Addex Therapeutics (SIX Swiss: ADXN) Q1 2026 Earnings Call

0:00 Good day, and thank you for standing by. Welcome to the Addex Therapeutics First Quarter twenty twenty six Financial Results and Corporate Update Conference Call and Webcast. At this time, all participants are in listen only mode. After the speakers' presentation, there will be the question and answer session. To ask a question during the session, you need to press 11 on your telephone keypad. You will now hear an automatic message advising your hand is raised. To withdraw your question, please press 11 again.

0:29 If you wish to ask a question via the webcast, please use the Q and A box available on the webcast link at any time during the live event. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Tim Dyer, CEO. Please go ahead. Hello, everyone. I would like to thank you all for attending our Q1 twenty twenty six financial results conference call. I am here with Mikhail Kalinichev, our Head of Translational Clients, who will provide an update on our R and 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.

1:20 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 mGAR5 negative allosteric modulator program for brain injury recovery and the GABA B positive modulator program for cough. I will then review our twenty twenty six Q1 financial results. Following that, we will open the call for Q and A. So starting with the highlights, Q1 has seen several important achievements across our pipeline. We have made excellent progress in our GABA B positive modulator COF program as we continue to complete preclinical characterization of alpha lipids compounds.

2:09 We recently announced robust anti occlusive activity in a non human primate COF model, as well as solid anti occlusive 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 secure funding to advance the program into the IND enabling studies. Mikael will be sharing some of the data with you later in our presentation. We've repositioned diproglurant, our MGLR5 negative allosteric modulator of brain injury recovery. I've made good progress in preparing the program for clinical studies in post stroke recovery patients.

2:57 In 2025, we entered into an option agreement giving us access to an exclusive license to intellectual property covering the use of MLR5 in brain injury recovery, including stroke and TBI. Included in the agreement is a research collaboration, under which we are working with Syntaxis and the University of Lund in Sweden to complete preclinical profiling of diproglarant and prepare for 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 Neurosterics and raise £65,000,000 from a syndicate of investment led by Perceptive Advisors.

3:48 We retained a 20% equity interest in Neurosterics. The value of which is unfortunately not being properly reflected in our current share price. NeuroStarix has made excellent progress in advancing its pipeline including its M4 PAM and mGluR7 NAM programs. The lead drug candidates in the M4 PAM program, NTX253, is in Phase I, and we expect data in Q3 this year. On the financial side, we completed the quarter with CHF0.9 million of cash and have successfully raised CHF0.3 million in Q2. Given that our cash burn is extremely low following the Neurosteric spinout, this provides us with cash runway through into Q4 of twenty twenty six on a going concern basis.

4:40 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 dipaglutide. And we are executing our plans to reposition the development for brain injury recovery. As a reminder, we have regained the rights to ADX71149 from our partner J and 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.

5:27 For our GABA BPAM collaboration with Indivior, Indivior has selected a compound for development in substance use disorders and has successfully completed IND enabling studies. As a reminder, under the terms of the agreement, ADXN is eligible for payment of up to £330,000,000 of successful achievement of our pre specified regulatory clinical and commercial milestones, as well as tiered royalties on the level of net sales from high single digit up to low double digits. As mentioned earlier, we are advancing an independent GABA B 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, Neurosterics. We are expecting Phase I data from NTX-two 53 program in Q3.

6:17 Backup M4 PAM compound NTX-five twenty nine has been selected for IND enabling studies, which should start shortly. The mGlu7NaM program has selected NTX-eight a highly selective first in class compound, which has demonstrated robust preclinical anxiolytic and antidepressant like activity, which supports its development as a potential next generation therapy. We expect NTX-eight 19 to complete IND enabling studies in the coming months. Now I will hand over to Misha, who will give you some more details about our exciting portfolio. Thanks, Tim. Hello, everyone. I will start by speaking about dupaglutide and our plans for development in brain injury recovery.

7:05 Dupaglutide is an orally available, highly selective Mglu5 negative allosteric modulator, which we believe could improve the outcome of rehabilitation for patients suffering from traumatic brain injury or stroke.

7:20 The mechanism of action of dipragorant targets neuroplasticity early in rehabilitation to promote the building of neuronal connections and sensorimotor recovery. The unmet medical need and commercial opportunity in post stroke and TBI recovery is undisputed. Stroke is among the leading causes of chronic, often lifelong disability, as it leads to motor sensory cognitive impairment and multiple comorbidities. There are over one hundred million stroke survivors worldwide, and the number is growing at the annual rate of twelve million. A variety of rehabilitation therapies are used with post stroke patients, but the recovery is slow and often inadequate.

8:09 There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by rehabilitation therapy. Now to why mblu5nm is such a great target for this indication. Mblu5 receptor is a suitable target to address post stroke recovery as it is densely expressed in the brain, involved in neuroplasticity, and modulate excitatory inhibitory equilibrium. In fact, activation of MOR5 has been observed in a large range of neurological disorders, including stroke, which plays a role in so called maladaptive rewiring of the brain following stroke.

8:57 Inhibition of MgLo5, 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 lesion 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 ulceric modulator of M05 MTEP administered daily in RADS following stroke 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 motor function that was observed in animals treated with our MD5NAM dipraglutide.

9:54 We are currently working with our collaboration partner, Syntaxis, to complete the preclinical profile of dupaglutide in this animal model. In addition to the compelling in vivo data, MRI imaging of the resting state functional connectivity in post stroke products show that daily administration of mTeP also stimulates intra and interhemispheric 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.

10:42 Dipraglutide 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 dipraglutide can become a first in class drug to facilitate post stroke recovery. We can also speculate that the praglutide mediated adaptive rewiring and facilitation of recovery following brain damage would also be seen in traumatic brain injury patients.

11:33 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 GABA B positive allosteric modulator COF program. As a part of our agreement with Indivior, Addex has exercised its right to select a compound to advance its own independent gabapam program for the treatment of chronic cough. I will now present this exciting opportunity. There is a strong rationale for developing GABA vPAMS for chronic cough. Chronic cough is a persistent cough that lasts more than eight weeks and can be caused by a variety of factors, including respiratory infections, asthma, allergies, and acid reflux, but also possibly by a cough hypersensitivity syndrome.

12:36 There's a large unmet medical need in novel anti use of drugs as current standards of care are ineffective at thirty percent of patients, or only moderately effective in up to sixty percent of patients. In addition, the current treatments carry risks of serious side effects. Support for using GABA B PAMs 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 neuronal pathway regulating cough. Therefore, we believe that GABA B PAMs could offer superior efficacy in cough patients.

13:28 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 on one mg per kg and ED50 of six mg per kg in cough frequency in a KINO PIC 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 sedation biomarker.

14:15 Recently we confirmed the antiducive efficacy in the nonhuman primates and are currently and now currently evaluating the compound in rabbits. IND enabling studies are planned and ready to start subject to securing financing. Now to the data. In the model of citric acid induced cough in Guinea pigs, acutely administered compound A delivered a robust anti use of efficacy, reducing the cough number dose dependently and achieving 70% reductions at the maximum dose. The anti juicy profile of compound A was similar to that of nalbuffin, or repitant baclofen, and codeine.

15:06 Now to cough latency. Compound A increased latency to first cough dose dependently, thus delaying the onset of cough. The antiducive profile of compound A in delaying cough onset was similar or better than that of reference drugs. As a reminder, our objective in the program is to design a gabapam 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 sixty mg per kg.

16:00 In contrast, nalbuphine or repitant baclofen and codeine resulted in robust reductions of respiratory rate at doses required to achieve maximal efficacy indicative of sedative like effects. When we evaluated the antidotes of efficacy across compounds at the respective highest doses free from respiratory effects, compound A was shown to be superior to nalbuphine or repitant baclofen codeine in both COF number and COF latency measures. In the model of ATP potentiated citric acid COF in guinea pigs in a head to head comparison experiment, acutely administered compound A and the P2X3 inhibitor had similar efficacy and tolerability profiles.

16:51 As a reminder, P2X3 inhibitors are activities peripherally mediated, which explains their lack of sedative effects, but also the reason for more than thirty percent of cough patients do not respond to treatment. In the citric acid induced cough model, subchronic administration of compound A for seven days showed no signs of tolerance, neither in cold frequency nor in latency to first cough. Also, were no changes in the respiratory rate, body temperature, and gross hormone release in animals treated subchronic with compound A. Compound A was also assessed in the IPF related exacerbated chronic cough model in guinea pigs. Here's the study design.

17:43 On day zero, animals received a single oropharyngeal administration of bleomycin or were left intact. Bleomycin exposed animals were then treated with compound A or V Go orally once daily for twenty eight days. Intact animals received V Go. On day seven, fourteen, 21, and 28, animals were exposed to low concentrations of citric acid to stimulate cause. On day 28, at the end of the experiment, the lung tissue was collected for histopathological analysis. The total number of cause was significantly higher in bleomycin exposed vehicle treated animals than in healthy controls.

18:34 This difference between the groups grew progressively larger over time,

18:39 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 magnitude. The latency to first call showed significant reductions in bleomycin exposed vehicles treated 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. 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 vehicles treated animals. This suggests that compound A administered over twenty eight days reduced lung fibrosis.

19:49 Now to the nonhuman primate cough 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 coughs at two mgs per kg. In summary, we have selected a clinical candidate for chronic cough with a robust reproducible anti use of efficacy at one mg per kg and good PKPD. The compound showed a favorable developability profile in non GLP tox studies performed in rats, 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.

20:44 Subjects to raising financing, we are ready to start the IND enabling studies. This concludes our prepared remarks on the progress of our R and D programs. Now I hand it back to Tim. Thanks, Alicia. Now for a review of our Q1 twenty twenty six financials. Starting with the income statement. The operating loss amounts to CHF0.5 million in Q1 twenty twenty six compared to CHF0.6 million in Q1 twenty twenty five. The decrease of 100,000 between both periods is primarily due to reduced outsourced R and D. As a reminder, on 04/02/2024, we received an equity interest of 20% in Neurosterics as part of our Neurosterics Finance transaction.

21:38 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 three month period ended 03/31/2026, our share of the net loss of Neurosterics amounted to $1,300,000 compared to $800,000 for the three month period ended 03/31/2025. This increase is primarily driven by the move of NTX-two fifty three into clinical development by NeuroStar. The net loss amounted to $1,700,000 during the first quarter, compared to $1,500,000 during the same period ended 03/31/2025.

22:26 Again, strongly driven by the increase in our share of the Neurosterics net loss compensated by a reduction in our own internal net loss, which reduced by 23%. Now to the balance sheet. We completed Q1 with $900,000 of cash held in Swiss francs and to a lesser extent US dollars compared to the $1,600,000 held at the end of twenty twenty five. The decrease of $800,000 is primarily due to our operating loss of $500,000 and an increased net working capital of $300,000 driven by one off annual payments made at the beginning of the year such as retirement benefit contributions and insurance premiums.

23:19 Our current assets amounted to CHF25,000 primarily related to increased prepaid retirement benefits. Our non current assets of CHF3.5 million at the end of March primarily relates to our investment in urosterics accounted for using the equity method, and to a lesser extent, our investments in SOLICLA. Current liabilities remained steady at 1,200,000 at the end of March compared to December and primarily relate to accruals and payables from outsourced R and D and professional service activities. Non current liabilities primarily relate to the retirement benefit obligations calculated in accordance with IAS 19.

24:06 It amounted to $300,000 at the end of Q1 compared to $400,000 at the end of December.

24:17 Now to the cash flow statement. We started the quarter with $1,600,000 We used $766,000 for operations primarily to raise R and D and G and A activities. We received $65,000 from the sale of treasury shares and completed the year with 935,000

24:38 Sorry, completed the quarter with 935,000 As mentioned in the highlights, we have been active with our ATM facilities both on the NASDAQ and the SIX exchange and have raised small amounts of capital in Q2 to strengthen the balance sheet while we await good news from our key outcomes in The U. Area.

25:03 Now to summarize. We have made excellent progress advancing our GABA B PAM program for cough and our diprogram post stroke recovery program. Our spin out company, Neurosterics, continues to advance its portfolio with their M4 PAM program on track to complete Phase I Q3. We are very pleased by the progress Delicca is making in advancing on its business strategy and pipeline. We are looking forward to completing our evaluation of potential indications for our mGAR2PAM 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 so much, dear participants. This will take a few moments.

26:05 Once again, if you would like to ask a question, please press 11. And now we're going to take our first question. And it comes from the line of Raghuram Selvaraju from H. C. Wainwright and Co. Your line is open. Please ask your question. Thanks so much for taking our questions. We have four of them. Two of these relate to the chronic cough 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 Nalbuphine extended release. And also, 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

26:58 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 cough intensity in that context? And to what extent you rely on those measurements relative to the assessment of the lung tissue? Thank you. Yes, happy to answer the question. Let me start with the first, which is comparison of Nalupin with our candidate compound A. As you saw on the slide that I shared, the overall profile is very, very similar. Compound A appears to be more potent. We see a minimal effective dose at one, whereas with Nalbuphine one needs to administer three in exactly the same model in guinea pigs where COF is stimulated by citric acid inhalation.

27:58 And in terms of maximal efficacy both deliver approximately seventy percent reduction. The difference comes from the tolerability aspect of nalbuphine versus gabapam. Here at the top dose thirty mg per kg we see significant reductions in respiratory rate and it's nicely aligned with what we know on the tolerability profile and albufin in clinical trials where it showed CNS related side effects even at the dose which was lower to the one corresponding dose to the one we tested in animals. Even at the efficacious dose which roughly aligns to three to five mgs per kg

28:48 in a guinea pig if we use 75 kilo calculation for a human body weight. So based on that we expect similar efficacy to now be buffing but markedly wider therapeutic margin. And regarding your second question on the formulation, our current formulation is expected to deliver once daily compound. 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.

29:47 And that contrasts with nalbufin very well as with nalbufin even extended release formulation requires twice daily administration. So that shows another advantage of gabobipam clinical candidate over Norbufin.

30:09 There was also a question on intensity. We use plasmography chambers that deliver cough frequency and cough latency. There is no way of measuring cough intensity with that setup. The cough 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.

30:44 Okay. And then with respect to the Neurosterics 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 possible future public listing of neurosterrics. I was also wondering if from a scientific perspective, you could comment on the complex interplay between muscarinic receptor signaling pathways, and in particular, if you could talk a little bit about, and this doesn't necessarily have to be solely in the context of what neurosterics is doing, although I presume that is probably the most relevant aspect.

31:41 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 applicability within the context of schizophrenia versus depression? Thank you. Okay. So let me take the first one about the equity holding. Thank you very much for the questions. So yeah, let's just rewind. I mean, look, we founded Neurosterics really as a financing vehicle for some of our preclinical programs.

32:29 And if you remember back and you dig into the press releases back in 2024, Eurosteryx raised $65,000,000 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 Neurosterics at about $20,000,000 Now clearly, with a market cap of $8,000,000 today, there seems to be a little bit of a disconnect. Now what we know about neurotherics is that neurotherics has advanced, in the last two years, an M4 PAM from clinical candidate selection substantially through phase one. And we're expecting phase one to complete very soon, with data coming out in Q3.

33:34 Phase It's also identified a backup compound in the M4 PAM program called NTX529, which is ready to go into IND enabling studies. It's advanced the mGAR7, 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?

34:22 We have had some inbound interest. One strategy could be to monetize the Neurosterics interest and sell it, and to then use the proceeds to invest in our COF program. Alternatively, at some point, we'll 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 ADXN to comment on that. However, we are evaluating all opportunities regarding building value for our shareholders with that equity position.

35:22 Now, what I would like to do is hand over to Nisha, who will talk at length, because he is very knowledgeable about the muscarinic space. Thank you, Tim. So we believe that the contribution of M1 into the antipsychotic efficacy of Coventry, which is a coadministration of zanomalin atrospil, 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.

36:15 As you know, there were multiple companies that were developing M1, muscarinic M1 selected compounds for cognitive improvement and all those clinical trials show lack of activity. Some also showed a range of muscarinic cholinergic side effects, which also brought additional aspects to consider. If we look at animal studies that evaluated antipsychotic like profile of zanomalin in rodents, it was very clear that the main bulk of activity, if not exclusively in an amphetamine induced hyperactivity model is driven by muscarinic M4 receptor with virtually no contribution from M1.

37:14 So, and then of course we have positive 1b clinical trial with emeraclidin. Putting all together, we believe that having a selective and for positive modulator will be able to deliver clinical efficacy which we see with SonomaLib. That was the main question. Then you mentioned receptor seven. I believe you had in mind MGO R7, am I correct? Yes, MGO R7. The interplay between that and M1 and M4 systems, systems, yes. Yes. Well, there is no direct evidence of interaction between muscarinic M4 and mGluR7.

38:15 There is some evidence of interaction between mGluR7 and mGluR8. They may create heterodimers, and their co administration can have an impact on the outcome. But I'm not aware of any functional interaction between these two receptors. Thank you. Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star 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.

39:28 Thank you. And 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, end of your week. Thank you. Bye bye. This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.