Newron Pharmaceuticals — Evenamide notches up another win (study 008A)

Newron Pharmaceuticals (SIX: NWRN)

Last close As at 20/11/2024

CHF7.00

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Market capitalisation

CHF149m

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Research: Healthcare

Newron Pharmaceuticals — Evenamide notches up another win (study 008A)

Newron Pharmaceuticals has shared positive top-line data for its evenamide programme from its potentially pivotal Phase II/III trial (study 008A) in patients with poorly managed schizophrenia on current antipsychotic therapy, but not considered treatment-resistant. The trial met its primary endpoint of improvement on the Positive and Negative Syndrome Scale (PANSS) score from baseline, and the key secondary endpoint of improvement on the Clinical Global Impression of Severity (CGI-S) scale. Statistical significance was met in both, consolidating the already strong results from the Phase II trial (study 014/015) in treatment-resistant schizophrenia (TRS). Management plans to follow this up with a potentially pivotal Phase III study in TRS (study 017), which, subject to final agreement by potential partners and regulatory bodies, could commence within 2024.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Newron Pharmaceuticals

Evenamide notches up another win (study 008A)

Clinical update

Pharma and biotech

1 May 2024

Price

CHF8.21

Market cap

CHF153m

€1.02/CHF

Net debt (€m) at end-December 2023 (excluding €5.5m in initial proceeds from the March 2024 private placement)

34.4

Shares in issue (including initial 750k shares issued under the March 2024 private placement)

18.6m

Free float

95%

Code

NWRN

Primary exchange

SIX SWISS Exchange

Secondary exchange

N/A

Share price performance

Business description

Newron Pharmaceuticals is focused on the central nervous system. Xadago for Parkinson’s disease is sold in Europe, Japan and the United States. Evenamide, a novel schizophrenia add-on therapy, is involved in a Phase III trial programme targeting schizophrenia.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Arron Aatkar

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Newron Pharmaceuticals is a research client of Edison Investment Research Limited

Newron Pharmaceuticals has shared positive top-line data for its evenamide programme from its potentially pivotal Phase II/III trial (study 008A) in patients with poorly managed schizophrenia on current antipsychotic therapy, but not considered treatment-resistant. The trial met its primary endpoint of improvement on the Positive and Negative Syndrome Scale (PANSS) score from baseline, and the key secondary endpoint of improvement on the Clinical Global Impression of Severity (CGI-S) scale. Statistical significance was met in both, consolidating the already strong results from the Phase II trial (study 014/015) in treatment-resistant schizophrenia (TRS). Management plans to follow this up with a potentially pivotal Phase III study in TRS (study 017), which, subject to final agreement by potential partners and regulatory bodies, could commence within 2024.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/22

6.09

(16.99)

(0.95)

0.0

N/A

N/A

12/23

9.06

(16.00)

(0.90)

0.0

N/A

N/A

12/24e

24.33

(2.6)

(0.14)

0.0

N/A

N/A

12/25e

27.06

(0.8)

(0.04)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Study 008A was a randomised, double-blind, placebo-controlled, potentially pivotal Phase II/III trial across 45 centres in 11 countries in Europe, Asia and Latin America. The study was designed to assess the safety, tolerability and efficacy of evenamide following a four-week 30mg twice-daily (bid) treatment regimen (n=291). The target population was patients with poorly managed schizophrenia already receiving antipsychotics, but who are not classed as having TRS. 280 of 291 patients completed the study, with only three discontinuing due to adverse events (two of whom were in the evenamide treatment arm).

Encouragingly, the top-line results confirmed the safety and tolerability profile of evenamide, which was similar to placebo (adverse events – 25.0% for evenamide vs 25.8% for placebo). Management noted that no new or specific concerns were raised in the study that were inconsistent with prior data. In terms of the primary efficacy measure, evenamide treatment was associated with a statistically significant (p-value 0.006) reduction in PANSS total score of 10.2 points, compared to 7.6 points with placebo at day 29. The key secondary endpoint was also met with statistical significance (p-value 0.037), with the CGI-S data showing a least square mean difference of 0.16 between evenamide and placebo. Collectively, we believe the results are highly encouraging, supporting Newron’s approach to managing this condition through the glutamatergic inhibition mechanism.

While we await further details on the study data (expected in the next few weeks), as well as Newron’s development/commercial plans, we maintain our valuation of CHF219.1m; our assumptions may be reassessed as new information becomes available. We expect partnering discussions to gather steam, and anticipate progress here to define the plan and expected timeline for the Phase III 017 study initiation. Based on our projections, we expect the company to be funded into 2025, sufficient for it to finalise a partnering deal for evenamide, in our opinion.

General disclaimer and copyright

This report has been commissioned by Newron Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Newron Pharmaceuticals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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United Kingdom

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This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Newron Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Newron Pharmaceuticals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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