On Wednesday, Addex Therapeutics (NASDAQ:ADXN) maintained its Buy rating and $30.00 stock price target from H.C. Wainwright. The firm's positive outlook follows Addex's recent business update and financial results for the first half and second quarter of 2024, which were disclosed earlier in the week.
The notable highlights from the update include the completion of the Neurosterix spinout, which received $63 million in funding from Perceptive Advisors. Addex retains a 20% ownership stake in Neurosterix, a detail that is expected to yield significant long-term benefits for Addex shareholders. The first candidate from Neurosterix's pipeline is anticipated to enter clinical trials in the second half of 2025.
Moreover, Addex has developed a promising candidate for its chronic cough program. This candidate has shown several positive characteristics, including better potency compared to a competing P2X3 receptor antagonist currently in advanced development stages. This development positions Addex favorably in the market.
The collaboration between Addex and Indivior is progressing well. Their joint effort has resulted in ADX71441, which has demonstrated proof-of-concept in animal models for both alcohol and cocaine addiction. Indivior has selected a lead candidate and plans to initiate IND-enabling studies in the first half of 2025.
H.C. Wainwright's reiteration of the Buy rating and the 12-month price target of $30 per share reflects the firm's confidence in Addex's strategic developments and its potential for growth. The analyst's statement underscores the milestones achieved by Addex and the anticipated clinical advancements on the horizon.
In other recent news, Addex Therapeutics reported significant updates in its half-year financial results and research and development progress. The company announced the launch of Neurosterix, raising $63 million in Series A funding, and the formation of a partnership with Indivior to develop a GABAB PAM compound for substance use disorders.
Moreover, an independent GABAB PAM program is planned for chronic cough, with IND studies expected to start in 2025. The company also reported the termination of dipraglurant for PD-LID, redirecting its application towards brain injury recovery. Financially, the second quarter of 2024 saw the company reporting an income of $0.1 million, with a cash position of CHF3.8 million at the quarter's end.
Despite a decrease in income from the previous year's second quarter, the company has managed to maintain stable R&D expenses. These recent developments highlight Addex Therapeutics' strategic moves in its R&D programs and financial management.
InvestingPro Insights
While H.C. Wainwright maintains a positive outlook on Addex Therapeutics (NASDAQ:ADXN), recent InvestingPro data reveals some challenges the company faces. The company's revenue for the last twelve months as of Q2 2024 stood at $0.96 million, with a significant revenue decline of 59.82% over the same period. This aligns with an InvestingPro Tip indicating that analysts anticipate a sales decline in the current year.
Despite these headwinds, Addex's market capitalization of $7.81 million and a price-to-book ratio of 0.52 suggest the stock might be undervalued relative to its assets. This could be particularly interesting given the company's recent developments, including the Neurosterix spinout and progress in its chronic cough program.
An InvestingPro Tip highlights that Addex holds more cash than debt on its balance sheet, which could provide some financial flexibility as the company advances its pipeline. However, investors should note that the company is quickly burning through cash and is not expected to be profitable this year, according to additional InvestingPro Tips.
For a more comprehensive analysis, InvestingPro offers 11 additional tips for Addex Therapeutics, providing deeper insights into the company's financial health and market position.
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