Good day and thank you for standing by. Welcome to the Addex Therapeutics Half Year 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be the question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Dyer. Please go ahead.

Hello, everyone. I'd like to thank you all for attending our half year 2023 financial results conference call. I am here with Robert Lutjens, our Head of Discovery Biology; and Mikhail Kalinichev, our Head of Transition Science. 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 disclaimers. We will be making certain forward-looking statements that are based on the knowledge we have today. I'll start this conference call by giving a quick overview of our recent achievements before handing over to Robert and Mikhail, who will be reviewing our clinical and preclinical pipeline. I will then review our half year 2023 financial results. Following that, we will open the call for questions. So starting with the highlights. Our partner, Janssen, continued to make excellent progress in executing their global Phase 2 study in epilepsy patients with ADX71149. Cohort 1 of 60 patients has completed the study and Cohort 2 of 50 patients is currently recruiting. An independent interim review committee established by Janssen to review the unblinded data from Part 1 of Cohort 1 recently made its recommendation to continue the study. This recommendation and the decision of Janssen to continue the study is very encouraging and suggests ADX71149 is potentially safe and well tolerated and may have a positive impact on this patient population. Recruitment of Cohort 2 is going well, and we look forward to providing further updates on this important clinical study later this year, including providing guidance on when we can expect to report data. We continue to believe there is value in dipraglurant and have substantially completed our evaluation of future development. We have identified post-stroke recovery as an interesting area for future development and are…

Thanks, Tim. I will start by speaking about our Phase 2 epilepsy study with ADX71149, which is being executed by Janssen. Janssen is making excellent progress with Cohort 1 of 60 patients completed and Cohort 2 of 50 patients currently recruiting well, an independent interim review committee established by Janssen, reviewed the unblinded data from Part 1 of Cohort 1 and recently made its recommendation to continue the study. This recommendation and the decision of Janssen to continue the study is very encouraging. As an introduction to this program, for those of you who are not aware of the details, ADX71149 is a metabotropic glutamate receptor sub-Type 2 or mGlu2 positive allosteric modulator discovered in partnership with Janssen using Addex's proprietary allosteric modulation platform. Janssen have extensively profiled ADX71149 in preclinical models of epilepsy and has demonstrated both stand-alone efficacy and a strong synergistic effect in combination with inhibitors of SV2A such as Keppra and Briviact. Epilepsy is a large multibillion-dollar market opportunity where despite several available treatment options many patients are still in need of improved therapies to treat the seizure. Interestingly, Keppra, while being largely sold as a generic is still leading the market of antiepileptic with close to CHF1 billion sales revenue per year. Over 2 million patients are taking Keppra, but many experienced breakthrough seizures, or a suboptimal response, demonstrating the need for improved treatment options. ADX71149 has been thoroughly profiled in clinical and preclinical studies by Janssen, demonstrating its good safety and tolerability profile and healthy volunteers and patients. Janssen are responsible for the development of the compound and are currently running both Phase 2 study and an open-label extension study in epilepsy patients. It is important to note, we have significant economics in our deal with Janssen. We have prelaunch milestones of CHF109 million,…

Thank you, Robert. Following termination of the development of dipraglurant 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 the other forms of pay. We have completed this exercise and have identified post strong recovery as an interesting indication for the fuel development of dipraglurant. We believe that the differentiated profile of the program makes it particularly suitable for post-stroke recovery. There is large unmet medical need in post-stroke recovery and rehabilitation. Stroke is a common cause of chronic often lifelong disability as it is an associated with 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 5.7 million. There are variety of physiotherapies use with strong patients, but the recovery is slow, and typically mild to moderate. There is an urgent need for pharmacological agents that can facilitate the recovery stimulated by physical therapies. mGlu5 receptor is a suitable target to address post-stroke recovery as it is densely expressed in brain involved in neuroplasticity and modulate [indiscernible] in fact activation of mGlu5 has been observed in the range of neurological disorders including stroke where it placed the role and so-called maladaptive rewiring of the brain following stroke. Inhibition of mGlu5 on the other hand, can facilitate adaptive wiring of the brain, promoting plasticity and creating of new functional pathways moving the neural network towards the pre-lesion state. Exciting new evidence suggests that negative allosteric modulator of the mGlu5 receptor MPEP administered daily in rent following stroke causes a sustained and growing improvement in sensory motor function in comparison to vehicle treatment. Similar improvement can be seen with mGlu5 dipraglurant. Dipraglurant is ideally suited to be used in…

Thank you, Mikhail. Let me start with an update on our M4 PAM program as a potential novel treatment of schizophrenia and other psychosis. Schizophrenia affects approximately 1% of the world population, and patients have been treated with the same mechanism of action for the last 50 years with limited efficacy and significant tolerability 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 acetylcholine receptors. The recent positive readout of a third Phase 3 registrational study of CAR XT, a combination of xenominine, a nonselective M1/M4 agonist, and a peripherally restricted pan-muscarinic antagonist strongly validates the M4 receptor activation approach. In addition, a Phase 1b testing of emraclidine and M4 PAM developed by cerebral and schizophrenia patients showed an antipsychotic effect paving the way for our M4 PAM program. Without going into too much detail, the mechanism of action of muscarinic M4 acetylcholine receptors allow us 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 side effects 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 and emraclidine are significant steps up in the realm of schizophrenia treatments, but selectivity issues may still result in suboptimal tolerability. We are, therefore, in our M4 positive allosteric modulation program aiming at identifying highly selective and brain-penetrant molecules, offering potential best-in-class efficacy and liability. We are currently working on a highly differentiated and novel chemical series identified from our proprietary chemical library of small molecules with our specific allosteric modulation biological assays. We have made great…

Thanks, Robert. I'll now switch to an overview of the financials. Starting with the income statement, we recognized CHF0.6 million of income in Q2 compared to CHF0.2 million in Q2 of 2022. Primary source of revenue continues to be the research funding from our collaboration partner, Indivior. In terms of expenses, R&D expenses were CHF1.9 million in Q2 compared to the CHF5.8 million in Q2 of 2022. This significant decrease of CHF3.9 million is primarily due to the termination of different development in PD-LID in June of 2022 and the winding up of all the costs related to this study. G&A expenses were $1.3 million in Q2 compared to $1.5 million in Q2 of 2022. The decrease of CHF0.2 million is primarily driven by reduced costs of D&O insurance. The finance result is primarily related to foreign exchange losses on U.S. dollar cash deposits. Now on to the balance sheet. Our assets are primarily held in cash, and we completed Q2 with CHF7.2 million of cash held in Swiss francs and in U.S. dollars. Other current assets amount to CHF1.5 million and primarily relate to prepayments in D&O insurance premiums and retirement benefit as well as trade receivables that mainly relate to the research agreement with Indivior. Current liabilities of CHF2.7 million decreased compared to the end of 2022 and primarily relate to R&D, payables and accruals. Noncurrent liabilities relate mainly to retirement benefit obligations. Now to summarize. The development of 71149 in epilepsy is ongoing with Cohort 2 recruiting patients, and we are encouraged by the recommendation of the independent review committee to continue the study. We continue to believe in the value of they put on completing preclinical profiling in post-stroke recovery. In parallel, we are pursuing collaborative arrangements to advance development and look forward to sharing more information on this subject in the future. Our preclinical programs continue to make solid progress towards delivering drug candidates for future clinical development and important therapeutic areas, including stress-related disorders, chronic cough, cognition and schizophrenia. As a reminder, our portfolio was discovered in-house from our pioneering allosteric modulator drug discovery platform. And constantly, we have significant intellectual property in all programs. We have a track record of securing partnerships at the preclinical stage and supported top-tier investors. We recognize that 2023 stock performance and current market capitalization is very disappointing. However, we are having multiple business discussions across our portfolio. And we believe strong believe that if we are successful in executing our near-term partnering strategy that 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 Instructions] The first question comes from the line of Boobalan Pachaiyappan from H.C. Wainwright. Please ask you question.

This is Boobalan dialing in for Ram Selvaraju. Firstly, with respect to the proof-of-concept epilepsy trials being conducted by Janssen, I'm curious when the top line data will be released.

Yes, excellent question. So as we pointed out, Cohort 1 of 60 patients is completed. Cohort 2 has been recruiting for some time. So it's well on its way to be recruited. Now if you look on clinicaltrials.gov, Janssen are guiding the completion for April 2024. They're also talking about recruiting up to 160 patients in three cohorts. So at the moment, we are having discussions with Janssen about being able to give some guidance on the answer to your question. So at the moment, we are not able to tell you when results are going to come out. But it very much depends on whether Janssen move into a third cohort, as you can imagine. If you look at what we've said and you look at what's in clinicaltrials.gov, you can imagine that, that is all dependent. So as soon as we have information from Janssen, and we are authorized to communicate, we'll be communicating publicly. And I'm hoping to be able to do that before the end of the year. So I'm sorry, I can't give you a better answer than that, but now you know where we stand.

That's fair enough. And then secondly, with respect to the Indivior collaboration, then might a candidate be advanced into the clinic?

Yes. So, this discovery program has received significant financial resources from Indivior. I mean another CHF2.7 million of commitment added to the CHF13.8 million that's already been spent. And it's been very, very successful. There are multiple drug candidates, and we are -- Indivior a sort of choice, they are profiling many candidates in parallel. We are also profiling a separate set of candidates for chronic cough. And I think we're in a very, very good shape to be able to select a compound by the end of the year, beginning of next year with the ideal profile. I would like to give you more detail about what that ideal profile is. But unfortunately, at the moment, we are keeping that confidential.

That's clear. And then thirdly, do you have any updates on the initiative to unlock value from dipraglurant?

Sorry, can you repeat your question? I didn't quite hear that.

Do you have any updates on the initiative to unlock value from dipraglurant?

Yes. So as Mikhail said, we've done -- we've wrapped up the PD-LID development. We still believe in PD-LID but we believe there are some significant challenges about running clinical studies in PD-LID. So we have decided, following a detailed analysis to go into post-stroke recovery. And we've secured an option to license a use patent of mGlu5 in post-rate recovery. And we are now working with a group and a third party to profile dipraglurant in preclinical models of stroke, post-stroke recovery. And if the data from that preclinical evaluation comes out successfully, we will be moving the compound into post-stroke recovery. In parallel, we are having discussions with multiple partners who have some interest in post-stroke recovery but also have interest in dipraglurant for some of the other disease areas where there's some significant validation. We know where these discussions start. We just never know where they end.

Great. And then one final question from us. Can you discuss your cash runway guidance?

Yes. So we've -- as you can see, we've significantly reduced the cash burn. Many of the activities we've spoken about are being funded through non-dilutive funding and are not being funded by our balance sheet. I mean, the Janssen collaborations funded by Janssen, the whole GABAB program is being funded by Indivior. And dipraglurant stroke is not being funded by us either. So we've managed to even as a dual listed public company, really reduce our cash burn, CHF7.2 million on the balance sheet at the end of June. We're burning well under CHF1 million a month. You can see that the G&A is becoming a significant part of the overall cash runway because as we spend less and less of our balance sheet actually on the R&D. But we are guiding today in our best estimate based on what we're planning to achieve is that we will have cash through into 2024. And if we further cut back on activities, we can probably extend it for even longer.

[Operator Instructions] There are no further questions at this time. And I would like now to hand the conference over to Tim Dyer for any closing remarks.

Thank you. Well, thank you, everyone, for attending our Q2 first half results conference call. We very much look forward to speaking to you again soon, and being able to update you on the progress we're making. I wish you all a very nice day.

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