Last close As at 05/08/2026
CHF12.30
▲ 0.04 (0.33%)
Market capitalisation
CHF256m
Research: Healthcare
Newron has completed the recruitment of 138 patients into the Phase II study of its novel schizophrenia drug, Evenamide. As expected, the read out is due in March 2021. Newron notes that Evenamide Phase III trials could start in H221 and it is progressing possible partnering and co-development deals. Newron had €39m cash at end-June 2020, with enough cash to fund development well into 2022. Our indicative value remains CHF121m.
Written by
Newron Pharmaceuticals |
Evenamide Phase II completes recruitment |
Clinical trial update |
Pharma & biotech |
25 January 2021 |
Share price performance
Business description
Next events
Analysts
Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
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Newron has completed the recruitment of 138 patients into the Phase II study of its novel schizophrenia drug, Evenamide. As expected, the read out is due in March 2021. Newron notes that Evenamide Phase III trials could start in H221 and it is progressing possible partnering and co-development deals. Newron had €39m cash at end-June 2020, with enough cash to fund development well into 2022. Our indicative value remains CHF121m.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
4.03 |
(15.01) |
(0.84) |
0.0 |
N/A |
N/A |
12/19 |
7.04 |
(20.16) |
(1.13) |
0.0 |
N/A |
N/A |
12/20e |
5.59 |
(14.47) |
(0.81) |
0.0 |
N/A |
N/A |
12/21e |
6.67 |
(20.19) |
(1.13) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Evenamide on track to enter pivotal trials in H221
Newron has finished recruiting for the four-week exploratory safety trial (Study 008) in 138 patients with chronic schizophrenia who are taking an established therapy (NCT04461119). Doses tested were 7.5mg and 15mg given twice a day versus a placebo arm. The data report should be available in March 2021, after which Newron aims to start two pivotal studies in H221. These comprise Study 003 in patients with inadequate, worsening response to antipsychotic agents plus Study 004 in patients who are resistant to clozapine. Clozapine is currently the most effective antipsychotic agent but about 30–50% of patients become resistant, giving no further options. Newron is seeking a partner for the more general indication of inadequate response to current atypical antipsychotic agents and plans direct marketing of Evenamide for the focused indication of clozapine-resistant adjuvant treatment. Alternativity, co-development could also yield a higher return than a standard royalty deal.
Xadago’s further trial plus potential novel therapies
Xadago is a marketed product that faces competition from established generic products such as rasagiline. Extending its indications into relief of levodopa-induced dyskinesia in Parkinson’s disease would add value. Newron wishes to run the study and will provide 50% of the funding (up to €10m) with the licensee, Zambon, funding the remainder. If agreement is reached soon, a trial could start in 2021, with possible approval from 2023. Newron is also seeking to in-license novel products targeting the central and peripheral nervous systems.
Valuation: Funding to 2022
Newron had €39.4m cash in June 2020. There is cash and available funding to support development well into 2022, partly from an unused €15m EIB loan facility, and partnering would extend this. Our model indicates an unchanged value of about CHF121m (CHF6.8/share). A partnering or co-development decision would potentially trigger a valuation rebasing depending on the terms.
Exhibit 1: Financial summary
€000s |
2018 |
2019 |
2020e |
2021e |
||
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
4,025 |
7,038 |
5,590 |
6,669 |
Cost of Sales |
0 |
0 |
0 |
0 |
||
Gross Profit |
4,025 |
7,038 |
5,590 |
6,669 |
||
EBITDA |
|
|
(14,931) |
(20,707) |
(13,757) |
(19,593) |
Operating Profit (before amort. and except.) |
|
|
(14,967) |
(20,899) |
(13,963) |
(19,616) |
Intangible Amortisation |
(11) |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Operating Profit |
(14,978) |
(20,899) |
(13,963) |
(19,616) |
||
Net Interest |
(41) |
737 |
(507) |
(572) |
||
Profit Before Tax (norm) |
|
|
(15,008) |
(20,162) |
(14,470) |
(20,189) |
Profit Before Tax (reported) |
|
|
(15,019) |
(20,162) |
(14,470) |
(20,189) |
Tax |
(16) |
(45) |
0 |
0 |
||
Profit After Tax (norm) |
(15,024) |
(20,207) |
(14,470) |
(20,188) |
||
Profit After Tax (reported) |
(15,035) |
(20,207) |
(14,470) |
(20,189) |
||
Average Number of Shares Outstanding (m) |
17.8 |
17.8 |
17.8 |
17.8 |
||
EPS - normalised (c) |
|
|
(84.20) |
(113.24) |
(81.09) |
(113.13) |
EPS - (reported) (€) |
|
|
(0.84) |
(1.13) |
(0.81) |
(1.13) |
Dividend per share |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
100.0 |
100.0 |
100.0 |
100.0 |
||
EBITDA Margin (%) |
N/A |
N/A |
N/A |
N/A |
||
Operating Margin (before GW and except.) (%) |
N/A |
N/A |
N/A |
N/A |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
487 |
342 |
342 |
332 |
Intangible Assets |
30 |
20 |
20 |
10 |
||
Tangible Assets |
106 |
116 |
116 |
116 |
||
Investments |
351 |
206 |
206 |
206 |
||
Current Assets |
|
|
59,512 |
59,946 |
49,912 |
40,674 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
15,659 |
20,783 |
19,783 |
19,783 |
||
Cash |
43,853 |
39,163 |
30,129 |
20,891 |
||
Other |
0 |
0 |
0 |
0 |
||
Current Liabilities |
|
|
(4,432) |
(5,595) |
(7,081) |
(8,081) |
Creditors |
(4,432) |
(5,595) |
(7,081) |
(8,081) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(731) |
(17,895) |
(25,395) |
(40,395) |
Long term borrowings |
0 |
(16,749) |
(24,249) |
(39,249) |
||
Other long-term liabilities |
(731) |
(1,146) |
(1,146) |
(1,146) |
||
Net Assets |
|
|
54,836 |
36,798 |
17,778 |
(7,470) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(15,954) |
(22,210) |
(16,484) |
(24,189) |
Net Interest |
(78) |
71 |
0 |
0 |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
(40) |
(51) |
(50) |
(50) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
51 |
0 |
7,500 |
15,000 |
||
Other |
3,002 |
16,619 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(13,019) |
(5,571) |
(9,034) |
(9,239) |
||
Opening net debt/(cash) |
|
|
(60,081) |
(43,853) |
(22,414) |
(5,880) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
(3,209) |
(15,868) |
(7,500) |
(15,000) |
||
Closing net debt/(cash) |
|
|
(43,853) |
(22,414) |
(5,880) |
18,358 |
Source: Company accounts, Edison Investment Research
|
|
Research: Healthcare
The bulk of Sareum’s value rests on the late preclinical autoimmune therapy SDC-1801, with planned filing to start clinical development in H121 followed by possible exploratory clinical studies, if funding allows, from H221. This could open the way to a substantive partnering deal from Q222. Partnering could be helped if the related BMS therapeutic deucravacitinib gains FDA approval and blockbuster sales in psoriasis. Sareum could offer a partner a promising route to an autoimmune therapy with potentially broad indications.