Hello, everyone. I'd like to thank you all for attending the 2022 full year financial results conference call. I'm here with 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 Robert, who will review our clinical and preclinical pipeline. I will then review our 2022 full year financial results.

Following that, we will open the call for Q&A. Our partner, Janssen Pharmaceuticals, continued to make excellent progress in executing their global Phase II study in epilepsy patients with ADX71149, [indiscernible] in Part 1 of the study and progress to Part 2.

An independent interim review committee has been established by Janssen to review the data from Part 1 and make a recommendation on the future direction of the study. We expect to announce the recommendation from this independent interim review committee early in Q2 this year.

We continue to believe there is value in dipraglurant and have substantially completed our evaluation of the future development. We have identified post-stroke recovery and pain as interesting areas of future development in addition to PD-LID. However, we are currently pursuing collaborative arrangements to advance future development.

We continue to be excited by our preclinical pipeline, which has made excellent progress, with multiple clinical candidates rapidly advancing towards IND-enabling studies.

We've selected a drug candidate in our mGlu7 NAM program for stress-related disorders including posttraumatic stress disorder and are progressing this drug candidate into IND-enabling studies. We expect to start dosing in these studies in the second half of this year.

We also continue to progress several backup compounds from differentiated [indiscernible] candidate selection phase. We have made substantial progress in our collaboration with our partner Indivior in advancing several novel GABAB PAM compounds into clinical candidate selection.

As a reminder, Indivior's primary interest is in substance use disorder, and under the agreement, we have retained the right to select drug candidates for development in certain exclusive reserved indications, including Charcot-Marie-Tooth Ia neuropathy, chronic cough and pain.

During 2022, we extended our collaboration with Indivior and Indivior agreed to provide us with additional research funding of $1.8 million. We expect Indivior and ourselves to select compounds to advance into IND-enabling studies in early 2024.

Our mGlu2 NAM program for mild neurocognitive disorders associated with Alzheimer's disease, Parkinson's disease and depression ran into some challenges during clinical candidate selection phase. So we've gone back into lead optimization.

We're making -- Last but not least, our M4 PAM program for schizophrenia continues to make rapid progress through lead optimization. M4 PAM is a particularly exciting target for schizophrenia, especially following the recent positive Phase III data from Karuna.

Following the inconclusive data from our blepharospasm clinical study and the termination of dipraglurant's development in PD-LID due to slow recruitment rate attributed to COVID-19 pandemic-related constraints, we have completed the closedown of the studies and implemented a number of cost-saving measures.

These cost-saving measures have significantly reduced our monthly cash burn going forward. And as of today, we estimate that our cash reserves provide us with a runway through the end of Q3 2023 and enough time to secure a partnership to strengthen our balance sheet and provide resources to advance our portfolio.

Now I will hand over to Robert, who will give you some more details about our exciting pipeline..

the GABAB positive allosteric modulator; the mGlu7 negative allosteric modulator; the mGlu2 negative allosteric modulator; and the M4 positive allosteric modulator programs.

Starting with our GABAB positive allosteric modulator program, which is partnered with Indivior, the aim of this collaboration is to deliver treatment for substance use disorders.

Indivior is supporting the research at Addex and have recently committed additional funding for us to complete clinical candidate selection activities reaching CHF 13.8 million total funding so far. As a reminder, GABAB receptor activation has been clinically validated in a number of disease using baclofen, a GABAB [indiscernible] agonist.

Baclofen is FDA approved for treatment of spasticity and is widely used off-label to treat numerous diseases including alcohol use disorder, chronic cough, Charcot-Marie-Tooth 1a and various types of pain. However, baclofen has a short half-life and comes with significant side effects, hampering its wider use.

Thus, there is a strong need for a better baclofen. We believe this can be achieved with positive allosteric modulators and their differentiated pharmacology, having the efficacy of baclofen but longer half-life and improved side effect profile.

We are well on our way to meeting this objective with multiple novel drug candidates rapidly advancing through clinical candidate selection phase with the aim to nominate drug candidates for IND-enabling studies in 2024.

As part of our agreement with Indivior, we have the right to select drug candidates from the funded research activities for our own independent GABAB positive allosteric modulator program. I will now speak about the indications we plan to pursue.

Firstly, Charcot-Marie-Tooth disease Type Ia or CMT1A, which is a type of inherited neurological disorder affecting the peripheral nervous system.

It is caused by a duplication of the PMP22 gene, which leads to the [indiscernible] of this PMP22 protein damages the myelin sheet that surrounds and protects nerve fibers, resulting in slow and progressive damage to the nerves. People with this disease experience weakness and wasting of the muscles of the lower limbs beginning in adolescents.

Later, they can also have hand weakness and sensory loss resulting in a significant reduction in their quality of life. CMT1A is the most common subtype of Charcot-Marie-Tooth disease accounting for about 70% of cases. And there is currently no approved drug to treat CMT1A. However, baclofen has shown beneficial effects in patients.

In addition, we have collected robust preclinical data with GABAB PAM in highly translation models of CMT1A demonstrating positive effects of chronic treatment on both biomarkers and behavioral measures, suggesting GABAB PAM has the potential to slow or even stop the progression of the disease.

There is also a strong rationale for developing GABAB PAM for chronic cough. Chronic cough is a persistent cough that lasts for more than 8 weeks and can be caused by a variety of factors, including respiratory infections, asthma, allergies and acid reflux, but also possibly because of an overactive cough reflux.

Support for this approach comes from validation with baclofen used off-label in several [indiscernible] chronic cough and from [indiscernible] expression in the neuronal pathway involved in cough.

Therefore, we believe that GABAB PAM could be an innovative new treatment of chronic cough offering improved efficacy, fewer nonresponder patients' lack of gustatory side effects in comparison to P2X3 inhibitors. We are currently progressing our proprietary compounds and disease-relevant models of chronic cough.

Another indication we're highly interested in is pain. GABAB receptor activation has been well validated by baclofen, which has shown efficacy in patients with cancer pain and is used off-label in patients with bladder pain or trigeminal neuralgia.

Current medication is largely based on opioids, gabapentin and pregabalin, NSAIDs for bladder pain or carbamazepine and other antiepileptic drugs for trigeminal neuralgia.

These medications are suboptimal as they leave a significant proportion of patients [indiscernible] approach using a GABAB positive allosteric modulator, which we expect to be highly efficacious without the side effects reported for current medications.

Here also, we are working with multiple compounds progressing in late clinical candidate selection phase, and we expect to move into IND-enabling studies in 2024 in parallel to delivering compounds for our partner, Indivior.

We have made significant progress with our mGlu7 negative allosteric modulator program for stress-related disorders including post-traumatic stress disorder as we have now selected a clinical candidate drug to enter IND-enabling studies and have identified several differentiated backup compounds.

We have established a wide intellectual property position, ensuring a strong protection for our program. PTSD is a psychiatric disorder, affecting approximately 3.5% of the population and may occur in people who have experienced or witnessed a traumatic event [indiscernible] a war.

Current treatments rely mostly on behavioral therapy as most pharmacological treatments such as anxiolytics and antidepressants show insufficient benefit.

The rationale for inhibiting mGlu7 receptors as an approach for treating stress-related disorders, including PTSD, is based on a wide body of preclinical evidence from the anxiolytic profile of mGlu7 knockout or knockdown animals to studies using mGlu7 negative allosteric modulators performed at Addex but as well as in many other groups.

We have completed a robust preclinical package with our lead drug candidate and are now moving into IND-enabling studies and expect to enter Phase I studies in second half of 2024. On to our mGlu2 negative allosteric modulator program for mild neurocognitive disorders or mNCD and depression.

[indiscernible] expected to cognitive decline [indiscernible] of dementia. Besides being potentially the early sign of Alzheimer's disease, mNCD is also often experienced by patients suffering from depression.

Even patients that do not -- that do respond to antidepressant treatment continue to suffer from mNCD, which significantly affect their quality of life. Developing mGlu2 negative allosteric modulators offers the exciting opportunity to treat cognitive impairment while also addressing symptoms of depression.

Both pro cognitive and antidepressant effects have been demonstrated in relevant preclinical models with our mGlu2 negative allosteric modulator candidate compounds.

We're completing lead optimization of our series and expect to begin clinical candidate selection phase with multiple compounds by end of this year, with the aim to start IND-enabling studies in 2024. And finally, a few words about our new muscarinic M4 positive allosteric modulator program for treatment of schizophrenia and other types of psychosis.

[indiscernible] limited efficacy and significant tolerability issues, often leading to treatment discontinuation and relapse.

The big news in the field came from Karuna Therapeutics, who recently published the positive results of the third Phase III registrational study of their KarXT compound in schizophrenia patients and who are on track to submit a new drug application to FDA in mid -- by mid-2023.

KarXT is a combination of xanomeline, a muscarinic M4 receptor agonist, and trospium, a peripherally restricted muscarinic antagonist. This combination allows to selectively activate muscarinic receptors in the brain while blocking the off-target effects xanomeline has because of its poor selectability [indiscernible].

This is the perfect validation for the M4 receptor agonist and 1 of our positive [indiscernible] products [indiscernible] identifying highly select and brain pattern molecules. In summary, our drug discovery engine has achieved great progress with multiple drug candidates advancing towards IND-enabling studies.

The renewed commitment of our partner, Indivior, the delivery of a candidate starting IND-enabling studies in the mGlu7 program and the significant progress achieved in our other preclinical programs are further validation of the quality and productivity of our allosteric modulation platform.

This concludes my prepared remarks, and I hand it back to Tim..

Thanks, Robert. I'll now switch to an overview of the financials. Starting with the income statement, we recognized $1.4 million of income in 2022 compared to $3.2 million in 2021.

The primary source of revenue is research funding from our collaboration with Indivior, which we expect to reduce in 2023 as drug candidates move to late-stage clinical candidate selection, and our partner takes over more of the operational execution of the development.

In terms of expenses, R&D expenses were $14.7 million in 2022 compared to $12.8 million in 2021. The increase of $1.9 million is primarily due to the increased R&D outsourced activities linked to clinical candidate, so clinical activities that wasn't going in the first half, as well as, to a lesser extent, share-based compensation costs.

Given that we have terminated clinical activities in 2022, we expect R&D expenditure to be significantly lower in 2023. G&A expenses were $7.3 million in 2022 compared to $5.8 million in 2021. The increase of $1.5 million is due to increased share-based compensation costs.

Finance loss of $0.3 million in 2022 relates primarily to exchange gains due to the strengthening of the U.S. dollar over the period. Now to the balance sheet. Our assets are primarily held in cash, and we completed 2022 with CHF 7 million of cash held in Swiss francs from equity offering.

Other current assets of $0.9 million primarily relate to receivables from Indivior and R&D prepayments. Current liabilities of $3.3 million as of December 31, 2022, decreased by $0.9 million compared to the end of last -- 2021 and primarily relate to R&D payables and accruals.

Noncurrent liabilities of $0.1 million as of December 31, 2022, decreased by $1.4 million compared to December 31, 2021, primarily due to decreased retirement benefit obligations calculated under IAS 19. Now to the cash flow statement.

We started the year with $20.5 million, raised net proceeds of $3.7 million in the offering executed in July of last year, received $1.1 million research funding from Indivior and consumed $17.6 million in operations. We have a paper profit of $200,000 in ForEx when U.S. dollar cash balances are converted to Swiss francs at the end of the year.

Reporting purposes, this results in $7 million of cash at the end of the year. Now to summarize, the development of 71149 in epilepsy is ongoing, and we are looking forward to being able to report very soon the recommendations from the independent interim review committee, which has been established by Janssen to review the data from Part 1.

We continue to believe in the value of dipraglurant and PD-LID and are evaluating its future development in post-stroke recovery and pain. In parallel, we are pursuing collaborative arrangements in advance development -- to advance development and look forward to sharing more information on this subject in the future.

Our preclinical programs continue to make solid progress towards delivering drug candidates for future clinical development in important therapeutic areas, including stress-related disorders, chronic cough, cognition, schizophrenia.

As a reminder, our portfolio was discovered in-house from our pioneering allosteric modulator drug discovery platform, but consequently, we have a significant intellectual property for [indiscernible]. We have a track record of securing partnerships at the pre-clinical stage and supportive top-tier investors.

We recognize the 2022 stock performance and current market capitalization is very disappointing. However, we are having multiple business discussions across our portfolio and strongly believe that if we are successful in executing our near-term partnering strategy, then our stock price should move to recognize the value of our portfolio.

This concludes the presentation, and we will now open the call for questions..

[Operator Instructions] The question comes from the line of Raghuram Selvaraju from H.C. Wainwright & Co..

So firstly, I was wondering if you could frame for us what Janssen might consider an unexpectedly positive outcome from the epilepsy proof-of-concept study.

And in what context they might frame it as such, for example, from a competitive perspective from the standpoint of being able to combine the molecule with other existing antiepileptic drugs and so forth?.

Okay. So where do I start? I think we have to remember that when Janssen started this study, they were going to recruit 60 patients and 2:1 randomized, and that was going to be 1 cohort. And they then modified slightly once they'd started, and now they have publicly announced on clinicaltrials.gov that they are going to have up to 3 cohorts.

Now because of this, they're not stopping recruitment. And therefore, that's why they've established this independent interim review committee. So [indiscernible] Part 1.

You'll remember that, as Robert mentioned earlier on in the presentation, the endpoint is -- the end of Part 1 is how many patients got to the baseline seizure count and how many didn't, and then how that is split between active and placebo. Now what we know from Janssen is that they're going to report to us a go/no-go decision.

So we are not going to and I don't think Janssen are going to get much granularity from the independent interim review committee as they really don't want to unblind the study as they move other cohorts.

Does that answer your question?.

Sorry, can you hear me?.

Yes..

Yes..

Yes. No, no, that's very helpful. And I think what we wanted to get a better sense of was if there's likely to be a sort of upside surprise as it were from this clinical study result. Let's assume that the baseline is for a positive outcome, but what would constitute a positive upside surprise. But I think what you've done is frame it quite nicely.

So we appreciate that. The second question is in relation to the M4 allosteric modulator in the context of xanomeline plus trospium data so far.

And I was hoping that you could clarify a little bit, first of all, how you expect the allosteric modulation approach on the M4 target to potentially present advantages versus xanomeline plus trospium because, obviously, xanomeline as a single agent was not successful. That was the reason why they came up with this combination approach.

And secondly, whether you think the xanomeline plus trospium clinical development programs represent an appropriate template for the future development of your lead candidate or if your lead candidate is going to follow a somewhat different path.

And if so, why?.

Yes. So maybe, Robert, you'd like to..

I'll answer the first question. Sure. So yes, I mean, it's a very good question. I mean the main, I would say, and first difference between Karuna's approach with xanomeline in that this is a, I would say, nonselective. It's an M1, M4 agonist. So its mechanism of action is activating the M4 receptor.

Coming with a positive allosteric modulator, we know that we have all sorts of benefits compared to agonists, where we are helping the activation of the receptor, making the receptor more sensitive to its natural ligand asset [indiscernible] and therefore, also respecting the natural rhythm of receptor activation.

So the other difference with xanomeline of our approach is that we have highly selective [indiscernible] compound that we have, where we demonstrate a high brain penetration. So that's, I think, in a nutshell, what is differentiating.

And going forward, if you again, comparing an agonist approach versus a positive allosteric modulator approach, with an agonist, as long as the agonist is on board, we will be activating the receptor. And we know that this is a receptor that gets desensitized and gets internalized and so with a positive allosteric modulator.

This can lead to tolerance and with a positive allosteric modulator, we have demonstrated that, not yet for the M4, but for some of the other positive allosteric modulator programs that we've worked on, but this is not happening. So we don't -- basically, we don't see tolerance appearing with -- when we're chronically testing the compound..

Yes. Regarding the clinical side of things, I think we'll be looking much more closely at Theravel because I mean they are developing a positive allosteric modulator on the M4 PAM. So we'll be watching very carefully what they're going to be doing in the clinic..

Just as a follow-on to that, I thought I would ask a somewhat provocative question. It's well documented that PureTech Health, which was one of the original inceptors of the company developing xanomeline plus trospium, has done very well with that investment. And my understanding is there is a historical link between PureTech Health and Addex.

So I was wondering if you could perhaps comment on the degree to which PureTech Health is aware of your activities on the M4 allosteric modulation side and what their thoughts are as to what has already been demonstrated from a clinical success perspective vis-à-vis xanomeline and trospium..

I mean all I can say is we're having multiple discussions with multiple parties across our portfolio, and that includes the M4 PAM. I mean, as you can imagine the -- as you know, the Karuna data has certainly lit up the field, and there's a lot of excitement. There's been a number of deals already done on other M4 PAM programs.

I mean there was a Neurocrine acquisition of the Heptares Sosei program. The Vanderbilt program, went to Neumora. But there are plenty of other CNS-focused pharma that are watching this space and discussing with us. That's all I can say..

[Operator Instructions] The next question comes from the line of [Peter Ellik] from [A-Consult]..

I have a very simple question. I noticed in the annual report that the compensation for the Board has almost tripled from '21 to '22 and for the executives, it has almost doubled in the same time.

Can you explain why?.

Yes. This is all linked to some reorganization of the share-based compensation program. So it's all noncash compensation. And it's driven by the IFRS 2 calculations that are linked to the reorganization of the equity incentive plan..

[Operator Instructions] The next question comes from the line of Edouard Riva from ZKB..

I will have 2 of them. The first one being as seen in the slide that you expect 2 IND-enabling studies for the GABAB, the one that Indivior is going to develop and the one you are going to develop in 2024.

I was wondering why wouldn't this happen earlier? What are the steps that lead to the start of the IND-enabling studies?.

Yes. So I mean this program has been extremely successful. It's generated a lot of molecules with different profiles. You may be aware that Astellas has a GABAB positive allosteric modulator, which is in Phase II clinical development for alcohol use disorder. This is the indication of primary interest to Indivior.

And therefore, Indivior are profiling, many, many -- well, several compounds in parallel in multiple preclinical models and doing a very, very thorough job, in fact, a much more thorough job than we expected. And that's why, if you look back historically over the guidance, we are certainly delayed. And this is for good reason.

And they are doing a very thorough job to select compound. Now the way the selection of compounds works is that Indivior needs to select the compound first before Addex is able to select -- until Indivior selects, Addex not able to select.

But what we are doing is we are now profiling, I would say, at risk a number of compounds in some of the indications that we're interested in. We mentioned Charcot-Marie-Tooth, which we have profiled in the past, but we are now looking very closely at chronic cough and certain types of pain as well.

And again, these are areas where we are getting some significant interest from potential business partners. And because this is carved out of the collaboration with Indivior, once we've selected compounds, we will actually be free to license them to partners should we get interest or develop them ourselves..

Understand. And my second question would be regarding ADX71449.

Are you already recruiting for the second part of the study? Or are you waiting for the independent review committee?.

Well, as I said, they are -- this is an open recruitment and as they say in clinicaltrials.gov, they're going to do up to 3 cohorts. We are able to say that cohort 1 has completed. And therefore, you can assume that patients that are being randomized are now being randomized into a second cohort..

And so those 3 cohorts are only for the second part, not for the first part?.

Well, the study has a Part 1 and a Part 2. Cohort 1 was completed with 60 patients with a 2:1 randomization. And those 60 patients have completed Part 1 and those that didn't hit their baseline seizure count in that -- in Part 1, have now rolled over into Part 2.

And the patients who did hit their baseline seizure count have been offered the open-label extension study..

Dear speakers, please be advised at this moment, we do not have any more audio questions, and we will hand over to the written questions. So now we have the first question from [Jesse Brockton].

Can you tell us how many patients from each group advanced from Phase I to Phase II in the seizure study?.

So when you say Phase I to Phase II, you're talking about Part 1 to Part 2, I assume? The answer is we don't have any information on that..

Thank you. We have also another question from [Jesse Brockton].

Can you state with confidence that J&J will communicate the data with you and then us from the seizure study?.

Yes. With confidence, we will get the data, and we will be able to communicate it. I have no information on timing though. So I can't give you any guidance on when that will be..

Thank you. Now we have another question from Jesse Brockton. Please give us a time estimate of the communication of the conclusions of the interim review board of the seizure study..

Yes. So the guidance on the reservation of the independent review committee is early in Q2 of this year..

Thank you. Now we have another question from Patrick Marquis.

Which part, if any at all, of the EUR 109 million milestone payment from Janssen is coupled to that ADX71149 epilepsy Phase II study, Part 1, related to go/no-go decision?.

We're not authorized to disclose any granularity around the EUR 109 million milestone. I'm afraid we're not authorized to disclose the answer to the question..

Thank you, dear speakers. [Operator Instructions] Dear speakers, there are no further questions at this time. And I would like now to hand the conference over to the management team for any closing remarks..

Well, thank you very much for attending the conference call, and we look forward to speaking to you on the next call. I wish you all a very nice day..