Addex Therapeutics : Reports 2015 Financial Results

Addex Therapeutics / Addex Therapeutics Reports 2015 Financial Results . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

Geneva, Switzerland, 29 April 2016 - Addex Therapeutics (SIX: ADXN) announced today 2015 financial results.

2015 Financial Highlights

• Net increase in cash and cash equivalence of CHF0.6 million;
• Cash and cash equivalents of CHF2.6 million at end of year;
• Income of CHF0.8 million;
• Operating loss of CHF4.2 million;
• Capital increase of CHF2.8 million.

2015 Operating Highlights

• Orphan drug designation granted by US Food and Drug Administration for dipraglurant in levodopa-induced dyskinesia associated with Parkinson's disease;
• Successful completion of mGlu5 receptor occupancy study in healthy subjects provides data for dipraglurant PD-LID Phase III study dose selection;
• Dipraglurant shows highly statistically significant anti-dyskinetic effects following additional analysis of data from the PD-LID Phase II study;
• ADX71441 demonstrates robust efficacy in multiple preclinical models of alcohol use disorder in collaboration with the US National Institute on Alcohol Abuse and Alcoholism;
• Addex strategic partner, Janssen Pharmaceuticals Inc. demonstrates synergistic efficacy of ADX71149 with levetiracetam in preclinical models of epilepsy;
• Secured Swiss government grants for CHF1m to advance preclinical programs in collaboration with universities of Lausanne and Geneva;
• Entered collaboration with the Dystonia Medical Research Foundation to prepare Phase II development of dipraglurant in dystonia;
• Entered a collaboration with Pierre Fabre Pharmaceuticals to evaluate Addex mGlu3 receptor modulators for central nervous system disorders;
• ADX71441 included in the US National Institute of Neurological Disorders and Stroke Anticonvulsant Screening Program for evaluation in preclinical models of epilepsy;
• Addex moves its R&D operations to the Campus Biotech, a new life sciences center of excellence located at the former Merck Serono site in Geneva.

Key 2015 Financial Data

2015 Financial Summary

Income was CHF0.8 million in 2015 compared to CHF1.0 million in 2014, and is comprised of CHF0.3 million of grants from the Michael J. Fox Foundation for Parkinson's Research, to cover certain clinical activities related to dipraglurant development in Parkinson's disease levodopa-induced dyskinesia, CHF65 thousand received from Pierre Fabre Pharmaceuticals for research services, and CHF0.4 million from the sale of fixed assets and consumables that are surplus to requirements.

Research & development expenses increased by 91% to CHF1.8 million in 2015, compared to CHF0.9 million in 2014, primarily due to increases in external research and development costs and consulting fees associated with preparing dipraglurant for phase III development. 

General & administration expenses decreased by 13% to CHF1.7 million in 2015, compared to CHF1.9 million in 2014 primarily due to reduced professional fees.

French tax authorities' escrow account write-off
In 2015 we recorded a charge of CHF1.2 million related to the write-off of an escrow account that had been set up and recorded as a non-current asset in 2012 to cover an amount claimed by the French tax authorities for VAT that had not been charged on intercompany R&D services from Addex Pharmaceutical France SAS (Addex France) to Addex Pharma SA (Addex Swiss). The French tax authorities claim that the services delivered by Addex France to Addex Swiss fall under former article 259A,4° of the French tax code (i.e. services of a scientific nature) rather than former article 259B, 4° (i.e. services performed by engineers) as they claim no analysis was performed by Addex France in conducting the services and therefore claim that VAT should have been charged on all intercompany invoices. Addex France disputes this claim as (i) the services delivered were related to pharmaceutical R&D services conducted by highly qualified drug development scientists and consequently the notion that no analysis was performed is unsubstantiated and (ii) scientific services falling within the scope of former Article 259A, 4° should be limited to services rendered to several clients simultaneously (e.g. services rendered in a symposium). In March 2015, the tribunal of Grenoble decided in favor of the French tax authorities and in May 2015 claimed the release of the escrow account in their favor. Addex France has filed an appeal against the decision, however due to the release of the escrow account to the French tax authorities, the Group has recorded a charge of CHF1.2 million in the statement of income.

Finance result, net of CHF0.3 million is comprised of interest income of CHF40 thousand received on the French tax escrow account, interest expense of CHF0.2 million paid to the French tax authorities following the release of the escrow account in their favor and exchange losses of CHF0.1 primarily related to the escrow account which was denominated in Euro.

Net loss for the year increased significantly to CHF4.2 million for 2015, compared to CHF1.8 million for 2014, primarily due to the CHF1.2 million non-cash charge related to the write off of the French tax escrow account and increased R&D expenses related to the development of dipraglurant. Basic and diluted loss per share also increased accordingly to CHF0.39 for 2015, compared to CHF0.18 for 2014.

Cash and cash equivalents amounted to CHF2.6 million at 31 December 2015, compared to CHF2.0 million at the end of 2014. 2015 cash burn of CHF0.6 million is mainly due to the cash used in operations of CHF2.5 million, off-set by capital increase net proceeds of CHF2.7 million, CHF0.4 million from the sale of property, plant and equipment and CHF0.4 million from the sale treasury shares.

Post balance sheet event
In January 2016, the Group sold 317,400 treasury shares for net proceeds of CHF1,003,496.

Outlook: We continue to focus on the clinical development of our most advance clinical stage assets, dipraglurant and ADX71441. In addition, we continue to pursue collaborations with industry, patient advocacy groups, academic institutions and governmental organizations to drive forward our portfolio of exciting allosteric modulator drug candidates. In parallel, we will execute our strategy to secure the resources necessary to advance the pipeline for the benefit of patient while maximizing value for our shareholders. Based on current expectations, full year 2015 cash utilization guidance is CHF2.0 million giving a cash runway into 2017.

2015 Annual Report
The 2015 annual report can be found on our website at the investor relation page 

About Addex Therapeutics
Addex Therapeutics (www.addextherapeutics.com) is a biopharmaceutical company focused on the development of novel, orally available, small molecule allosteric modulators for neurological disorders. Addex lead drug candidate, dipraglurant (mGluR5 negative allosteric modulator or NAM) has successfully completed a phase IIa POC in Parkinson's disease levodopa-induced dyskinesia (PD-LID), and is being prepared to enter phase III for PD-LID with support from the Michael J. Fox Foundation for Parkinson's Research (MJFF). In parallel, dipraglurant's therapeutic use in dystonia is being investigated with support from the Dystonia Medical Research Foundation (DMRF).  Addex second clinical program, ADX71149 (mGluR2 positive allosteric modulator or PAM) is being developed in collaboration with Janssen Pharmaceuticals, Inc for epilepsy. In addition, ADX71441 (GABAB receptor PAM) has received regulatory approval to start phase I and is being investigated for its therapeutic use in Charcot-Marie-Tooth Type 1A disease (CMT1A), alcohol use disorder and nicotine dependence. Discovery programs include mGluR4PAM for neurodegenerative diseases, mGluR7NAM for psychosomatic disorders and TrkBPAM for neurodegenerative disorders which are being advanced in collaboration with the Universities of Lausanne and Geneva under the Swiss CTI grant program; and mGluR3PAM which is being advanced in collaboration with Pierre Fabre Pharmaceuticals. Allosteric modulators are an emerging class of small molecule drugs which have the potential to be more specific and confer significant therapeutic advantages over conventional "orthosteric" small molecule or biological drugs.  Addex allosteric modulator drug discovery platform targets receptors and other proteins that are recognized as essential for therapeutic intervention - the Addex pipeline was generated from this pioneering allosteric modulator drug discovery platform.

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Disclaimer / Forward-looking statements: This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Addex Therapeutics Ltd. This publication may contain certain forward-looking statements concerning the Company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the Company to be materially different from those expressed or implied by such statements. Readers should therefore not place undue reliance on these statements, particularly not in connection with any contract or investment decision. The Company disclaims any obligation to update these forward-looking statements.