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# [DD] $NWRN (SIX) — Evenamide: a Phase-3 TRS add-on with a real Japan deal, tiny CHF ~140m mcap. My rNPV says this is wildly mispriced.
TL;DR
* Company: Newron Pharmaceuticals (SIX: NWRN) — Swiss-listed, \~19.96m shares, mcap \~CHF 140m at \~CHF 7.
* Drug: Evenamide — add-on therapy for treatment-resistant schizophrenia (TRS); Phase 3 (ENIGMA-TRS 1)has started enrollment.
* Third-party validation: EA Pharma (Japan+ASEAN) paid €44m upfront (total up to \~€117m + tiered royalties).
* Valuation (from my DD): rNPV per share ≈ CHF 32 (bear) / 68 (base) / 91 (bull).
* Back-solve from Japan deal: implies \~€46–82 per share globally (varies by assumptions) — still a multi-bag vs \~CHF 7.
* Why cheap? Illiquid microcap, post-fail scars (Sarizotan), long Phase-3 runway, financing overhang optics, limited coverage.
* Trade idea: small size, no options, Swiss listing only (SIX). This is binary risk. Size it like a grenade, not a mortgage. Not financial advice.
# What is this?
Newron is a small biopharma. Lead asset Evenamide is an add-on (non-dopaminergic; glutamatergic modulation) aimed at TRS — the badly served chunk of schizophrenia patients who don’t respond to typical antipsychotics.
State of play: Phase-3 program kicked off (ENIGMA-TRS 1 enrollment started). Timelines are long (think first 12-week readout after meaningful enrollment; full study \~52 weeks), but this is the value-inflection path.
# Why the market is apathetic (and why I think it’s wrong)
* Microstructure: thin order book on SIX → tiny sells push price down; closing auction can look ugly; very low natural liquidity.
* “Once bitten” bias: the prior Sarizotan failure left scars. Market waits for fresh Phase-3 receipts.
* Funding optics: debt (EIB) + periodic raises in the past create a “dilution overhang” perception, even after non-dilutive cash from EA Pharma.
* Coverage desert: mostly small/sponsored research; big funds not paying attention.
# Hard validation: the Japan+ASEAN deal
* EA Pharma paid €44m upfront, headline up to \~€117m plus tiered royalties for Japan + ASEAN rights.
* That’s a real check from a capable regional player after due diligence. It doesn’t guarantee Phase-3 success, but it’s not nothing.
# Valuation (two ways)
# 1) Reverse from the Japan deal (back-of-the-envelope)
* Territory share proxy = 8–10% of global market.
* Upfront often represents roughly 30–40% of territorial rNPV at late-stage.
* Implied global rNPV ≈ Upfront / (Upfront-share × Territory-share) Example: €44m / (0.35 × 0.10) ≈ €1.26bn global → \~€63 per share (≈ CHF similar).
* Range across assumptions: \~€46–82 per share. Current price \~CHF 7.
# 2) My rNPV scenarios (per share) from the full DD
* Conservative: \~CHF 32
* Base: \~CHF 68
* Optimistic: \~CHF 91 (Assumptions include PoS \~60%, WACC \~12%, launch around 2029, region licenses modeled; Japan/Korea on royalty, US/EU unpartnered.)
Bottom line: multiple paths say fair value >> current price if Phase-3 works out and financing gets de-risked.
# Near-term catalysts
* Enrollment updates for ENIGMA-TRS 1 (pace matters; signals execution).
* Additional partnering (US/EU or other regions) with non-dilutive cash.
* Interim/12-week data once enough patients are through (timing is the big unknown).
* Any sell-side coverage or Swiss/US microcap awareness can help liquidity.
# Key risks (don’t skip this, degenerates)
* Clinical binary: Phase-3 could miss — that’s game over for the thesis.
* Time: long runway to full readouts; opportunity cost + sentiment decay.
* Financing: if non-dilutive sources lag, equity raises can happen.
* Regulatory/HTA: even with efficacy, pricing/coverage can bite, esp. ex-US.
* Liquidity: SIX only, no options; slippage is real; spreads can widen.
* Governance/process: small-cap boards vary; transparency is improving but not guaranteed.
# How to trade it (mechanics)
* Listing: SIX: NWRN (Switzerland). Use a broker with Swiss access (e.g., IBKR).
* No options I’m aware of; this is a common-stock only situation.
* Sizing: keep it small; add on real execution milestones; don’t YOLO rent money.
* Time horizon: quarters → years, not days.
# Why post this now?
Two fresh positives: (1) Phase-3 enrollment started, (2) EA Pharma upfront already banked — and yet price ≈ CHF 7(\~CHF 140m mcap). The asymmetry here is attractive if you can stomach biotech risk.
# Disclosures
* I’m long common. This is not financial advice. I’m just a guy who read documents and built a model. Do your own DD. If you can’t handle biotech volatility, this is not for you.