Addex Therapeutics (NASDAQ:ADXN) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below.

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Summary

Addex Therapeutics reported significant progress in its GABAB Positive Modulator Cough program, with preclinical data showing strong antitussive activity in non-human primates and guinea pigs.

The company is preparing Diproglurant for clinical studies in post-stroke recovery patients, with recent repositioning efforts and collaborations enhancing its development.

The financial report showed an operating loss of 0.5 million Swiss francs for Q1 2026, a decrease from the previous year due to reduced outsourced R&D. Cash on hand was 0.9 million, providing a runway into Q4 2026, but not enough for unpartnered programs.

Addex retains a 20% equity interest in Neurosterix, which has advanced its M4PAM program into Phase 1, though this value is not reflected in Addex's current share price.

The company is in discussions to secure funding for its independent GABAB program for cough and has potential milestone payments of up to 330 million in its collaboration with Indivior for substance use disorders.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the Addex Therapeutics first quarter 2026 financial results and Corporate Update Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press Star 11 on your telephone keypad. You will then hear an automatic message advising your hand is raised.

To withdraw a question, please press Star 11 again. 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.

Tim Dyer, Chief Executive Officer

Hello everyone. I would like to thank you all for attending our Q1 2026 financial results conference call. I am here with Mikhail Kalinichev, our Head of Translational Science, who will provide an update on our R&D program. I draw your attention to the press release and the financial statements issued earlier today, which are available on our website. I also draw your attention to our disclaimer. We will be making certain forward-looking statements that are based on the knowledge we have today.

I will start this conference call by giving a quick overview of our recent activities and achievements before reviewing our pipeline. I will then hand over to Misha, who will review in more detail our MGLUR5 negative allosteric modulator program for brain injury recovery and the GABAB Positive Modulator program for cough. I will then review our 2026 Q1 financial results. Following that, we will open the call for Q&A. So starting with the highlights, Q1 has seen several important achievements across our pipeline.

We have made excellent progress in our GABAB Positive Modulator Cough program as we continue to complete preclinical characterization of our selective compound. We recently announced robust antitussive activity in a non-human primate cough model as well as solid antitussive 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 have repositioned diproglurant, our MGLUR5 negative allosteric modulator for brain injury recovery, and have made good progress in preparing the program for clinical studies in post-stroke recovery patients. In 2025, we entered into an option agreement giving us access to an exclusive license to intellectual property covering the use of MGLUR5 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 Diproglurant 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 Neurosterix and raised 65 million from a syndicate of investors led by Perceptive Advisors.

We retained a 20% equity interest in Neurosterix, the value of which is unfortunately not being properly reflected in our current share price. Neurosterix has made excellent progress in advancing its pipeline, including its M4PAM and MGLUR7NAM programs. The lead drug candidate in the M4PAM program, NTX253, is in phase one, and we expect data in Q3 this year. On the financial side, we completed the quarter with 0.9 million Swiss francs of cash and have successfully raised 0.3 million in Q2.

Given that our cash burn is extremely low following the Neurosterix spin-out, this provides us with a cash runway through into Q4 of 2026 on a going concern basis. 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 diproglurant and we are executing our plans to reposition the development for brain injury recovery. As a reminder, we have regained the right to ADX 71149 from our partner JJ 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. For our GABAB PAM 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, Addex is eligible for payment of up to 330 million on successful achievement of 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-digit.

As mentioned earlier, we are advancing an independent GABAB 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 Neurosterix. We are expecting phase one data from the NTX253 program in Q3. The backup M4PAM compound, NTX529, has been selected for IND enabling studies, which should start shortly. The MGLUR7NAM program has selected NTX819, 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 NTX819 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.

Mikhail Kalinichev (Head of Translational Science)

Thanks, Tim. Hello everyone. I will start by speaking about Dipraglurant and our plans for development in brain injury recovery. Dipraglurant 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. The mechanism of action of Dipraglurant targets neuroplasticity early in rehabilitation to promote rebuilding 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 100 million stroke survivors worldwide, and the number is growing at the annual rate of 12 million. A variety of rehabilitation therapies are used with post-stroke patients, but the recovery is slow and often inadequate.

There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by rehabilitation therapy. Now to why mGlu5 NAM is such a great target for this indication. The mGlu5 receptor is a suitable target to address post-stroke recovery as it is densely expressed in the brain, involved in neuroplasticity, and modulates excitatory-inhibitory equilibrium. In fact, activation of mGluR5 has been observed in a large range of neurological disorders, including stroke, where it plays a role in so-called maladaptive rewiring of the brain following stroke.

Inhibition of mGlu5, 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 allosteric modulator of mGlu5, MTEP, administered daily in red 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 mGlu5 NAM, Dipraglurant. We are currently working with our collaboration partner, Syntaxis, to complete the preclinical profile of Dipraglurant in this animal model. In addition to the compelling in vivo data, 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.

It is important to note that improvement in brain connectivity after stroke is known to correlate with functional recovery and is observed across species. Dipraglurant 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 Dipraglurant can become a first-in-class drug to facilitate post-stroke recovery. We can also speculate that Dipraglurant-mediated adaptive rewiring and facilitation of recovery following brain damage would also be seen in traumatic brain injury patients. The next step in clinical development is to perform an imaging study in stroke patients to show the intra- and interhemispheric connectivity in the brain disrupted by stroke.

Now I would like to update you on our GABAB Positive Allosteric Modulator (PAM) program. As a part of our agreement with Indivior, Addex has exercised its right to select a compound to advance its own independent GABAB PAM program for the treatment of chronic cough. I will now present this exciting opportunity. There is a strong rationale for developing GABAB PAMs 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.

There is a large unmet medical need in novel antitussive drugs as current standards of care are ineffective in 30% of patients or only moderately effective in up to 60% of patients. In addition, the current treatments carry risks of serious side effects. Support for using GABAB PAMs in the treatment of chronic cough comes from the clinical evidence that Baclofen, a GABAB agonist, is used off-label in cough patients and from the anatomical evidence that GABAB receptors are strongly expressed in airways and in neuronal pathways regulating cough.

Therefore, we believe that GABAB PAMs could offer superior efficacy in cough patients. The pre-IND activities including in vivo proof of concept, non-GLP tox, and CMC have been completed and our clinical candidate has shown favorable efficacy, tolerability, and developability profiles. Our clinical candidate has demonstrated a consistent minimum effective dose of 1 mg/kg and an ED50 of 6 mcg/kg in cough frequency in a guinea pig model of cough. No signs of tolerance were seen after sub-chronic dosing and more than a 60-fold safety margin was demonstrated based on respiratory depression as a sedation biomarker.

Recently, we confirmed the antitussive efficacy in non-human primates and are 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 antitussive efficacy, reducing the cough number dose-dependently and achieving 70% reductions at the maximum doses.

The antitussive profile of compound A was similar to that of Nalbufin, Orbipitant, Baclofen, and Codeine. Now to cough latency, compound A increased latency to first cough dose-dependently, thus delaying the onset of cough. The antitussive profile of compound A in delaying cough onset was similar or better than that of reference drugs. As a reminder, our objective in the program is to design a GABAB PAM with the efficacy of reference compounds but without the CNS side effects such as sedation.

In the same experiment where 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 60 mg/kg. In contrast, Nalbufin, Orbipitant, 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 antitussive efficacy across compounds at the respective highest doses free from respiratory effects, compound A was shown to be superior to Nalbufin, Orbipitant, Baclofen, and Codeine in both cough number and cough latency measures in the model of ATP-potentiated citric acid cough in guinea pigs. In a head-to-head comparison experiment, acutely administered compound A and the P2X3 inhibitor had similar efficacy and tolerability profiles. As a reminder, P2X3 inhibitors' activity is peripherally mediated which explains their lack of sedative effects but also the reason why more than 30% of patients do not respond to treatment. In the citric acid-induced cough model, sub-chronic administration of compound A for seven days showed no signs of tolerance neither in cough frequency nor in latency to first cough.

Also, there were no changes in the respiratory rate, body temperature, and gross hormone release in animals treated sub-chronically with compound A. Compound A was also assessed in the IPF-related exacerbated chronic cough model in guinea pigs. Here's the study design. 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 vehicle orally once daily for 28 days.

Intact animals received vehicle. On days 7, 14, 21, and 28, animals were exposed to low concentrations of citric acid to stimulate cough. On day 28, at the end of the experiment, lung tissue was collected for histopathological analysis. The total number of coughs was significantly higher in bleomycin-exposed vehicle-treated animals than in healthy controls. This difference between the groups grew progressively larger over time, indicative of exacerbated cough in an 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 cough showed significant reductions in bleomycin-exposed vehicle-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. A 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 vehicle-treated animals. This suggests that compound A administered over 28 days reduced lung fibrosis. Now to the non-human primate cough data, similar to what we saw in guinea pigs. In the model of citric acid-induced cough in non-human primates, compound A demonstrated more than 60% reduction in the number of coughs at 2 mcg/kg. In summary, we have selected a clinical candidate for chronic cough with a robust, reproducible antitussive efficacy at 1 mcg/kg and good PK/PD.

The compound showed a favorable developability profile in non-GLP tox studies performed in rats, dogs, and non-human primates. The compound has the potential to have the best-in-disease efficacy and tolerability profile and broad application in chronic cough patients subject to raising financing. We are ready to start the IND enabling studies. This concludes our prepared remarks on the progress of our R&D programs.

Tim Dyer, Chief Executive Officer

Now I hand it back to Tim. Thanks, Misha. Now for a review of our Q1 2026 financials. Starting with the income statement, the operating loss amounts to 0.5 million Swiss francs in Q1 2026 compared to 0.6 million in Q1 2025. The decrease of 0.1 million between both periods is primarily due to reduced outsourced R&D. As a reminder, on April 2, 2024, we received an equity interest of 20% in Neurosterix as part of our Neurosterix spin-out transaction. Under IFRS, we are required to account for the investment using the equity method of accounting and recognize our share of their results in our income statement.

For the three-month period ended March 31, 2026, our share of the net loss of Neurosterix amounted to 1.3 million compared to 0.8 million for the three-month period ended March 31, 2025. This increase is primarily driven by the move of NTX 253 into clinical development by Neurosterix. The net loss amounted to 1.7 million during the first quarter compared to 1.5 million during the same period ended March 31, 2025, again strongly driven by the increase in our share of the Neurosterix 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 0.9 million of cash held in Swiss Francs and, to a lesser extent, US dollars compared to the 1.6 million held at the end of 2025. The decrease of 0.8 million is primarily due to our operating loss of 0.5 million and an increased net working capital of 0.3 million driven by annual payments made at the beginning of the year, such as retirement benefit contributions and insurance premiums. Our current assets amounted to 25,000 Swiss francs, primarily related to increased prepaid retirement benefits.

Our non-current assets of 3.5 million at the end of March primarily relate to our investment in Neurosterix accounted for using the equity method and, to a lesser extent, our investment in Solica. Current liabilities remain steady at 1.2 million at the end of March compared to December and primarily related to accruals and payables from outsourced R&D and professional service activities. Non-current liabilities primarily relate to the retirement benefit obligations calculated in accordance with IAS 19 and amounted to 0.3 million at the end of Q1 compared to 0.4 million at the end of December.

Now to the Cash Flow Statement. We started the quarter with 1.6 million. We used 766,000 for operations primarily related to R&D and G&A activities. We received 65,000 from the sale of treasury shares and 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 a very small amount of capital in Q2 to strengthen the balance sheet while we wait for good news from our finance company.

Now to summarize, we have made excellent progress advancing our GABAB PAM program for COF and our Diprochloron Post Stroke Recovery Program. Our spin-out company Neurosterix continues to advance its portfolio with their M4PAM program on track to complete phase one in Q3. We are very pleased by the progress Solica is making in advancing on its business strategy and pipeline. We are looking forward to completing our evaluation of potential indications for our MGA2 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.

OPERATOR

Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press on your telephone keypad and wait for your name to be announced. To withdraw a question, please press Star one and one again. Alternatively, you can submit your questions via the webcast. Please stand by for the Q&A roster. This will take a few moments. Once again, if you would like to ask a question, please press Star one one. And now we're going to take our first question, and it comes from the line of Raghuram Selvaraju from H.C. Wainwright & Co. Your line is open. Please ask a question.

Raghuram Selvaraju, Analyst at H.C. Wainwright & Co.

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 GABAB PAM, against Nalbufine extended release. And also, I 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 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.

Mikhail Kalinichev (Head of Translational Science)

Yes, happy to answer the question. Let me start with the first, which is the comparison of Nalbufine 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 minimum effective dose at 1, whereas with Nalbufine, one needs to administer 3 in exactly the same model. In guinea pigs, where cough is stimulated by citric acid inhalation, in terms of maximal efficacy, both deliver approximately 70% reduction.

The difference comes from the tolerability aspect of Nalbufine versus GABAB PAM. Here at the top dose, 30 mg per kg, we see significant reductions in respiratory rate, and this is nicely aligned with what we know about the tolerability profile of Nalbufine in clinical trials, where it showed CNS-related side effects even at the dose, which was lower than the one corresponding dose to the one we tested in animals, even at the efficacious dose, which roughly aligns to 3-5 mg per kg in a guinea pig if we use a 75 kg calculation for human body weight.

So based on that, we expect similar efficacy to Nalbufine but a markedly wider therapeutic margin. Regarding your second question on the formulation, our current formulation is expected to deliver a once-daily compound, so there will be no need for extended release unless we aim for something that is once weekly or once monthly. But a once-daily formulation is believed to be achievable with the current simple formulation that we have. And that contrasts with Nalbufine very well, as with Nalbufine, even the extended-release formulation requires twice-daily administration.

So that shows another advantage of the GABAB PAM clinical candidate over Nalbufine. There was also a question on intensity. We use plethysmography 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.

Raghuram Selvaraju, Analyst at H.C. Wainwright & Co.

Okay, and then with respect to the Neurosterix 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 Neurosterix. I was also wondering if from a scientific perspective you could comment on the complex interplay between muscarinic receptor signaling pathways.

In particular, if you could talk a little bit about this, it doesn't necessarily have to be solely in the context of what Neurosterix is doing, although I presume that is probably the most relevant aspect. 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 applicabilities within the context of schizophrenia versus depression.

Thank you.

Tim Dyer, Chief Executive Officer

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 Neurosterix really as a financing vehicle for some of our preclinical programs. And if you remember back and you dig into the press releases, back in 2024, Neurosterix raised 65 million, and Addex received a 20% equity holding. And if you run the numbers, you know, the 20% equity interest that Addex received was valued based on the post-money valuation of Neurosterix at about 20 million.

Now clearly with a market cap of 8 million today, there seems to be a little bit of a disconnect. Now what we know about Neurosterix is that Neurosterix has advanced in the last two years M4PAM from clinical candidate selection substantially through phase one. And we're expecting phase one to complete very soon with data coming out in Q3. It's also identified a backup compound in the M4PAM program called NTX529, which is ready to go into IND enabling studies.

It's advanced the MGLR7, 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, you know, our equity holding is not being correctly reflected. Now the question is really, do we try and monetize it? Today we have had some inbound interest. One strategy could be to monetize the Neurosterix interest and sell it and to then use the proceeds to invest in our COF program.

Alternatively, Neurosterix at some point will be executing a Series B, whether that's in the private arena or whether it's part of a public offering. You know, I'm not in a position on this call in the context of Addex to comment on that. However, we are, you know, we are evaluating, you know, all opportunities regarding, you know, building value for shareholders, for our shareholders. And with that equity position. Now, what I would like to do is hand over to Misha, who will talk at length because he is very knowledgeable about the muscarinic space.

Mikhail Kalinichev (Head of Translational Science)

Thank you, Tim. So we believe that the contribution of M1 into the antipsychotic efficacy of Cobenfi, which is a co-administration of Xanomeline and Trospium, is speculative. There is still discussion, but there is no robust data that supports that the M1 component is necessary or is contributing significantly to its efficacy either in cognition or in psychosis reduction. As you know, there are multiple companies that were developing M1, muscarinic M1 selective compounds for cognitive improvement, and all those clinical trials showed a 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 the antipsychotic-like profile of Xanomeline in rodents, it was very clear that the main bulk of activity, if not exclusively in an amphetamine-induced hyperactivity model, is driven by the muscarinic M4 receptor with virtually no contribution from M1. And then, of course, we have a positive 1B clinical trial with Emraclidine.

So putting it all together, we believe that having a selective M4 positive modulator will be able to deliver clinical efficacy, which we see with Xanomeline. That was the main question. Then you mentioned receptor 7. I believe you had in mind MGLR7, am I correct?

Raghuram Selvaraju, Analyst at H.C. Wainwright & Co.

Yes, MGLR7. The interplay between that and M1 and M4 systems. Yes.

Mikhail Kalinichev (Head of Translational Science)

Well, there is no direct evidence of interaction between muscarinic M4 and MGLR7. There is some evidence of interaction between MGLR7 and MGLR8. 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.

Raghuram Selvaraju, Analyst at H.C. Wainwright & Co.

Thank you.

OPERATOR

Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star on your telephone keypad and wait for a name to be announced. Alternatively, you can submit your questions via the webcast. Dear speakers, we will just give a moment to our participants to enter the queue. Dear speakers, 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.

Tim Dyer, Chief Executive Officer

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.

OPERATOR

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.