Good day, and thank you for standing by. Welcome to the Addex Therapeutics First Quarter 2024 Financial Results and Corporate Update Conference Call. At this time, all participants are in 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 first speaker today, Tim Dyer. Please go ahead.

Hello, everyone. I'd like to thank you all for attending our Q1 2024 financial results conference call. I'm here with Misha Kalinichev, our Head of Translational Science, who will provide an update on our R&D programs. 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 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 some of our clinical and preclinical programs, and I will then speak about the recent launch of Neurosterix before reviewing the Q1 2024 full year financial results. Following that, we will open the call for Q&A. We've made great progress in our GABAB positive allosteric modulator program, which is funded by our partner, Indivior, and are on track for Indivior to select a drug candidate for advancing into IND enabling studies at the end of this month. As a reminder, under the agreement with Indivior, we have the right to select our own drug candidate after they have selected their candidate and to develop it in eight reserve disease areas, where Indivior is precluded from developing their candidate. We have selected chronic cough and expect to complete preclinical characterization in the second half of 2024. We launched Neurosterix with a Series A financing round of $63 million led by Perceptive Advisors. This is an innovative financing transaction that provides us with the resources needed to advance our preclinical portfolio without diluting our shareholders' interest in our clinical stage asset and partner programs. As part of…

Thanks, Tim. Hello, everyone. I will start by speaking about dipraglurant and our plans for development in brain injury recovery. Following termination of the development of dipraglurant in PD-LID, we embarked on a detailed evaluation of a number of potential indications of interest for future development, including substance use disorder, migraine and other forms of pain. We have completed this exercise and have identified brain injury recovery as an interesting indication for the future development of dipraglurant. We believe the differentiated profile of dipraglurant makes it particularly suitable for enhancing the impact of rehabilitation in traumatic brain injury and stroke patients. There is a large unmet medical need in post-stroke recovery and rehabilitation. Stroke is among 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 therapies. mGlu5 receptor is a suitable target to address post-stroke recovery as it is densely expressed in the brain, involved in neuroplasticity and modulate excitatory-inhibitory equilibrium. In fact, activation of mGlu5 has been observed in a 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 creating of new functional pathways, moving the neural network towards a pre-lesion state. Exciting new evidence recently published in the journal Brain suggests that the negative allosteric modulator of mGlu5, MPEP, administered daily in rats following stroke results in…

Thanks, Misha. 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, mGlu7NAM and mGlu2NAM 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 to our shareholders, so we decided to spin out these programs and our platform into a new private company and raise the necessary capital directly into the new private company. 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 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, however, we have retained -- 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 the review of Q1 2024 financials. Following Neurosterix transaction, we were required under the IFRS standards to identify continuing operations related to the retained programs and discontinued operations related to the operations and programs that were sold to Neurosterix. All income and expense items related to discontinuing operations have been reclassed under a specific line of the comprehensive loss called net loss from discontinued operations. Starting…

Thank you. [Operator Instructions] And now we're going to take our first question. And it comes from the line of Leonildo Delgado from Baader Helvea. Your line is open. Please ask your question.

Hi, good afternoon. Thanks for taking my questions. A couple of questions on my side. In addition to the CHF5 million upfront payment, should we expect more upside for Addex when it comes to Neurosterix? And so, when would Addex be able to capitalize on 20% equity interest? And so, how big would the opportunity be?

Okay, thanks for the question. Yeah, so the CHF5 million, yes, it's being received in Q2. Addex has retained this 20% interest in Neurosterix. Neurosterix has got $60 million on its balance sheet. And the post-money valuation of Neurosterix is basically just south of $100 million. So, the value at the date of the transaction of the 20% is about $20 million. Now, regarding upside, there was a sale of the carved-out entity. There are no milestones and royalties on any of the products that were divested into Neurosterix. So, the upside for Addex is in its equity interest in Neurosterix. And I mean, there's a number of recent deals around the muscarinic M4. For example, AbbVie bought Cerevel $8.7 billion. BMS bought Karuna at the end of last year for $14 billion. I think the most relevant comparator is that, Cerevel had an M4 PAM, the M4 PAM had just started Phase 2. And what's interesting for Neurosterix is the cash that's on the Neurosterix's balance sheet finances the M4 PAM all the way through to a stage very close to where Cerevel was with their M4 PAM program. I wouldn't want to speculate about the value upside, but I think you can make your own conclusions that there is significant upside for Addex in that 20% of Neurosterix because Neurosterix is well funded and financed to meet some very significant value inflection points, being the advancing of one or two programs into the clinic and through Phase 1. I hope that answers your questions.

It answers. Thanks a lot. Maybe one final question. On the epilepsy program, when do you think Janssen will communicate plans for the ADX71149?

Yeah. So, as mentioned, we've seen the top line results. Unfortunately, the primary endpoint was not met. We are now doing a full analysis -- or Janssen doing a full analysis of the full data set. And we are expecting to receive the full data set and the full analysis and have discussions with them about it. I mean, we're talking about H2. We're very hopeful that it'll come earlier in H2. Given the timelines to do this, it should come in Q3, we would have thought. And then, we will work with Janssen to work out how best to move the program forward. Clearly, one option which is reasonably possible is that the collaboration gets terminated and Addex receives back the molecule and all the backup molecules as well. So, this is one of the, I would say, reasonably probable outcome once the full dataset has been reviewed. But again, until we see the full dataset, we can't really fully understand whether there is a way forward in epilepsy or not.

Okay. Thank you.

Thank you. [Operator Instructions] Thank you, ladies and gentlemen. This brings the main part of our conference to a close. And I would now like to hand back to Tim Dyer for closing remarks.

Well, thank you very much everyone for attending the Q1 2024 conference call. We look forward to speaking with you again soon. Have a very nice day.

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