Newron Pharmaceuticals - Xadago sales slow but STARS ahead

Newron Pharmaceuticals’ recently reported interim results highlight that despite additional worldwide launches of Xadago, sales growth in the US and Europe remain below our expectations. For Evenamide, the company is addressing FDA concerns on the pre-clinical data and plans are underway for short-term explanatory studies before starting the pivotal Phase III trials. Top-line data from the pivotal trial Sarizotan Treatment of Apnoeas in Rett Syndrome (STARS), are expected in Q419. The reported net loss increased 85% to €14.0m in H119, driven by higher than expected net R&D expenses. We value Newron at CHF466m or CHF26.1/share.