Newron Pharmaceuticals - Spotlight on evenamide following licensing deals

We refresh our valuation for Newron Pharmaceuticals in light of the licensing agreements for its lead asset, evenamide, in Japan and South Korea. The €117m deal with EA Pharma in Japan (c 10% of evenamide's global market) was particularly significant, with an upfront payment of €44m and committed trial cost contributions (estimated at c €10m) securing Newron's cash runway into H226. This de-risks the 12-month Phase III trial plan, set to commence in H125. Furthermore, South Korean partner Myung In Pharm will contribute 10% of the Phase III patient population and related costs as part of undisclosed licensing terms. Evenamide is a first-in-class therapy being developed for treatment-resistant schizophrenia (TRS), with its potential backed by favourable Phase II/III data. As we update our estimates to reflect these developments, our valuation increases to CHF18.5 per share (from CHF12.3/share previously).

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