Last close As at 05/08/2026
CHF12.26
▲ 0.44 (3.72%)
Market capitalisation
CHF256m
Research: Healthcare
Newron Pharmaceuticals has announced new arrangements that offer the company improved operational flexibility. We estimate a pro forma gross cash balance of €17.5m (estimated year-end gross cash of €12m plus €5.5m initial equity issue) to extend the company’s cash runway into FY25, well past the top-line readout from the potentially pivotal 008A study (expected this month) and initiation of the Phase III 003 study (anticipated in Q224), both assessing evanamide in schizophrenia subsets. Provided results are positive, we expect the company to sign a licensing deal by H224. We will present updated estimates following the release of full-year results on 19 March. Management has announced a private placement of up to €15m (c CHF14.4m) from an institutional investor (initial issue of 750k shares worth €5.5m with an option to subscribe to up to an additional 1.3m shares for €9.5m). The company also reported an amendment to its loan repayment terms with the European Investment Bank (EIB), pushing out the first repayment to November 2025 (previously €10m in June 2024).
Written by
Newron Pharmaceuticals |
Operational flexibility with new/updated financing |
Funding update |
Pharma and biotech |
15 March 2024 |
Share price performance
Business description
Analysts
Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
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Newron Pharmaceuticals has announced new arrangements that offer the company improved operational flexibility. We estimate a pro forma gross cash balance of €17.5m (estimated year-end gross cash of €12m plus €5.5m initial equity issue) to extend the company’s cash runway into FY25, well past the top-line readout from the potentially pivotal 008A study (expected this month) and initiation of the Phase III 003 study (anticipated in Q224), both assessing evanamide in schizophrenia subsets. Provided results are positive, we expect the company to sign a licensing deal by H224. We will present updated estimates following the release of full-year results on 19 March. Management has announced a private placement of up to €15m (c CHF14.4m) from an institutional investor (initial issue of 750k shares worth €5.5m with an option to subscribe to up to an additional 1.3m shares for €9.5m). The company also reported an amendment to its loan repayment terms with the European Investment Bank (EIB), pushing out the first repayment to November 2025 (previously €10m in June 2024).
Year end |
Revenue (€m) |
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.
The financing of up to €15m will be effected via a subscription agreement for up to 2.05m newly issued shares with an institutional investor focused on high-growth sectors, including biotech and healthcare. The investor will initially be issued 750,000 Newron shares at €7.33/CHF7.05 per share (c 10% discount to the last trading price of CHF7.82) for gross proceeds of c €5.5m, with an option to subscribe to up to an additional 1.3m shares until 31 January 2025. If fully subscribed, the shareholders will hold a c 10% stake in the company. In parallel, Newron announced an amendment to its repayment dates for the €40m loan raised from the EIB between 2019 and 2021 (across five tranches), the first tranche of which (€10m) was previously due for repayment in June 2024, with tranches 2 and 3 due in September 2025 and tranches 4 and 5 in September 2026. Under the revised arrangement, tranche 1 will now be repayable in November 2025 and tranches 2 and 3 in April 2026, with the timeline for tranches 4 and 5 remaining unchanged at September 2026. In return, the EIB will now be entitled to performance-based remuneration.
We believe these new and revised arrangements will provide increased flexibility and legroom for Newron to progress its clinical pipeline and come at an opportune time for the company, given the imminent readout from the potentially pivotal 008A trial evaluating evanamide in patients with chronic schizophrenia, not classed as treatment-resistant (expected in March 2024) and the initiation of the Phase III 003 study in treatment-resistant schizophrenia (planned to initiate in Q224). We expect the pro forma gross cash balance of c €17.5m will be sufficient to fund operations into 2025 (previously the cash runway was to Q324), well past these milestones, each of which could be a major inflection point for Newron. Should data from the trial(s) be positive, we expect the company to sign a partnering agreement in H224.
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Research: Consumer
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