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. Two recently completed safety studies, one in patients and the other in healthy volunteers respectively showed no brain or heart safety issues. The patient Phase II study did not show efficacy at the 7.5mg or 15mg bid doses requested by the FDA. Newron will now complete the requested safety work using the intended therapeutic dose of 30mg bid. This continuation study (008A) will take until H221 to complete. Our indicative value of CHF121m has been retained until Study 008A completes.
Written by
Newron Pharmaceuticals |
Gate not yet open to Phase III |
Evenamide update |
Pharma & biotech |
7 April 2021 |
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Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
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Newron is developing evenamide as an add-on to existing anti-psychotic therapies to treat poorly managed and refractory schizophrenia. Two recently completed safety studies, one in patients and the other in healthy volunteers respectively showed no brain or heart safety issues. The patient Phase II study did not show efficacy at the 7.5mg or 15mg bid doses requested by the FDA. Newron will now complete the requested safety work using the intended therapeutic dose of 30mg bid. This continuation study (008A) will take until H221 to complete. Our indicative value of CHF121m has been retained until Study 008A completes.
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. 2019 accounts were restated.
Confirmatory expansion study at 30mg dose
Evenamide reduces the firing rate of neurons, preventing rapid bursts of the nerve depolarisation that carries electric signals. As neuronal signalling is how the brain and heart function, the FDA required key safety evidence. Newron reported on 1 April that evenamide was safe. This was based on data from Study 008 with 138 patients studying brain wave activity. A further 58-volunteer heart study (010) showed no effects on heart electrical activity, indicating no risk of arrythmias.
In study 008 in chronic schizophrenia, patients were assessed on the widely used Positive and Negative Syndrome Scale (PANSS) for efficacy. There was no statistical difference compared to placebo at the 15mg twice per day (bid) dose; 7.5mg bid was sub-therapeutic. As a result, an extension, Study 008A, will be run at a 30mg bid dose. If Study 008A is positive, the 30mg bid intended therapeutic dose could progress into Phase III. A 25mg bid dose was evaluated, including PANSS, in a 90-patient, four-week dose escalation study from 15mg to 25mg with efficacy reported; a single 30mg dose has also been tested.
Effect on cash flow and partnering
Study 008A could complete by late 2021 with pivotal studies now possible from Q222, in our view. Phase III data may not be available before H223 with full year marketing possible from 2025. This also implies that an evenamide deal is unlikely before H222. There is funding and anticipated cash flows to support development until at least late 2022; this may be extended as Phase III costs are delayed.
Valuation: Held at CHF121m until more data available
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. If evenamide cannot show sufficient indication of efficacy at the 30mg bid dose or if significant safety issues arise, the project might not progress. In that case, the remaining value would rest on Xadago with current annual royalties of €5.3m.
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: Industrials
Following the latest trading update, we have increased our earnings estimates again. Trading momentum is expected to continue beyond the year end and we now expect dividends to normalise more quickly. Although there are still some market issues to contend with (most obviously easing COVID-19 restrictions and a tight freight industry), recent updates suggest the company is meeting the challenges well.