20-F: Addex Therapeutics Releases 2024 Financial Results, Highlights Strategic Shift

Addex Therapeutics reports a net profit for 2024 driven by reduced operating losses and the divestment of its allosteric modulator drug discovery platform.

Summary

• Addex Therapeutics Ltd reports its financial results for the year ended December 31, 2024.
• The company generated a net profit of CHF 7.18 million, a significant shift from previous years' losses.
• This profit is primarily attributed to reduced operating losses and proceeds from the divestment of its allosteric modulator drug discovery platform to Neurosterix.
• As part of the transaction, Addex received CHF 5.0 million and a 20% equity interest in Neurosterix US Holdings LLC.
• Operating expenses are expected to increase as Addex continues development of its GABAB PAM chronic cough drug candidate and initiates further clinical trials.
• As of December 31, 2024, Addex had cash and cash equivalents of CHF 3.3 million.
• The company believes its current cash reserves are sufficient to fund operations through mid-June 2026.
• Future funding will depend on partnerships, grants, and further financings.
• The company is currently evaluating the future development of ADX71149.
• The company is completing the preclinical evaluation of its selected compound for chronic cough.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company reports a net profit, it also faces challenges related to funding and competition. The strategic shift with the Neurosterix transaction is a positive move, but the long-term success remains uncertain.

Positives

• The company achieved a net profit of CHF 7.18 million for 2024.
• The divestment of the allosteric modulator drug discovery platform provided a significant cash infusion.
• The company has a clear strategy for future drug development.
• The company has a partnership with Indivior for the GABAB PAM program.
• The company has a 20% equity interest in Neurosterix US Holdings LLC.

Negatives

• The company's cash reserves are limited, requiring reliance on future funding.
• The company is dependent on the success of its drug candidates and partnerships.
• The company is currently evaluating the future development of ADX71149.

Risks

• The company needs significant additional capital to fund its development activities.
• The company is dependent on Indivior or any future partner to develop and commercialize drug candidates.
• The company's drug candidates must prove their efficacy and safety in rigorous clinical testing.
• The company faces competition from entities that have developed or may develop similar or different drug candidates.
• The company may fail to obtain, maintain or enforce licenses, patents and proprietary technology.
• The company may be deemed to be an investment company under the Investment Company Act of 1940, including as a result of our interest in Neurosterix.
• The value of our ADSs may be driven by the release of preclinical and clinical studies led by Neurosterix Group.

Future Outlook

Addex expects operating expenses to increase as it continues to develop its GABAB PAM chronic cough drug candidate and initiates further clinical trials. The company believes its current cash reserves are sufficient to fund operations through mid-June 2026, with future funding dependent on partnerships, grants, and further financings.

Industry Context

The announcement reflects the challenges and opportunities in the biopharmaceutical industry, where companies often rely on partnerships and strategic shifts to navigate the high costs and risks of drug development. The focus on allosteric modulators positions Addex in a niche area with potential for novel therapies.

Comparison to Industry Standards

• It's difficult to directly compare Addex's results to industry standards without knowing the specific stage and focus of comparable companies.
• However, the company's reliance on partnerships and strategic divestments is a common strategy in the biotech sector.
• For example, companies like Galapagos NV have also pursued partnerships to advance their drug development programs.
• Similarly, strategic divestments, like the one Addex made with Neurosterix, are often used to streamline operations and focus on core assets.
• The success of Addex's approach will depend on the clinical and commercial success of its remaining pipeline and the value generated from its equity stake in Neurosterix.

Related Party Transactions

• On April 2, 2024, Addex sold its allosteric modulator drug discovery technology platform and a portfolio of pre-clinical programs to Neurosterix Pharma Srl for CHF 5.0 million and a 20% equity interest in Neurosterix US Holdings LLC.
• The company has a sale agency agreement with Kepler Cheuvreux to sell treasury shares on the Six Swiss Exchange.

Stakeholder Impact

• Shareholders will be impacted by the company's ability to secure future funding and the success of its drug development programs.
• Employees may be affected by changes in the company's strategic direction and potential restructuring.
• Patients could benefit from the development of new therapies for neurological disorders.

Next Steps

• Continue to evaluate dipraglurant for post-stroke/TBI recovery.
• Evaluate new indications for ADX71149.
• Continue to advance the GABAB PAM program.
• Continue to pursue collaborative arrangements with pharmaceutical companies.

Key Dates

Keywords

Addex Therapeutics, financial results, allosteric modulators, GABAB PAM, Neurosterix, drug development, clinical trials, funding, ADX71149, dipraglurant