Last close As at 05/08/2026
CHF12.26
▲ 0.44 (3.72%)
Market capitalisation
CHF256m
Research: Healthcare
Newron is focusing on its novel schizophrenia drug, Evenamide, and on a further Xadago study. The Evenamide preclinical studies required by the FDA have been successfully completed. A four-week, 120-patient Phase II safety study is now underway to report in Q121; Newron notes that Phase III could start in Q221. Discussions with Zambon on a Xadago dyskinesia study are progressing. Newron drew down a €7.5m EIB loan in April (a €15m loan facility remains) and had €39m cash at end December 2019. Newron has cash well into 2022. Our indicative value remains at CHF121m.
Written by
Newron Pharmaceuticals |
Evenamide safety trial underway |
Evenamide update |
Pharma & biotech |
26 August 2020 |
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Business description
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Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
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Newron is focusing on its novel schizophrenia drug, Evenamide, and on a further Xadago study. The Evenamide preclinical studies required by the FDA have been successfully completed. A four-week, 120-patient Phase II safety study is now underway to report in Q121; Newron notes that Phase III could start in Q221. Discussions with Zambon on a Xadago dyskinesia study are progressing. Newron drew down a €7.5m EIB loan in April (a €15m loan facility remains) and had €39m cash at end December 2019. Newron has cash well into 2022. Our indicative value remains at 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 in new safety study, pivotal move in Q221
Newron is focusing development work onto Evenamide for schizophrenia. A four-week exploratory safety trial (Study 008) in patients with chronic schizophrenia, as requested by the FDA, is underway (NCT04461119). This plans to use three US sites, 11 hospitals in India and one UK site. It aims to be completed by late January 2021. As a 120-patient outpatient study, it should not be severely affected by COVID-19; 40 patients have been enrolled to date. The randomised trial has three arms: a 7.5mg dose twice per day (bid), a 15mg bid dose and placebo (bid). The endpoint is safety with secondary efficacy endpoints. All patients have psychotic symptoms despite taking an established therapy. Newron then hopes to start two pivotal studies in Q221. These comprise Study 003 to alleviate partial symptoms alongside current anti-psychotic agents plus Study 004 in patients who are treatment refractory to clozapine. Clozapine is currently the most effective anti-psychotic agent, but about 30–50% of patients become resistant to the therapy giving no further treatment options.
Xadago’s further trial plus potential novel therapies
Xadago is a marketed product that faces competition from established generic products like 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. Agreement is said to be close and a trial could start in 2021 with possible approval from 2023. In April, the US sublicensee changed to Supernus; this may boost growth due to a larger salesforce. Newron is seeking to in-license novel products targeting the central and peripheral nervous systems.
Valuation: Evenamide partnering or funding needed
Newron had €39m cash in December and drew a further €7.5m EIB loan in April. There is sufficient cash and available funding, according to Newron, well into 2022. Our model indicates an unchanged value of about CHF121m (CHF6.8/share).
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: Financials
Secure Trust Bank (STB) reported H120 PBT of £5.1m (vs £18.1m a year ago) and a 3.0% ROE. Income grew 4% y-o-y, but impairments almost doubled, and payment holiday charges also hurt. STB notes that since the lockdown ended, business has been rebounding. Its robust capital (CET 13.5%), business model and proven agility allow it to react to the changing lending environment. STB currently trades on a P/BV of 0.49x, reflecting sentiment more than fundamentals given its profitability track record and successful model. Our fair value estimate is 1,704p per share, down from 2,428p.