08/05/2021 | Press release | Distributed by Public on 08/05/2021 04:41

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Form 6-K)

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Interim Condensed Consolidated Financial Statements
Unaudited Interim Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the three-month and six-month periods ended June 30, 2021 and 2020	3
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the six-month periods ended June 30, 2021 and 2020	4
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the three-month periods ended June 30,2021 and 2020	5
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2021 and 2020	7
Unaudited Notes to the Interim Condensed Consolidated Financial Statements	8

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Balance Sheets

as of June 30, 2021, and December 31, 2020

					June 30,			December 31,
		Notes			2021			2020
					Amounts in Swiss francs
ASSETS
Current assets
Cash and cash equivalents			6				18,108,214				18,695,040
Other financial assets			7/15				38,305				64,930
Trade and other receivables			7				126,445				68,373
Contract asset			7				1,101,429				-
Prepayments and deferred costs			7				1,625,650				661,221
Total current assets							21,000,043				19,489,564
Non-current assets
Right-of-use assets			8				412,717				565,344
Property, plant and equipment			9				59,480				67,760
Non-current financial assets			10				59,369				59,144
Total non-current assets							531,566				692,248
Total assets							21,531,609				20,181,812
LIABILITIES AND EQUITY
Current liabilities
Current lease liabilities							258,674				308,611
Payables and accruals			11				3,425,548				2,491,927
Contract liability			15				-				733,668
Deferred income			16				-				86,481
Total current liabilities							3,684,222				3,620,687
Non-current liabilities
Non-current lease liabilities							161,487				258,785
Retirement benefits obligations			14				1,263,174				1,692,537
Total non-current liabilities							1,424,661				1,951,322
Equity
Share capital			12				49,272,952				32,848,635
Share premium			12				288,256,887				286,888,354
Treasury shares reserve			12				(15,505,209	)			(6,078,935	)
Other reserves							15,433,746				14,657,637
Accumulated deficit							(321,035,650	)			(313,705,888	)
Total equity							16,422,726				14,609,803
Total liabilities and equity							21,531,609				20,181,812

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

for the three-month and six-month periods ended June 30, 2021 and 2020

					For the three months ended June 30,			For the six months ended June 30,
		Notes			2021			2020			2021			2020
					Amounts in Swiss francs
Revenue from contract with customer		15				992,595				860,793				1,836,818				1,764,853
Other income		16				79,285				71,561				157,483				119,957
Operating costs
Research and development						(3,731,839	)			(2,318,977	)			(6,479,882	)			(5,871,588	)
General and administration						(1,846,678	)			(1,587,283	)			(3,169,084	)			(3,259,806	)
Total operating costs		17				(5,578,517	)			(3,906,260	)			(9,648,966	)			(9,131,394	)
Operating loss						(4,506,637	)			(2,973,906	)			(7,654,665	)			(7,246,584	)
Finance income						(160,573	)			10,843				368,582				32,769
Finance expense						(22,939	)			(151,675	)			(43,679	)			(206,844	)
Finance result		19				(183,512	)			(140,832	)			324,903				(174,075	)
Net loss before tax						(4,690,149	)			(3,114,738	)			(7,329,762	)			(7,420,659	)
Income tax expense						-				-				-				-
Net loss for the period						(4,690,149	)			(3,114,738	)			(7,329,762	)			(7,420,659	)
Basic and diluted loss per share for loss attributable to the ordinary equity holders of the Company		20				(0.14	)			(0.12	)			(0.22	)			(0.28	)
Other comprehensive income/(loss)
Items that will never be reclassified to profit and loss:
Remeasurements of retirement benefits obligation						126,061				(226,999	)			251,462				(42,048	)
Items that may be classified subsequently to profit and loss:
Exchange difference on translation of foreign operations						1,232				(814	)			1,696				(847	)
Other comprehensive income/(loss) for the period, net of tax						127,293				(227,813	)			253,158				(42,895	)
Total comprehensive loss for the period						(4,562,856	)			(3,342,551	)			(7,076,604	)			(7,463,554	)

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

For the six-month periods ended June 30, 2021 and 2020

			Amounts in Swiss francs
			Notes				Share Capital				Share Premium				Treasury Shares Reserve				Foreign Currency Translation Reserve				Additional Reserves				Accumulated Deficit				Total
Balance as of January 1, 2020							32,848,635				286,375,977				(6,572,316	)			(653,161	)			14,371,983				(300,847,289	)			25,523,829
Net loss for the period							-				-				-				-				-				(7,420,659	)			(7,420,659	)
Other comprehensive loss for the period							-				-				-				(847	)			(42,048	)			-				(42,895	)
Total comprehensive loss for the period							-				-				-				(847	)			(42,048	)			(7,420,659	)			(7,463,554	)
Value of share-based services			13				-				-				-				-				640,791				-				640,791
Movement in treasury shares:			12
Settlement of supplier invoices							-				27,955				111,842				-				-				-				139,797
Net purchases under liquidity agreement							-				(7,987	)			(31,759	)			-				-				-				(39,746	)
Balance as of June 30, 2020							32,848,635				286,395,945				(6,492,233	)			(654,008	)			14,970,726				(308,267,948	)			18,801,117
Balance as of January 1, 2021							32,848,635				286,888,354				(6,078,935	)			(657,230	)			15,314,867				(313,705,888	)			14,609,803
Net loss for the period							-				-				-				-				-				(7,329,762	)			(7,329,762	)
Other comprehensive income for the period							-				-				-				1,696				251,462				-				253,158
Total comprehensive loss for the period							-				-				-				1,696				251,462				(7,329,762	)			(7,076,604	)
Issue of shares-third parties			12				6,900,000				3,199,323				-				-				-				-				10,099,323
Issue of treasury shares			12				9,524,317				-				(9,524,317	)			-				-				-				-
Cost of share capital issuance							-				(1,902,487	)			-				-				-				-				(1,902,487	)
Value of share-based services			13				-				-				-				-				522,951				-				522,951
Movement in treasury shares:			12
Settlement of supplier invoices							-				35,115				80,306				-				-				-				115,421
Net purchases under liquidity agreement							-				(4,422	)			(22,203	)			-				-				-				(26,625	)
Other net sales of treasury shares							-				41,004				39,940				-				-				-				80,944
Balance as of June 30, 2021							49,272,952				288,256,887				(15,505,209	)			(655,534	)			16,089,280				(321,035,650	)			16,422,726

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

For the three-month period ended June 30, 2021 (1/2)

			Amounts in Swiss francs
			Notes				Share Capital				Share Premium				Treasury Shares Reserve				Foreign Currency Translation Reserve				Additional Reserves				Accumulated Deficit				Total
Balance as of January 1, 2020							32,848,635				286,375,977				(6,572,316	)			(653,161	)			14,371,983				(300,847,289	)			25,523,829
Net loss for the period							-				-				-				-				-				(4,305,921	)			(4,305,921	)
Other comprehensive income for the period							-				-				-				(33	)			184,951				-				184,918
Total comprehensive loss for the period							-				-				-				(33	)			184,951				(4,305,921	)			(4,121,003	)
Value of share-based services			13				-				-				-				-				297,708				-				297,708
Movement in treasury shares:			12
Settlement of supplier invoices							-				20,123				62,808				-				-				-				82,931
Net sales under liquidity agreement							-				(3,193	)			596				-				-				-				(2,597	)
Balance as of March 31, 2020							32,848,635				286,392,907				(6,508,912	)			(653,194	)			14,854,642				(305,153,210	)			21,780,868
Net loss for the period							-				-				-				-				-				(3,114,738	)			(3,114,738	)
Other comprehensive loss for the period							-				-				-				(814	)			(226,999	)			-				(227,813	)
Total comprehensive loss for the period							-				-				-				(814	)			(226,999	)			(3,114,738	)			(3,342,551	)
Value of share-based services			13				-				-				-				-				343,083				-				343,083
Movement in treasury shares:			12
Settlement of supplier invoices							-				7,832				49,034				-				-				-				56,866
Net purchases under liquidity agreement							-				(4,794	)			(32,355	)			-				-				-				(37,149	)
Balance as of June 30, 2020							32,848,635				286,395,945				(6,492,233	)			(654,008	)			14,970,726				(308,267,948	)			18,801,117

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │ Interim Condensed Consolidated Financial Statement

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

For the three-month period ended June 30, 2021 (2/2)

			Amounts in Swiss francs
			Notes				Share Capital				Share Premium				Treasury Shares Reserve				Foreign Currency Translation Reserve				Additional Reserves				Accumulated Deficit				Total
Balance as of January 1, 2021							32,848,635				286,888,354				(6,078,935	)			(657,230	)			15,314,867				(313,705,888	)			14,609,803
Net loss for the period							-				-				-				-				-				(2,639,613	)			(2,639,613	)
Other comprehensive income for the period							-				-				-				464				125,401				-				125,865
Total comprehensive loss for the period							-				-				-				464				125,401				(2,639,613	)			(2,513,748	)
Issue of shares-third parties			12				6,900,000				3,199,323				-				-				-				-				10,099,323
Cost of share capital issuance							-				(1,767,053	)			-				-				-				-				(1,767,053	)
Value of share-based services			13				-				-				-				-				186,102				-				186,102
Movement in treasury shares:			12
Settlement of supplier invoices							-				21,284				37,382				-				-				-				58,666
Net purchases under liquidity agreement							-				8,061				(63,028	)			-				-				-				(54,967	)
Other net sales of treasury shares							-				41,004				39,940				-				-				-				80,944
Balance as of March 31, 2021							39,748,635				288,390,973				(6,064,641	)			(656,766	)			15,626,370				(316,345,501	)			20,699,070
Net loss for the period							-				-				-				-				-				(4,690,149	)			(4,690,149	)
Other comprehensive income for the period..							-				-				-				1,232				126,061				-				127,293
Total comprehensive loss for the period							-				-				-				1,232				126,061				(4,690,149	)			(4,562,856	)
Issue of treasury shares			12				9,524,317				-				(9,524,317	)			-				-				-				-
Cost of share capital issuance							-				(135,434	)			-				-				-				-				(135,434	)
Value of share-based services			13				-				-				-				-				336,849				-				336,849
Movement in treasury shares:			12
Settlement of supplier invoices							-				13,831				42,924				-				-				-				56,755
Net sales under liquidity agreement							-				(12,483	)			40,825				-				-				-				28,342
Balance as of June 30, 2021							49,272,952				288,256,887				(15,505,209	)			(655,534	)			16,089,280				(321,035,650	)			16,422,726

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Statements of Cash Flows

for the six-month periods ended June 30, 2021 and 2020

					For the six months ended June 30,
		Notes			2021			2020
							Amounts in Swiss francs
Net loss for the period							(7,329,762	)			(7,420,659	)
Adjustments for:
Depreciation			8/9			176,909				192,670
Value of share-based services			13				522,951				640,791
Post-employment benefits							(177,901	)			(61,538	)
Finance cost/(income) net							(328,977	)			195,452
Decrease/(increase) in other financial assets			7				26,625				(40,253	)
Decrease/(increase) in trade and other receivables			7				(58,072	)			14,032
Increase in contract asset			7				(1,101,429	)			-
Increase in prepayments			7				(1,127,268	)			(1,142,610	)
Increase/(decrease) in payables and accruals			11				880,344				(1,788,170	)
Decrease in contract liability			15				(733,668	)			(945,737	)
Decrease in deferred income			16				(86,481	)			(110,806	)
Services paid in shares							115,421				139,797
Net cash used in operating activities							(9,221,308	)			(10,327,031	)
Cash flows from investing activities
Purchase of property, plant and equipment			9				(5,393	)			(10,634	)
Net cash used in investing activities							(5,393	)			(10,634	)
Cash flows from financing activities
Proceeds from capital increase							10,161,746				-
Costs paid on issue of shares							(1,682,517	)			(109,167	)
(Purchase)/sale of treasury shares							54,319				(39,746	)
Principal element of lease payment							(157,033	)			(185,766	)
Interest received			19				3,329				32,769
Interest paid			19				(43,679	)			(46,695	)
Net cash from/(used in) financing activities							8,336,165				(348,605	)
Decrease in cash and cash equivalents							(890,536	)			(10,686,270	)
Cash and cash equivalents at the beginning of the period			6				18,695,040				31,536,803
Exchange difference on cash and cash equivalents							303,710				(179,832	)
Cash and cash equivalents at the end of the period			6				18,108,214				20,670,701

The accompanying notes form an integral part of these consolidated financial statements.

Addex Therapeutics │Financial Review

Unaudited Notes to the Interim Condensed Consolidated Financial Statements

for the three-month and six-month periods ended June 30, 2021

(Amounts in Swiss francs)

1. General information

Addex Therapeutics Ltd (the 'Company'), formerly Addex Pharmaceuticals Ltd, and its subsidiaries (together, the 'Group') are a clinical stage pharmaceutical group applying its leading allosteric modulator drug discovery platform to discovery and development of small molecule pharmaceutical products, with an initial focus on central nervous system disorders.

The Company is a Swiss stockholding corporation domiciled c/o Addex Pharma SA, Chemin des Aulx 12, CH1228 Plan-les-Ouates, Geneva, Switzerland and the parent company of Addex Pharma SA, Addex Pharmaceuticals France SAS and Addex Pharmaceuticals Inc. registered in Delaware with its principal business location in San Francisco, California, United States. Its registered shares are traded at the SIX, Swiss Exchange, under the ticker symbol ADXN. On January 29, 2020, the Group listed on the Nasdaq Stock Market, American Depositary Shares (ADSs) under the symbol 'ADXN', without a new issuance of securities. ADSs represents shares that continue to be admitted to trading on SIX Swiss Exchange.

These condensed consolidated financial statements have been approved for issuance by the Board of Directors on August 4, 2021.

2. Basis of preparation

These condensed consolidated interim financial statements for the three-month and six-month periods ended June 30, 2021, have been prepared under the historic cost convention and in accordance with IAS 34 'Interim Financial Reporting' and are presented in a format consistent with the consolidated financial statements under IAS 1 'Presentation of Financial Statements'. However, they do not include all of the notes that would be required in a complete set of financial statements. Thus, this interim financial report should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020.

Interim financial results are not necessarily indicative of results anticipated for the full year. The preparation of these unaudited condensed consolidated interim financial statements made in accordance with IAS 34 requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. The areas involving a higher degree of judgment which are significant to the condensed consolidated interim financial statements are disclosed in note 4 to the consolidated financial statements for the year ended December 31, 2020.

A number of new or amended standards and interpretations became applicable for financial periods beginning on or after January 1, 2021. The Group noted that the latter did not have a material impact on the Group's financial position or disclosures made in the condensed consolidated interim financial statements.

Due to rounding, numbers presented throughout these condensed consolidated financial statements may not add up precisely to the totals provided. All ratios and variances are calculated using the underlying amount rather than the presented rounded amount.

3. Critical accounting estimates and judgments

The Group makes estimates and assumptions concerning the future. These estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities or may have had a significant impact on the reported results are disclosed below:

Addex Therapeutics│Financial Review

Going concern

The Group's accounts are prepared on a going concern basis. To date, the Group has financed its cash requirements primarily from share issuances and licensing certain of its research and development stage products. The Group is a development-stage enterprise and is exposed to all the risks inherent in establishing a business. The Group maintains detailed financial forecasts and monitors actual results on a regular basis so that measures can be taken to ensure the Group remains solvent.

COVID-19

In early 2020 a coronavirus disease (COVID-19) pandemic developed globally resulting in a significant number of infections and negative effects on economic activity. The Group is actively monitoring the situation and is taking any necessary measures to respond to the situation in cooperation with the various stakeholders. On March 18, 2020, the Group announced the suspension of the initiation of a placebo-controlled Phase 2b/3 pivotal clinical trial of dipraglurant in levodopa-induced dyskinesia associated with Parkinson's disease (PD-LID). The Group decided to suspend the trial based on the inability of planned clinical trial sites in the United States to initiate the trial in full compliance with the Group's planned clinical trial procedures including with respect to data reporting, data monitoring, and the recommendations of various health authorities that the infirm patients who would participate in the trial not risk being exposed to COVID-19 at clinical trial sites. Such sites have been and may continue to be required to focus their limited resources on matters unrelated to our planned clinical trial, thereby decreasing availability, in whole or in part, for services to our planned clinical trial. On June 29, 2021, the Group announced the initiation of a placebo-controlled Phase 2b/3 pivotal clinical trial of dipraglurant in PD-LID. Although the Group believes, based on current projections of the pandemic, that it will be able to execute the clinical trial as planned, the duration of the COVID-19 crisis is uncertain and, if the enumerated risks are not addressed, the Group may have to adjust its expectations as to trial duration, in order to accommodate the foregoing factors. In addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to dipraglurant and our other product candidates. Any such delays could increase the cost of our clinical trials and increase the uncertainty of receiving approval from the FDA of our product candidates. Depending on the duration of the COVID-19 crisis and continued negative impact on global economic activity, the Group may have to take additional measures that will have a negative impact on the Group's business continuity and may experience certain liquidity restraints as well as incur impairments on its assets. The exact impact on the Group's activities in 2021 and thereafter cannot be reasonably predicted. However, based on the risk mitigation measures undertaken, the Group concluded that there is no material uncertainty that may cast a significant doubt upon the Group's ability to continue as a going concern.

Revenue recognition

Revenue is primarily from fees related to licenses, milestones and research services. Given the complexity of the relevant agreements, judgements are required to identify distinct performance obligations, allocate the transaction price to these performance obligations and determine when the performance obligations are met. In particular, the Group's judgement over the estimated stand-alone selling price which is used to allocate the transaction price to the performance obligations is disclosed in note 15.

Grants

Grants are recorded at their fair value when there is reasonable assurance that they will be received and recognized as income when the Group has satisfied the underlying grant conditions. In certain circumstances, grant income may be recognized before explicit grantor acknowledgement that the conditions have been met.

Accrued research and development costs

The Group records accrued expenses for estimated costs of research and development activities conducted by third party service providers. The Group records accrued expenses for estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced, and these costs are included in accrued expenses on the balance sheets and within research and development expenses in the statements of comprehensive loss. These costs are a significant component of research and development expenses. Accrued expenses for these costs are recorded based on the estimated amount of work completed in accordance with agreements established with these third parties.

To date, the Group has not experienced significant changes in the estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, the Group may be required to make changes to the estimates in the future as it becomes aware of additional information about the status or conduct of its research activities.

Addex Therapeutics │Financial Review

Research and development costs

The Group recognizes expenditure incurred in carrying out its research and development activities, including development supplies, until it becomes probable that future economic benefits will flow to the Group, which results in recognizing such costs as intangible assets, involving a certain degree of judgement. Currently, such development supplies are associated with pre-clinical and clinical trials of specific products that do not have any demonstrated technical feasibility.

Share-based compensation

The Group recognizes an expense for share-based compensation based on the valuation of equity incentive units using the Black-Scholes valuation model. A number of assumptions related to the volatility of the underlying shares and to the risk-free rate are made in this model. Should the assumptions and estimates underlying the fair value of these instruments vary significantly from management's estimates, then the share-based compensation expense would be materially different from the amounts recognized.

Pension obligations

The present value of the pension obligations is calculated by an independent actuary and depends on a number of assumptions that are determined on an actuarial basis such as discount rates, future salary and pension increases, and mortality rates. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each period. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions.

4. Interim measurement note

Seasonality of the business: The business is not subject to any seasonality, but expenses and corresponding revenue are largely determined by the phase of the respective projects, particularly with regard to external research and development expenditures.

Costs: Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year.

5. Segment reporting

Management has identified one single operating segment, related to the discovery, development and commercialization of small-molecule pharmaceutical products.

Information about products, services and major customers

External income of the Group for the three-month and six-month periods ended June 30, 2021 and 2020 is derived from the business of discovery, development and commercialization of pharmaceutical products. Income was earned from rendering of research services to a pharmaceutical company and grants earned.

Information about geographical areas

External income is exclusively recorded in the Swiss operating company.

Analysis of revenue from contract with customer and other income by nature is detailed as follows:

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Collaborative research funding			992,595				860,793				1,836,818				1,764,853
Grants earned			73,735				66,381				146,852				110,806
Other service income			5,550				5,180				10,631				9,151
Total			1,071,880				932,354				1,994,301				1,884,810

Addex Therapeutics │Financial Review

Analysis of revenue from contract with customer and other income by major counterparties is detailed as follows:

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Indivior PLC			992,595				860,793				1,836,818				1,764,853
Eurostars /Innosuisse			73,735				66,381				146,852				110,806
Other counterparties			5,550				5,180				10,631				9,151
Total			1,071,880				932,354				1,994,301				1,884,810

For more detail, refer to note 15, 'Revenue from contract with customer' and note 16 'Other income'.

The geographical allocation of long-lived assets is detailed as follows:

		June 30, 2021			December 31, 2020
Switzerland			517,641				665,012
United States of America			13,530				26,847
France			395				389
Total			531,566				692,248

The geographical analysis of operating costs is as follows:

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Switzerland			5,567,368				3,886,741				9,628,157				9,086,493
United States of America			8,646				18,506				16,627				43,047
France			2,503				1,013				4,182				1,854
Total operating costs (note 17)			5,578,517				3,906,260				9,648,966				9,131,394

The capital expenditure during the six-month period ended June 30, 2021 is CHF 5,393 (CHF 10,634 for the six-month period ended June 30, 2020).

6. Cash and cash equivalents

		June 30, 2021			December 31, 2020
Cash at bank and on hand			18,108,214				18,695,040
Total cash and cash equivalents			18,108,214				18,695,040

Split by currency:

		June 30, 2021			December 31, 2020
CHF			59.79	%			60.53	%
USD			39.47	%			38.70	%
EUR			0.45	%			0.63	%
GBP			0.29	%			0.14	%
Total			100.00	%			100.00	%

The Group pays interests on CHF cash and cash equivalents and earns interests on USD cash and cash equivalents. The Group invests its cash balances into a variety of current and deposit accounts mainly with Swiss banks. In addition, the Group invests a portion of its USD cash in line with its treasury guidelines. As of December 31, 2020, non-used funds received from Eurostars/Innosuisse amount to CHF 86,481 (note 16).

All cash and cash equivalents were held either at banks or on hand as of June 30, 2021 and December 31, 2020.

Addex Therapeutics │Financial Review

7. Other current assets

		June 30, 2021			December 31, 2020
Other financial assets			38,305				64,930
Trade and other receivables			126,445				68,373
Contract asset			1,101,429				-
Prepayments			1,625,650				498,382
Deferred costs			-				162,839
Total other current assets			2,891,829				794,524

The Group applies the IFRS 9 simplified approach to measuring expected credit losses ('ECL'), which uses a lifetime expected loss allowance for all contract assets, trade receivables and other receivables. As of June 30, 2021, the contract asset relates to the research agreement with Indivior whilst the trade and other receivables comprise of CHF 60,371 related to the grant from Eurostars/Innosuisse to be received and three non-governmental debtors whose combined outstanding balances are CHF 7,698 (four non-governmental debtors for CHF 20,577 as of December 31, 2020).The Group has considered that the contract asset and the trade and other receivables have a low risk of default based on historic loss rates and forward-looking information on macroeconomic factors affecting the ability of the third parties to settle invoices. As a result, expected loss allowance has been deemed as nil as of June 30, 2021 and December 31, 2020. The increase in prepayments as of June 30, 2021 compared to December 31, 2020 primarily relates to the Directors and Officers (D&O) Insurance premium and the retirement benefits paid annually at the beginning of the year. As of December 31, 2020 deferred costs relate to paid legal and auditor fees associated with the preparation of the capital increase executed on January 8, 2021.

8. Right-of-use assets

		Properties			Equipment			Total
Year ended December 31, 2020
Opening net book amount			496,126				47,214				543,340
Additions			27,612				-				27,612
Depreciation charge			(333,714	)			(25,760	)			(359,474	)
Effect of lease modifications			434,150				-				434,150
Disposals			(72,504	)			-				(72,504	)
Exchange differences			(7,780	)			-				(7,780	)
Closing net book amount			543,890				21,454				565,344
As of December 31, 2020
Cost			1,111,338				71,168				1,182,506
Accumulated depreciation			(567,448	)			(49,714	)			(617,162	)
Net book value			543,890				21,454				565,344

		Properties			Equipment			Total
Period ended June 30, 2021
Opening net book amount			543,890				21,454				565,344
Additions			2,000				-				2,000
Depreciation charge			(150,356	)			(12,880	)			(163,236	)
Effect of lease modifications			(3,998	)			11,796				7,798
Exchange differences			811				-				811
Closing net book amount			392,347				20,370				412,717
As of June 30, 2021
Cost			1,110,610				82,964				1,193,574
Accumulated depreciation			(718,263	)			(62,594	)			(780,857	)
Net book value			392,347				20,370				412,717

Addex Therapeutics │Financial Review

9. Property, plant and equipment

		Equipment			Furniture & fixtures			Chemical Library			Total
Year ended December 31, 2020
Opening net book amount			27,626				-				-				27,626
Additions			59,414				-				-				59,414
Depreciation charge			(19,280	)			-				-				(19,280	)
Closing net book amount			67,760				-				-				67,760
As of December 31, 2020
Cost			1,682,279				7,564				1,207,165				2,897,008
Accumulated depreciation			(1,614,519	)			(7,564	)			(1,207,165	)			(2,829,248	)
Net book value			67,760				-				-				67,760

		Equipment			Furniture & fixtures			Chemical Library			Total
Period ended June 30, 2021
Opening net book amount			67,760				-				-				67,760
Additions			5,393				-				-				5,393
Depreciation charge			(13,673	)			-								(13,673	)
Closing net book amount			59,480				-				-				59,480
As of June 30, 2021
Cost			1,687,672				7,564				1,207,165				2,902,401
Accumulated depreciation			(1,628,192	)			(7,564	)			(1,207,165	)			(2,842,921	)
Net book value			59,480				-				-				59,480

10. Non-current financial assets

		June 30, 2021			December 31, 2020
Security rental deposits			59,369				59,144
Total non-current financial assets			59,369				59,144

11. Payables and accruals

		June 30, 2021			December 31, 2020
Trade payables			1,209,329				983,545
Social security and other taxes			171,988				171,876
Accrued expenses			2,044,231				1,336,506
Total payables and accruals			3,425,548				2,491,927

All payables mature within 3 months. Accrued expenses and trade payables primarily relate to R&D services from contract research organizations, consultants and professional fees. The increase in accrued expenses as of June 30, 2021 compared to December 31, 2020, primarily relates to R&D activities linked to the initiation of a placebo-controlled Phase 2b/3 pivotal clinical trial of dipraglurant in PD-LID announced by the Group on June 29, 2021. The carrying amounts of payables do not materially differ from their fair values, due to their short-term nature.

12. Share capital

		Number of shares
		Common shares			Treasury shares			Total
Balance as of January 1, 2020			32,848,635				(6,243,487	)			26,605,148
Settlement of supplier invoices			-				111,842				111,842
Net purchase of treasury shares under liquidity agreement			-				(29,801	)			(29,801	)
Balance as of June 30, 2020			32,848,635				(6,161,446	)			26,687,189

Addex Therapeutics │Financial Review

		Number of shares
		Commonshares			Treasuryshares			Total
Balance as of January 1, 2021			32,848,635				(5,729,861	)			27,118,774
Issue of shares - capital increase			16,424,317				(9,524,317	)			6,900,000
Settlement of supplier invoices			-				80,306				80,306
Net purchase of treasury shares under liquidity agreement			-				(19,448	)			(19,448	)
Other net sale of treasury shares			-				39,940				39,940
Balance as of June 30, 2021			49,272,952				(15,153,380	)			34,119,572

The Company maintains a Liquidity Agreement with Kepler Capital Markets SA ('Kepler'). Under the agreement, the Group has provided Kepler with cash and shares to enable them to buy and sell the Company's shares. As of June 30, 2021, 73,937 (December 31, 2020: 54,489) treasury shares are recorded under this agreement in the treasury share reserve and CHF 38,305 (December 31, 2020: CHF 64,930) is recorded in other financial assets.

As of June 30, 2021, the total outstanding share capital is CHF 34,119,572, consisting of 34,119,572 shares excluding 15,153,380 treasury shares. As of December 31, 2020, the total outstanding share capital was CHF 27,118,774 consisting of 27,118,774 shares excluding 5,729,861 treasury shares. All shares have a nominal value of CHF 1.

On April 23, 2021, Addex Therapeutics Ltd issued 9,524,317 new shares from the authorized capital to its 100% owned subsidiary, Addex Pharma SA, at CHF 1. These shares are held as treasury shares.

On January 8, 2021, Addex Therapeutics Ltd issued 6,900,000 registered shares, with a nominal value of CHF 1 each, at an issue price of CHF 1.46. Out of the total new shares, 6,750,000 are in the form of American Depositary Shares, listed on the Nasdaq Stock Market. The gross proceeds amounted to CHF 10.1 million (USD 11.5 million) and directly related share issuance costs of CHF 1.8 million were recorded as a deduction in equity.

During the six-month period ended June 30, 2021, the Group sold 39,940 treasury shares for a gross amount of CHF 80,944 under a Sale Agency Agreement entered with Kepler Cheuvreux and used 80,306 treasury shares to purchase services from consultants (June 30, 2020: 111,842) including 41,937 treasury shares for Roger Mills, the Group's Chief Medical Officer (June 30, 2020: 64,689). The total value of consulting services settled in shares was CHF 116,817 for the six-month period ended June 30, 2021 (CHF 139,797 for the six-month period ended June 30, 2020). On June 30, 2021, the Company entered into a sales agreement with Cantor Fitzgerald & Co (Cantor Fitzgerald) to offer ADSs through an 'at-the-market' (ATM) offering program. As of June 30, 2021, no treasury shares have been sold under the ATM offering program.

13. Share-based compensation

The total share-based compensation expense recognized in the statement of comprehensive loss for equity incentive units granted to directors, executives, employees and consultants for the three-month and six-month periods ended June 30, 2021 amounts respectively to CHF 336,849 and CHF 522,951 (CHF 343,083 and CHF 640,791 for the three-month and six-month periods ended June 30, 2020).

As of June 30, 2021, 8,592,056 options were outstanding (6,768,460 options as of December 31, 2020). During the first half 2021, the Group granted 1,828,492 options with vesting over 4 years and a 10-year exercise period and 4,896 options were forfeited. Of these new options, 27,492 were granted at an exercise price of CHF 1.99 on April 1, 2021 and 1,801,000 were granted at an exercise price of CHF 1.45 on May 17, 2021.

On January 1, 2020, the exercise period of 194,687 vested options has been extended for 5 years and share-based compensation related to the fair value adjustment for the exercise period extensions of CHF 21,613 has been recognized for the six-month period ended June 30, 2020 (CHF 6,111 for the three-month period ended June 30, 2020).

As of June 30, 2021 and December 31, 2020, a total of 198,750 equity sharing certificates (ESCs) were outstanding.

Addex Therapeutics │Financial Review

14. Retirement benefits obligations

The amounts recognized in the statement of comprehensive loss are as follows:

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Current service cost			(74,885	)			(78,931	)			(163,439	)			(157,863	)
Past service cost			-				-				219,104				102,764
Interest cost			(6,036	)			(5,501	)			(12,121	)			(11,002	)
Interest income			3,857				3,550				7,714				7,101
Company pension amount (note 18)			(77,064	)			(80,882	)			51,258				(59,000	)

The conversion rates have successively changed as of January 1, 2020, and January 1, 2021, which has led to a positive past service cost for the six-month periods ended June 30,2020 and 2021.

The amounts recognized in the balance sheet are determined as follows:

		June 30, 2021			December 31, 2020
Defined benefit obligation			(9,067,974	)			(9,406,967	)
Fair value of plan assets			7,804,800				7,714,430
Funded status			(1,263,174	)			(1,692,537	)

15. Revenue from contract with customer

License & research agreement with Indivior PLC

On January 2, 2018, the Group entered into an agreement with Indivior for the discovery, development and commercialization of novel GABA_B PAM compounds for the treatment of addiction and other CNS diseases. This agreement included the selected clinical candidate, ADX71441. In addition, Indivior agreed to fund a research program at the Group to discover novel GABA_B PAM compounds.

The contract contains two distinct material promises and performance obligations: (1) the selected compound ADX71441 which falls within the definition of a licensed compound, whose rights of use and benefits thereon was transferred in January 2018 and, (2) the research services to be conducted by the Group and funded by Indivior to discover novel GABA_B PAM compounds for clinical development that may be discovered over the research term of the agreement and selected by Indivior.

Indivior has sole responsibility, including funding liability, for development of selected compounds under the agreement through preclinical and clinical trials, as well as registration procedures and commercialization, if any, worldwide. Indivior has the right to design development programs for selected compounds under the agreement. Through the Group's participation in a joint development committee, the Group reviews, in an advisory capacity, any development programs designed by Indivior. However, Indivior has authority over all aspects of the development of such selected compounds.

Under terms of the agreement, the Group granted Indivior an exclusive license to use relevant patents and know-how in relation to the development and commercialization of product candidates selected by Indivior. Subject to agreed conditions, the Group and Indivior jointly own all intellectual property rights that are jointly developed and the Group or Indivior individually own all intellectual property rights that the Group or Indivior develop individually. The Group has retained the right to select compounds from the research program for further development in areas outside the interest of Indivior including Charcot-Marie-Tooth type 1A neuropathy, or CMT1A. Under certain conditions, but subject to certain consequences, Indivior may terminate the agreement.

In January 2018, the Group received, under the terms of the agreement, a non-refundable upfront fee of USD 5.0 million for the right to use the clinical candidate, ADX71441, including all materials and know-how related to this clinical candidate. In addition, the Group is eligible for payments on successful achievement of pre-specified clinical, regulatory and commercial milestones totaling USD 330 million and royalties on net sales of mid-single digits to low double-digits.

Addex Therapeutics │Financial Review

On February 14, 2019, Indivior terminated the development of their selected compound, ADX71441. Separately, Indivior funds research at the Group, based on a research plan to be mutually agreed between the parties, to discover novel GABA_B PAM compounds. These future novel GABA_B PAM compounds, if selected by Indivior, become licensed compounds. The Group agreed with Indivior to an initial research term of two years, that can be extended by twelve-month increments and a minimum annual funding of USD 2 million for the Group's R&D costs incurred. R&D costs are calculated based on the costs incurred in accordance with the contract. Following Indivior's selection of one newly identified compound, the Group has the right to also select one additional newly identified compound. The Group is responsible for the funding of all development and commercialization costs of its selected compounds and Indivior has no rights to the Group's selected compounds. The initial two-year research term was expected to run from May 2018 to April 2020. In 2019, Indivior agreed an additional research funding of USD 1.6 million, for the research period. On October 30, 2020, the research term was extended until June 30, 2021 and Indivior agreed an additional research funding of USD 2.8 million. Effective May 1, 2021, the research term was extended until July 31, 2022 and Indivior agreed an additional research funding of CHF 3.7 million, of which CHF 2.7 million is expected to be received directly by the Group and CHF 1 million paid directly by Indivior to third party suppliers that are supporting the funded research program.

For the three-month and six-month periods ended June 30, 2021, the Group recognized CHF 1.0 million and CHF 1.8 million as revenue, respectively (For the three-month and the six-month periods ended June 30, 2020, CHF 0.9 million and CHF 1.8 million, respectively) and recorded CHF 1.1 million as contract asset as of June 30, 2021 (December 31, 2020: CHF 0.7 million as contract liability).

Janssen Pharmaceuticals Inc. (formerly Ortho-McNeil-Janssen Pharmaceuticals Inc).

On December 31, 2004, the Group entered into a research collaboration and license agreement with Janssen Pharmaceuticals Inc. (JPI). In accordance with this agreement, JPI has acquired an exclusive worldwide license to develop mGlu2 PAM compounds for the treatment of human health. The Group is eligible to receive up to EUR 109 million in success-based development and regulatory milestone, and low double-digit royalties on net sales. The Group considers these various milestones to be variable consideration as they are contingent upon achieving uncertain, future development stages and net sales. For this reason, the Group considers the achievement of the various milestones as binary events that will be recognized as revenue upon occurrence.

No amounts have been recognized under this agreement in the three-month and six-month periods ended June 30, 2021 and 2020.

16. Other income

Under a grant agreement with Eurostars/Innosuisse the Group is required to complete specific research activities within a defined period of time. The Group's funding is fixed and received based on the satisfactory completion of the agreed research activities and incurring the related costs.

The Group was funded by Eurostars/Innosuisse for CHF 512,032 of which CHF 380,184 were paid as of June 30, 2021.

For the three-month and six-month periods ended June 30, 2021, the Group recognized CHF 73,735 and CHF 146,852 as other income (CHF 66,381 and CHF 110,806 for the three-month and six-month periods ended June 30, 2020). As of June 30, 2021, the Group recognized CHF 60,371 as other receivables in accordance with the grant conditions (CHF 86,481 as short term deferred income as of December 31, 2020).

17. Operating costs

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Staff costs (note 18)			1,273,385				1,278,094				2,163,344				2,217,064
Depreciation (notes 8/9)			88,264				96,514				176,909				192,670
External research and development costs			2,781,951				1,336,831				4,741,337				4,143,388
Laboratory consumables			55,561				102,056				138,906				159,794
Patent maintenance and registration costs			66,270				107,710				144,961				173,360
Professional fees			642,403				421,993				928,746				995,246
Short-term leases			8,046				9,641				16,437				17,334
D&O Insurance			396,838				389,506				795,858				726,885
Other operating costs			265,799				163,915				542,468				505,653
Total operating costs			5,578,517				3,906,260				9,648,966				9,131,394

The evolution of the total operating costs is mainly driven by external research and development expenses, staff costs, professional fees, D&O insurance and other operating costs.

Addex Therapeutics │Financial Review

During the six-month period ended June 30, 2021, total operating costs increased by CHF 0.5 million compared to the same period ended June 30, 2020, primarily due to increased external research and development costs of CHF 0.6 million partially offset by decreased professional fees.

During the three-month period ended June 30, 2021, total operating costs increased by CHF 1.7 million compared to the same period ended June 30, 2020, primarily due to increased external research and development costs of CHF 1.4 million and increased legal fees of CHF 0.2 million. The increase in external research and development primarily relates to CHF 0.7 million for dipraglurant PD-LID program, CHF 0.4 million for dipraglurant blepharospasm program and CHF 0.3 million for other preclinical research programs.

18. Staff costs

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Wages and salaries			816,750				817,597				1,592,602				1,501,417
Social charges and insurances			118,595				109,661				217,606				175,880
Value of share-based services			260,976				269,954				404,394				480,767
Retirement benefit (note 14)			77,064				80,882				(51,258	)			59,000
Total staff costs			1,273,385				1,278,094				2,163,344				2,217,064

19. Finance result, net

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Interest income			1,717				10,843				3,329				32,769
Interest cost			(17,274	)			(13,080	)			(31,404	)			(35,477	)
Interest expense on leases			(5,665	)			(5,056	)			(12,275	)			(11,218	)
Foreign exchange (losses)/gains, net			(162,290	)			(133,539	)			365,253				(160,149	)
Finance result, net			(183,512	)			(140,832	)			324,903				(174,075	)

20. Loss per share

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of shares in issue during the period excluding shares purchased by the Group and held as treasury shares.

		For the three months ended June 30,			For the six months ended June 30,
		2021			2020			2021			2020
Loss attributable to equity holders of the Company			(4,690,149	)			(3,114,738	)			(7,329,762	)			(7,420,659	)
Weighted average number of shares in issue			34,060,051				26,668,552				33,789,956				26,636,850
Basic and diluted loss per share			(0.14	)			(0.12	)			(0.22	)			(0.28	)

The Company has three categories of dilutive potential shares as of June 30, 2021 and 2020: equity sharing certificates ('ESCs'), share options and warrants. For the three-month and six-month periods ended June 30, 2021 and 2020, equity sharing certificates, share options and warrants have been ignored in the calculation of the loss per share, as they would be antidilutive.

Addex Therapeutics │Financial Review

21. Related party transactions

Related parties include members of the Board of Directors and the Executive Management of the Group. The following transactions were carried out with related parties:

	For the three months ended June 30,			For the six months ended June 30,
Key management compensation		2021			2020			2021			2020
Salaries, other short-term employee benefits and post-employment benefits			516,146				490,109				793,077				759,316
Consulting fees			63,077				65,255				121,854				179,473
Share-based compensation			266,916				288,423				421,221				511,385
Total			846,139				843,787				1,336,152				1,450,174

Salaries, other short-term employee benefits and post-employment benefits relate to members of the Board of Directors and Executive Management who are employed by the Group. Consulting fees relate to Roger Mills, a member of the Executive Management who delivers his services to the Group under a consulting contract. The Group has a net payable to the Board of Directors and Executive Management of CHF 170,268 as of June 30, 2021 (December 31, 2020: CHF 145,443).

22. Events after the balance sheet date

The research agreement with Indivior has been extended until July 31, 2022, with an effective date of May 1, 2021. Under the amendment to the research agreement, Indivior committed additional research funding of CHF 3.7 million, of which CHF 2.7 million is expected to be received directly by the Group and CHF 1 million paid directly by Indivior to third party suppliers that are supporting the funded research program.

There were no other material events between the balance sheet date and the date on which these financial statements were approved by the board of directors that would require adjustment to the financial statements or disclosure under this heading.

Please select the service you want to use:

• Newsvine
• Digg
• Delicious
• StumbleUpon
• Technorati
• Buzz
• Favorites
• Google Reader

Close

 Back

 View original format