Financial Performance - The company incurred accumulated losses totaling CHF 353 million since inception, but generated a net profit of CHF 7.18 million for the twelve-month period ended December 31, 2024, primarily due to reduced operating losses and proceeds from divesting part of its business to Neurosterix[32]. - As of December 31, 2024, the company had cash and cash equivalents of CHF 3.3 million, which are expected to fund operating expenses through mid-June 2026[35][36]. - The company has raised an aggregate of CHF 355.4 million in equity financing and generated CHF 66.8 million in revenue since its inception through December 31, 2024[159]. Business Operations and Development - The company has no products on the market and may never commercialize its drug candidates, with none currently approved for marketing or in Phase 3 trials[39]. - The company is dependent on its partner Indivior for the development and commercialization of its drug candidates, which exposes it to significant risks[43]. - The company expects to increase expenses in the medium and long term as it continues the development of its GABAB PAM chronic cough drug candidate and seeks marketing approval for its drug candidates[33]. - The company may need significant additional capital to fund its continued development activities and may be unable to raise such capital when needed[31][35]. - The company faces risks related to health pandemics and geopolitical issues that could disrupt its operations and clinical trials[40]. - The company relies on third-party collaborations for drug development, which may impact the commercialization of drug candidates if partnerships fail[46]. - Clinical trials and preclinical studies are dependent on third-party performance, and any delays or failures could adversely affect development timelines[47]. - The company does not have in-house manufacturing capabilities, relying on third-party suppliers, which poses risks of supply interruptions or quality issues[48]. - Regulatory approval for drug candidates is uncertain, and even successful trials may not guarantee approval from agencies like the FDA or EMA[49]. - Clinical testing is expensive and time-consuming, with potential for delays or failures at any stage of the process[50]. - The company may face competition from larger pharmaceutical firms with more resources, which could hinder its ability to successfully develop and market drugs[52]. - The company is focused on developing GABAB PAM for substance use disorder, with a significant commercial opportunity identified[138]. - The company plans to initiate a Phase 2a clinical study for dipraglurant, pending funding or a development partner[140]. - The company aims to develop a best-in-class treatment for chronic cough through precise targeting of the GABAB receptor, addressing a significant unmet medical need[130]. Intellectual Property and Legal Risks - The company holds 9 U.S. patents and 130 foreign patents, but the validity and enforceability of these patents are uncertain[54]. - The company may be restricted by third-party patents, which could limit its ability to develop and commercialize drug candidates[55]. - Protecting intellectual property rights is crucial, and breaches or failures to secure agreements could adversely affect the company's competitive position[56]. - Legal disputes over intellectual property could divert resources and management attention, impacting overall business operations[57]. - The company is subject to extensive government regulations that could increase development costs or delay commercialization[61]. - The company may face potential fines and penalties for non-compliance with anti-corruption laws, which could harm its business operations[74]. - The company is exposed to risks related to data privacy and cybersecurity breaches, which could result in significant penalties and reputational damage[80]. Market and Regulatory Environment - The company may be deemed a "passive foreign investment company" for U.S. federal income tax purposes, which could have adverse consequences for U.S. holders of its shares[37]. - Changes in healthcare laws and regulations may impact the company's ability to sell drug candidates and could lead to decreased reimbursement rates[65]. - The Inflation Reduction Act of 2022 introduces price negotiation for certain drugs, which may affect revenue generation starting in fiscal year 2023[66]. - Future healthcare reforms could impose price controls and affect the competitive landscape for drug pricing[71]. - The potential for reference pricing in European countries may restrict sales potential unless drugs are significantly differentiated from existing options[71]. - The company is subject to significant uncertainty regarding third-party coverage and reimbursement for its drug candidates, which may adversely affect market acceptance and financial results[73]. Compliance and Reporting - The company expects to incur significant legal, accounting, and compliance costs as it operates with securities listed in both the United States and Switzerland[94]. - The company qualifies as a foreign private issuer, which allows it to follow less stringent reporting obligations compared to U.S. domestic public companies[109]. - The company is classified as an "emerging growth company" until December 31, 2025, allowing it to take advantage of reduced reporting requirements[114]. - The company reported that its internal control over financial reporting was not effective as of December 31, 2024, due to two material weaknesses identified[118]. - The company anticipates that the loss of its emerging growth company status may make its ADSs less attractive to investors, potentially affecting trading volume and price[116]. Shareholder Information - The company currently lacks internal sales, marketing, and distribution capabilities necessary for successful commercialization[59]. - The company has never paid dividends on its share capital and does not anticipate paying cash dividends in the foreseeable future[99]. - As of December 31, 2024, there were 69,683,409 shares reserved for issuance under the existing equity incentive plan, including 61,676,618 warrants[100]. - The company may face challenges in maintaining an active market for its ADSs, which have traded on Nasdaq since January 29, 2020[96]. - Holders of ADSs may not have the same voting rights as holders of shares and may not receive voting materials in time[101]. - The rights of holders of shares are governed by Swiss law, which differs from the rights of shareholders in typical U.S. corporations[105]. Development Pipeline - The company has a pipeline of proprietary clinical and preclinical stage drug candidates targeting diseases with no approved therapies, including post-stroke recovery and substance use disorder[127]. - The lead development compound, dipraglurant, is under evaluation for post-stroke and traumatic brain injury recovery, with a collaboration agreement with Sinntaxis AB announced on April 30, 2025[128]. - The second development compound, ADX71149, was terminated by partner Janssen due to lack of statistical significance in Phase 2 study, and the program has been returned to the company for future evaluation[129]. - The company completed a funded research program for GABAB PAM for chronic cough in 2024, with plans to advance its own independent program[130]. - The company divested its allosteric modulator discovery platform to Neurosterix Pharma Sàrl on April 2, 2024, receiving gross proceeds of CHF 5.0 million and a 20% equity interest in Neurosterix US Holdings LLC[134]. - Neurosterix US Holdings LLC secured USD 65.0 million in funding commitments from investors, enhancing the financial backing for its drug development initiatives[134]. - The company has established a portfolio of clinical and preclinical programs, with ongoing efforts to secure grants and subsidies to offset development costs[131]. - The company is developing multiple chemical series of GABAB PAMs and has selected a drug candidate for refractory chronic cough, expecting to initiate IND enabling studies subject to securing funding or a development partner[181].
Addex Therapeutics(ADXN) - 2024 Q4 - Annual Report