Currency in CHF
Last close As at 25/03/2023
CHF5.96
▲ 0.14 (2.41%)
Market capitalisation
CHF104m
Research: Healthcare
Newron, a Switzerland-quoted Italian company, is developing evenamide (30mg twice per day) to meet the major unmet need for new therapies to help both poorly managed and refractory schizophrenia patients. Evenamide would add on to existing treatments. A potentially pivotal study is due to report by Q422. Newron hopes to partner evenamide for the larger market of patients no longer gaining the full benefit of current anti-psychotic therapies. Newron may directly sell evenamide to treat identified clozapine-resistant patients. The company now gains royalties from Xadago, a Parkinson’s disease therapy. A further Xadago dyskinesia study, starting in Q122, could boost sales. Newron had cash plus loan facilities at end June totalling €36.9m plus Xadago royalties to fund it into 2023.
Written by
John Savin
Newron Pharmaceuticals |
Pivotal progress on schizophrenia therapy
Pharma & biotech |
Deutsches Eigenkapitalforum 2021
1 November 2021 |
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Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
Newron, a Switzerland-quoted Italian company, is developing evenamide (30mg twice per day) to meet the major unmet need for new therapies to help both poorly managed and refractory schizophrenia patients. Evenamide would add on to existing treatments. A potentially pivotal study is due to report by Q422. Newron hopes to partner evenamide for the larger market of patients no longer gaining the full benefit of current anti-psychotic therapies. Newron may directly sell evenamide to treat identified clozapine-resistant patients. The company now gains royalties from Xadago, a Parkinson’s disease therapy. A further Xadago dyskinesia study, starting in Q122, could boost sales. Newron had cash plus loan facilities at end June totalling €36.9m plus Xadago royalties to fund it into 2023.
Potentially pivotal study to provide validation
Evenamide selectively blocks sodium channels to prevent rapid bursts of the nerve depolarisation that carries electric signals. This may help to control schizophrenia. Study 008A (at a 30mg twice per day (bid) dose) has been boosted to give higher statistical power (196 patients) to become a potentially pivotal Phase II/III study. It is being run in Europe, Asia and Latin America. Completion is scheduled for late 2022. We expect mainly US studies, possibly in treatment-resistant schizophrenia patients, once the US regulatory strategy has been agreed with the FDA.
Xadago: Royalties, trials and possible generics
Xadago is a marketed product competing with established generic products like rasagiline. In the United States, generic companies have filed notice of their intention to enter the Xadago market; Newron is contesting these. Xadago’s H121 royalties were €2.65m, up 6.5% over H120. A trial to extend Xadago’s US label to cover relief of Parkinson’s dyskinesia would add major value and might start by Q122. Newron and Zambon agreed in March 2021 to fund this study on a 50:50 basis; the expected cost to Newron is under €10m. Newron is running the study.
Valuation: Funding into 2023
Newron had €21.9m cash on 30 June 2021 and has since drawn the last €15m of the EIB loan facility so effectively had €36.9m in cash (pro forma) and €40m face value of debt. There are also anticipated Xadago royalties to support planned developments into 2023. Our valuation indicates about CHF107m (CHF6/share) based on Xadago royalties and probability adjusted evenamide sales. Our valuation will be revised once Study 008A reports and a full evenamide efficacy readout at a therapeutic dose is available. Newron aims to acquire products to boost its pipeline.
Edison estimates
Source: Newron reports, Edison estimates |
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Research: Consumer
Borussia Dortmund has an established track record as one of the most successful football clubs in Europe. This enables it to exploit structural tailwinds, increasing global and multi-media coverage, to drive long-term revenue growth. FY21 was a challenging year financially due to the negative effects of COVID-19 related restrictions, but the team was relatively successful including winning major silverware and guaranteed participation in the financially lucrative Champions League in FY22. The phased return of fans to the stadium through FY22 should lead to better financial results. The share price weakness has led to it trading at recent low multiples and well below our sum-of-the-parts valuation of €11.56/share.
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