Addex: Refocusing, Restructuring And Realigning

Addex Therapeutics Ltd. (ADDXF) is now focused on developing its clinical pipeline for rare diseases and will significantly reduce discovery activities. In 2013 Addex will complete a pilot Phase II study of dipraglurant for rare dystonia and target a partnership for the Parkinson’s disease (PD) indication. It will also complete a Phase I study of ADX71441 for Charcot-Marie-Tooth (CMT) disease, as well as select a clinical candidate for the mGlu4 PAM programme in multiple sclerosis. While Addex is currently financed to end-2013, potential licensing deals and/or financings could extend the cash runway.

0BRefocusing, restructuring and realigning
Following a strategic review, Addex will now focus on developing its clinical-stage pipeline in rare (orphan) disease indications. The restructuring of research operations (suspension of discovery activities) will free up financial resources to implement this new strategy. Finally, Addex has also announced plans to list on a US stock exchange (ADR on NASDAQ), which could broaden the potential US investor base.

1BDipraglurant: Pilot Phase II in rare dystonias
The rationale for dipraglurant in dystonia is based on positive preclinical data and initial clinical findings in the Phase II study in PD, where the drug reduced levodopa-induced dystonia. We understand a Phase II trial in dystonia (start Q213) will readout in Q413. Addex will seek to partner the PD levodopa-induced dyskinesia (PD-LID) indication.

2BADX71441: Advancing into Phase I for CMT1A
ADX71441 is being developed for CMT Type 1A (CMT1A) disease, a rare inherited neurological disease. A Phase I study in healthy volunteers (start Q213) will assess the safety, tolerability and initial biological activity of ADX71441. Provided results are positive in Q413, the drug could enter a Phase IIa study in CMT1A patients in 2014.

3BCash runway to end-2013
Addex had cash of CHF15.3m at year-end 2012. We now model CH15m in operating expenditure for 2013, including restructuring related costs. On our revised projections, and barring new partnerships and/or financing, Addex is financed to year-end 2013.

4BValuation: Risk-adjusted NPV of CHF218m
We value Addex at CHF218m ($236m) or CHF25.40 per share. Our rNPV assumes industry-standard success rates for drugs based on their development stage and a hypothetical 18% royalty on dipraglurant and 12% on JNJ-40411813.

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