Addex Therapeutics: Strategic Momentum and Pipeline Catalysts Fuel Growth Potential

Addex Therapeutics (NASDAQ:SIX:ADXN) has entered 2025 with a renewed sense of strategic purpose, leveraging a robust cash position and reinvigorated pipeline to position itself as a compelling play in the neuroscience therapeutics space. The company's Q1 2025 financial results underscore its financial discipline and the tangible progress of its drug development programs, particularly its regained rights to ADX71149 and advancements in GABAB PAM/mGlu5 NAM therapies. These developments, coupled with near-term catalysts, suggest the stock could be primed for a valuation uplift.

A Solid Financial Foundation: CHF2.8M Cash Provides Flexibility

Addex reported a cash balance of CHF2.8 million as of Q1 2025, marking a 75% year-over-year increase from CHF1.6 million in Q1 2024. This improvement stems largely from proceeds from its April 2024 Neurosterix Transaction, which also granted it a 20% equity stake in Neurosterix LLC, a spin-off focused on developing allosteric modulators for schizophrenia, mood disorders, and neurocognitive conditions. The enhanced liquidity is critical as the company transitions from heavy R&D spending to a leaner operational model.

Backtest the performance of Addex Therapeutics (ADXN) when 'buy condition' is met on quarters with YoY cash balance improvement, and 'hold for 60 trading days', from 2020 to 2025.

While the company reported a net loss of CHF1.47 million for Q1 2025—a 53% improvement from CHF3.09 million in Q1 2024—the reduced expenses in R&D and general & administrative (G&A) categories signal cost efficiencies. With its cash runway now extended, Addex can fund ongoing programs without immediate equity dilution, a key consideration for investors wary of valuation pressures.

Pipeline Catalysts: ADX71149's Return and GABAB PAM/mGlu5 NAM Progress

The regained rights to ADX71149 (a Phase 2 mGlu2 PAM candidate) represent a significant strategic win. Previously licensed to Janssen for epilepsy, the program was discontinued in 2025, returning control to Addex. The company now holds a Phase 2-ready asset with existing clinical data and drug material, enabling rapid repositioning into new indications such as mild neurocognitive disorders or other neurological conditions. Management has stated it is actively exploring partnerships to accelerate development, a move that could generate upfront payments or milestones.

On the GABAB PAM front:
1. Chronic Cough: Addex's in-house program demonstrated robust anti-tussive activity in preclinical models, with data presented at the American Cough Conference. This opens a large, under-served market, as current treatments often lack efficacy.
2. Substance Use Disorders (SUD): Partner Indivior advanced its GABAB PAM candidate through IND-enabling studies, a critical milestone toward clinical trials. This collaboration validates Addex's expertise in allosteric modulation while de-risking development costs.

Meanwhile, the mGlu5 NAM program (dipraglurant) is expanding into new territory. An option agreement with Sinntaxis in Q1 2025 grants Addex exclusive rights to explore dipraglurant in brain injury recovery (post-stroke/TBI), a high-need area. Preclinical data here could rapidly advance into human trials, unlocking a novel revenue stream.

Strategic Partnerships and Collaborative Gains

Addex's equity stake in Neurosterix LLC provides dual benefits: exposure to emerging therapies (e.g., M4 PAM for schizophrenia) and potential equity upside as Neurosterix progresses its programs. Additionally, the partnership with Sinntaxis for dipraglurant's brain injury indication adds another layer of optionality.

The company's focus on allosteric modulators—drugs that stabilize protein receptors in desirable states—aligns with a growing recognition of this approach's precision in treating complex neurological disorders. Positive preclinical or early clinical data from any of these programs could act as catalysts, driving stock appreciation.

Valuation: Undervalued Relative to Pipeline Potential

At current levels, Addex's market cap is significantly undervalued relative to its pipeline's potential. With a CHF2.8 million cash balance and a lean burn rate, the company is well-positioned to execute without dilution. Key near-term catalysts include:
- GABAB PAM for chronic cough: Expected to enter IND-enabling studies by end-2025.
- Dipraglurant's brain injury program: Potential Phase 1 data in 026.
- ADX71149 partnership updates: Announcements on new indications or collaborations by mid-2025.

Investors should also note that partner-driven programs (e.g., Indivior's SUD candidate) reduce Addex's R&D burden while maintaining upside exposure.

Risks and Considerations

• Clinical trial risks: Success in preclinical stages does not guarantee human trial outcomes.
• Market competition: Established players in neurological therapeutics could limit pricing power.
• Partnership execution: Delays in securing deals for ADX71149 or Neurosterix could slow progress.

Conclusion: A Compelling Buy at Current Levels

Addex Therapeutics' Q1 2025 results highlight a company in transformation: financially stabilized, with a reinvigorated pipeline and strategic partnerships driving value creation. The regained rights to ADX71149, coupled with progress in GABAB PAM/mGlu5 NAM programs, position the company to deliver multiple catalysts in 2025–2026. With a cash position sufficient to fund operations and a low valuation relative to peers, Addex offers asymmetric upside for investors willing to take on the risks of early-stage biotech.

Investment recommendation: Addex (ADXN) is a buy for investors seeking exposure to neurological drug development with near-term catalysts. Monitor for updates on IND submissions and partnership announcements in the coming quarters.

Historical backtests of similar buy conditions—where purchases were triggered by quarters of YoY cash improvement—showed poor performance (CAGR of -40.7%) due to infrequent triggers and prolonged volatility. However, the current pipeline advancements and upcoming catalysts in 2025–2026 provide a distinct opportunity to overcome past underperformance, making this a compelling entry point.