Breaking Down Addex Therapeutics Ltd (ADXN) Financial Health: Key Insights for Investors

Are you keeping a close watch on Addex Therapeutics Ltd (ADXN) and wondering about its financial stability? With a recent market cap of just $6.15 million and a volatile 52-week range between $6.67 and $27.9, understanding Addex's financial health is crucial. The company's full-year 2023 financial results reveal a net loss decrease of CHF 10.2 million, bringing the total to CHF 10.6 million, alongside a concerning drop in cash and equivalents to CHF 3.9 million. But what does this mean for investors? Dive in to explore the key insights that will help you assess Addex Therapeutics' financial position and make informed decisions.

Addex Therapeutics Ltd (ADXN) Revenue Analysis

Addex Therapeutics Ltd (ADXN) is a biopharmaceutical company, and understanding its revenue streams requires a look into its financial reports, press releases, and investor presentations. As a company focused on developing novel treatments, its revenue streams are primarily influenced by research collaborations, licensing agreements, and potential milestone payments.

Addex Therapeutics does not currently have any products on the market and therefore is not generating revenue from product sales. Instead, the company relies on funding through partnerships and collaborations.

To properly understand Addex Therapeutics Ltd (ADXN) revenue streams, let's consider the following aspects:

• Primary Revenue Sources: Addex Therapeutics generates revenue primarily through collaboration and licensing agreements with pharmaceutical companies. These agreements typically involve upfront payments, research funding, milestone payments, and royalties on future sales of any products developed through the collaboration.
• Year-over-Year Revenue Growth Rate: Analyzing the year-over-year revenue growth rate provides insights into the company's ability to secure new partnerships and advance its drug development programs. It is important to note that fluctuations in revenue are common in the biotechnology industry due to the project-based nature of collaborations and licensing agreements.
• Contribution of Different Business Segments to Overall Revenue: Since Addex Therapeutics operates as a single business segment focused on the discovery and development of pharmaceutical products, all revenue is attributed to this segment.
• Analysis of Significant Changes in Revenue Streams: Significant changes in revenue streams can occur when Addex Therapeutics enters into new collaboration agreements, achieves clinical development milestones, or experiences changes in existing partnerships.

Addex Therapeutics reported total revenue of CHF 2.2 million for the year ended December 31, 2024, compared to CHF 3.3 million for the year ended December 31, 2023.

The decrease of CHF 1.1 million was primarily due to a decrease in revenue recognized from the Janssen collaboration.

Here’s a table summarizing key revenue figures for Addex Therapeutics:

Explore more about Addex Therapeutics Ltd (ADXN) in this insightful article: Exploring Addex Therapeutics Ltd (ADXN) Investor Profile: Who’s Buying and Why?

Addex Therapeutics Ltd (ADXN) Profitability Metrics

Analyzing a company's profitability is crucial for investors. Profitability metrics show how well a company is generating profit from its revenue and invested capital. Here’s an examination of Addex Therapeutics Ltd (ADXN) through the lens of several key profitability indicators.

Addex Therapeutics Ltd, a pharmaceutical company, faces challenges typical of its industry, including substantial research and development costs and the complexities of bringing new drugs to market. These factors significantly influence the company's profitability metrics.

Here's a look into the details of profitability for Addex Therapeutics Ltd:

• Gross Profit: Addex Therapeutics' gross profit is influenced by its cost of revenue, which includes the direct costs associated with producing and delivering its products or services. Investors should monitor gross profit trends to assess the company's efficiency in managing production costs.
• Operating Profit: Operating profit provides a view of profitability before interest and taxes. For Addex Therapeutics, this metric is vital as it reflects the profitability of the core business operations, excluding financial leverage and tax impacts.
• Net Profit Margins: Net profit margin is a key indicator of overall financial health. It represents the percentage of revenue that remains as profit after all expenses, including interest and taxes, are accounted for. Monitoring the trend in net profit margins helps investors understand the company's ability to convert revenue into profit.

Addex Therapeutics operates in the biotechnology sector, where profitability can be significantly impacted by research and development expenses, clinical trial outcomes, and regulatory approvals. These factors can cause substantial fluctuations in profitability metrics.

Operational efficiency is critical for Addex Therapeutics. Effective cost management and favorable gross margin trends can significantly improve the company’s profitability. Investors should closely monitor these aspects to evaluate the company’s ability to manage its resources and maintain healthy profit margins.

Addex Therapeutics Ltd (ADXN) reported a net loss of CHF 13.9 million for the year 2023, compared to a net loss of CHF 16.8 million for the year 2022. The decrease in net loss was primarily due to lower research and development expenses. Research and development expenses decreased by CHF 3.0 million to CHF 11.4 million in 2023, compared to CHF 14.4 million in 2022. This decrease was primarily due to the completion of clinical trials for dipraglurant in Parkinson's disease levodopa-induced dyskinesia (PD-LID) and the prioritization of other research programs. General and administrative expenses decreased slightly to CHF 3.1 million in 2023, compared to CHF 3.3 million in 2022.

Here is a table summarizing the key financial figures for Addex Therapeutics Ltd (ADXN) in 2023:

Understanding these elements provides a comprehensive view of Addex Therapeutics Ltd's financial strengths and areas for improvement, aiding investors in making well-informed decisions. To gain more insight into the company's values and long-term goals, refer to: Mission Statement, Vision, & Core Values of Addex Therapeutics Ltd (ADXN).

Addex Therapeutics Ltd (ADXN) Debt vs. Equity Structure

Understanding how Addex Therapeutics Ltd (ADXN) manages its debt and equity is crucial for investors. This involves looking at the company’s debt levels, its debt-to-equity ratio, and how it balances debt and equity financing.

As of December 31, 2023, Addex Therapeutics reported total liabilities of CHF 14.248 million. The company's financial statements provide a breakdown of these liabilities, distinguishing between current and non-current portions.

Here’s an overview of Addex Therapeutics Ltd (ADXN)'s debt situation:

• Total Liabilities: CHF 14.248 million as of December 31, 2023.
• Current Liabilities: CHF 6.884 million, consisting of items due within one year.
• Non-Current Liabilities: CHF 7.364 million, covering long-term obligations.

Addex Therapeutics finances its operations through a mix of debt and equity. Reviewing the consolidated statement of financial position helps to understand the specifics of their financing strategy. The balance between debt and equity is vital as it impacts the company’s financial risk and potential returns.

Recent activities such as debt issuances, credit ratings, or refinancing can significantly alter the company’s financial structure. For instance, the proceeds from share offerings and the utilization of existing financing facilities are key components of their financial strategy. Notably, Addex Therapeutics has been actively raising capital through share placements and has a finance agreement with an entity named Kreos, indicating reliance on both equity and debt to fund operations and research activities.

Addex Therapeutics' financial strategy involves:

• Share Placements: Raising capital through the issuance of new shares.
• Financing Agreements: Utilizing debt financing, such as the agreement with Kreos.

Understanding the specifics of these activities requires a detailed review of their financial statements and related announcements. More insights about Addex Therapeutics Ltd (ADXN) and its investors can be found here: Exploring Addex Therapeutics Ltd (ADXN) Investor Profile: Who’s Buying and Why?

Addex Therapeutics Ltd (ADXN) Liquidity and Solvency

Assessing a company's financial health involves looking at its liquidity and solvency, which indicate its ability to meet short-term and long-term obligations, respectively. For Addex Therapeutics Ltd (ADXN), several key metrics provide insights into its financial standing.

Liquidity Positions: Current and Quick Ratios

These ratios evaluate Addex Therapeutics' ability to cover its short-term liabilities with its short-term assets. As of December 2024, key liquidity ratios for Addex Therapeutics Ltd (ADXN) are:

• Current Ratio: 1.46
• Quick Ratio: 1.46

A current ratio of 1.46 suggests that Addex Therapeutics has 1.46 times more current assets than current liabilities. A quick ratio of 1.46, which excludes inventories from current assets, indicates a similar capacity to meet short-term obligations with its most liquid assets. These values provide a snapshot of the company's ability to cover its immediate liabilities.

Analysis of Working Capital Trends

Working capital is a measure of a company's short-term financial health, calculated as the difference between current assets and current liabilities. For Addex Therapeutics, the net current asset value has seen considerable fluctuation over the years.

The net current asset value for Addex Therapeutics:

• December 2020: CHF 13.92M
• December 2021: CHF 16.33M
• December 2022: CHF 4.46M
• December 2023: CHF 738.18K

The trend indicates a significant decrease in net current assets over the past few years, which might raise concerns about the company's short-term financial flexibility.

Cash Flow Statements Overview

An overview of cash flow trends reveals how Addex Therapeutics generates and uses cash. The cash flow can be broken down into three main activities:

• Operating Activities
• Investing Activities
• Financing Activities

For the 2024 fiscal year, Addex Therapeutics' operating cash flow was CHF -28.36M. For Q3 2024, the company's free cash flow was CHF 1.00. A consistent negative operating cash flow suggests that the company is using cash to fund its operations.

Addex Therapeutics's Cash Flow from Operations for the three months ended in Sep. 2024 was CHF -0.40 Mil.

According to the Q3 2024 results, cash and cash equivalents stood at CHF 3.3 million.

Here’s a summary of Addex Therapeutics' cash flow activities based on the most recent data:

• Cash Flow from Operations (TTM): -7.06M
• Cash Flow from Investing (TTM): 5.51M
• Levered Free Cash Flow (TTM): -6.30M

Potential Liquidity Concerns or Strengths

Addex Therapeutics' principal source of liquidity is its cash reserves, primarily obtained through the sale of new shares and, to a lesser extent, the sale of its research and development stage products. The ability of the Group to maintain adequate cash reserves to sustain its activities is highly dependent on the Group's ability to raise further funds from the licensing of its development stage products and the sale of new shares. Consequently, the Group is exposed to significant liquidity risk.

Addex Therapeutics faces potential liquidity concerns stemming from negative operating cash flow and reliance on external funding. However, the company has taken steps to strengthen its financial position. For instance, the launch of Neurosterix with Perceptive Advisors secured funding of USD 63 million in Series A, extending the cash runway beyond 2026. Addex Therapeutics received CHF 5 million and a 20% equity interest in Neurosterix as part of this transaction.

Addex Therapeutics risk management includes liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. Group Finance monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs.

For more insights into Addex Therapeutics' strategic direction, see Mission Statement, Vision, & Core Values of Addex Therapeutics Ltd (ADXN).

Addex Therapeutics Ltd (ADXN) Valuation Analysis

Determining whether Addex Therapeutics Ltd (ADXN) is overvalued or undervalued requires a multifaceted approach, examining key financial ratios, stock performance, and analyst sentiment. Below is an analysis based on available information.

Currently, comprehensive data for traditional valuation metrics such as price-to-earnings (P/E) ratio for Addex Therapeutics Ltd may be limited due to the company's financial stage and focus on research and development. For companies in the biotechnology sector, particularly those still in the development phase, alternative valuation methods and metrics are often more relevant.

Here's a breakdown of factors to consider:

• Price-to-Book (P/B) Ratio: The price-to-book ratio compares a company's market capitalization to its book value of equity. It can indicate whether the market is overpaying for the company's net assets. However, for biotech firms heavily reliant on intellectual property, this ratio might not be the most insightful.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio assesses the company's total value (including debt and equity) against its earnings before interest, taxes, depreciation, and amortization. It's useful for comparing companies with different capital structures. Again, its applicability to Addex Therapeutics Ltd may be limited if EBITDA is not yet consistently positive.

Analyzing Addex Therapeutics Ltd's stock performance over the last 12 months provides context on market sentiment and investor confidence.

• Stock Price Trends: Reviewing the stock's price movement, volatility, and overall trend helps in understanding market perception. Significant price fluctuations might be tied to clinical trial results, partnership announcements, or regulatory updates.

Given that Addex Therapeutics Ltd is a development-stage biotech company, dividend yield and payout ratios are likely not applicable, as the company is probably reinvesting earnings into research and development rather than distributing dividends.

Analyst consensus can offer insights into how financial professionals view the stock's potential.

• Analyst Ratings: Check for recent analyst reports that provide ratings (buy, hold, or sell) and price targets for Addex Therapeutics Ltd. These ratings reflect analysts' expectations for the stock's future performance, based on their assessment of the company's pipeline, market opportunities, and financial health.

Due diligence involves staying informed on the latest financial news, assessing risks and opportunities, and understanding the factors driving Addex Therapeutics Ltd's valuation. Keep in mind that valuations for development-stage biotech companies can be highly speculative and sensitive to news flow regarding clinical trials and regulatory outcomes.

For further insights, consider exploring this resource: Breaking Down Addex Therapeutics Ltd (ADXN) Financial Health: Key Insights for Investors

Addex Therapeutics Ltd (ADXN) Risk Factors

Addex Therapeutics Ltd (ADXN), like any clinical-stage pharmaceutical company, faces a variety of risks that could impact its financial health and operational success. These risks can be broadly categorized into internal and external factors, encompassing industry competition, regulatory changes, market conditions, and company-specific strategic and operational challenges.

Here's a breakdown of key risk areas:

• Financial Risks:
• Currency Fluctuations: A significant portion of Addex’s costs are denominated in currencies other than the Swiss franc, particularly the U.S. dollar, Euro, and British pound. Fluctuations in exchange rates between the Swiss franc and these currencies can adversely affect the company’s financial results. For example, in the six-month period ended June 30, 2019, approximately 38% of costs were denominated in currencies other than the Swiss franc.
• Going Concern: Addex Therapeutics' annual report for 2021 mentions risks that could cast a significant doubt upon the Group's ability to continue as a going concern.

• Operational Risks:
• Clinical Trial Delays: The COVID-19 pandemic has previously affected the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to dipraglurant and other product candidates. Any such delays could increase the cost of planned clinical trials and delay filing for approval from the FDA.

• Strategic Risks:
• Reliance on Collaborations: Addex relies on collaborative arrangements with other companies, such as Indivior, for funding and development of its drug candidates. Termination of these collaborations or failure to receive ongoing research payments could adversely affect the company's financial position. For instance, Addex and Indivior selected clinical candidates from GABAB Positive Allosteric Modulator Research Collaboration in August 2024.

• Regulatory and Clinical Development Risks:
• Regulatory Hurdles: The drug development process is inherently risky and subject to regulatory challenges.
• Clinical Trial Outcomes: Uncertainty related to the efficacy of drug candidates in treating targeted indications and the results of clinical and preclinical trials pose significant risks.
• Approval Uncertainty: Uncertainty of regulatory approval is a major risk factor, as failure to obtain necessary approvals can halt the commercialization of drug candidates.
• Partner Discontinuation: In July 2024, Addex's partner discontinued ADX71149 development in Epilepsy.

• Market and Economic Risks:
• Market Conditions: General economic and market conditions can impact Addex's ability to raise capital and commercialize its products.

In Addex Therapeutics' full-year 2023 financial results, forward-looking statements are subject to risks, uncertainties, and other important factors, including those related to market conditions, described in greater detail in the section entitled “Risk Factors” in Addex Therapeutics' Annual Report on Form 20-F for the year ended December 31, 2023.

Here's a summary of Addex Therapeutics Ltd's recent financial performance:

Addex is actively working on mitigating risks, as evidenced by the launch of Neurosterix, a transaction designed to enhance the company's financial position. Additionally, Addex is evaluating high-value therapeutic indications for future development programs and pursuing discussions with potential partners.

To gain further insights into Addex Therapeutics' strategic direction, explore their Mission Statement, Vision, & Core Values of Addex Therapeutics Ltd (ADXN).

Addex Therapeutics Ltd (ADXN) Growth Opportunities

Addex Therapeutics Ltd (ADXN) is focusing on developing novel small molecule allosteric modulators. These compounds are designed to address unmet needs in neurological disorders. The company's future growth prospects are intertwined with the success of its product pipeline and strategic collaborations.

Key growth drivers for Addex Therapeutics include:

• Product Innovations: Addex is actively involved in creating new chemical entities that can modulate specific receptors in the brain.
• Market Expansions: While specific details on market expansion depend on clinical trial outcomes and regulatory approvals, the company is positioning itself to address global markets if its products are successful.
• Strategic Initiatives or Partnerships: Collaborations with other pharmaceutical companies or research institutions can provide financial support and expertise, accelerating the development and commercialization of Addex's products.

Future revenue growth projections and earnings estimates for Addex Therapeutics are highly dependent on clinical trial results and regulatory approvals. As a biotechnology company in the clinical stage, Addex does not currently have products on the market generating revenue. Therefore, revenue projections typically start after a product receives regulatory approval and is launched commercially.

Addex's competitive advantages that position the company for growth include:

• Allosteric Modulation Expertise: Addex has a specialized focus on allosteric modulation, which can offer advantages over traditional orthosteric drugs by providing more selective and nuanced control over receptor activity.
• Pipeline Depth: A diverse pipeline of drug candidates targeting different neurological disorders increases the likelihood of eventual commercial success.
• Intellectual Property: Strong patent protection for its drug candidates and allosteric modulation technology provides a competitive edge.

For additional insights into Addex Therapeutics Ltd (ADXN) financial health, you can explore: Breaking Down Addex Therapeutics Ltd (ADXN) Financial Health: Key Insights for Investors