Addex Pharmaceuticals 2008 Financial Results

Addex 2008 Financial Results (PDF)
Addex 2008 résultats financiers (PDF)
Addex 2008 Finanzergebnis (PDF)

Geneva, Switzerland, 24 February 2009 - Allosteric modulation company
Addex Pharmaceuticals (SWX:ADXN) announced today 2008 financial
results and reviewed the status of its pipeline.

Financial Highlights

* Cash and cash equivalents of CHF119.5 million at 31 December 2008
* Revenues increased to CHF26.9 million from CHF0.6 million
* Operating loss reduced to CHF24.9 million from CHF37.6 million
* Net cash burn below guidance of CHF25-30 million at CHF20.6
million

Tim Dyer, CFO, said: "Our revenues and expenses for 2008 were better
than expected, mainly due to the results of partnering efforts early
in the year and cost control measures taken in the second half of the
year, which resulted in cash burn being 18% below the low end of our
guidance. We have CHF119.5 million of cash, which should allow us to
drive forward our business plan until early 2012 without seeking
additional capital. In light of current market conditions, we have
undergone a healthy process of project prioritization and revised our
2010 & 2011 growth to give ourselves additional financial
flexibility. We also are implementing partnering strategies for
certain programs earlier than previously planned in order to control
cost, share risk and access alternative sources of financing. We
expect our cash burn to be CHF40-45 million in 2009, excluding
potential cash inflows from out-licensing activities."

Vincent Mutel, CEO, said: "We have effectively implemented our growth
strategy in 2008, adding both new facilities and new expertise across
the organization. We also created significant value by successfully
completing the modified release formulation work necessary to advance
ADX10059 MR into phase IIb testing for both GERD and migraine
prevention. However, after nearly doubling the size of our company to
135 employees, and considering current market conditions, we believe
it is prudent to slow our growth and control costs. While this will
reduce the number of new discovery programs that we plan to put into
development, it will not compromise the speed or quality of our
discovery and development projects, including ADX10059, ADX48621 and
ADX71943. We also are actively pursuing the out-licensing of a number
of our preclinical allosteric modulator programs including FSHR NAM,
Adenosine A3 antagonist and mGluR2 NAM. Most importantly, we continue
to focus on finding the right partner for ADX10059 and are looking
forward to Phase IIb GERD data in the second half of 2009."

Key 2008 Financial Data

CHF' million 2008 2007 Change 2H08 2H07 Change

Revenues 26 874 643 4079% 1 029 234 340%
(44 (27 (25 (14
R&D expenses 192) 497) 61% 271) 887) 70%
(10
G&A expenses (7 554) 768) (30%) (4 063) (2 831) 44%
Total
operating (24 (37 (28 (17
loss 872) 622) (34%) 305) 484) 62%
Finance
result, net 2 806 2 536 11% 3 638 1 897 92%
Net loss for (22 (35 (24 (15
the period 066) 086) (37%) 667) 587) 58%

Basic and
diluted net
loss per
share (3.85) (6.99) (45%) (4.30) (2.72) 58%

Net (cash
burn) / cash (20 (23 (19
received 574) 99 098 121% 325) 091) 22%

Cash and cash
equivalents 119 471 140 045 (15%) 119 471 140 045 (15%)
Shareholders
equity 118 991 140 108 (15%) 118 991 140 108 (15%)

2008 Financial Summary

Revenues consist primarily of amounts received from collaboration
partners. Revenues increased to CHF26.9 million in 2008 from CHF0.6
million in 2007, mainly due to the upfront payment from the
schizophrenia deal with Merck & Co., Inc. received in January 2008.

Research & Development expenses increased to CHF44.2 million in 2008
from CHF27.5 million in 2007 broadly reflecting the growth in our
discovery and development capabilities and the maturing preclinical
and clinical product pipeline.

General and Administration expenses decreased to CHF7.6 million in
2008 from to CHF10.7 million in 2007 mainly due to the absence of the
2007 IPO related costs. Excluding IPO related costs G&A has increased
by 49% reflecting the 71% growth in our headcount over the year.

Net Finance Result increased to CHF2.8 million in 2008 from CHF2.5
million mainly due to higher average level of cash invested.

Cash and cash equivalents amount to CHF119.5 million at 31 December
2008, a decrease of CHF20.6 million compared to the position at year
end 2007. Cash burn in 2008 was significantly influenced by CHF25.3
million of cash income received from collaborations with Merck.

Outlook: Based on current expectations, which include the completion
of a substantial part of ADX10059 Phase IIb development by Q4 2009
and the advancement of our current discovery and preclinical
portfolio, full year cash burn guidance is CHF40-45 million.

Pipeline status review

ADX10059, a metabotropic glutamate receptor subtype five (mGluR5)
negative allosteric modulator (NAM), is currently in three Phase IIb
trials in two indications: migraine and gastroesophageal reflux
disease (GERD), the cause of heartburn. All three trials are
enrolling patients and are expected to complete according to
previously announced timelines. Study 205 has active centers with
patients enrolled in both Europe and the U.S., under an active IND
that was successfully established late in 2008.

Study ADX10059-204 is a double-blind, placebo-controlled,
multi-center European Phase IIb trial in about 90 GERD patients known
to respond well to proton pump inhibitors (PPIs). There will be a two
week baseline symptom evaluation period followed by two weeks of
administration of ADX10059 MR 120 mg twice daily. ADX10059 will be
used as a monotherapy so patients in the study will not use PPIs or
other acid suppressant therapy during the baseline and study
treatment periods. The primary endpoint is patient reported symptom
control compared to baseline. Objective measures of the effects of
ADX10059 on lower esophageal sphincter (LES) function and acid reflux
events will be made in a subset of patients using esophageal
manometry and pH impedance monitoring. Data are expected in late
2009.

Study ADX10059-205 is a double-blind, placebo-controlled,
multi-center U.S. and European Phase IIb trial in about 280 GERD
patients who are partial responders to PPIs. Patients in the trial
will continue taking PPIs, the gold standard treatment for GERD,
which work by reducing the acidity of the stomach contents. There
will be a baseline symptom evaluation period followed by four weeks
of administration of twice-daily ADX10059 MR (50mg, 100mg or 150mg).
The primary endpoint is patient reported symptom control compared to
baseline. Data are expected in late 2009.

Study ADX10059-206 is a double-blind, placebo-controlled, dose range
finding, multi-center European Phase IIb trial in about 300
migraineurs who suffer from three or more migraine attacks per month.
Following a one month baseline period patients will take study
medication for 3 months. ADX10059 MR (25mg, 50mg or 100mg) or placebo
will be taken once-daily during the first two weeks of the treatment
period and twice daily thereafter. The primary endpoint will compare
migraine frequency and severity in the last month of treatment with
the baseline. Data are expected early in 2010.

ADX48621 is an mGluR5 NAM that is being developed for Parkinson's
disease levodopa induced dyskinesia (PD-LID). In data release earlier
this year, ADX48621 was shown to be well tolerated in older subjects,
achieving satisfactory pharmacokinetics, safety and tolerability with
single and repeat dose administration across the dose range planned
to be used in a Phase IIa proof of concept study in PD-LID patients
scheduled to start late in 2009.

ADX71943, a gamma-aminobutyric acid receptor subtype B (GABAB)
positive allosteric modulator (PAM), is in late preclinical
development and is scheduled to start Phase I testing late in 2009 or
early in 2010. Preclinical testing of this product has suggested a
better safety and tolerability profile compared to baclofen. As a
result, it has potential in a wider range of indications, including
inflammatory pain, urinary incontinence and GERD.

Note to Editors

mGluR5 inhibition has therapeutic potential in multiple indications
because mGluR5 is involved in a variety of functions in the central
and peripheral nervous systems*. mGluR5 inhibitors have achieved
clinical proof of concept in separate studies in patients with
gastroesophageal reflux disease (GERD), migraine, Parkinson's disease
levodopa induced dyskinesia (PD-LID) and generalized anxiety disorder
(GAD). Inhibition of mGluR5 also has potential in Fragile X syndrome,
pain and addiction. ADX10059 has been shown to have clinically and
statistically significant effects compared to placebo in separate
Phase IIa trials in patients with GERD and migraine headache.

*mGluR5 antagonists: Discovery, characterization and drug
development, Current Opinion in Drug Discovery & Development 2008
11(5):655-665

GERD is a chronic condition caused by stomach contents flowing back
into the esophagus on a regular basis. The underlying cause of this
is an abnormally functioning lower esophageal sphincter that allows
stomach content to pass back into the esophagus too easily. GERD
leads to painful symptoms like heartburn and can also damage the
lining of the esophagus. It is a common disorder with prevalence at
about 15% in the United States and between 10% and 25% in Europe.
Marketed GERD products work by reducing the acidity of the stomach
contents but do nothing to reduce reflux events, so that in many
patients symptoms of GERD persist.

Migraine is a condition distinguished by recurrent episodes of a
characteristic headache, which can be accompanied by a variety of
other symptoms such as nausea, and sensitivity to light and sound.
The average migraine patient suffers 12 attacks a year. The
International Headache Society estimates that about 25% of migraine
patients have three or more attacks per month and could benefit from
migraine prevention treatment. A migraine attack, which typically
lasts about 24 hours but can range from 4-72 hours, has three
distinct phases: the prodrome phase, when an array of individual
warning signs - like blurred vision or tingling of the skin - may
begin to appear; the headache phase; and the postdrome phase, when
many patients report fatigue or other "hangover-like" symptoms. As
migraine attacks are prolonged, many patients and especially those
with frequent attacks, lose a significant amount of work and family
time to suffering caused by the disease. Indeed, migraine is
currently estimated to cost employers $13 billion annually in lost
productivity in the United States. Prevalence of migraine is
estimated at 12% in the United States, where about 30 million people
suffer from migraine.

Addex Pharmaceuticals (www.addexpharma.com) discovers and develops
allosteric modulators for human health. Allosteric modulators are a
different kind of orally available small molecule therapeutic agent,
which we believe will offer patients better results than classical
drugs. Our lead allosteric modulator product, ADX10059, has achieved
clinical proof of concept and is in Phase IIb testing for the
treatment of GERD and, separately, migraine headache. Both are
important diseases for which existing products have established
multi-billion dollar markets despite sub-optimal efficacy. ADX10059
is a first-in-class mGluR5 inhibitor, a therapeutic strategy that
also is being pursued to treat multiple indications by large pharma
competitors.

Our product pipeline and technology already have proven their value
through our relationships with four of the top 10 pharmaceutical
companies in the world. Specifically, in two separate license
agreements with Merck & Co., Inc., we are developing positive
allosteric modulators of mGluR4 and mGluR5 as drugs to treat
Parkinson's disease and schizophrenia, respectively. A third
agreement, with Ortho McNeil Pharmaceuticals Inc., a Johnson &
Johnson company, is focused on development of positive allosteric
modulators of mGluR2 to treat anxiety and schizophrenia. Separately,
investment funds from Roche and GlaxoSmithKline have extended their
validation of our technology, products and management by making
significant investments in Addex.

Chris Maggos
Head of IR & Communications
Addex Pharmaceuticals
+41 22 884 15 11
chris.maggos@addexpharma.com

Disclaimer: The foregoing release contains forward-looking
statements that can be identified by terminology such as "not
approvable", "continue", "believes", "believe", "will", "remained
open to exploring", "would", "could", or similar expressions, or by
express or implied discussions regarding Addex Pharmaceuticals Ltd,
its business, the potential approval of its products by regulatory
authorities, or regarding potential future revenues from such
products. Such forward-looking statements reflect the current views
of Addex Pharmaceuticals Ltd regarding future events, and involve
known and unknown risks, uncertainties and other factors that may
cause actual results with allosteric modulators of mGluR7, mGluR5,
mGluR4, mGluR2, GABAB, FSH, GLP-1 or other receptors to be materially
different from any future results, performance or achievements
expressed or implied by such statements. There can be no guarantee
that allosteric modulators of mGluR7, mGluR5, mGluR4, mGluR2, GABAB,
FSH, GLP-1 or other receptors will be approved for sale in any market
or by any regulatory authority. Nor can there be any guarantee
that allosteric modulators of mGluR7, mGluR5, mGluR4, mGluR2, GABAB,
FSH, GLP-1 or other receptors will achieve any particular levels of
revenue (if any) in the future. In particular, management's
expectations regarding allosteric modulators of mGluR7, mGluR5,
mGluR4, mGluR2, GABAB, FSH, GLP-1 or other receptors could be
affected by, among other things, unexpected actions by our partners,
unexpected regulatory actions or delays or government regulation
generally; unexpected clinical trial results, including unexpected
new clinical data and unexpected additional analysis of existing
clinical data; competition in general; government, industry and
general public pricing pressures; the company's ability to obtain or
maintain patent or other proprietary intellectual property
protection. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, believed,
estimated or expected. Addex Pharmaceuticals is providing the
information in this press release as of this date and does not
undertake any obligation to update any forward-looking statements
contained in this press release as a result of new information,
future events or otherwise.

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