Addex shares jump on J&J schizophrenia treatment deal

ZURICH (Reuters) - Shares in Addex ADXN.S jumped on Tuesday after the Swiss biotech said it could get up to 112 million euros in a deal with Johnson & Johnson JNJ.N unit Ortho-McNeil-Janssen Pharmaceuticals Inc.

OMJPI is developing Addex’s schizophrenia treatment ADX71149 and Addex is also eligible for low double-digit royalties on sales of the compound, subject to regulatory approval and a successful commercial launch.

Addex said ADX71149 would move into Phase IIa testing for schizophrenia and anxiety this year, providing it completes the current Phase I trial.

At 0918 GMT, shares in the group were trading 7.5 percent higher at 12.90 Swiss francs, outperforming a near flat European pharmaceuticals sector .SXDP.

“The compound has huge potential. The prevalence of schizophrenia is very high and with this prevalence one can always expect very high sales,” Addex Chief Executive Vincent Mutel told Reuters, adding ADX71149 had the potential to be the next generation schizophrenia treatment.

Johnson & Johnson’s Risperdal schizophrenia drug is expected to have peak sales of around $1.5 billion, according to Thomson Reuters data.

Addex, which suffered a severe setback last year when it stopped development of its lead drug candidate, is hosting an investor day in Geneva on Tuesday.

“Addex needs to rebuild its mid-to-late stage clinical pipeline and with today’s event it seems that the company is well on its way,” said Vontobel analyst Andrew Weiss.

“Addex has a unique platform technology to develop drugs with allosteric properties. The company’s current cash should last the company to 2012,” he said.

Reporting by Katie Reid; Editing by Louise Heavens