Last close As at 06/08/2026
CHF12.30
▲ 0.04 (0.33%)
Market capitalisation
CHF256m
Research: Healthcare
On 4 May Newron Pharmaceuticals announced that the pivotal Rett syndrome STARS study of sarizotan had not met the primary or any secondary endpoints. The company will focus now on its novel schizophrenia drug, Evenamide. This clinical programme, due to resume in 2020, is on hold due to COVID-19. Newron drew a €7.5m EIB loan on 15 April and had €39m in cash in December 2019.
Written by
Newron Pharmaceuticals |
Sarizotan fails to shine |
Trial update |
Pharma & biotech |
5 May 2020 |
Share price performance
Business description
Analysts
Newron Pharmaceuticals is a research client of Edison Investment Research Limited |
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On 4 May Newron Pharmaceuticals announced that the pivotal Rett syndrome STARS study of sarizotan had not met the primary or any secondary endpoints. The company will focus now on its novel schizophrenia drug, Evenamide. This clinical programme, due to resume in 2020, is on hold due to COVID-19. Newron drew a €7.5m EIB loan on 15 April and had €39m in cash in December 2019.
Year end |
Revenue (€m) |
PBT* (€m) |
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 |
5.56 |
(17.05) |
(0.96) |
0.0 |
N/A |
N/A |
12/21e |
6.63 |
(29.44) |
(1.65) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments. FY20 and FY21 forecasts are retained but subject to further guidance.
The STARS study of sarizotan showed no efficacy so development has stopped. In our former valuation of CHF340m, now withdrawn, we had assumed a 30% probability of success and discounted value of CHF211m.
Newron will now focus on Evenamide for schizophrenia. In H119, the FDA delayed the two planned pivotal studies due to safety concerns. On 9 January, Newron announced that it would run a four-week exploratory safety study in patients with schizophrenia. However, on 31 March Newron announced a delay due to the COVID-19 pandemic. As yet, there is no revised timeline. We anticipate that the safety study may conclude by mid-2021, which would allow Phase III studies possibly from Q321. We have not changed our expectation for sales to start in 2025.
We have retained current FY20 and FY21 forecasts. Xadago (safinamide) royalties are as previously forecast. In the US, WorldMeds Pharma, the Xadago sublicensee, has exited the CNS market by selling its portfolio, including Xadago, to Supernus Pharmaceuticals. This may be beneficial to Newron from 2021 if it leads to more sales investment. A trial to gain a label extension in L-DOPA-induced dyskinesia is being planned. There may, however, be lower R&D costs in 2020 due to trial delays and no registration costs. In 2021, potential pre-marketing costs for sarizotan will not now be incurred so SG&A might be lower.
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Research: Investment Companies
BlackRock Greater Europe Investment Trust (BRGE) is co-managed by Stefan Gries (developed markets) and Sam Vecht (emerging markets). Gries explains that one of their jobs as active investors is to identify parts of the market that will be problematic and therefore will not create value on a multi-year basis. This informs their focus on high-quality growth businesses that can be held for the long term and on avoiding ‘value traps’. Gries believes that ultimately, the coronavirus-led market sell-off will provide a real opportunity for investors to return to Europe, a market that already had a low allocation from global investors. It will benefit from any improvement in the global economy as c 60% of its revenues are generated outside of the region, ‘which makes me quite excited’, he adds.