Last close As at 05/08/2026
CHF12.26
▲ 0.44 (3.72%)
Market capitalisation
CHF256m
Research: Healthcare
Newron has released its H123 results and presented an overview of its upcoming clinical activities assessing evenamide as a potential treatment for schizophrenia. Positive results from these trials from Q423 to Q124, may represent the most significant near-term catalysts for the company, in our view. Throughout the period, Newron has also continued to work with partners Zambon and Supernus to maintain the intellectual property of Xadago in the US, which is protected by three patents until at least 2027. At end-June 2023, Newron had a total cash and liquid asset position of €17.1m (versus €22.8m at the start of the year), which we estimate will provide a cash runway into 2024. We value Newron at CHF137.4m or CHF7.7 per share (previously CHF128.7m or CHF7.2 per share).
Written by
Newron Pharmaceuticals |
Crucial upcoming datasets for evenamide |
H123 results update |
Pharma and biotech |
7 August 2023 |
Share price performance
Business description
Next events
Analysts
Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Newron has released its H123 results and presented an overview of its upcoming clinical activities assessing evenamide as a potential treatment for schizophrenia. Positive results from these trials from Q423 to Q124, may represent the most significant near-term catalysts for the company, in our view. Throughout the period, Newron has also continued to work with partners Zambon and Supernus to maintain the intellectual property of Xadago in the US, which is protected by three patents until at least 2027. At end-June 2023, Newron had a total cash and liquid asset position of €17.1m (versus €22.8m at the start of the year), which we estimate will provide a cash runway into 2024. We value Newron at CHF137.4m or CHF7.7 per share (previously CHF128.7m or CHF7.2 per share).
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
5.76 |
(14.12) |
(0.79) |
0.0 |
N/A |
N/A |
12/22 |
6.09 |
(16.99) |
(0.95) |
0.0 |
N/A |
N/A |
12/23e |
8.95 |
(14.62) |
(0.82) |
0.0 |
N/A |
N/A |
12/24e |
6.85 |
(22.27) |
(1.25) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Study 014/015: Full one-year results expected in Q124
The Phase II trial (study 014 – six weeks, and study 015 – extension study) is a randomised, open-label, rater-blinded assessment of evenamide (safety and efficacy) as an add-on to an antipsychotic (excluding clozapine) in patients with moderate to severe treatment-resistant schizophrenia (TRS). The most recent update from extension study 015 provided data for the first 100 patients at the one-year timepoint, and demonstrated the efficacy of evenamide across multiple measures of psychopathology. Six-month results from the full 161-patient cohort in study 015 are expected in October 2023, and full one-year data are expected in Q124. We note that interim results have been encouraging, and hence Newron is preparing to initiate a potentially pivotal Phase III trial (study 003). This will be a randomised, double-blind, placebo-controlled study to assess the potential of evenamide as an add-on treatment in TRS patients, expected to launch in H223.
Study 008A: Results expected by end-2023 or Q124
The Phase III trial (study 008A) is a potentially pivotal randomised, double-blind, placebo-controlled study to assess the safety, efficacy and tolerability of evenamide in patients on antipsychotics, but not classified as having TRS. Management has communicated that patient recruitment is ongoing, and the company is on track to share full results by end-2023 or Q124, potentially representing a major catalyst.
Valuation: CHF137.4m or CHF7.7 per share
Our valuation for Newron increases to CHF137.4m or CHF7.7 per share (previously CHF128.7m or CHF7.2 per share) due to rolling forward our model by six months and FX changes, partially offset by increased net debt at end H123.
Financials
In its H123 results, Newron recorded total revenue of €5.5m for the period, nearly double H122 revenue of €2.8m. The revenue increase was primarily driven by higher royalty income of €3.2m (versus €2.8m in H122) for Xadago and an additional €2.3m in other income related to contracts with customers (H122: zero). Total operating expenses were up by 5.6% y-o-y to €9.8m in H123, out of which R&D expenses moderately increased to €5.7m (H122: €5.3m) due to increased services from subcontractors as a result of ongoing clinical activities. G&A expenses were €4.1m, compared to €3.9m in H122. As a result, the operating loss for the period was €4.3m, versus €6.5m in H122. The company reported a pre-tax loss of €6.9m (H122: €8.6m), which included €2.0m in interest expenses mainly relating to the European Investment Bank loan. Cash used in operating activities for H123 remained largely flat at €5.6m.
Based on the H123 results, we have increased our FY23 revenue forecast to €8.9m (vs €6.5m previously) as we now incorporate other income of €2.5m based on the half year performance. This adjusts our operating loss and net loss forecasts to €11.9m (€14.4m previously) and €14.6m (€17.1m previously), respectively in FY23. Our long-term assumptions and FY24 forecasts remain unchanged based on H123 performance.
At end-H123, Newron had a cash position of €7.7m, plus €9.4m in other current financial and liquid assets. Based on our forecasted operating cash burn, we estimate a cash runway into 2024, consistent with management guidance. Assuming a positive readout from study 008A in H223, we expect Newron will pursue a partnership deal for evenamide in schizophrenia, a payment from which may extend our estimated cash runway further. In the absence of a partnership deal for evenamide in schizophrenia, we continue to expect that the company would need to raise additional capital of €30m in FY24, which we have modelled as illustrative debt. If the funding is realised through an equity issue instead (at the 3 August 2023 closing trading price of CHF5.00 per share), Newron would have to issue 6.0m shares, resulting in our per share valuation reducing to CHF7.0 per share from CHF7.7 currently (shares outstanding would increase from 17.9m to 23.8m).
Research: Healthcare
Basilea has announced that it has filed its new drug application (NDA) for Zevtera (ceftobiprole) with the FDA. As part of this submission, the company is seeking approval for three indications: Staphylococcus aureus bacteraemia (SAB), acute bacterial skin and skin structure infections (ABSSSI) and community-acquired bacterial pneumonia (CABP). We note that the NDA is eligible for priority review and, hence, Basilea expects a regulatory decision on the approval of Zevtera in the US by Q224, potentially representing a significant catalyst for the company.