judges how many patients had a clinically meaningful response. And here, we see a 20% improvement from baseline is a yard stick. And again, in week 6, you see a 15% improvement, not fantastic. But then I get to 6 months, again, something which is very difficult to understand, the responder rate jumps to 34%, and then, at 1 year, 41%. Why am I so surprised? Because this tells me that the patients who had improved at week 6 held on to that improvement at 6 months and 1 year. But those who had not improved at 6 weeks, many of them improved at 6 months. And those who had not improved at 6 months, improved by 1 year. This is not seen in treatment-resistant schizophrenia. Patients improve early, as I said, 4 weeks, 6 weeks, maybe 8 weeks, but 6 months, 1 year, nobody has ever seen this. So again, it's a fantastic result. But this is not the end of it. If I go to the next slide, which is Slide 15 now. As I mentioned, these are all patients with schizophrenia who are treatment-resistant. And we use certain criteria to qualify them for the study, and these are listed on the left-hand side. Then, we looked at these criteria at different time points, and let's just go to the 1-year endpoint. At 1 year, if you go to the last row, 50% of the patients no longer meet the criteria for treatment resistance. In other words, they won't even get into the study. They had improved so much that they no longer can be called as treatment-resistant. Again, a fascinating finding not reported for any other drug till now. And if you go to the next slide, Slide 16, what you're seeing here are patients who meet criteria for remission. Remission is the goal of treatment. When we start treating a patient with schizophrenia, it's not just to improve positives symptoms or negative symptoms, not just to improve severity, it is to improve them to an extent that for a period of time there are no symptoms at all. The patient may not be considered as schizophrenic anymore. And there are 2 sets of criteria, the old one and the new one. The new one requires the symptoms be absent for 6 months. And what you can see is 25% of the patients have gone into remission, they no longer have the key criteria by which we judge a patient to be having schizophrenia, again, never been reported for any other drug. However, there was a shortcoming in this study. The study was open label. A vast majority of patients came from India and Sri Lanka. So the question was, will this drug work when there's a placebo control? Will it work in the West? The next study was 008A, a placebo-controlled study in patients who had failed at least 1 drug, they may have failed others also, but they were not documented. This was a 4-week study. This is done in patients who are outpatients, who are at least mild to moderately psychotic by a PAN Score of 85. The CGI of severity was up to moderately severe. This study was done in 11 countries equally. The number of patients were equally divided in different zones, as you will see in the next slide. So first of all, what drugs were used? And this is shown in the next slide. What you can see here? The proportion of patients who are using a certain drug is approximately the same in the drug evenamide group or the placebo group. Also, the proportion of usage of each drug corresponds to the market share of these drugs. But amazingly, what you will see is in the third row is clozapine. Approximately 14% of the patients -- 13% of the patients were on clozapine. So we allowed clozapine failures to go into this study. Next slide. The most common adverse events that occurred, and this is Slide 19, in this slide as shown out here. First of all, just looking at the numbers, you can see there is no difference between drug and placebo. If you look at the individual adverse events, it is almost too difficult to say what is the side effect of this drug. Nasopharyngitis is 3% -- 2.3% versus 0.6% on placebo; headache is the same percentage on drug as on placebo; vomiting, 2.3% versus 0.6%; diarrhea, 1.5%; somnolence, 1.5% on drug and 3% on placebo. In other words, there is no pattern of adverse events. What is more important is what you do not see. There is no extrapyramidal symptom disorder adverse event. There is no dystonia and no dyskinesia. There's no rigidity. There's no akathisia. There are no sexual side effects. There's no abnormal bleeding episodes for females. There is no breast enlargement. There's no prolactin increase. There's no weight gain. There's no increase in blood glucose. There's no cardiac abnormality. It's a perfect drug for add-on treatment. Next slide. If we go to Slide 20 now, the primary efficacy measure. Based upon FDA and ICH requirements, we call it the primary estimand, and it is to be analyzed as the patients went into the study. It doesn't matter what they took the drug, didn't take the drug, whatever they did, you have to analyze the data as they are. And when we do that at the end of 6 weeks, the treatment difference is highly, highly significant, as you can see, a p-value of 0.006. The key secondary measure is the CGI of severity. And again, you see it's a significant difference at less than 5% chance level. What is the shape of the improvement? And that is shown on the next slide. And as I showed you in study 014, there's an improvement which keeps on increasing over time. Here, you can see in this study, at 4 weeks, it is improving, and the slope tells us that if we had continued the study longer, there will be a much bigger effect. But even here, as you've seen, there is a clear evidence that the next study, which will have a primary endpoint at 12 weeks, is likely to have a much larger difference and be statistically significant. But does this mean that there were no clinically meaningful changes in patients? No. If you go to the next slide, 21 -- sorry, 22, we have a responder analysis. Again, 20% improvement from baseline. And as we saw in the study 014, it slowly starts to build up. And by day 29, the difference in the percentage of patients who are responders is significant. Again, if we went on longer, this would get bigger and bigger, the difference. In the next slide, 23, we are now looking at CGI of change responder. This, to me, is the most important measure. Why? This is done by a psychiatrist. It is not a scale. The psychiatrist has a conversation, a holistic assessment of the patient, how he feels, what does it look like outside, can he dress himself, does he know what's going on in the country, does he know basically where he is, why he is, does he have insight into the illness. And then you make a judgment saying our patient has not changed or he has worsened or he shows minimal improvement or he shows much improved. Much improved means clinically significant improvement. And we look at that, the proportion of patients who are much improved is approximately double that of placebo. And remember placebo here is another second-generation antipsychotic. And again, this is a highly significant p-value. If I summarize, in the next slide, the efficacy signals, there are frankly too many to count, but whichever measure you look at, whether it be the PANSS, the CGI of severity, doesn't matter how we analyze it, MMRM, ITT, the CGI of change, which is the response, and I showed you just now. Again, look at the p-values, the p-values are astronomically low. The PANSS positive symptoms improved, negative symptoms have improved. So it's a fascinating result that we have had from a study which we never really expected would be this positive in a population for which there is no treatment available, no study to this date has ever shown the addition of 1 antipsychotic to another to be significant. So it's a remarkable, remarkable result. And the responder analysis are shown on the next slide, which is Slide 35. And again, you can see here that the p-values tell us the results are significant or clinically significant improvement. Where does all this lead to our next study? And this is the study which we have been working up to. This will be a study in treatment-resistant patients who meet the international criteria. These patients must have failed 2 antipsychotics and must be on another antipsychotic at a therapeutic dose. The study will be 1 year in duration with a primary endpoint at 12 weeks for showing the drug works, 26 weeks second endpoint to show long-term benefit. The first part of the study, the screening period, is really critical for us, and this is something which we have done, which was highly acclaimed yesterday when I presented the data from the previous study. Here, we take every patient and take a blood sample to find out if they are taking the drug they say they are taking or not. In the last study, we found 30% of the patients who are not taking any drug. The parent would not believe it, the patients wouldn't believe it, the physicians didn't believe it, but the lab showed they were not taking drugs. We had to exclude all those patients. And this is the best way to make sure the study does not fail because if a patient is not taking the medication he is not going to improve. Then patients get randomized. Even if they are taking the drug at the right concentration, they don't get accepted into the study. Their data goes to an independent eligibility committee, independent of Newron, independent of the CRO, independent of the investigator, who then decide if a patient is really treatment-resistant or not. And only then the patient goes into the study. We have had inquiries from every major company involved in this research in the methodology that we had used out here. And it's very clear to me. The reason why we have such clean results in the previous study is because we excluded patients who were not taking the drug they were supposed to be taking at baseline. This study has now been submitted to different health authorities as in the process, and we expect that the first patients will be going into the study in the next few weeks. With that, I thank you all for listening, and I'll turn it over to Roberto for continuation.

Thank you, Ravi, and welcome, everybody, to this call. So we have at year-end, about 20 million shares listed, of which 0.6% is held by senior managers and directors. Newron always at year-end has about 1.8 million derivatives of, let's say, option plus a warrant, of which 2.8% of options is held by senior managers and directors, while EIB, so the European Investment Bank, holds about 4% of the warrants. All this information can, of course, be found in the corporate governance of the annual report. I want to say thank you to our analysts, all of whom joining this call, so Thomas, Samir, Bob and Arron. And, of course, I want also to say thank you to our significant shareholder, Mr. Scherer. We can go now into Slide 28. And let me start with the last line in the income statement for the net profit. For the first time after 25 years, Newron registered a profit at year-end. And this also trigger, of course, the booking of income taxes. I said booking because we are not going to pay income taxes because we are going to use our fiscal receivables. So all the receivables we have in the balance sheet can be used to offset the payment of the income taxes. License income show mainly the effect of the signature of the EA Pharma/Eisai deal, so the EUR 44.4 million related to the down payment. As per the general and administrative, the increase that you see are mainly one-off costs related to the lawyers and the financial advisers that help us in signing the agreement. Royalties increased by about 3%, I would say. So we can move to Slide 29. Again, in the current asset, there is mainly the effect of the Eisai receivable, while the -- this -- the movement in the liabilities is mainly related to the EIB loan, so what can be -- what has been reclassified among current and what has been reclassified among noncurrent liabilities. If you look at the balance sheet -- sorry, the cash flow, the EUR 45.7 million effect related to the working capital is mainly due to the, again, Eisai receivable because we cashed in EUR 44 million in 2025. On the next slide, Slide 30, I want to show you that on April 23, 2025, at 10:00 a.m., in our premises, so here in Bresso, we will have our general meeting. This year, it's going to be an ordinary meeting and an extraordinary meeting. In the ordinary meeting, we will go for the standard approval of financial statement. We will appoint Chris Martin, as Stefan mentioned it before. We will appoint the audit company for the next 3 years as well as the statutory auditors. And in the extraordinary part, we will ask you to approve few capital increases that are all mainly related to support the future development of the company and to create the American depository shares so that we will be listed at NASDAQ. As said at the beginning, it's very important for you to register so that you can support us in our next step. I'm done. So I think that we can open the question-and-answer section.

Thank you, Roberto. And over to Sandra to open the Q&A session.

[Operator Instructions] Our first question comes from Bob Pooler from ValuationLAB.

Congratulations, first of all, on the progress you made in 2024 and also early this year, both on the clinical side as well as on the corporate side. Just a few questions from my side, and particularly around the new Phase III trial in TRS, which you're going to start in Q2 or within a few weeks, as you said, that's a crucial trial, I believe. So a few questions on that. First of all, what are the estimated costs? And also, how will these costs roughly be split between Newron, EA Pharma and also Myung In Pharm.

I'll leave it to you, Roberto.

Yes, sure. So the overall cost of the study is in the range of EUR 45 million. It will be spread among the next 3 years. So the idea is starting this year with a very high impact, then slowly decreasing. And given the -- given that [indiscernible] will participate, and we have 60 patients out of the 600, the cost will be, let's say, reduced by 10% because they will take care of this. On top, we will also invoice a minor part of those cost also to Myung In Pharm because they will -- let's say, participating to the study, they will have to support us in managing all the centralized activities done by the CRO.

And if I may add to Roberto, it will be our partner, EA Pharma/Eisai Group, who will contribute another EUR 11 million as we advance with the study.

Yes, indeed.

Okay. Yes. I believe you said also, Stefan, in the beginning also EUR 11 million milestone will then come when you start the trial.

It is actually when we start the study, so first patient in, and partially when we take the last patient in.

Okay. And last patient, okay. Then, because we have previous trials there also in TRS, and how far is it similar to the study 014/015 in terms of patients, dosing and endpoints?

Yes. Basically, what we are having is an exact replica of study of 014/015 except for the following differences. That was open label. This is double blind. That did not follow the TRRIP criteria, which are the international criteria rigidly, but fairly close to it because that was a Phase II open-label study. And now we're doing Phase III, so it's a rigid following of that. Third, in that, we had India, Sri Lanka and a very small number of patients from Italy. In this study, we will have basically patients from 18 countries, 12 European countries, 4 Latin American countries and 2 Asian countries. So the split of patients will become dramatically different. The majority is going to be basically white Caucasian patients in this study. The end points remain exactly the same. The timeline for the first efficacy assessment is different. Instead of being at 6 weeks, which we saw in that last study, this will be 12 weeks. So in other words, we'll allow the treatment effects to increase over time, so it becomes bigger. And the most important point, I think, probably for the treatment difference is going to be that in the last study, I had limited the severity to PAN Score of 85. In this study, it will go up to 100. Why is that important? Because it's a fact that has been demonstrated again and again, the baseline PAN Score determines the level of change at the end. So by going from a mean of 78, which was in this study to a mean of about 90 in that study, you expect the treatment difference to increase dramatically.

Okay. And just on the terms of dosing, will that be the 30-milligram BID?

Same -- no, it will be basically 15-milligram BID and 30-milligram BID, so 2 groups, 15 and 30. Since obviously we have demonstrated the efficacy of 30-milligram BID, it's a no-brainer. So 30-milligram will be the primary dose, and then, we would also assess 15 milligram.

So you might have some if that works -- if both work, you have then also some room to titrate going forward then.

Well, there's no titration, basically, in the study at the moment, but what can always happen is you can have an 85-year-old female who prefers to -- a lower -- starting a lower dose, so that way. If both come out significant, Bob, I'll buy you a beer.

Okay. And then I believe you're going to report the topline results Q3 next year?

Yes. The idea is that basically we're going to finish the enrollment by June approximately sometime next year. And the 12-week end point, that will be reported third, fourth quarter.

The next question comes from Samir Devani from Rx Securities.

Maybe just with Ravi, just I guess on the new study, I'm just trying to get my head around the timelines. And obviously, the size of the study seems to be going up since I think we initially talked about it. So I guess it's sort of twofold. How do you keep the study blinded while reporting the data at 12 weeks? I guess that's first question. And the second question is, I think you need to get the safety database to beyond 1,500. What's the plan in between to get that database up? And when do you think you'll be in a position assuming everything goes well in terms of this study to file with the FDA?

Sure. So let me take the second question first, which is the number of patients. We are approximating about 1,000-plus patients now. By the time we complete this study and some ancillary studies, we will have crossed the borderline of 1,500 patients, which is what is required by ICH and FDA at a minimum. Secondly, because it's treatment-resistant schizophrenia, we are going for the approval based upon a single well-performed study with good results. And there also, there is a relaxation for the number of patients. So we hope to meet that by that criteria, but 1,500, we will have to get, and we will cross that one. The study size has actually not increased that much. But what has happened is that because we now have a 15-milligram group, that is, again, the same number of patients as the 30-milligram group. And looking at the study 014/015, there's a clear realization that the treatment benefit appears to increase with time. And that's why we made the endpoint of 12 weeks rather than earlier. Now you asked the question about how you're going to keep it blinded. So basically, what happens in these kind of things is the unblinding is done at the level of the statistician. It is not done at the level of the patient or the caregiver -- I mean, the investigator or the CRA. It's only 1 group of statisticians who do the analysis. And this group of statisticians who do the analysis do not have any further enrollment with the study. So we do not want to take a penalty obviously. So that's why the results will be released in such a way they do not bias the ongoing data in any way. So that's the way it will be managed.

The next question comes from Aatkar, Arron from Edison Group.

Congratulations on the highly rewarding year. Few of my questions have already been covered, so just one from me. You've touched upon it before, but please could you recapture some of the key reasons why evenamide does or, should I say maybe, doesn't compete directly with BMS's KarXT, COBENFY?

Sure, sure. First of all, the BMS drug is a monotherapy. Evenamide is an add-on therapy. So theoretically, it could even be added to xanomeline/trospium combination. So it's not competing for the same. Second, this is a drug which is acting by a mechanism that is purely glutamatergic, and whereas that drug, it's purported to be acting by M1/M4 agonists -- M1/M4 receptors, the muscarinic receptors, which are actually pretty scanty in the hippocampus, they may appear to be much more in the prefrontal cortex. So if anything else, this drug is going to be acting upstream of that drug. So, therefore, this is not going to have any side effect of the type that you're seeing with COBENFY, and there's no -- I mean, if I remember correctly, the data for that is about 25% to 30% GI side effects. There's none out here. It's 1%, something of this time. And this is not going to have any liability for EPS ever because it does not affect dopamine. It does not affect serotonin. There's no likelihood for weight gain, as it doesn't affect any serotonin receptors. It doesn't affect any histaminergic receptors. Now, of course, there is this finding of liver enzyme increases that have been reported with xanomeline, and they were discussed extensively yesterday. There is no such finding with this drug. Also, we have -- on the QTc side of it, we have done the TQT study. And instead of increasing QTc, this actually decreases QTc. So based on the safety side, it's a completely different drug. You can add it to anything. You can add this to anything. You can add anything to this drug. On the efficacy side, this is going for treatment resistant. And that drug is not meant for treatment-resistant patients. There's no study done ever with that drug for treatment-resistant patients.

The next question comes from Ramesh, Maanasa from ROTH Capital.

So I'm Maanasa dialing in for Boobalan. Congrats on the progress. So we have a few questions. So what is your expected timeline to wrap up the enrollment once the study begins? And is there a planned interim futility analysis for our Phase III study?

Yes. That's a good question. First of all, I think my expectation is that we will start the enrollment in the next couple of weeks, and we will complete by June next year. So that will be 600-plus patients, including 60 patients from Korea. The first end point is 12 weeks. To do an interim analysis, we would need to have 12-week data for at least 50% of the patients. By the time we were to do the interim analysis of 50% of the patients, we were up to be, including by that time, probably close to 85% of the patients already. So there's not much value gain. Secondly, the moment you do an interim analysis, you're going to have to do an alpha adjustment. And I, for the life of me, do not want to go to a lower p-value than we have. Although we had very low p-values in this study, I would not bank on it. So, therefore, I don't want to take any hit on the alpha. So, therefore, I would not do any interim analysis.

Okay. So the second question would be what percentage of the patients in your upcoming Phase III will have dominating negative symptoms? Like, can you discuss how evenamide is expected to this particular subsegment?

Sure. I mean, first of all, treatment-resistant patients, they come to the attention of the clinic because of prominent positive symptoms. What -- why somebody brings a patient with this type into the clinic is because despite being on antipsychotic medications, delusions are high, hallucinations are high, thought disorder is high. Nobody brings the patient into the clinic because they're sitting there and staring at a wall the whole day. However, this does not mean that these patients don't have negative symptoms. I was actually very surprised in the 008A study, which was not in treatment resistant, but in poor responders, we had a significant improvement of negative symptoms. So I think once the positive symptoms are controlled, you will see an improvement in negative symptoms. So you will definitely see it. But that's not going to be enough to qualify as getting a label for negative symptoms. All we'll be able to do is to describe that the PANSS was improved, the PANSS positive was improved and the PANSS negative was improved.

The last question for today's call comes from Thomas Meyer from Baader-Helvea.

Unfortunately, I think all my questions have pretty much been answered, but I'll have one last one. First of all, congratulations again. If there were to be an approval for that listing in the U.S., would you be able to give a rough timeline of when we would potentially see that happen?

Stefan?

Question on the timeline to approval? Well, I think -- sorry, yes, I think the simple answer is that we should be listed minimally 6 months before the result of the study. So if we talk about fourth quarter next year, minus 6 months, that means the hot work will start after JPM 2026. And the simple reason is that investors don't want to get too close to news, to relevant news. And we want to be listed in the moment that the result hits the news ticker to get to the peak value without any delay. Everybody should be prepared we would use the news flow of this year -- additional deals getting some institutional investors on board before the IPO, we would use the news flow to create enough excitement. We could even have a deal signed around the listing, and then, we would all be waiting for the results. And if those results confirm -- only confirm close to what we have seen in the 1-year Phase II study, then this will be a landmark study, a new mechanism, first drug in TRS since 1987 and the first add-on therapy. That will be very exciting news, even more as we heard Ravi describe the science that has been lately disclosed. And more news flow to come. I can only invite everybody to stay very close to us. There's going to be news on Newron all through this year.

Ladies and gentlemen, this concludes today's question-and-answer session. I would now like to turn the conference back over to Mr. Weber for any closing remarks.

Yes. Thank you all for this very exciting and good call. And as I said, stay tuned. We have plenty of news coming. We would very much appreciate all our shareholders out there to register their shares for the upcoming shareholders' meeting. This is very crucial to our success of this year and next year. We want to take evenamide and the Newron stock to the value where our peers have been before they were acquired. That's the objective. Please support us. Stay tuned. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.