Addex Therapeutics Ltd. Q4 FY2021 Earnings Call

Hello, everyone. I would like to thank you all for joining our 2020 full year financial results conference call. I am here with Roger Mills, our Chief Medical Officer, and Robert Lutjens, our Head of Discovery Biology. I draw your attention to the press release and the financial statements issued earlier today which are available on our website. I also draw your attention to our disclaimer. We will be making certain forward-looking statements that are based on the knowledge we have today. I will start this conference call by giving a quick overview of our recent achievements, before handing over to Roger and Robert, who will review our clinical and preclinical pipeline. I will then review our 2021 full year financial results. Following that, we will open the call for Q&A. During 2021, we have continued to make excellent progress towards achieving our strategic objectives, and now have three clinical programs dosing patients, which is a significant achievement. In September, we started dosing patients in our Phase 2a clinical trial of Dipraglurant for blepharospasm, a type of dystonia characterized by involuntary contractions or spasms of the eyelid muscles resulting in sustained eyelid closures. During 2021, we also continued to advance our pivotal program with Dipraglurant in dyskinesia associated with Parkinson's Disease. Our partner Janssen continued to make significant progress in executing their global Phase 2 study in epilepsy patients. Due to the continued disruption caused by the global Coronavirus pandemic, and in particular its impact on clinical research, we have revised our guidance for reporting data from our Dipraglurant clinical studies. We now expect to report data from our blepharospasm study in Q2 of this year instead of the end of Q1, a six-week delay. We also expect our PD-LID study to report data in H1 of 2023 instead of the end of Q4 2022, a three to six-month delay. While these delays are disappointing, we are focused on maintaining the integrity and quality of the study. We continue to expect our partner, Janssen to report data from their epilepsy study in Q3 of 2022. We're also very excited by our preclinical pipeline, which has made spectacular progress with multiple clinical candidates rapidly advancing towards IND-enabling studies. In 2021, we announced the extension of our strategic collaboration on GABAB PAM with Indivior and their commitment of an additional $4 million of research funding to advance drug candidates through to the start of IND-enabling studies. We continue to make progress with an independent GABAB PAM program for Charcot Marie Tooth Type 1A neuropathy, and entered into a collaboration with Charcot Marie Tooth Association in the United States. This collaboration is to evaluate selective drug candidates in preclinical models for Charcot Marie Tooth 1A neuropathy. We are on track to deliver multiple GABAB PAM drug candidates ready to IND-enabling studies. We continue to advance our other preclinical programs, in particular our mGlu7 Negative Allosteric Modulator program for post-traumatic stress disorder which is progressing through clinical candidate selection funded by the Eurostars/Innosuisse grant program. We also expect our mGluR2 negative allosteric modulator program for mild neurocognitive disorders associated with Alzheimer’s and Parkinson's Disease depression to enter clinical candidate selection Phase in the second half of this year. On the financing side, the extension of our collaboration with the Indivior and the additional $4 million of funding as well as the $10 million financing from Armistice Capital contributed to our completing the year with a cash position of CHF20.5 million, or the equivalent of $22.5 million. So now I would like to hand over to Roger. Roger, the floor is yours.

Thanks, Tim. Good morning, good afternoon, everybody. Let’s start by speaking about our Dipraglurant program for dyskinesia associated with Parkinson's Disease. This indication represents a multi-billion dollar market opportunity. We announced the initiation of our 301 Pivotal Phase 2b/3 Study during the second quarter of 2021. The study is intended to enroll 140 Parkinson's patients who are experiencing moderate to severe dyskinesia and includes around 50 sites based in the United States. Let me remind you of the study design. This is a one-to-one randomized, placebo-controlled study of 100 milligrams Dipraglurant taken three times daily, in conjunction with the patient's levodopa dose. Duration of the study is 12 weeks. In parallel, we also initiated our 302 study. Patients who complete the 12 weeks of 301 study are eligible to roll over into the 302 study, which is a 12-month open-label safety study where all patients receive Dipraglurant 100 milligrams three times daily, irrespective of the study arm they were randomized to in the earlier 301 study. The 302 study provides 6 and 12 month treatment safety data to meet the regulatory requirements for an NDA submission. The primary endpoint of the 301 study is a change from baseline in the Unified Dyskinesia Rating Scale or UDysRS. This scale was developed specifically to assess dyskinesia symptoms in Parkinson's patients. It's a scale recommended by the Movement Disorder Society, and has regulatory precedent with the FDA approval of Gocovri to Parkinson's Disease world. Secondary endpoints include the Clinician’s Global Impression Severity, and standardized patients diary-based assessments of on time, without troublesome dyskinesia, and off time. Importantly, we have included a number of measures to manage placebo response. These include the use of the UDysRS scale, which is less prone to perceived responsibility scales for dyskinesia. The use of the brief psychosocial therapy adapted for dyskinesia to be used in a screening period of study, and the requirement that patients have moderate to severe symptoms both at the screening visit, as well as at the study baseline visit. We're also using expert reviews of the ratings to ensure quality. In addition, the 12-week durational study is expected to mitigate placebo response. For background, in a previous Phase 2a study, Dipraglurant met its primary endpoint by being generally well-tolerated and showing no clinically significant safety issues. In addition, at day 1, and day 14 Dipraglurant showed statistically significant benefit on the PD-LID clinical symptoms, as measured using the Modified Abnormal Involuntary Movement Scale or M AIMS. However, statistical significance was not achieved at day 28 due in part to an increasing placebo response. The Registrational 301 study has an improved design incorporating multiple methods to mitigate placebo response. We expect this study to read out top line data in the first half of 2023. In addition, we've initiated our second Dipraglurant clinical program. This is for the treatment of blepharospasm. Blepharospasm or BSP is a type of dystonia, which affects the muscles of the eyelids and can lead to sustained eyelid closure, resulting in substantial visual disturbance and functional blindness and can involve other cranial or facial muscles in over half the patients. There are at least 50,000 BSP patients in the United States. About 2,000 new cases occur every year. The mainstay of treatment is by injecting Botulinum Toxin, and this is the only treatment approved by the FDA for BSP. With waning benefit or in more severe cases, patients may undergo surgical interventions, often with limited benefit or resulting in poor cosmetic outcomes. There is a clear need for an improved therapy with an oral therapeutic. Study 203 is an exploratory placebo-controlled trial involving about 15 patients with moderate to severe blepharospasm randomized equally to either 50 milligrams or 100 milligrams of Dipraglurant or matching placebo. Patients receive three doses in total over a two-day period. Following baseline assessments, the first dose is administered in the clinic, and the severity of the blepharospasm is assessed during dosing. Patients take a further dose at home, returning for pre and post assessments in the clinic the following day. The outcome measures in this study include Computerized Motor Objective Rater, Or CMOR as well as standard efficacy scales of blepharospasm. We expect to report data from the study for blepharospasm in Q2 of this year. And now to ADX71149, for epilepsy, which is partnered with Janssen Pharmaceuticals, a J&J company. In June, we announced that Janssen had started enrolling into the Phase 2 Epilepsy Study evaluating 149 in treating patients with focal onset seizures. 149 is a selective metabotropic glutamate type 2 or mGluR2 receptor positive allosteric modulator. This is a Phase 2 double-blind placebo-controlled proof-of-concept study that’s enrolling patients with focal onset seizures, who have suboptimal response to treatment with levetiracetam or Keppra. Patients will establish a 28 day seizure count over a 56 day baseline period, prior to randomization, when they will be randomized to receive either 149 at 50 milligrams BID, or matching placebo. The primary endpoint is the time taken to return to their monthly baseline seizure count. So they will have two periods, period one being the four-week acute efficacy phase and period two is an eight-week maintenance efficacy phase. Period two will include patients who did not return to their baseline monthly seizure rate during the first period of study, and they will continue on their randomized drug or placebo. Data from this study is expected in Q3 2022. This study illustrates a continued commitment to our long-term collaboration partner, Janssen Pharmaceuticals, to this program and to pioneering novel ways to help epilepsy patients. As a reminder, Janssen is covering all the costs of development, and we have significant pre-launch milestones of EUR109 million and double-digit royalties on net sales. And now I'd like to hand over to Robert, who will provide an update on some of our preclinical programs.

Thanks, Roger. Good morning, and good afternoon to everyone. We have made significant progress over the year and today I will highlight three programs starting with our GABAB positive allosteric modulator program. As a reminder, this program is partnered with Indivior who is funding the research at Addex and their primary interest is substance use disorder. GABAB receptor activation is a well-validated approach, benefiting from the wealth of scientific and clinical data generated with baclofen, the FDA approved GABAB agonist. The aim of this program is to use the differentiated pharmacology of allosteric modulation to discover novel drug candidates with the efficacy of baclofen without its side effects. In other words, a better baclofen. We're well on our way to meeting this objective with multiple novel drug candidates rapidly advancing through clinical candidate selection phase. We announced in 2021, the extension of our research collaboration with an additional $4 million of funding committed by Indivior to advance the development of the drug candidates discovered by Addex. We are currently profiling several candidates in non-GLP studies, with the aim to nominate drug candidates for IND-enabling studies this year. In addition, candidates are being profiled in alcohol use disorder models in order to identify one candidate that Indivior will progress into the clinic for substance use. In parallel, we are progressing multiple different sets of drug candidates for our independent Charcot Marie 1A program. We announced in September 2021, a collaboration with the American Charcot Marie Association. This collaboration will provide us access to significant resources and expertise in the field of CMT 1A. As mentioned earlier, there is strong data supporting the GABAB receptor activation mechanism coming from clinical studies that reported the beneficial effects of baclofen in patients with CMT 1A. In addition, we have robust preclinical data with our own drug candidates in highly translational models of CMT 1A. In these studies, we have demonstrated a robust effect both on biomarkers and behavioral measures, suggesting we can slow and possibly stop the progression of the disease with this approach. Our candidates are completing studies in CMT 1A models and other non-GLP preparatory studies, as we get ready to select the candidate to enter IND-enabling studies by the end of 2022. The second program I want to highlight today is the mGlu7 negative allosteric modulator program for post-traumatic stress disorder, or PTSD. PTSD is a psychiatric disorder that may occur in people who have experienced or witnessed a traumatic event such as a serious accident, natural disaster or war. Current treatments are mostly relying on behavioral therapy, as most pharmacological treatments show poor or insufficient benefit. We're developing mGlu7 negative allosteric modulators as a novel approach to addressing fear memory consolidation and retrieval. We have generated robust preclinical data in multiple in vivo models of the disease. The program is supported by Eurostars/Innosuisse grant of EUR4.85 million, which is financing consortium led by us. We are advancing drug candidates through clinical candidate selection and expect to enter IND-enabling studies in H2 2022. And finally, a few words on our mGlu2 negative allosteric modulator program for mild neurocognitive disorders or MCI. MCI is the stage between expected cognitive decline of normal aging and the more serious decline of dementia. Besides being potentially the early sign of Alzheimer's Disease, MCI is also often experienced by patients suffering from depression. Developing mGlu2 NAM offers the exciting opportunity to address cognitive impairment, while also providing an antidepressant effect. Both these effects have been demonstrated in relevant preclinical models with our mGlu2 NAM candidate compounds. We are now progressing through the final stages of lead optimization and expect to enter clinical candidate selection phase with multiple compounds in the second half of the year. In summary, we have made spectacular progress in our preclinical portfolio, with multiple drug candidates rapidly advancing towards IND-enabling studies. The renewed commitment of our partner Indivior, and additional funding is further validation of the quality and productivity of Addex’s drug discovery platform, and the significant achievements made in our GABAB PAM program. This concludes my prepared remarks. And I'll hand back to Tim.

Thanks, Robert. I'll provide an overview of the financials. In the income statement, we recognized $3.2 million in revenue and income in 2021, up from $2.9 million in 2020. Most of our revenue comes from research funding through our collaboration with Indivior, which we anticipate will decrease in 2022 as drug candidates enter late-stage clinical selection and our partner assumes greater control of development operations. Regarding expenses, R&D expenses totaled $12.8 million, mainly driven by activities related to our Dipraglurant and GABAB PAM programs, and to a lesser extent our mGlu7 NAM and mGlu2 negative allosteric modulator program. This represents an increase of $2.5 million from 2020, largely due to heightened activities in the Dipraglurant on PD-LID program and blepharospasm programs as they begin patient recruitment. G&A expenses were $5.8 million in 2021 compared to $5.7 million in 2020, with the slight increase attributed to higher insurance premiums as we enhanced our coverage after the company listed on NASDAQ. Finance results of $0.2 million in 2021 primarily came from exchange rate gains on U.S. dollar cash deposits due to the strengthening of the US dollar. On the balance sheet, our assets mainly consist of cash, ending the year with CHF20.5 million in cash held in Swiss francs and US dollars. Current assets just below $1.5 million in 2021 primarily relate to research funding receivable from Indivior, and prepayments relate to insurance and retirement benefits. Current liabilities of $4.1 million are consistent with previous years, primarily due to R&D payables and accruals. Non-current liabilities of $1.5 million relate to retirement benefit obligations calculated under International Financial Reporting Standards. In terms of cash flow, we began the year with $18.7 million, raised net proceeds of $16 million from offerings executed in 2021, spent $6.7 million on operations, and received $2 million in research funding from Indivior. We also noted a paper profit of $0.1 million in foreign exchange when converting U.S. dollar cash balances to Swiss francs for financial reporting, resulting in $20.5 million at year-end. In summary, Addex made significant clinical development progress in 2021. We have three clinical programs actively treating patients in tough indications where we are first in class, and we look forward to updating you on these studies as they progress, starting with blepharospasm in the next quarter. The company is based on a leading technology platform that has produced a promising portfolio of enhanced discovery programs and partnerships. We have a skilled team of drug developers, collaborations with the industry, and support from top-tier investors, with much news expected for the remainder of 2022 and beyond. In addition to three upcoming clinical data readouts, we have four preclinical programs anticipated to enter IND-enabling studies in the next year. Overall, I believe Addex has a very promising outlook and potentially an undervalued equity story. We look forward to keeping you updated on our progress soon. This concludes the presentation, and we will now open the call for questions.

Thank you. Your first question comes from Ram Selvaraju from HC Wainwright. Please go ahead; your line is open.

Hello for the team. This is Mansa representing Ram Selvaraju at HC Wainwright. Thanks for the update. Very comprehensive. You effectively answered all of our questions. Just one is the enrollment for the PD-LID Dipraglurant study hastening as the Omicron wave recedes?

Yeah, maybe Roger, you'd like to take this one?

Yes, COVID has certainly had its effects, and the Omicron variant notably impacted everyone at the end of last year. However, we are witnessing positive momentum and increased activity across a wide range of sites, which is very encouraging. We seem to be at the start of a post-COVID recovery, and we are hopeful as we continue to make progress.

All right, excellent. I look forward to a catalyst-rich year. Thanks for the update.

Thank you. Your next question also comes from the line of Ram Selvaraju from HC Wainwright. Please go ahead. Your line is open.

Hi, thanks very much for taking our follow-up questions as well. I wanted to ask about the overall strategic positioning for Dipraglurant in terms of the different indications being pursued in the context of PD-LID as well as blepharospasm. And how you're thinking about that, from a partnering perspective, should the blepharospasm study data prove to be positive? And if you can also give us a sense of what you would consider to be a slam dunk outcome versus a merely positive outcome from the blepharospasm clinical readout? Thank you.

That's an interesting question. Ram. Thank you very much. Roger, do you want to have a first stab at this one?

Okay, thanks. So first of all, in terms of pre-positioning, we need to see the data from the blepharospasm study to really start to think about the further elements of how we exploit the compound. In terms of our result, this is an exploratory study. So this is really the first time we have put the drug into this indication, these patients and such. It's you know, what I'm really what I'd be really excited to see is, is obviously a strong signal. If it's a slam dunk, then I would be even more pleased. It's a relatively small study, 15 patients. We've got two active doses versus placebo. So a number of factors in terms of looking at the data from this study. That will then inform the program as we then decide how to sort of prosecute the next phase of the development, which obviously would be a much larger Phase 2 proof-of-concept study. And the data from this first study, this exploratory study will obviously inform such as dosing, get a real feel for the clinical outcomes in the study, how the drug manifests on those. And then we'll build that into the program moving forward.

As a follow up to that, I think, Tim, you know, what I would also be interested in learning more about is how you folks are thinking about the possibility of indication splitting for Dipraglurant? And if that's really something that you consider feasible, or if when you think about the prospect of partnering, you're looking at it more as a package deal as it were.

We believe there is a strong rationale for developing an immediate release formulation of Dipraglurant for PD-LID, based on our generated data and the mechanism of action, as well as data from other mGlu5 negative allosteric modulators in this condition. While we're currently conducting a study in blepharospasm with the immediate release formulation, we are also developing an extended release formulation. We think the extended release version will be the one we pursue for other indications, including blepharospasm. From a partnering perspective, we don’t anticipate interest in acquiring the Dipraglurant PD-LID ahead of the 301 readouts. However, if there is interest based on the blepharospasm data, we would consider partnering the extended release formulation for that indication. We believe it’s complicated to split indications for the same formulation of the same drug, so any potential split would only be around different formulations.

Thank you. Very helpful. And then just two other very quick ones. I was wondering if you had a sense of timing with regard to Indivior’s decision-making process in terms of extending the collaboration and determining how much additional funding would be provided to Addex under the scope of that arrangement. And also, if you could speak a little bit about prospects for non-dilutive funding in the context of the PTSD indication, which our understanding is multiple governmental entities, including, for example, the Department of Defense in the United States.

Yes, so sorry, the first question you had. Can you just repeat that?

Yes, it was with respect to the Indivior collaboration, what do you think the timing for Indivior to reach a decision regarding what's going to happen to the collaboration and its scope and the extent of the funding that would be provided to Addex post mid-2022?

We extended our collaboration last year with an additional $4 million commitment from Indivior, which lasts until the end of July 2022. Currently, we are fulfilling our obligations within the collaboration, and the program is progressing to advanced stages of clinical candidate selection. Several molecules are reaching a point where Indivior is beginning to take greater control over the operational aspects of development. We will be discussing with Indivior whether it's necessary to extend the research collaboration beyond July 2022. At this time, the program is performing very well, and it's uncertain if Addex will need to extend the research collaboration. We will provide updates to the markets as soon as any decisions are made regarding this matter. Now regarding the mGluR7, negative allosteric modulator program, as you know, we were leading a consortium that managed to secure a EUR4.85 million grant from the Eurostars. We are currently executing on that. We have managed to identify a clinical candidate or lead that's entered clinical candidate selection phase from that program. So we are currently profiling that molecule. And we are also in parallel driving forward multiple theories through lately the optimization, the collaboration and the consortium is working extremely efficiently, extremely well. We will start to pursue other funding sources. As you rightly point out, there are a number of government organizations which are offering support to run clinical studies. And we have started to look into those, in addition to discussing with pharma partners as well.

Thank you.

Thank you. Your next question comes from the line of Bob Pooler from valuationLAB. Please go ahead. Your line is open. Thank you.

Thank you. Hello, gentlemen. A few questions from my side. Just on the cash, could you provide some guidance on your cash burn? And how’s your cash reach?

Yeah, so we've reported having CHF20.5 million at the end of the year. Last year, we were burning about CHF1.5 million a month on average. And so we're basically guiding cash through into the first half of 2023.

First half 2023. Okay, great. Just on the grant on blepharospasm, are there any implications if you have a strong readout there for other dystonias, maybe even for the PD-LID trial? And then also what is the market potential for this indication?

So maybe, Robert, do you want to take the first bit of that around all the preclinical data for the dystonia?

Sure, yeah. Hi, Bob. Yeah, I think this, talking mGlu5, has been tested in several models of different dystonias. And so demonstrated, again at the behavioral level, that we were able to reduce or have an anti-dystonic effect with mGlu5 chronic treatment. We've also been exploring the mechanism at the cellular level, looking at electrophysiology to measure the effect. And we've shown basically, that a very specific phenomenon is being restored when you add Dipraglurant, which is an indication that possibly this is a common mechanism of all sorts of different forms of dystonias. And therefore could be helpful. So showing or providing some support for Dipraglurant being effective in several forms of dystonia. And then, in the PD-LID study, there were seven patients who had dystonia and three of them were on placebo and four were on Dipraglurant. We observed there some effect; obviously the size of the number of patients was not sufficient to actually be able to do some statistical analysis. But nevertheless, this was a very positive signal that we observed.

So with regard to the market, we believe there's about 50,000 patients in the United States suffering from blepharospasm. And there's about 2,000 new blepharospasm patients being identified annually. I mean, maybe, Roger, you'd like to talk through how we took the decision to move into blepharospasm as opposed to other forms of dystonia, because vocal cervical dystonia is clearly a very interesting area as well. But we decided on blepharospasm and I'll leave Roger to explain how we took that decision.

Thank you, Tim. Dystonias encompass a wide range of different symptoms, functioning like an umbrella that includes many subtypes. We chose to focus on blepharospasm because it allows us to achieve a more uniform patient population. With a diverse group of patients, it becomes more challenging to assess responses in a small study, but with blepharospasm, we can accomplish that. This condition significantly affects patients by causing functional blindness and is very disfiguring, with limited treatment options primarily involving recurrent botulinum toxin. Another important reason for selecting blepharospasm is our ability to obtain objective measurements using the central nervous system. One of the main challenges in conducting CNS studies is the subjectivity involved in determining endpoints, so using objective assessments is especially appealing. We have a significant disease to address, a more uniform patient group, and the chance to apply objective criteria, making this a particularly advantageous choice within the broader spectrum of dystonias.

Okay, then maybe moving on to GABAB PAM program there. You are indicating then when you expect them maybe to start with a lead candidate in clinical trials?

Well, we're currently scaling up a number of compounds, running them through secondary in vivo assays. We’re looking very closely at substance use disorder. And we're looking forward to Indivior making a decision on which compound they want to then move into the IND-enabling studies. We're expecting that to happen around the end of the year, potentially early in 2023. And then of course, that's going to take a good three to nine months, depending on how long they decide they want to run those regulatory IND-enabling studies and then moving into Phase 1. So I think moving into Phase 1 is best guess is late in ‘23, at the earliest.

How's the CMT program proceeding?

Yeah, so I can take that Tim. So very well, again, we've identified several compounds that we're currently profiling in different preclinical studies, including in CMT 1A models. And so we expect to complete those by the end of Q2 this year, and in parallel, we're running additional studies. So that we are gearing up the preparation to enter IND-enabling studies by the end of this year.

Then just moving on ADX71149 epilepsy, just with the readout of the results expected in Q3 2022. Will positive results trigger a milestone payment, and I believe that Roger said there were EUR109 million pre-launch milestones.

No, the results will not trigger a milestone.

Okay.

The trial is currently ongoing, and we received the last update when the program moved into a Phase 2 proof-of-concept study. Unfortunately, we cannot provide more detailed guidance at this time. However, these are all milestones related to development or pre-sales, and there will be double-digit royalties on the first net sale. The study is progressing well.

That's great, also, we're considering the pandemic. Do you know if there's any potential for combination of Kaprun ADX 71149? That would substantially extend the patent life?

Janssen has obtained a patent for the mechanism involved in the combination. This includes a new patent that combines the molecule with SB 2A antagonists. However, we cannot provide any comments on this matter. Janssen is the primary leader in development, and we do not have access to their strategies regarding the co-formulation of the two compounds.

Okay, then just my final question, as you also mentioned in the presentation, you’re making good progress with your preclinical candidates. What new value inflection points do you expect to reach this year? And any potential partner agreements in the offing?

We're making significant progress on our clinical portfolio. We currently have Dipraglurant in two Phase 2 or Phase 2b studies, and we plan to share data soon. We don't anticipate forming partnerships on these programs until we have more data available. The clinical program with Janssen is already established. Additionally, we are making strides with the GABAB program, which is not in partnership with Indivior, presenting us with potential opportunities. We have several well-characterized compounds, and the mechanism of action is highly validated because of the previous work done with baclofen, which is now a generic. We also have mGlu7 and mGlu2 programs that have produced well-defined drug candidates progressing through the clinical candidate selection phase. There are definitely attractive opportunities for pharma to consider. We are beginning to see interest from potential partners regarding some of these programs. However, as you know, it's challenging to predict the outcome of such discussions. One of our strategic goals remains to secure more partnerships around our portfolio to generate cash inflows and alleviate pressure on the balance sheet.

Okay, yeah. Because also with your Scientific Board also, yeah, some people there that have direct connections with pharma. So it's great here that pharma is looking at some of the candidates as well. Okay, thank you for answering my questions.

Thank you.

Thank you. Your next question comes from Charles Duncan from Cantor Fitzgerald. Please go ahead. Your line is open.

Yeah, good morning, Tim and team. Thanks for taking my question despite not covering the stock and therefore not being able to recommend it. I had a few questions, because I'm intrigued with the pipeline. I'm wondering if, first of all, Roger could help us understand a little bit about not only the pace of enrollment for the ongoing PD-LID study, but also, perhaps whether or not there's been any participation in the open label extension study. It would seem to me that since the time that this study opened, that there would be patients through the 12-week dosing period and I'm wondering if there is participation and rollover into the OLE.

I’m glad to address that. As I mentioned earlier, we are seeing momentum building in the study. I'm not providing specific guidance on enrollment, but you brought up an important point regarding our 302 study. We have patients who transitioned into 302 and are progressing well over the months in that study. It’s an excellent study because it allows for flexibility in changing background medications, making it more reflective of real-world management. It captures the longer-term maintenance of patients on the drug and provides essential safety data for long-term administration, which is necessary for compiling an NDA with 6 and 12-month data. We are very pleased with the progress of both the 302 and 301 studies.

Okay, very good. That's helpful, and I appreciate the color. My second question was on the PTSD program. And I'm going to ask you to speculate, so don't really expect any definitive answers. But I'm just kind of wondering about the mechanism. And PTSD being very often looked at by lots of neuro innovators, there are programs with MDMA. There's also an NMDA positive allosteric modulator programming. So I guess I'm wondering how you feel, mGlu7 negative allosteric modulator mechanism fits in, and what gives you confidence for it being useful in PTSD? You mentioned memory consolidation and retrieval. So I'm particularly intrigued with that.

Yeah, thanks, Charles, for that question. I'll hand that over to Robert. He can answer that.

Thanks for the question, Charles. There is substantial data regarding mGlu7 from both knockout and knockdown animal studies that suggest it has an anxiolytic effect. Blocking or lacking mGlu7 seems to be beneficial for treating anxiety. We are investigating the underlying mechanisms at the cellular level through electrophysiology, which indicates that mGlu7 influences long-term potentiation related to memory phenomena. We've also conducted animal models involving fear conditioning to simulate PTSD responses, allowing us to explore various aspects of fear learning and memory recall. This opens a critical window in the memory formation process known as memory consolidation or reconsolidation. At later stages, we focus on memory retrieval, and our compounds demonstrate the ability to modulate this process. This gives us confidence that mGlu7 NAM, combined with behavioral therapy for patients following trauma, could more effectively address symptoms compared to other methods. While this is still speculative and based on animal data, the findings are coherent. Regarding other compounds in PTSD trials, particularly the MDA compound, it suggests that modulating glutamatergic transmission, both at MDA and mGlu7 receptors, could lead to beneficial outcomes. This serves as indirect validation of our approach. mGlu7 has a widespread expression in the brain, specifically at synapses, and it is notable because it requires high levels of glutamate for activation. This high threshold makes sense considering its synaptic location, suggesting that activation occurs during conditions of panic or behaviors resulting in significant glutamate release.

And let me ask you a follow up. Do you know if those receptors become overexpressed within a long-term potentiation model and therefore reinforced? It would seem like that might be the case. And in that case, a negative allosteric modulator may be particularly useful?

I find it challenging to provide a definitive answer. My response can only be somewhat speculative. I don't believe the expression of the receptor is upregulated during long-term potentiation. Instead, it seems more related to the strengthening of synapses, suggesting that there are mechanisms that activate certain synapses over others. This likely underlies memory formation.

Makes sense? Last question, probably a lot easier, maybe for Tim, and appreciate you taking all my questions. That is relative to the J&J program. I understand that you're very much a passive partner in that program. So do you think you'll be able to press release top line data from the focal seizure study? And then there was a question about milestone payments, being triggered with the results. But could you see a milestone payment, say in the next 12 months or so? Should J&J take that data and decide to move forward with that particular candidate?

Yeah, so the first question around, would we press release the top line data from the part one of the study? The answer is yes. And they will let us press release that. With regard to the milestone, we are not allowed to give any granularity around the milestones, unfortunately.

No worries. That's fair. I appreciate it. But you did say that the last milestone received was with the start of a clinical study. Correct?

Correct. But again, I can leave you to therefore speculate when the next milestone could be. That's what I'm allowed to do.

Yeah, okay, okay.

I know it’s not very helpful. But we’ve been through this a lot with our partner Janssen. And they're quite clear on what we're allowed to communicate around the milestones.

No worries. I understand. Thanks for taking my questions. Thanks.

Thank you.

Thank you. Your next question comes from the line of Peter Alec from Acontrove. Please go ahead. Your line is open.

Thank you, and good afternoon to everybody. My question relates to the expected milestone payment. I understand now it's not with the completion of the current study. And also, Roger mentioned there is a royalty payment expected in a double-digit figure. Now royalty payments, I suppose, would only be expected when the product is in the market, which may take quite a few years yet. But any indication, a bit closer indication about the milestone payment when that is expected? And also, I'm not quite sure whether I understood the amount correctly. I understood first EUR109 million. And on the second discussion, it sounded more like EUR190 million, 1-9-0. So can you explain please?

The total number of milestones is 109 million euros. We can only disclose that these are pre-launch milestones connected to development stages and the regulatory approval process, rather than milestones related to product launches or sales targets. None of the 109 million is tied to sales targets. The royalty is a flat low double-digit percentage, which will apply to the first sale of the product anywhere in the world.

Okay. And then I suppose on all subsequently sales also.

Yes.

Yeah. Okay. And that could be a few years out yet, likely?

Yes, Janssen is running a Phase 2 study. And then there will be further studies. Further pivotal studies could be expected prior to filing for a marketing authorization. So yes, some years out. Correct.

Okay. Thank you.

Thank you. Ladies and gentlemen, this brings the main part of our conference to a close and I would like to hand back to Tim Dyer for closing remarks.

Thank you. So 2022 looks like it will be an exceptional year for Addex, with the three ongoing clinical trials and data starting to report out as early as Q2 this year, which is only a couple of months. In addition, we have multiple clinical preclinical programs advancing rapidly through clinical candidate selection. And these are novel programs. So lots of novel IP that's being generated at Addex to cover these programs. And we'd like to thank our shareholders for their continued support, especially New Enterprise Associates, New Leaf ventures and CAM Capital, as well as Armistice Capital for supporting the recent 10 million financing. We look forward to updating you on all the progress we are making in the coming months. So thank you very much for attending this call. I wish you all a very nice day.

Thank you. That does conclude today's conference call. Thank you for participating. You may all disconnect.