Addex Therapeutics Ltd. — FY2023 Form 20-F
Reporting period: Year ended December 31, 2023. This is an annual report, not a standalone Q4 report. Financial statements are prepared under IFRS in Swiss francs (CHF). Addex is a clinical-stage biotechnology company with no marketed products or product-sales revenue.
Financial performance and position
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | CHF 1.61 million | CHF 1.42 million | Up 13%; research funding from Indivior |
| Research and development expense | CHF 6.96 million | CHF 14.67 million | Down 53% |
| General and administrative expense | CHF 4.97 million | CHF 7.30 million | Down 32% |
| Operating loss | CHF 10.28 million | CHF 20.52 million | Narrowed 50% |
| Net loss | CHF 10.56 million | CHF 20.80 million | Narrowed 49% |
| Operating cash used | CHF 7.99 million | CHF 16.44 million | Down 51% |
| Cash and cash equivalents at year-end | CHF 3.87 million | CHF 6.96 million | Down 44% |
Revenue was entirely from collaborative research funding; the company has not generated product-sales revenue. No meaningful product gross margin is reported. Loss per share was CHF 0.14 versus CHF 0.46 in FY2022; the lower loss per share reflects, in part, a higher weighted-average share count.
At December 31, 2023, total assets were CHF 4.64 million, current assets CHF 4.23 million, current liabilities CHF 2.89 million, total liabilities CHF 3.50 million, and equity CHF 1.15 million. The company reported no outstanding debt; lease liabilities were CHF 0.34 million. Year-end cash was mainly denominated in U.S. dollars (56%) and Swiss francs (40%).
Material changes and business developments
- Lower R&D spending was primarily due to the termination of the U.S. dipraglurant PD-LID registration studies in June 2022, following slow recruitment. Lower share-based compensation and D&O insurance costs also reduced expenses.
- Operating cash use fell year over year, but the company continued to incur losses and rely on external funding. FY2023 financing cash inflow was CHF 5.26 million, primarily from equity-related proceeds, including pre-funded warrants and treasury-share sales.
- On April 2, 2024, after the reporting date, Addex sold its allosteric-modulator discovery platform and preclinical programs to Neurosterix. Addex received CHF 5.0 million in cash and a 20% indirect equity interest in Neurosterix; Neurosterix announced USD 63 million in initial funding. Addex retained its Janssen and Indivior partnerships, dipraglurant, and its GABAB PAM chronic-cough program.
- The transaction transferred the associated R&D staff and infrastructure. At the report’s issuance, Addex had one full-time employee; former employees, including the CEO, were to provide support under a service agreement. Management expects lower near-term expenses, but notes costs could rise if Addex resumes development or expands operations.
- The ADS-to-share ratio changed from 1:6 to 1:120 in October 2023, equivalent to a 1-for-20 reverse ADS split. Addex regained Nasdaq’s minimum bid-price compliance in November 2023.
Outlook, commentary and principal risks
- Management stated that cash available at the report’s issuance, including CHF 5.2 million raised after year-end, was expected to fund operating expenses through 2026. This depends on assumptions and does not assure funding beyond that point; the company may need partnerships, grants or further financing, which could dilute shareholders.
- Addex expected Janssen’s Phase 2 epilepsy trial results for ADX71149, evaluating efficacy, safety and tolerability with levetiracetam or brivaracetam, in Q2 2024. Janssen controls and funds the program.
- Indivior-funded GABAB PAM research was scheduled to run through June 2024. Addex expected candidate selection by the end of Q2 2024; further IND-enabling work was conditional on financial resources. Addex retains rights to develop selected compounds for certain indications, including chronic cough.
- Dipraglurant’s prior Phase 2a PD-LID study met its safety/tolerability primary endpoint and showed statistically significant symptom effects at Days 1 and 14, but not Day 28 amid an increasing placebo response. Restarting a pivotal study or initiating post-stroke/TBI clinical work depends on funding or a partner.
- Key risks include ongoing losses and financing needs, clinical and regulatory uncertainty, dependence on Janssen and Indivior, third-party trial and manufacturing reliance, competition, foreign-exchange exposure, and possible future Nasdaq listing noncompliance. The filing identifies Addex as a PFIC for U.S. tax purposes for 2023, subject to uncertainty.
- The audited IFRS financial statements received an unqualified opinion from BDO AG. Management reported effective disclosure controls and internal control over financial reporting at year-end; the auditor did not provide an internal-control attestation.
Most important facts for investors to verify
- Whether post-year-end proceeds, the Neurosterix transaction, service arrangements and ongoing costs support management’s cash-runway estimate through 2026.
- The exact assets and liabilities transferred, Addex’s ownership interest and rights in Neurosterix, and the conditions and economics of the service agreement.
- Actual results and subsequent development decisions for ADX71149, dipraglurant and the GABAB PAM programs, including whether partners continue funding and whether Addex secures development partners.
- Potential dilution from outstanding warrants, share options, deferred-strike-price-plan shares and any future equity sales; confirm share-count figures against the relevant date and treasury-share treatment.
- Liquidity and listing compliance, and U.S. tax implications of the company’s disclosed PFIC status for individual investors.