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

Hello, everyone. I’d like to thank you all for attending our 2023 financial results conference call. I’m 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 the 2023 activities and recent achievements before reviewing our pipeline. I will then hand over to Mikhail, who will review in more detail some of the clinical and preclinical programs. I will then speak about the recent launch of Neurosterix before reviewing our 2023 full year financial results. Following that, we will open the call for Q&A. So to start with the highlights, our partner Janssen has completed the Phase 2 epilepsy clinical study and we are now expecting to report data from the study by mid-May this year. I’d like to remind you that an Independent Interim Review Committee established by Janssen to review the unbiased 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 ADX71149 is safe and well tolerated and may be having a positive impact on this patient population. We continue to believe there is value in Dipraglurant and have substantially completed our evaluations of future development for dyskinesia and Parkinson’s disease we have worked with experts on a new trial design, which we believe will overcome the recruitment challenges we encountered in the past. However, our preferred strategy for this indication is…

Thanks Tim. Hello everyone. I will start by speaking about our Phase 2 epilepsy study with ADX71149, which has been completed recently by Janssen. Epilepsy is a large multi-billion-dollar market opportunity where despite several available treatment options, many patients are still in need of improved therapies to their -- to treat their seizures. As a reminder, ADX71149 is a metabotropic glutamate receptor subtype 2 or mGluR2 positive allosteric modulator discovered in partnership with Janssen using Addex’s proprietary allosteric modulation platform. ADX71149 has demonstrated both standalone efficacy and a strong synergistic effect in combination with inhibitors of SV2A such as Keppra and Briviact. ADX71149 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 responsible for development have just completed both the Phase 2 study and an open label extension study in epilepsy patients. Results are expected by mid-May this year. We have significant economics in our deal with Janssen with pre-launch milestones of €109 million, low double-digit royalties on net sales and Janssen is responsible for all development costs. To illustrate the synergistic effect, same with the combination of ADX71149 and levetiracetam, the active molecule in Keppra, here are the data obtained in the 6 hertz psychomotor seizure model widely recognized as having high translational value to characterize the efficacy of anti-epileptic drugs. As a reminder, ADX71149 given alone in this model produces a robust protection against 6 hertz induced seizures with an ED50 of approximately 20 mgs per kg. In combination studies with varying doses of levetiracetam, a fixed dose of ADX71149 increased the potency of levetiracetam leading to approximately 35-fold shift in its ED50 values. Conversely, using a fixed dose of levetiracetam with varying doses of ADX71149, it increased the potency of ADX71149…

Thanks, Mikhail. Now, before I move on to the financials, I would like to spend a few moments to speak about the Neurosterix transaction. Due to the excellent progress made by our R&D team in advancing our unpartnered preclinical portfolio, our M4 PAM, mGlu7 NAM and mGlu2 NAM programs reached a stage of development where they now need significant amounts of financing to progress into the clinics. Unfortunately, given the low market capitalization of Addex, raising the amount of capital needed would have been extremely challenging and highly dilutive for our shareholders, so we decided to spin out these programs and our platform into a new private company and raise the necessary capital into the new private entity. We believe this is an excellent transaction for Addex shareholders, as it has secured CHF5 million for Addex and removed the financing overhang on the Addex stock. We have retained a 20% interest in Neurosterix, so we can benefit from the upside from advancing the programs into the clinic, which is now secured by the $63 million capital from a high-quality investor syndicate led by Perceptive Advisors. As part of the transaction, we have divested our allosteric modulation technology platform, including the majority of our staff and significantly reduced our cash burn going forward. However, we have entered into a service agreement with Neurosterix to ensure that we can access the skills needed to execute on our business strategy. Now, for a review of our 2023 financial results. Starting with the income statement, we recognize CHF1.6 million of income in 2023, compared to CHF1.4 million in 2022. The primary source of revenue is research funding from our collaboration with Indivior, which is recognized as the associated research costs are incurred. In terms of expenses, R&D expenses were CHF7 million in 2023, compared…

Thank you. [Operator Instructions] And now we’re going to take our first question and it comes from the line of Joanne Lee from Maxim Group. Your line is open. Please ask a question.

Hi. This is Joanne speaking. Thanks for taking the question, and firstly, congratulations on the Neurosterix deal. So now that you know you’ve secured some funding through that deal, what are the upcoming actions, specifically which program are you prioritizing for advancement?

Yeah. So we continue to execute on the Indivior collaboration. So our primary focus is to deliver the clinical candidates so that Indivior can make their selection by the end of June. Because under the deal, we have the right to then select second choice. They have third choice. We have fourth choice. So that’s really our priority, because once Indivior are able to select, it means we can also select and that will then give us the candidate that we can advance into the IND-enabling studies for the cough program.

Gotcha. So I’m getting that the priority would be the GABAB program and the Indivior. So I’m aware that you guys have been releasing some positive preclinical data and are currently in the candidate selection phase. I wanted to ask what specific criteria are you considering when evaluating potential candidates for this program? And as a follow-up, additionally, regarding the collaboration with Indivior, it’s currently set to continue until the end of June. Are you considering independently moving the asset into the clinic or are there discussions underway to extend that collaboration further? Thank you.

Yeah. So, in addition to the GABAB program, we also have Dipraglurant. We’ve done a lot of work to design a new study in PD-LID. We’ve also -- we are currently completing preclinical work in the stroke recovery area. Now, Addex has continued to dialogue with potential partners and we continue to have discussions not only around Dipraglurant in PD-LID, but Dipraglurant in post-stroke recovery. But also we have started to identify some potential partners for the GABAB cough program. However, you can imagine, we are not going to -- we are not free to disclose much information about the GABAB candidates until Indivior has exercised their selection, because at the moment, while we have a good idea of which candidates they will select and which candidates we will select, until they have formally selected, they have first choice, so they could select any of the candidates, which means we are not at liberty to disclose any information about the candidates. And to your question about, how we are characterizing and what the target product profile would look like of the different candidates and that’s confidential information and we’re not at liberty to disclose it. I’m sorry about that.

Got it. Well, that’s very helpful. Really exciting stuff ahead and thanks again for taking the questions.

You’re welcome. Thanks.

Thank you. Now we’re going to take our next question. Just give us a moment. And the next question comes to the line of Raghuram Selvaraju from H.C. Wainwright & Co. Your line is open. Please ask your question.

Thanks very much for taking my questions and congratulations on all the progress, the Neurosterix transaction in particular. Just wanted to ask, first of all, with respect to the M4 program, can you give us a sense, Tim, of what some of the recent precedent transactions or comparators might be in this space? And what implications that could have for Neurosterix, as well as Addex’s stake in Neurosterix going forward, especially if you continue to have development success with work regarding that specific target?

Yeah. Hello, Ram. Thank you very much for the question. And yeah, at the back end of last year, Cerevel, which is leading the field in muscarinic M4 positive allosteric modulators with Emraclidine and they’re in Phase 2. They were purchased for a little south of $9 billion by AbbVie, so that’s a very nice comparator. We believe our program is about two and a half years behind theirs, and clearly that M&A activity, I would say, sharpened the interest of Perceptive and the investor syndicate that has put the $63 million behind Neurosterix. And then, coming pretty quickly after the Cerevel M&A, BMS purchased Kar -- Karuna, which has filed for registration with a product called KarXT. Now, KarXT is an M4, M1 preferring agonist. So, again, much of the efficacy that’s been seen in the phase three program of KarXT is coming from the in schizophrenia, I should say, is coming from its M4 agonist activity, which is a very strong validation, again, of the M4 PAM approach in schizophrenia. Now, again, we’re some way off from filing for registration. However, we have $60 million on the balance sheet of Neurosterix. We are owning 20% of it. And so you can imagine we have got the capital to advance the M4 PAM program through Phase 1 development.

Excellent. Also can you just clarify two other points? The first is, with respect to the other programs that Neurosterix plans to advance, maybe give us a flavor of what the target indications might be beyond schizophrenia or adjunctive therapy in schizophrenia, which probably would be the most appropriate application of the M4 pathway modulator, as well as if there are likely to be any future targets that Addex could conceivably retain the right to pursue using the original Addex technology platform or if these are all going to ultimately be taken forward by Neurosterix? Thank you.

Yeah. The technology platform and all the preclinical programs except for the GABAB PAM are all now in Neurosterix. And therefore, Addex’s interest in these is through our equity interest, which we plan to protect going forward. So the other targets which are being financed are the mGluR7 and the -- this is the negative allosteric modulator program for stress-related disorders and there are a number of very interesting indications in neuropsychiatry, but we’re not at liberty to disclose those. And then there’s the mGluR2 negative modulator program, which has gone across to Neurosterix, along with the Eurostar grant that was secured last year. So this has, in addition to the, of course, some of the $60 million that’s sitting in Neurosterix, it also has the Eurostar consortium grant, which is driving that program rapidly forward with the consortium to the clinical candidate selection, but currently is in lead optimization. And again, this program is for cognition and cognition is an unmet medical need across a number of neurodegenerative disorders. And again, we’re not at liberty to disclose the details of some of those indications that we’ll be going after. And there is another program on an undisclosed neurological target and we certainly have the plans within Neurosterix to definitely leverage the platform. But again, I’m not at liberty to disclose details of those activities at the current time.

Thank you very much. And just one quick housekeeping item, if I may. Can you tell us whether the equity stake that Addex has in Neurosterix is in any way preferred and/or if Addex might in the future have the ability or the option, or at least, would not be restricted in any way from investing in Neurosterix and future funding rounds in order to maintain the 20% equity holding? Thank you.

No. Addex has the same rights as the investors and Addex has the right to participate pro rata in all future financing and our intention is to protect our 20% interest in Neurosterix going forward. But as you can imagine…

Thank you very much.

… so as you can imagine, with $60 million on its balance sheet, we don’t expect to have to participate in a future fundraising for quite some time.

Agreed. Thank you.

Thank you. [Operator Instructions] And now we’re going to take our next question. And the question comes to the line of Michael Okunewitch from Maxim Group. Your line is open. Please ask a question.

Hey there. Good morning or good afternoon everyone. Thank you for taking my questions and congrats on all the progress this past quarter. So, I guess, I’d like to ask just on the epilepsy program, given that that data is approaching, could you remind us of the criteria that the IRC were using to determine whether or not to proceed with that?

Yeah. So we haven’t actually disclosed the criteria. However, there were some criteria. So what we know today is that the Independent Review Committee and must have seen at least a signal in Cohort 1 for Part 1. So the first four-week acute efficacy period in Cohort 1. So that was 60 patients after four weeks. We know that they must have seen at least the signal. Otherwise, they would not have recommended to continue. They also would not have seen any safety and tolerability issues. So those are the two things we know, because we’re not -- but we don’t actually know what the criteria were. But we know that that’s the details that we know and that’s what we’re allowed to disclose. I am sorry…

Thank you for that. I would like to see, are you at liberty to discuss any more granularity on the pre-launch milestone structure for that program? But in particular, if any are attached to that Phase 2 data?

Right. So if you look through the previous disclosure, Addex received a milestone when J&J dosed first patient in Phase 1. We also received a milestone when J&J dosed the first patient in Phase 2. We’re also at liberty to disclose that the €109 million of milestones are all development and regulatory. So there’s no sales milestone included in that amount. So I think you can sort of work out. And if you look at the amounts of the Phase 1 and Phase 2 milestones, you could probably work out when the next milestone is coming and you can probably work out that it’s pretty back-ended. So, we’re not relying on any cash inflows from this partnership to finance Addex for some time.

All right. Thank you. And that actually just leads into my last question. Just more of a, I guess, modeling and financial angled question. I just wanted to see if you could help me understand what assumptions are going into your runway projection and then how much of the previous burn way -- burn rate was dedicated to staff and programs that are now being handled at Neurosterix?

Yeah. So we have significantly removed the operating burn of Addex. So now what is not included in our guidance of into 2026 is the cash required to fund basic -- a clinical development of Dipraglurant, for example, and we have not included the cost required to develop the cough program. What we have included there is the cost of operating Addex and so operating -- being a public company, operating an IR business development, finance activity and some preclinical work on Dipraglurant for the stroke indication and some clinical activities to prepare the development plan for Dipraglurant in stroke and in the dyskinesia in Parkinson’s and plus some money to finish off the preparation and the CMC for the GABAB cough program.

All right. Thank you very much for taking my questions today and once again congrats on the fantastic progress.

Thank you.

Thank you. And now we will proceed to any written questions. Just give us a moment. We have a few questions from the webcast. The first question comes from Michael Hofer [ph], and his question is, how high the first milestone payment is to be expected?

Oh! I’m sorry, but we’re not at liberty to disclose that information. As I pointed out in the response to one of the previous questions and there was a publicly disclosed Phase 1 milestone and a publicly disclosed Phase 2 start milestone. But we’re not at liberty to guide on the next milestone, I’m afraid.

Thank you. We have another question from Michael Hofer. What will be the forecasted expenses in 2024? Do they drop significant and from which month?

Yeah. So we’re not disclosing the details of the forecast. However, I mean, if you look at the expenses of 2023 will be significantly reduced because all the facilities, all the majority of the staff have moved to Neurosterix and that is effective the 1st of March.

Thank you. We have another question from Michael Hofer. Why no number can be named of these milestones payments? There are for sure contracts and the amount are written down. How much is the next milestone payment to be expected? I expect here a clear number?

Well, you’ll need to talk to J&J, because J&J have not authorized us to give any granularity around the economics of the contract with them. We have a contract, we have confidentiality clauses in the contract and we respect the confidentiality that we’ve signed up to. And I hope Mr. Hofer can respect that position.

Thank you. [Operator Instructions] There are no further questions. I would now like to hand conference over to Tim Dyer for any closing remarks.

Well, thank you everyone for attending our 2023 conference call and thank you very much for your questions. We look forward to speaking to you again soon. Have a very nice day.

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