Addex Therapeutics Q3 2023 Earnings Call Transcript

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November 29, 2023

There are 4 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Addex Therapeutics Third Quarter 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be the question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to our speaker today, Tim Dyer. Please go ahead.

Speaker 1

Thank you. Hello, everyone. I would like to thank you all for attending our Q3 2023 financial results conference call. I'm here with Robert Lugens, our Head of Discovery Biology and Mikhail Kuchev, our Head of Translational Science. I draw your attention to the press release and the financial statements issued earlier today, which are available on our website.

Speaker 1

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 achievements before handing over to Robert and Mikael, who will review our clinical and preclinical pipeline. I will then review our Q3 financial results. Following that, we will open the call for Q and A.

Speaker 1

Starting with the highlights, our partner Janssen completed recruitment of the ADX-seven eleven-fourteen-nine Phase 2 epilepsy study earlier this month We confirmed that data is expected in Q2, 2024. I'd like to remind you that an independent interim review committee established by Janssen to review the unblinded data from Part 1 of Cohort 1 made its recommendation to continue the study. This recommendation and the decision of Janssen to continue the study is very encouraging and suggests that 149 is safe and well tolerated and may be having a positive impact on this patient population. We have made substantial progress in our collaboration with our partner Indivior and advancing several novel GABAA B compounds, clinical candidate selection. As a reminder, Indivior primary interest is in substance use disorder.

Speaker 1

And under the agreement, we have retained the right to select drug candidates for development in certain exclusive preserved indications. We are focusing our independent program on cough. During Q3, we have continued to advance compounds through clinical candidate selection, with multiple compounds showing excellent efficacy in multiple preclinical of cough. In Q3, we announced the extension of our collaboration through June 2024 with CHF 2,700,000 of additional research funding committed by Indivior. We expect Indivior and ourselves to select compounds to advance into IND enabling studies in 2024.

Speaker 1

We lead a consortium we led a consortium, which has secured €4,000,000 grant to advance our mGluR2 negative modulator cognition program through lead optimization to clinical candidate selection phase. We also continue to believe there is value in diproglutant, our Phase 2 ready compound and have substantially completed our evaluation of the future development. We've put in post stroke recovery as an interesting area for future development. We're currently profiling different preclinical models of post stroke recovery. Furthermore, preclinical data was recently published in the journal BRAIN, which strongly supports the rationale for the inhibition of M5 receptors as a treatment for post stroke recovery and the development of dipoglerone in this important unmet medical need.

Speaker 1

We are in parallel pursuing discussions with potential partners to advance future development of dipoglerone. And last but not least, our M4 PAM program for schizophrenia, which is now a priority program for us continues to make rapid progress through clinical candidate selection base and is on track to start IND enabling studies in the second half of next year. From a financial perspective, we continue to pursue discussions with potential partners across the portfolio and tightly control costs. As of today, we estimate that our cash reserve provides us with a runway through Q1, 2024. Now I will hand over to Robert, who will give you some more details about our existing pipeline.

Speaker 2

Thanks, Tim. Hello, everyone. I will start by speaking about our Phase 2 epilepsy study with ADX-seven thousand one hundred and forty nine, which is being executed by Janssen. Janssen is making excellent progress and has recently completed recruitment of 110 patients across 2 cohorts. Epilepsy is a large multibillion dollar market opportunity where despite several of its restrictions many patients are still in need of improved therapies to treat disease.

Speaker 2

As a reminder, ADX-seven thousand one hundred and forty nine is a mesobotopicretimat receptor subtype 2 or mGlu2 positive allosteric modulator discovered in partnership with Janssen using Addix's proprietary allosteric modulation platform. ADX-seven thousand one hundred and forty nine has demonstrated both total amnificacy and a strong synergistic effect in combination with inhibitors of SV2a, such as Keppra and BRIZIACT. 149 has also been thoroughly profiled in preclinical and clinical studies by Janssen, demonstrating its good safety and tolerability profile in healthy volunteers and patients. Janssen is responsible for development and are currently operationally executing both the Phase II study and an open label extension study in epilepsy patients. We have significant economics in our deal with Janssen with pre launch milestones of €109,000,000 low double digit royalties on net sales and Janssen is responsible for all development costs.

Speaker 2

To illustrate the synergistic effect seen with the combination of 149 and evisiketan, the active molecule in Keppra, here is the data obtained in the 6 hertz psychomotor seizure model, widely recognized as having high translational value to characterize the efficacy of antiepileptic drugs. As a reminder, ADX-seven fourteen-nine given alone in this model produces a robust protection against 6 Hertz in DLSS with an ED50 determined to be approximately 20 milligrams per kilo. In combination studies with varying doses of lindiacetam, a fixed dose of 149 increased the potency of levetiracetam leading to an approximate 35 fold shift in ED50. Conversely, using a fixed dose of levetiracetam with varying doses of ADX-seven thousand one hundred and forty nine, levetiracetam increased the potency of 149 leading to an approximate 14 fold shift in its ED50, suggesting a positive pharmacodynamic relationship or strong synergistic effects for the 2 molecules when given in combination. This extraordinary effect of a combination of an mGRU2 PAM with an SV2A antagonist has been patented offering a strong protection for this program until 2,035 without additional extensions.

Speaker 2

This is the Phase 2 study design. The study is a double blind, placebo controlled, proof of concept study enrolling patients with focal oncetuses who have suboptimal response to treatment with Capra or Briviat. As mentioned, the study has BREVIACT. As mentioned, the study has completed recruitment of 110 patients across 2 cohorts evaluating 2 doses. In this Phase 2 study design, patients establish a 28 day seizure count over a 56 day baseline period prior to being randomized to receive either a non client or matching placebo.

Speaker 2

The primary endpoint is the time taken to return to their monthly baseline seizure count. The study has 2 parts, part 1 being the 4 week acute efficacy phase and the Part 2 being an 8 week maintenance of efficacy phase. Part 2 includes patients who did not reach their baseline seizure count during Part 1 of study and continue on their randomized drug or placebo. An open label extension study is ongoing in parallel, offering all patients the opportunity to get treated with 7,149 in combination with levetiracetam or blivaracetam. As previously announced in May, an independent interim review committee convened by our collaboration partner was rendered to continue the study following review of unblinded data from Part 1, patient cohort 1.

Speaker 2

This was encouraging news suggesting 149 is safe and well tolerated and potentially offering benefits to epilepsy patients. We look forward to sharing the top line release of course 12 in Q2 of 2024. I now pass it over to Micha, who will update you on the DIPROGLARANT and GARABPAM programs.

Speaker 3

Thank you, Robert. Following termination of the development of Algonquin in PD Lid, we embarked on the detailed evaluation of a number of potential indications of interest for future development, including substance use disorder, migraine and other forms of pain. We have completed this exercise and have identified post stroke recovery as an interesting indication for the future development of DIPRABLULRAT. We believe the differentiated profile of DIPRABLULRANT makes it particularly useful for post stroke recovery. There is a large unmet medical need in post stroke recovery and rehabilitation.

Speaker 3

Stroke is among leading causes of chronic, often lifelong disability as it leads to motor, sensory, cognitive impairments and multiple comorbidities. There are over 100,000,000 stroke survivors worldwide and the number is growing at the annual rate of 12,000,000. A variety of rehabilitation therapies are used with post stroke patients, but the recovery is slow and inadequate. There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by rehabilitation therapies. ENGlur5 receptor is a suitable target to address post stroke recovery as it is densely expressed in the brain, involved in neuroplasticity and modulates excitatory inhibitor equilibrium.

Speaker 3

In fact, activation of our VAR5 receptor has been observed in a range of neurological disorders, including stroke, where it plays a role in maladaptive rewiring of the brain following stroke. Inhibition of AMGAR5, on the other hand, can facilitate adaptive rewiring of the brain, promoting neuroplasticity and creating of new functional pathways moving the neural network towards a pre lesion state. Exciting new evidence recently published in the journal BRAIN suggests that negative oscillate modulator of mGluR5 receptor, MTEP, administered daily in rats following stroke results in a sustained and growing improvement in sensory motor function in comparison to vehicle treatment. Similar improvement in sensory motor function was observed in animals treated with our mGuard-five now, Deepraglarant. MRI imaging of the resting state functional connectivity in post stroke rodents shows that daily administration of MTEP also stimulates intra and interhemispheric connectivity in the brain disrupted by stroke.

Speaker 3

It is important to note that improvement in brain connectivity after stroke is known to correlate with functional recovery and is observed across species. Etopraglenec is ideally suited to be used in tandem with rehabilitation therapies in post stroke patients and 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 drug product ready, patent position and believe dipaglutin can become a 1st in class drug to facilitate post stroke recovery. Let me now switch to our preclinical programs, starting with our GABA B positive allylated modulator program, which is partnered with Indivior.

Speaker 3

The aim of this collaboration is to deliver a new treatment for substance abuse disorders. Indivior is supporting the research at ADEX and has recently committed an additional CHF 2,700,000 funding for us to complete clinical candidate selection activities in addition to CHF 13,800,000 total funding so far. As a reminder, GABA B receptor activation has been clinically validated in a number of disease areas using baclofen, a GABA B autosteric agonist. Baclofen is an FDA approved drug for treatment of spasticity and is widely used off label to treat numerous diseases, including substance use disorder. However, baclofen has a short half life and comes with significant side effects, hampering its wider use.

Speaker 3

Thus, there is a strong need for the back half. We believe that we can achieve this positive modulator approach and their differentiates pharmacology having the efficacy of Baclofen, but longer half life and improved side effect profile. We are well on our way to meeting with multiple novel drug candidates rapidly advancing through clinical candidate selection phase, with a aim to nominate drug candidates to enter IND enabling studies in 2024. As part of our agreement with Indivior, we have the right to select drug candidates from the funded research activities for our own independent gaba Bpam program. We have selected to focus our independent program on cough.

Speaker 3

Therefore, I will present this exciting opportunity. There is a 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 an overactive cough reflex. There is a large unmet medical need in novel anti use of 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.

Speaker 3

Support for using GABAPAPANDS in treatment of chronic cough comes from the clinical evidence of GABAPA B agonist is used off label in cough patients and from the anatomical evidence that GABAPA B receptors are strongly expressed in airways and in the neural pathway regulating cough. Therefore, we believe that gabavipamse could offer superior efficacy in cough patients. On the next slide, we show that cabozutops are likely to have a superior visibility profile in comparison to the current standards of care and show no taste related side effects as seen with the newly approved P2X3 inhibitor, gefapixant. Therefore, we believe that could be an innovative new treatment of chronic cough administered once daily via oral dosing and offering improved efficacy and tolerability with fewer non responder patients suitable for chronic dosing, therefore significantly improving patient quality of life. We are working with multiple compounds progressing in late clinical candidate selection phase, and we expect to move into IND enabling studies in 2024 in parallel to delivering compounds to our partner in DVR.

Speaker 3

I will now pass it back to Robert for an update on our other preclinical programs.

Speaker 2

Thanks, Micha. Let me start with an update on our M4 PAM program as a potential novel treatment of schizophrenia and other psychosis. The schizophrenia affects approximately 1% of the world population and patients have been using the same mechanism of action for the last 50 years with limited efficacy and significant durability issues often leading to treatment discontinuation and relapse. This space is seeing a major breakthrough with the advent of a completely novel approach based on activation of Muscarinic M4 Acetylgline receptors. The recent filing of an NDA and acceptance by FDA are currently the addition of xenomelene, a non selective M1M4 agonist and a peripherally restricted pan muscarinic antagonist strongly validates the M4 receptor activation approach.

Speaker 2

In addition, a Phase Ib testing of emiracridine, an M4 positive arstek modulator developed by Cerevel in schizophrenia patients showed an antipsychotic effect, paving the way for our M4 positive arstek modulator program. The mechanism of action of musicaremic M4 acetylcholine receptors allows to reduce striatal dopamine tone without directly blocking the dopamine receptors, the strategy used by current antipsychotic agents. This allows to retain a therapeutic effect without the start effect of typical and atypical antipsychotics. Standard of care antipsychotics as well as non selective muscarinic agents suffer from significant side effects, leading to high treatment discontinuation rate. CAR XT represents a significant step in providing a new treatment of schizophrenia patients, but poor selectivity of pregnancy will result in suboptimal tolerability.

Speaker 2

Our allosteric modulation approach is providing many advantages over an agonist approach, in particular with absolute receptor subtype selectivity and without the potential side effects linked to constant receptor activation, such as receptor desensitization and reduced efficacy due to tolerance. The aim of our M4 plus immunization program is to identify highly selective and brain penetrant molecules, offering potential best in class efficacy and tolerability. We are currently working on highly differentiated and novel chemical series identified from our proprietary chemical library specific allosteric modulation biological assays. We have made great progress in optimizing compounds, identifying highly M4 selective compounds, demonstrating an effect in preclinical models of schizophrenia for several lead compounds and have now entered into clinical candidate selection phase, aiming to identify the candidate strategy to enter IND enabling studies in 2024. Onto our mGlu2 negative our stake modulator program for mild neurocognitive disorders associated with Alzheimer's disease, Parkinson's disease and depression.

Speaker 2

The program has been awarded a €4,000,000 grant to allow identification of 1 or more drug candidates to advance into IND in the study space. Mild neurocognitive disorder, or MNCD, is the stage between expected cognitive decline of normal aging and the more serious decline of dementia. Besides being potentially the early signs of Alzheimer's disease, MNCD is also often experienced by patients suffering from depression. Cabotravalence is approximately 15% and augments significantly with age, affecting up to 25% of people aged 80 or more. Interestingly, MNCD is currently viewed as an intervention window for delaying the onset of dementia.

Speaker 2

There is currently no more public drug mild neurocognitive disorders. Some drugs such as acetylcholine acetyl inhibitors are being prescribed, but show limited efficacy and come with significant side effects. There is therefore a strong unmet medical need for better treatment options. The details by inhibiting presynaptic MGRU2 receptors, our negative our state modulators will counteract the synaptic deficits observed in M and CD by increasing the excitability of neurocircuits involved in cognition. This objective was also followed with positive diastolic modulators of AMPA or AMPA kinds, which pharmaceutical companies tried to develop without success.

Speaker 2

Pampakines seem to induce class related side effects, and we strongly believe our mglutininam approach will successfully address MNCD without having these side effects. Besides being potentially the early sign of Alzheimer's disease, MNCD is also often experienced by patients suffering from depression. Developing mGlu2 NAM offers the exciting opportunity to treat cognitive impairment while also addressing symptoms of depression. Both cognitive and antidepressant effects have been demonstrated in relevant preclinical models with our mglutinam candidate compound. Our project has been awarded a €4,000,000 grant, and it has 1 or more drug candidates to enter IND enabling studies.

Speaker 2

Eurostar funds highly innovative projects to address unmet needs. Therefore, we see this as a significant validation of our project while providing us with funds for 3 years. Hadex will lead a consortium of highly experienced teams with complementary expertise through the optimization of a series clinical candidate selection phase before identifying clinical drug candidates to enter IND enabling studies by end of 2025. In summary, our drug discovery engine has made great progress with multiple drug candidates advancing towards IND enabling studies. The renewed commitment of our PARP individual and the recent award of a €4,000,000 grant a further validation of the quality and productivity of our hysteric modulation platform.

Speaker 2

This concludes our prepared remarks on the progress of our R and D programs. I now hand it back to Tim.

Speaker 1

Thanks, Robert. I'll now switch to an overview of the financials. Starting with the income statement, we recognized $300,000 of income in Q3 compared to $400,000 in Q3 of Q2. The primary source of revenue is research funding from our collaboration with Indivior. In terms of expenses, R and D expenses were $11,800,000 in Q3 2023 compared to $2,800,000 in Q3 20 22.

Speaker 1

The decrease of $1,000,000 is primarily due to the termination of typical development in PD Lid in June of 2022. G and A expenses were $1,200,000 in Q3 compared to $1,800,000 in the same period as 2022. The decrease of $600,000 is primarily due to reduced share based service costs and decreased D and O insurance. The finance result is primarily related to foreign exchange gains on U. S.

Speaker 1

Dollar cash deposits and to a lesser extent to interest income. Out of the balance sheet, our assets are primarily held in cash and we completed Q3 with CHF 4,800,000 of cash held in Swiss francs and U. S. Dollars. Other current assets amount to $1,000,000 and primarily relate to prepaid D and O insurance and retirement benefits.

Speaker 1

Related to our agreement with Indivior. Current liabilities of $1,900,000 decreased by $1,400,000 compared to December 31, 2022 and primarily relate to our R and D payables and accruals. Non current liabilities of $300,000 decreased $200,000 compared to December 31, 2022 and primarily relate to retirement obligations. Now to summarize, so ADX-seventy one-one hundred and forty nine Phase 2 epilepsy clinical study completed recruitment of patients and top line results are expected in Q2 of next year. We believe the recommendation of the independent review committee to continue this study is very encouraging and suggest that 149 could be having positive impact on patients.

Speaker 1

We continue to believe in the value of DIPOGRAN and are completing preclinical profiling in post stroke recovery. In parallel, we are pursuing collaborative arrangements to advance development and look forward to sharing more information in the future. Our preclinical programs continue to make solid progress towards delivering drug candidates for future clinical development and important therapeutic areas like stress related disorders, chronic cough, cognition, schizophrenia. As a reminder, our portfolio was discovered in house from our pioneering allostate modulator drug discovery platform. Consequently, we have significant intellectual property on all programs.

Speaker 1

We have a track record of securing partnerships at the preclinical stage and supported top tier investors. We recognize the 2023 stock performance and current market capitalization is very disappointing. However, we are having multiple business discussions across our portfolio and strongly believe that if we are successful in executing our near term partnering strategy, then our stock price should move to recognize the value of our portfolio. This concludes the presentation, and we will now open the call for questions.

Operator

Thank you. Now we're going to take our first question over the phone. And it comes from the line of Leonilde Delgado from Baader Helvea. Your line is open. Please ask your question.

Speaker 3

Hi. Thanks for taking my question. So the question is, what can we expect if the epilepsy readout in 2Q 2024 is positive? So the question is basically what is the immediate implication for Adex in 2024? Thank you.

Speaker 1

Yes. So thanks for the question. Well, the immediate implications for Adex, well, as you know, Janssen is operationally executing and they're responsible for financing the study. And so Addix has very little, well, no control over the future development and we have very limited visibility. However, we believe that the data that's been generated, J.

Speaker 1

D. Is received because they've looked at 2 doses. So should the study be positive, then we would expect the program to be moved forward into a pivotal study. But again, we don't have visibility on exactly what the plans of Janssen are with respect to future development.

Speaker 3

Thank

Operator

you. Thank you. At this moment, there are no further questions over audio lines and we will proceed to any written questions. And the first question comes from the line of Peter Allick and the question is €4,000,000, EUR4,000,000 grant, when will the money be paid?

Speaker 1

Yes. So yes, some of that money comes to AbEx and some of that money goes to consortium partners. And we are seeing that money to be or a significant part of the money that's allocated to Addex to be received by Addex quite soon. But we are not providing the details of how that money is split at the current time.

Operator

Thank you. The next question comes from the line of Jesse Brodkin. In the IRB review of unblinded data from 149, were efficacy measures unblinded? Also, were any changes in dosage made between cohort 1 and cohort 2?

Speaker 3

Yes.

Speaker 1

So thanks for the question. Yes. So the independent interim review committee had some very clear guidance from Janssen. And they had they were given clear guidance that they should recommend to stop the study if they give it a certain level of

Speaker 3

split

Speaker 1

between active dose and placebo. And the fact that they and also of course, if they saw any safety significant safety issues, then they had to recommend to stop. Now, the recommendation to continue means that they must have seen at least a signal of efficacy and no safety significant safety concerns. Now and that was cohort 1. Now what we know is that cohort 2 is a higher dose than cohort 1.

Speaker 1

And this is why we are very encouraged by the combination of the recommendation to get the answer to continue and the fact that cohort 2 is a higher dose. And now that they have completed recruitment, we are guaranteed of data. I hope that answers your question.

Operator

Thank you. Thank you, ladies and gentlemen. This brings the main part of our conference for a close. And I would now like to hand it back to Tim Dyer for any closing remarks.

Speaker 1

Well, thank you everyone for attending the Q3 conference call and the corporate update. We look forward to speaking to you again soon. And just wish you a nice end of your day. Thank you. Bye bye.

Operator

That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.

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Key Takeaways

  • Our partner Janssen completed recruitment of 110 patients in the Phase 2 epilepsy trial of ADX-71149, with an independent interim review recommending continuation and top-line data expected in Q2 2024.
  • Indivior extended its GABAA B collaboration through June 2024, committing CHF 2.7 million in additional research funding to advance multiple clinical candidates toward IND-enabling studies next year.
  • A consortium led by Addex secured a €4 million grant to progress its mGluR2 negative allosteric modulator cognition program through lead optimization to clinical candidate selection.
  • The M4 positive allosteric modulator program for schizophrenia has entered clinical candidate selection and remains on track to begin IND-enabling studies in the second half of 2024.
  • With CHF 4.8 million in cash at the end of Q3, Addex projects its cash runway only through Q1 2024, underscoring the urgency of new partnerships or financing.
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Earnings Conference Call
Addex Therapeutics Q3 2023
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