CNS And Respiratory Therapies Will Unlock Expanding Global Markets

Key Takeaways

• Differentiated CNS and respiratory pipeline, positive clinical progress, and strategic partnerships position Addex for long-term growth with stabilized earnings and mitigated R&D risk.
  
• Expanded intellectual property and global market trends enhance future out-licensing opportunities and scalability potential for Addex's novel therapies.
  
• Heavy pipeline concentration, limited liquidity, strong external competition, dependency on partners, and regulatory pressures all threaten Addex's revenue sustainability and long-term growth prospects.

Catalysts

Addex Therapeutics Ltd discovers, develops, and commercializes small-molecule pharmaceutical products for neurological disorders in Switzerland.

• Addex's pipeline focuses on large unmet needs in CNS and respiratory indications (e.g., post-stroke recovery, chronic cough), both of which are expanding due to the aging global population and the increasing prevalence of chronic neurological disorders-supporting long-term revenue growth as these markets expand.
  
• Positive preclinical and clinical progress in key programs (e.g., GABAB PAM for cough, dipraglurant for brain injury recovery), combined with favorable safety/efficacy profiles, position Addex's differentiated assets to benefit from growing demand for precision medicine-potentially driving higher licensing/milestone payments and improved net margins as programs mature.
  
• Existing strategic partnerships, notably with Indivior, offer non-dilutive funding, risk-sharing, and milestone/royalty income potential that can stabilize earnings and offset R&D expenses-mitigating downside risk to operating cash flow during development stages.
  
• Addex's regained rights to the mGluR2 PAM program and new IP agreements (e.g., with Sinntaxis) expand the opportunity set for asset development and future out-licensing, enhancing long-term revenue optionality.
  
• The favorable reimbursement and healthcare access trends globally, especially in emerging markets, create a supportive environment for the eventual commercialization of Addex's novel therapies-ultimately enabling broader patient uptake and long-term revenue scalability.

Addex Therapeutics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Addex Therapeutics's revenue will grow by 108.8% annually over the next 3 years.
• Analysts are not forecasting that Addex Therapeutics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Addex Therapeutics's profit margin will increase from -2293.8% to the average GB Pharmaceuticals industry of 24.3% in 3 years.
• If Addex Therapeutics's profit margin were to converge on the industry average, you could expect earnings to reach CHF 544.5 thousand (and earnings per share of CHF 0.01) by about August 2028, up from CHF -5.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 32.2x on those 2028 earnings, up from -1.0x today. This future PE is greater than the current PE for the GB Pharmaceuticals industry at 22.4x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 3.82%, as per the Simply Wall St company report.

Addex Therapeutics Future Earnings Per Share Growth

Risks

• Addex faces heavy reliance on a small, undiversified pipeline with only a few lead assets (e.g., dipraglurant, GABAB PAM programs); any failure or delay in clinical trials or inability to secure additional indications would significantly threaten future revenue streams and sustainability.
  
• The company has a diminished cash position (CHF 2.8 million, covering operations only through mid-2026) and indicated that current cash does not fund progression of unpartnered programs into the clinic, increasing the risk of dilutive financing or project slowdowns-negatively impacting net margins and shareholder value.
  
• Intensifying competition in neurological and respiratory indications (chronic cough, brain injury recovery) from other emerging therapies and larger pharmaceutical companies threatens market share and bargaining power, which could impede long-term revenue growth and pressure future earnings.
  
• Addex's dependence on strategic partners (e.g., Indivior) for advancement of key assets makes it vulnerable to shifts in partner priorities, milestone achievement uncertainty, or dissolution of partnerships, which could jeopardize milestone payments and reduce operating cash flow.
  
• Long-term industry and secular trends-such as greater regulatory scrutiny, drug pricing pressures from governments and payers, and accelerated innovation in alternative treatment modalities (e.g., gene therapies)-pose structural risks that may delay approvals, compress achievable prices, or erode the future relevance and profitability of Addex's small molecule programs.

Valuation

• The analysts have a consensus price target of CHF0.16 for Addex Therapeutics based on their expectations of its future earnings growth, profit margins and other risk factors.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CHF2.2 million, earnings will come to CHF544.5 thousand, and it would be trading on a PE ratio of 32.2x, assuming you use a discount rate of 3.8%.
• Given the current share price of CHF0.06, the analyst price target of CHF0.16 is 65.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.