Earnings call transcript: Addex Therapeutics highlights Q1 2025 progress

Addex Therapeutics (ADXN) reported a Q1 2025 income decrease to $100,000 from $200,000 year-over-year, while cash reserves of CHF 2.8 million are expected to fund operations through mid-2026; the stock saw a modest 1.05% premarket increase. The company is advancing its drug development pipeline, notably the GABA B PAM program for chronic cough, with IND-enabling studies planned for this year and dipaglutide repositioned for brain injury recovery. Despite declining revenue and cash burn concerns, analysts project sales growth for the year, and the CEO expressed optimism about dipaglutide's potential in stroke recovery.

Analysis

Addex Therapeutics (ADXN), a $7 million market capitalization biotech, reported a challenging Q1 2025 with income halving to $100,000 year-over-year and a significant 74.6% decline in last-twelve-months revenue, highlighting concerns regarding its cash burn rate despite CHF 2.8 million in reserves stated to cover operations through mid-2026 and a strong current ratio of 4.42. The modest 1.05% premarket stock increase and a high beta of 1.99 underscore the stock's speculative nature and volatility. Offsetting these financial headwinds are strategic advancements in its drug pipeline: the GABA B PAM program for chronic cough has demonstrated robust preclinical efficacy, with IND-enabling studies planned for this year, contingent on securing additional financing. Dipaglutide, its mGluR5 NAM candidate, has been repositioned for brain injury recovery, backed by preclinical data and intellectual property agreements, with management targeting a first-in-class therapy for stroke. Furthermore, Addex's partner, Indivior, completed IND-enabling studies for a partnered GABA B PAM candidate, potentially unlocking future milestone payments up to $330 million and royalties for Addex. While analysts project sales growth for the current year, profitability remains distant, and the CEO has acknowledged that current cash does not sufficiently fund the clinical progression of its unpartnered programs, indicating a crucial need for further capital to advance its independent assets.

Key Decisions for Investors

• Investors should evaluate Addex's promising preclinical pipeline, particularly in chronic cough and stroke recovery, against its immediate financial pressures, including declining revenue and the explicit need for additional financing to advance key programs into clinical trials.
• Key catalysts to monitor include the initiation of IND-enabling studies for the GABA B PAM chronic cough program, clinical developments for dipaglutide, any new strategic partnerships, and critically, updates on the company's capital raising efforts to fund its development pipeline.
• Given Addex's small-cap status, significant cash burn, and high stock volatility (beta of 1.99), any investment carries substantial speculative risk and should be sized appropriately, with a clear understanding of the company's dependence on future clinical success and adequate funding.