Newron Pharmaceuticals

SW: NWRN

CHF31.9m market cap

CHF1.79 last close

Newron Pharmaceuticals is a CNS-focused company. Xadago for Parkinson’s disease is sold in Europe, Japan and the US. Evenamide, a novel schizophrenia therapy, may start Phase III trials from 2021.

Investment summary

Given that sarizotan did not meet the primary or any secondary endpoints in the pivotal Rett syndrome STARS study, Newron is focusing on its novel schizophrenia drug, Evenamide. This clinical programme, due to resume in 2020, is on hold due to COVID-19, but Phase III may start in Q321. A new marketing partner (Supernus) has taken over US Xadago sales (2019 royalties of €4.8m), which should yield higher growth. A dyskinesia trial is planned to expand the indication. Newron drew down a €7.5m EIB loan in April (a €15m loan facility remains) and had €39m cash at end December 2019. This provides cash throughout 2021. Our indicative value has been revised to CHF121m (formerly CHF340m) after removing sarizotan sales and costs.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2018A 4.0 (14.9) (15.0) (84.20) N/A N/A
2019A 7.0 (20.7) (20.2) (113.24) N/A N/A
2020E 5.6 (13.8) (14.5) (81.09) N/A N/A
2021E 6.7 (19.6) (20.2) (113.13) N/A N/A
Industry outlook

Xadago is approved and marketed in key territories as an add-on to levodopa therapy in Parkinson’s disease. A trial in dyskinesia is planned to expand the indication; this will be funded to €10m by Newron. In the US, Xadago will now be sold by Supernus Pharmaceuticals after US WorldMeds (the Zambon sublicensee) divested its CNS portfolio. This may be very beneficial to Newron as Supermus has a much bigger sales team.

Last updated on 04/06/2020
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (€m) 5.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (0.6) (66.9) (72.5)
Relative* (7.3) (66.3) (73.8)
52-week high/low CHF7.7/CHF1.6
*% relative to local index
Key management
Stefan Weber CEO
Marco Caremi Executive VP of Business Development

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