Why Addex Therapeutics stock skyrocketed 70% on Tuesday

Addex Therapeutics Ltd (NASDAQ: ADXN) opened about 70% up this morning after making significant strides in its GABAB-positive allosteric modulator research.

The clinical-stage pharmaceutical company has selected candidates for the PAM research that it’s undertaking in collaboration with Indivior PLC, as per a press release on Tuesday.

Additionally, its UK-based partner picked a compound for the treatment of substance use disorder and assumed full responsibility of its future development as well.

Despite today’s rally, Addex Therapeutics stock is down more than 50% versus its year-to-date high in April.

Why is it significant for Addex Therapeutics stock?

Addex could earn tiered royalties as well as up to $330 million as long as the aforementioned collaboration successfully achieves a few predetermined regulatory, clinical, and commercial milestones.

The Swiss firm has also exercised its right to pick a compound to proceed with an independent GABAB PAM study for the treatment of chronic cough. According to Christian Heidbreder – the chief scientific officer of Indivior PLC:

A sharp surge in Addex Therapeutics stock is coupled with a massive increase in trading volume.

More than 9 million shares of the ADXN have exchanged hands today (by the time of writing) versus their average daily volume of a few thousand only. Note that Addex shares do not currently pay a dividend.

ADXN recently extended its cash runway beyond 2026

The Indivior news arrived shortly after Janssen Pharmaceuticals – a subsidiary of Johnson & Johnson ended the development of ADX71149 that is used in the treatment of epilepsy.

In June, Addex Therapeutics reported about $3.0 million in net loss for the first quarter of 2024 it ended with over $1.6 million in cash and equivalents. At the time, Tim Dyer – its chief executive told investors:

Addex Therapeutics stock is not a very widely covered one among Wall Street analysts. Those who do currently have a consensus “hold” rating on it but their average price target of over $25 suggests potential for a 100% gain from here.