Addex Therapeutics Ltd. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone Q4 filing; quarterly results are not clearly provided. Financial statements are prepared under IFRS as issued by the IASB and reported in Swiss francs (CHF).
Business context
Addex is a clinical-stage neuroscience company developing small-molecule allosteric modulators. It had no approved products and no product-sale revenue. Its lead proprietary candidate, dipraglurant, was in a pivotal Phase 2b/3 trial for Parkinson’s disease levodopa-induced dyskinesia (PD-LID); partner Janssen was conducting a Phase 2a epilepsy trial of ADX71149. Indivior funded Addex’s GABA B PAM research program.
Financial performance and liquidity
| Metric (CHF, unless stated) | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | 2.916 million | 3.613 million | Down 19% |
| Other income | 0.237 million | 0.266 million | Down 11% |
| Research and development expense | 12.841 million | 10.373 million | Up 24% |
| General and administrative expense | 5.819 million | 5.749 million | Up 1% |
| Operating loss | (15.506) million | (12.243) million | Loss widened |
| Net loss | (15.352) million | (12.859) million | Loss widened 19% |
| Basic and diluted loss per share | (CHF 0.45) | (CHF 0.48) | Improved per share |
| Operating cash flow | (14.705) million | (12.180) million | Greater cash use |
| Cash and cash equivalents at year-end | 20.485 million | 18.695 million | Up 10% |
FY2021 revenue was entirely collaborative research funding from Indivior, recognized as related research costs were incurred. No product revenue was generated. The filing does not present a meaningful product gross margin; the company remained loss-making, with an accumulated deficit of CHF 329.1 million.
Cash used in investing activities was CHF 0.030 million. Financing activities provided CHF 16.403 million, principally from equity-related transactions. The company reported no outstanding debt; lease liabilities were CHF 0.482 million and retirement benefit obligations CHF 1.282 million. Year-end current assets were CHF 21.942 million and current liabilities CHF 4.135 million. Management expected existing cash to fund operations and capital expenditure through at least the first half of 2023, subject to assumptions and the need for additional funding thereafter.
Material changes and financing
- R&D spending rose by CHF 2.467 million, mainly due to higher outsourced development costs for dipraglurant and other programs, and increased R&D staffing.
- Revenue fell by CHF 0.697 million as Indivior-funded research activity recognized as revenue declined.
- Net loss increased by CHF 2.493 million, primarily reflecting higher R&D spending.
- Cash increased despite operating cash use, supported by financing proceeds. The January 2021 share offering generated CHF 10.1 million gross proceeds; the December 2021 Armistice transaction generated approximately CHF 9.2 million gross proceeds through shares and pre-funded warrants. Offering costs and other financing cash flows reduced net proceeds.
- Shares outstanding excluding treasury shares were 37,898,149 at year-end. The filing also reports 29.6 million potentially dilutive instruments, including warrants, pre-funded warrants and equity-plan awards; these were excluded from loss per share as antidilutive.
Outlook, commentary and risks
- Management expected topline results from the dipraglurant PD-LID pivotal trial in the first half of 2023, the blepharospasm Phase 2 study in Q2 2022, and Janssen’s ADX71149 epilepsy Phase 2a study in Q3 2022. These are forward-looking expectations, not reported outcomes.
- The pivotal PD-LID trial began in June 2021, targeted approximately 140 patients at about 50 U.S. sites, and used change in UDysRS score at week 12 as its primary endpoint. A prior Phase 2a trial met its primary endpoint, but the improvement in dyskinesia was not statistically significant versus placebo at day 28 amid a rising placebo response.
- Management cited additional capital needs, continued losses and negative operating cash flow as key risks. The company’s ability to continue development beyond the stated cash runway depends on financing, partnerships or grants; failure to obtain funding could force delays, reductions or termination of programs.
- Clinical and operational risks include trial execution and enrollment, third-party CRO and manufacturing dependence, regulatory approval uncertainty, COVID-19 effects, and potential disruption from Russia’s invasion of Ukraine, including impacts on trial sites, supply chains and capital markets.
- Development of Indivior’s previously selected compound ADX71441 was terminated in 2019; the separate funded GABA B PAM research program continued. Partners control key development and commercialization decisions under their agreements.
- After year-end, on January 4, 2022, exercise prices on 8.294 million equity incentive units were reduced to CHF 1. The company expected CHF 1.6 million of related share-based compensation expense in 2022 and CHF 0.1 million over 2023–2025.
- The independent auditor gave an unqualified opinion on the 2021 and 2020 IFRS financial statements. Management reported effective disclosure controls and internal control over financial reporting as of year-end; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Current cash runway and whether financing, partnership or grant proceeds are sufficient to sustain operations beyond the first half of 2023.
- Actual enrollment, timing and results of the dipraglurant PD-LID and blepharospasm trials, and Janssen’s ADX71149 epilepsy trial.
- Potential dilution from warrants, pre-funded warrants and equity incentives, including the impact of the December 2021 financing and January 2022 repricing.
- Indivior’s continued funding and program selection decisions, and Janssen’s ongoing commitment to ADX71149 development.
- Trial, supply-chain, foreign-exchange and fundraising exposure related to COVID-19, the Ukraine conflict and reliance on external providers.