Last close As at 05/08/2026
CHF12.26
▲ 0.44 (3.72%)
Market capitalisation
CHF256m
Research: Healthcare
Newron is developing evenamide as an add-on to existing anti-psychotic therapies to treat poorly managed and refractory schizophrenia. A potentially pivotal Phase II/III study is starting in Europe, Asia and Latin America. This could report by Q422. It uses an intended therapeutic dose of 30mg twice per day. We maintain our indicative value of CHF121m.
Written by
Newron Pharmaceuticals |
Evenamide Phase III at 30mg twice daily dose |
Evenamide Phase III |
Pharma & biotech |
8 September 2021 |
Share price performance
Business description
Next events
Analysts
Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Newron is developing evenamide as an add-on to existing anti-psychotic therapies to treat poorly managed and refractory schizophrenia. A potentially pivotal Phase II/III study is starting in Europe, Asia and Latin America. This could report by Q422. It uses an intended therapeutic dose of 30mg twice per day. We maintain our indicative value of CHF121m.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
7.04 |
(18.04) |
(1.01) |
0.0 |
N/A |
N/A |
12/20 |
5.26 |
(18.16) |
(1.09) |
0.0 |
N/A |
N/A |
12/21e |
6.67 |
(18.10) |
(1.01) |
0.0 |
N/A |
N/A |
12/22e |
7.68 |
(27.24) |
(1.53) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. FY19 accounts were restated.
Evanamide: A novel therapy to control schizophrenia
Evenamide reduces the firing rate of neurons, preventing rapid bursts of the nerve depolarisation that carries electric signals. Newron reported on 1 April that evenamide was very safe. Study 008 (NCT04461119) in chronic schizophrenia found that a 15mg twice per day (bid) dose, selected after FDA discussions, was too low but there is strong science supporting the case that a 30mg dose will give sustained efficacy – that dose is used in Study 008A. A 25mg bid dose was evaluated in a previous 89-patient, four-week study with positive efficacy; higher doses have been safely tested so we do not see the higher dose as problematic.
Potentially pivotal study at 30mg twice per day dose
Study 008A was previously viewed as a continuation of Study 008 but it has now been given higher statistical power to make it into a pivotal Phase II/III placebo controlled study run in Europe, Asia and Latin America. The study (EudraCT 2020-006062-36) aims to enrol at least 196 patients of whom at least 105 will be in Europe. The evenamide dose is titrated from 15mg bid in the first week to 30mg bid. There are two day-29 primary endpoints: safety and tolerability and, for efficacy, the improvement in the Positive and Negative Syndrome Scale (PANSS). We expect further US-based studies, possibly in treatment-resistant patients (including clozapine resistant), once the strategy has been agreed with the FDA.
Valuation: Held at CHF121m until more data available
Study 008A could complete by Q422 (formerly late 2021); this indicates that EU approval may be possible around mid-2024. This implies that an evenamide partnering deal is unlikely before mid-2023, but the delay should be beneficial as it could be at a much higher value given pivotal data and an EU regulatory filing.
Our current valuation uses an evenamide probability of 30% and indicates a value of about CHF121m (CHF6.8/share). We have retained this until study 008A reports. A further €7.5m EIB loan tranche has been drawn so with the revised clinical trial timings and anticipated Xadago royalties, management now estimates there is funding into 2023. Interim results are due on 17 September.
Exhibit 1: Financial summary
€000s |
2019 |
2020 |
2021e |
2022e |
||
Year end December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
7,038 |
5,258 |
6,669 |
7,678 |
Cost of Sales |
0 |
0 |
0 |
0 |
||
Gross Profit |
7,038 |
5,258 |
6,669 |
7,678 |
||
EBITDA |
|
|
(18,567) |
(16,386) |
(16,681) |
(25,822) |
Depreciation |
(206) |
(219) |
(219) |
(219) |
||
Share option adjustments |
(2,126) |
(1,461) |
0 |
0 |
||
Operating Profit |
(20,899) |
(18,066) |
(16,900) |
(26,041) |
||
Net Interest |
737 |
(1,552) |
(1,200) |
(1,200) |
||
Profit Before Tax (norm) |
|
|
(18,036) |
(18,157) |
(18,100) |
(27,241) |
Profit Before Tax (reported) |
|
|
(20,162) |
(19,618) |
(18,100) |
(27,241) |
Tax |
(45) |
(1,380) |
0 |
0 |
||
Profit After Tax (norm) |
(18,081) |
(19,537) |
(18,100) |
(27,241) |
||
Profit After Tax (reported) |
(20,207) |
(20,998) |
(18,100) |
(27,241) |
||
Average Number of Shares Outstanding (m) |
17.8 |
17.8 |
17.8 |
17.8 |
||
EPS - normalised (€) |
|
|
(1.01) |
(1.09) |
(1.01) |
(1.53) |
EPS - (reported) (€) |
|
|
(1.13) |
(1.18) |
(1.01) |
(1.53) |
Dividend per share (c) |
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 |
|
|
14,797 |
13,324 |
13,309 |
13,294 |
Intangible Assets |
20 |
11 |
11 |
11 |
||
Tangible Assets |
252 |
734 |
719 |
704 |
||
Investments |
14,525 |
12,579 |
12,579 |
12,579 |
||
Current Assets |
|
|
45,491 |
37,874 |
20,048 |
8,323 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
6,328 |
6,624 |
6,324 |
6,324 |
||
Cash |
39,163 |
31,250 |
13,724 |
1,999 |
||
Current Liabilities |
|
|
(5,595) |
(6,892) |
(7,151) |
(7,651) |
Creditors |
(5,595) |
(6,892) |
(7,151) |
(7,651) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(17,895) |
(27,060) |
(27,060) |
(42,060) |
Long term borrowings |
(16,749) |
(25,674) |
(25,674) |
(40,674) |
||
Other long-term liabilities |
(1,146) |
(1,386) |
(1,386) |
(1,386) |
||
Net Assets |
|
|
36,798 |
17,246 |
(854) |
(28,094) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(22,668) |
(12,656) |
(16,141) |
(25,341) |
Net Interest |
737 |
(1,552) |
(1,200) |
(1,200) |
||
Tax |
(45) |
(1,380) |
0 |
0 |
||
Capex |
(51) |
(34) |
(50) |
(50) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
0 |
0 |
0 |
0 |
||
Other |
17,337 |
7,365 |
(135) |
14,865 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(4,690) |
(8,257) |
(17,526) |
(11,726) |
||
Opening net debt/(cash) |
|
|
(42,972) |
(22,414) |
(5,576) |
11,950 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
(15,868) |
(8,581) |
0 |
(15,000) |
||
Closing net debt/(cash) |
|
|
(22,414) |
(5,576) |
11,950 |
38,675 |
Source: Company accounts, Edison Investment Research
|
|
Research: Investment Companies
European Opportunities Trust (JEO) invests in European and UK companies offering good prospects for capital growth. Alexander Darwall has managed JEO since its inception in 2000. He aims to construct a ‘fund for all seasons’ comprising stocks capable of generating profits in all economic climates. Darwall is a high-conviction investor and JEO is a concentrated portfolio of ‘special’, globally focused companies that benefit from unique technologies or favourable industry structures and possess multiple growth channels. Performance in the year ended May 2021 was disappointing, in part due to JEO’s bias towards high-quality companies, which lagged more economically sensitive stocks in late 2020, when the economic outlook was transformed by the arrival of viable vaccines. JEO also had exposure to the fraudulent German company Wirecard when it collapsed in June 2020. However, the trust’s long-term performance has been positive in both absolute and relative terms. It has realised an annualised NAV total return of 14.1% over the past 10 years to end August 2021, compared to an annualised benchmark return of 9.9%. This track record attests to Darwall’s ability to deliver sustainable capital growth, regardless of prevailing economic conditions.