Good morning, everyone. My name is Boobalan Pachaiyappan. I'm Managing Director and Senior Biotech Analyst at Roth Capital Partners. With me today is Stefan Weber, who is our Chief Executive Officer of Newron Pharmaceuticals. Stefan, welcome to the show. Thank you, Boobalan, for having us. It's a pleasure to be here. Absolutely. For those who are new to the story, Newron is focused on designing and developing new molecules for the treatment of neuropsychiatric disorders and neurodegeneration disorders. The primary focus right now is schizophrenia. Here's how we are going to do for the next 20-25 minutes. This is the outline of our discussion. First, maybe you can set us the foundation, talking a little bit about schizophrenia, unmet medical needs, and the gaps in the standard of care. Second, you can talk about the mechanism of action of evenamide and why you think this is a differentiated drug versus the rest of the three dozen type drugs we have in schizophrenia. Third, you can pinpoint towards specific clinical results that can reinvigorate investors' attention more towards your story. You can also talk about your timelines. Of course, you are running actually three clinical studies, so to speak, because you recently started the phase III study in Japan. That's very exciting. It's probably one of the largest clinical program in schizophrenia as we speak. Fourth, we can talk about the next steps. You can talk about the expectations for success in the ENIGMA studies. Finally, if we have some time, we can talk about additional shots. That sounds like a plan? That sounds like a perfect plan. All right. Absolutely. Let's start with your opening remarks, talk a little bit about Newron, and then we can segue into schizophrenia and their unmet medical needs. Yes. Boobalan, what I bring to you and your listeners today is the most advanced and the largest late-stage clinical development program in schizophrenia these days. As you mentioned, right now we have three pivotal studies running around the world with more than 1,300 patients going to be enrolled. Two of those studies we are running ourselves, and one study will be run by our Japanese partner, Eisai. That is in a world where big pharma is desperate for innovation with dried-out pipelines. You might have seen the latest peer acquisitions, Servier, Karuna, Intra-Cellular Therapies, all one-product companies were acquired for EUR 8.6 billion, EUR 14 billion, and EUR 15 billion. Karuna upon submission of the NDA and Intra-Cellular Therapies after six years being on the market with 16 times sales being the market cap at Nasdaq and then being acquired for 23 times sales. This is the environment. If we talk about schizophrenia and why it's so expensive to buy compounds, because this is big. This is 1% of the population in the world wherever you go. We have 70 years of drugs now to treat those patients who are suffering from positive symptoms, negative symptoms, or cognitive decline. The bitter message, the truth is that the vast majority of those 1% patients around the world will not or insufficiently benefit from today's medication. These patients we call poor responders. There's a big study called CATIE study, which says that 72% of all schizophrenic patients have to switch their medication every 18 months because they do no longer good or the side effects are unbearable. Pound weight gain, sex dysfunction, hormonal changes, Parkinson-like symptoms. If we talk about the latest approved drug, which they call the revolution or I think they have almost stopped calling it a revolution. That comes with about 40% of nausea, vomiting, diarrhea, and we have the first reports of surgical removal of constipation. We have a huge unmet medical need that is more than 70% of those patients. That means 0.7% of the global population who have no efficacious and safe treatment. The simple fact is that all today's treatments are working by the same mechanism. They all target dopamine. What we urgently need is, number one, a drug that works by a completely separate mechanism, no overlaps. That would make it the first ever to be approved add-on therapy, which is urgently needed. This is one of the very few exceptions where FDA has never approved an add-on for the simple reason that there's just adding one dopaminergic drug to another dopaminergic drug doesn't do any good. It just increases the side effects. Thirdly, that is what I said, we need that mechanism that justifies adding that drug in those poorly responding and treatment-resistant patients. Huge unmet medical need, and I'm happy to say that evenamide is the key to exactly that unmet medical need because it covers all those three components. It's a new mechanism, truly unique. No other comparator left or right behind us. It's the first add-on, and it works nicely and is absolutely developed exactly for those poor responding and treatment-resistant patients. The important thing is this drug is acting on hippocampus, right? Yes. Can you tell a little bit more about why targeting hippocampus might bring more benefits rather than targeting M1 or let's say dopamine pathways? It's absolutely fascinating because we had clinical results from a one-year study in treatment-resistant schizophrenia showing that patients improved up to one year in indication where the teaching is you have seen everything after four to six weeks, and FDA says design studies for four to six weeks. You won't see anything afterwards. Well, our drug in a phase II showed that it improves patients on a straight line up to one year. It cuts patient who are treatment-resistant by 50%, and for the first time it produced remission in treatment-resistant schizophrenia, which in our case means those patients were free from symptoms for at least six months up to one year. We had another phase III study, four weeks only, in which we did see highly significant improvement and again improving over time. The simple point was, we didn't know how and why. Then we understood from a publication from last year from University of Pittsburgh who tell us the following points. Number one. We might have misunderstood schizophrenia in the last 70 years because we believe, University of Pittsburgh, that this disease originates at the hippocampus, which is one of the centers for social interaction and cognition. There's something to it, obviously. What they say is, if we trigger that disease at the hippocampus, we see all the positive symptoms, negative symptoms, and we see the cognitive decline. If we compare this to where today's drugs are working, they are working four levels down. Which means they are never hitting the target. That explains also why they have those widespread side effects. Today's drugs will improve part of positive symptoms. They will not cover negative symptoms nor cognition. The simple answer is because they don't hit the target. When Pittsburgh, in their model, did use the drugs and check if they work at the hippocampus, there was only one drug that did so. That was our drug. What Pittsburgh says is, what we have is hyperexcitability of neurons at the hippocampus. This hyperexcitability of neurons triggers excessive release of glutamate, and that triggers those symptoms. Guess what? The only thing that our drug, evenamide, does is it targets hyperexcitable neurons and reduces their excessive activity. Therefore, reduces glutamatergic excess release without, and that's very important, touching the basal level of glutamate. Glutamate is one of the most prevalent neurotransmitters in the brain, but we only have one successful drug in the market, which happens to be esketamine, that works via glutamate. How comes? If you play around with basal levels of glutamate, you have massive loads of CNS side effects. Our drug comes with what I call, simplifying things, a magic switch. It only works if, when, and to the extent required. It will not touch neurons that fire normally, and therefore it will not affect basal level of glutamate. You need a bucket of drug in order to impact or impress one of those neurons who are normally firing. If you find a nerve cell that's excessively firing, a tiny drop of that drug would shut it down. That's exactly what it needed, and it's very nice that Pittsburgh, ex post, could explain what we had seen in patients over those two-year studies already. Let's talk about your clinical development journey. Obviously you have done phase II-A in an open-label setting. Yes. You have done II-B, which is a randomized controlled study, and then you're running three phase III studies. Yes. You touched something here and there, but just talk at a very high level, how did these clinical journeys sort of informed you into your pivotal studies? Yes. This one-year study that we did, you're rightfully saying that was not placebo-controlled, open-label, I will also say that largest part of the patients was in India. There are two caveats, two grains of salt here. We added our drug to treatment-resistant patients, 161 of them, we added it to all the best-selling antipsychotics, excluding clozapine, in that one-year study. There were a few things that were absolutely remarkable about that study. First of all, after six weeks, in treatment-resistant schizophrenia, you would expect that in such a period, about 30% of patients would have dropped out, they would have said, "It doesn't help like all the other stuff," or they would have said, "The side effects are unbearable." That just didn't happen. We had 95% of patients in the study after six weeks. We asked them, "You want to go on for the full year or you want to drop out?" Of the 95%, 90% decided to stay. After one year, we still had 75% of patients in the study, which is unheard of. The message from the KOLs was, look, obviously this drug is safe. No patient would stay for one year in a study if he had major load of side effects, second, the drug does something. When we looked at the effects of the drug in those patients, we saw after six weeks that we improved the PANSS Total regulatory endpoint by about 12%. That is something that is exciting because it's TI, as you wouldn't expect it. They are on the best medication that a doctor can give them. Yeah, it could be placebo because the average placebo rate in U.S. schizophrenia study is 12%-15%. After six months, first big surprise, the effects keep improving. After one year, the effects still keep improving. We ignored the mean change. We went for the responder rate. Who is minimally improving by 20%, which again, is the regulatory hurdle. We found that the responder rate tripled from six weeks to six months to one year. We have patients who improve early on, we have other patients who improve later on, then we have patients who even improve after one year. We saw that on all the regulatory endpoints responder rates. We took that question, okay, how many patients will be treatment-resistant after one year? Only half and 25% were in remission. The message from the KOLs was, well, Jesus, if you could repeat that in a double-blind, placebo-controlled international study, that would be close to revolutionary in schizophrenia therapy. That was clearly the most important impact on our phase III program, because both of our studies will be as an add-on to the best-selling antipsychotics, this time including clozapine. One of those studies will be for the full year, the other will be a second shot at target will be for 12 weeks. Way beyond the four to six weeks that FDA recommends. I should mention also because we agreed there were some caveats on that phase II study. We did a phase III study in poorly responding patients, but 70% of the population was treatment-resistant, was fulfilling the criteria. You see it's a gray zone between poor responders and treatment-resistant. Out of the 70%, 50% can be easily qualifying as treatment-resistant. It's huge. In that second study, which was only four weeks, we again added evenamide to all the best second-generation antipsychotics, including clozapine. This was double-blind, placebo-controlled, 11 countries. What we saw over four weeks was exactly the same pattern as in the one-year study, ever-increasing efficacy. If we compare the responders to the standard of care, after four weeks already, we have twice the number of patients who qualify as responders compared to standard of care, the best treatment a doctor can offer them today. After four weeks, we had a highly statistically significant improvement of the primary and secondary endpoint. Most importantly, from that phase III study, we learned that this is the one and only drug when given on top of clozapine, poorly responding or treatment-resistant clozapine patients, this is the one drug that improves those patients. Fascinatingly enough, when we looked at olanzapine, which is the second-best second-generation antipsychotic in the world, there's not a single study in which a drug has ever beaten olanzapine in the same study. We have beaten olanzapine monotherapy, so standard of care, by 5.5 points on the PANSS Total scale. That was only 32 patients, but in that small subpopulation of the 291-patient total study, this was statistically significant for that population. That is how we came to design the two pivotal studies. The first one will be a one-year double-blind, placebo-controlled study, add-on to any second-generation antipsychotic, including clozapine. We will do three readouts. That's remarkable. First time ever, one-year study. After 12 weeks, we will have the primary endpoint, PANSS Total. Did we reach the endpoint? Is the drug safe and well-tolerated? These 12 weeks results will be the basis for the NDA. We will keep going double-blind, placebo-controlled until week 26, and we will measure the long-term benefit, the maintenance effect of that drug. Which is important on top of the 12 weeks results for the European Medicines Agency, because if positive, they will waive the request for a relapse prevention study, which is highly unethical anyway. We will still go on double-blind, placebo-controlled to 52 weeks because the idea is we want to confirm what we saw in that phase II open label study. This is the one drug that improves patients up to one year. Doubles, triples responder rates, makes 50% of patients being no longer treatment-resistant, and hopefully again, makes first time ever, 25% patients being in remission without relevant symptoms for minimally six months. The second study is a second shot, as I said. In indication of high unmet medical need, one sufficiently positive study will do, and you get approved. We had that discussion with investors and partners. What happens if the reviewer at FDA says, "Well, they are positive, but are they sufficiently positive?" You have a two years delay to approve of the drug, and time is money. Patent life is limited in all cases. We said, what is the comparison of losing two years of EUR 1 billion each compared to the cost of a second study? The comparison said, let's do a second study. The second study doesn't go for one year. It doesn't have to. It will be for 12 weeks. It will not be 3 arms, not standard of care, low dose, and high dose, but it will be standard of care versus low dose only. That study on its own will still be sufficient to get the drug approved if the results are convincingly positive. Okay. Go ahead. Yeah. The 3rd study, I mentioned it already, that is run by Eisai in Japan, that's our partner for 7% of the world market. They have signed a deal which is good for EUR 100 million. Already by December 2024, when we signed the deal, the intrinsic value of evenamide was stated to be EUR 1.5 billion for the global rights by that Eisai deal. How common it is to have a phase II-B study with four weeks of treatment, then phase III with 12 weeks of treatment. Your thoughts on that. Also, just as a sub-question to this. Yeah. By extending the treatment duration, you're inadvertently increasing the chances of seeing a placebo effect. Any thoughts on that? Yes. Clearly the idea would have been, and that was the initial discussion with FDA, that for a pivotal study in treatment-resistant schizophrenia, you should go for about six to eight weeks. I think their recommendation initially was six weeks. We discussed, I said eight weeks. When we saw the results from that one-year study understanding that the effect grows over time almost linear. We went back to FDA and said, "Look, we would feel much more comfortable to do a 12-week study because we all agree TRS patients take their time." That's exactly what we saw while today's treatments in acute patients, and let's not forget, today's treatments do not work in Treatment-Resistant Schizophrenia. They get a quick onset, they plateau, and they fall off. That same thing applies to the placebo effect. What we saw was that slow ever-increasing efficacy, which seems to be kind of repair work in the brain of those patients. That's at least what the experts tell us. We agreed with FDA that the pivotal study in Treatment-Resistant Schizophrenia could and should be for 12 weeks. On the placebo response, what we have seen is in our phase III study, we call it phase II-B, phase III, it doesn't matter that much. What we saw was the lowest placebo response in any schizophrenia study in the U.S. over the last one or one and a half decades. We had 7% placebo response, while you usually see 12%-15%. That was due to a number of things. First time ever, what we did is We checked all the patients who wanted to participate in the study for their blood levels. We wanted to make sure these patients are truly treatment-resistant and not non-compliant. We shockingly, I think there was some kind of suspicion all the time by everybody, but nobody has done it. We asked those patients to give us blood samples, we found that 30% of patients who wanted to get into the study were not on the right dose of drug in their blood. We had to exclude them so they were not randomized even to the study. That's exactly what we are doing in both those pivotal studies. We will have 42 days of screening. We will have three times blood samples during those 42 days, and in the rest of the study, there will be another four times. We will make absolutely sure that every patient is on the right dose of his background medication, so what we see is the true additional benefit and the true additional side effect of evenamide being added. We will also have an eligibility committee, headed by John Kane from New York, one of the top experts in TRS. They will review every patient's dossier, all the aspects, and will make sure that only patients who fulfill all the inclusion criteria will make it into that study. We will have rater training. We have rater ranking, and raters who are not managing to pass the test have a chance to run it for a second time. If they are not able to match the requirements, they will be discontinued or excluded from that study. Okay. These are the reasons why we did have that low placebo response. You said, "Is there an expectation that the extension of the study to 12 weeks will trigger increased placebo response?" The answer is no, because what we see is usually the placebo response you have is very quick in setting on. It's not very long in enduring and then falls off. We would see perhaps even additional treatment benefit over those 12 weeks compared to the four weeks, six weeks. Okay, two or three very quick questions, right? Yes. We are almost probably five minutes or so. Yes. Let's set expectations for the primary endpoint, which is PANSS Total. Yeah. Right. Obviously, we're talking about phase III study now, right? These patients are already under standard of care. Yes. They're taking some of the well-known antipsychotics, right? They're very good in terms of improving the positive symptoms, right? In other words, any improvement in PANSS Total, at least in the intervention arm, should come from getting better in negative symptoms and cognition and all those elements, right? What's the efficacy threshold that would lead you to believe or even investors to take your story very seriously? Because obviously we cannot Manas and I, we analyzed placebo-adjusted PANSS Total for antipsychotics. They're between 4-10, right? Obviously, you can't expect 10 delta in your situation, but what would be the minimum you can say? Look, to be fair, there is no drug ever having been approved as an add-on and to treatment-resistant patients, there is no regulatory guideline at this point in time. What we know is that the last drug approved, lumateperone, was approved based on a three or four-point improvement. That was acute schizophrenia. That was monotherapy. Everybody knows, also the regulators know, the discussion has been going on for quite a while. They know that in treatment-resistant patients and as an add-on, you would probably not see the same treatment size as in monotherapy in very acute patients. The expectation by regulators is, let's say, understanding is educated. What we saw in our phase II-B or III study was that if we combine it with the phase II study one-year results, what we would see, talking now about the simulation after 12 weeks, is an expected 13 to 14 points improvement. If we reduce that by the 7% placebo, we should see a 7%-8% improvement treatment effect size. That would be without any doubt relevant for an approval of the drug, especially if you combine it with the responder rate, which have already in the four weeks study been highly significant. If we could get, and that is what we aim for, that's the official guidance. If we can get between three and four points after 12 weeks treatment size better than placebo, that drug should be approved. We believe that the drug can do substantially better than that. I think that is about what I can say. If this drug in treatment-resistant patients as an add-on to the best medication a top doctor can give his patient still provides the same net benefit as lumateperone as a monotherapy in acute patients, then we should be approved. Just to reiterate, a delta of 2-3 points with a P value of less than 0.05 should be sufficient to get regulatory approval. Yeah. I think 3-4 points, for sure 2-3 points. Yeah. Okay. All right. We are almost running out of time maybe. I just wanted to bring in the competitive landscape into the picture. Yes. Obviously you are kind of leading the race. There's a couple of follow-on drugs or maybe like your peers, so to speak. We have brexpiprazole which has done one phase III, but the second phase III is awaited, and we also have LB-102 that's also sort of like planning to start their phase III studies this year. How do you feel the competitive differentiation is favoring evenamide, and how do you see the landscape in the next couple of years? You can also bring in COBENFY to the discussion because obviously you'll be competing with COBENFY at some point. Yeah, look, these are all monotherapies in acute patients. That's number one. Yeah. They are not going for add-on and fully responding in treatment-resistant patients. The last one who tried was COBENFY with Bristol Myers Squibb because they did a phase III as an add-on in poorly responding patients. Didn't work. It did not work. Yeah. The simple reason is maybe it's dopaminergic. Don't add dopamine to dopamine. Same applies to Neurocrine and M4, and to all the other drugs. There is no competition because nobody else is touching the glutamate mechanism. You could add to GLYT-1 with a phase III failure. You could add, to be fair, Minerva did fail before. They are now trying again. That would be the serotonin mechanism of action. They aim at negative symptoms specifically. We have the TAAR1, the Sumitomo Otsuka, which failed again in a phase III study. There's plenty of failures. If we compare ourselves to all the drugs on the market and those under development, none of them is targeting our patient population, poorly responding and treatment-resistant. None of them tries to be add-on. Instead of being the 41st drug, which is monotherapy on a dopaminergic pathway and fighting for 2% market share, we go for 72% of all schizophrenic patients, and we have no competition at all. We are the one drug that can be added to each and any antipsychotic on the market. If you think of a big corral and all those horses are running around, today's antipsychotics and those in the pipeline, there's one cowboy who can sit on each of those horses, and that's us. Maybe two really quick questions. I know we are out of time. From a physician standpoint, or even from a payer standpoint, do you expect evenamide to be prescribed at the first-line setting? Because I feel like they're going to start with standard antipsychotics and then let the patients go through this journey, and if he or she becomes poor responder or treatment-resistant, at the same time, which means your initial target market could be those TRS or poorly responders. Is it fair to assume that first? Second, just tell us what are your timelines for filing in the U.S. and ex-U.S.? Let's start with the latter. The submission of the NDA should be expected in the next 12 to 15 months. Okay. Given the high unmet medical need, the drug should be approved by end of 2027. Okay. On your prior question, if you speak to doctors and you ask them, “How would you use such a drug?” They say, "Look, this is 70% of patients being treated off-label- with drugs which have never shown any benefit to the patients. There's a huge population today that is treated with something with no label, and without any evidence of efficacy. Those doctors say, "If we get a drug that is even minimally effective and safe, this will be used in all our patients." That means the initial market potential is from day one on, there's going to be doctors who will say, “I have treated my patient with things without evidence for years and years. Let me right away take that patient on evenamide as an add-on.” We didn't have a single relapse in our one-year study. evenamide is the perfect add-on drug for patients who are not benefiting from the medication. No relapses, no hospitalization, no increased suicidality. All those patients who are switching their medication every 18 months have that risky period, not only for the patient, for the families, for the doctors. Now imagine you have a drug that you can start at a low dose and increase to a higher dose and add it to any current antipsychotic with a label for that, and you have no more relapses for the patients, no more hospitalization, no sudden suicides. The potential of this drug is huge. Speak to doctors. This is coming. Fantastic. There's definitely a retention angle to the story as well. Thank you very much, Stefan. I know we went over a little bit, this is fantastic. Thank you, Boobalan.