Date: 2011-09-27
Type of information: Company acquisition
Acquired company: Newron (Italy)
Acquiring company: Biotie Therapies (Finland)
Amount: €45 million
Terms: * On September 27, 2011, Biotie Therapies and Newron Pharmaceuticals have signed an agreement for Biotie to acquire Newron in a transaction valued at €45 million. The transaction is still subject inter alia to the approval by the EGM of Newron expected to be convened at the end of October 2011. The transaction is to be effected as a European Union cross-border merger. According to the Merger Plan, Biotie will issue to the shareholders of Newron, at the execution of the merger, a maximum of 89,108,147 in initial Consideration Shares, with the possibility of additional contingent consideration consisting of options and a receivable intended to be used to pay the subscription price for shares subscribed based on such options, such additional consideration hereinafter referred to as the "Contingent Value Rights ("CVR"). Such CVRs shall consist of a maximum of 17,048,298 Consideration Options, dependent upon the achievement of certain milestones, conditionally entitling Newron shareholders to a total maximum of 17,048,298 Biotie shares.
* On October 3, 2011, Newron Pharmaceuticals published its invitation to the extraordinary shareholders' meeting for octer 31, 2011. The agenda includes the approval of the merger plan of Newron Pharmaceuticals with and into Biotie Therapies.
* On October 28, 2011, Newron Pharmaceuticals announced that the ongoing talks with Biotie Therapeutics Corp. on the planned acquisition of Newron by Biotie have been terminated. Newron believes that regaining global commercial rights to safinamide, Newron’s lead treatment for Parkinson’s disease currently in late phase III worldwide development, opens to the company substantial opportunities to create value for its shareholders. JSB Partners has been mandated to support Newron in this endeavour.
Details: In acquiring Newron Biotie creates a deep pipeline with two drugs, nalmefene and safinamide, in late-stage Phase 3 development targeting alcohol dependence and Parkinson’s disease, respectively.
Nalmefene, Biotie's lead product, is an orally administered drug that completed Phase 3 clinical development in Q2 2011 for the treatment of alcohol dependence. Biotie's development and commercialization partner Lundbeck plans to file a marketing authorization application (MAA) in Europe in the second half of 2011.
Newron's safinamide is an oral once-a-day potential adjunctive therapy for all stages of Parkinson's disease (PD). The safinamide clinical program includes completed studies 015, 016, 017, and 018. Data from two further registration-enabling Phase 3 studies, MOTION and SETTLE, are expected in H1 2012. Merck Serono has exclusive worldwide rights to develop, manufacture and commercialize safinamide in Parkinson's disease, Alzheimer's disease and other therapeutic applications, as per the agreement signed with Newron in 2006.
Biotie will continue to focus on the development of innovative, clinically differentiated medicines to address unmet medical needs primarily associated with neurological and psychiatric diseases and selected inflammatory diseases. Timo Veromaa, President and CEO of Biotie will continue in his current position. Luca Benatti, Managing Director and CEO of Newron will continue to lead Newron through to the closing of the deal, after which he will step down to pursue other opportunities.
No changes will take place in the board of directors of Biotie: Peter Fellner will continue as chairman, and Bradley J. Bolzon, William M. Burns, Merja Karhapää, Bernd Kastler, Ismail Kola, Guido Magni, Andrew J. Schwab, Piet Serrure and James S. Shannon continue as members of the board.
The transaction is not expected to affect Biotie's operations or organizations in Finland and in the US. The structure of the Newron organization in Italy and Switzerland will be reviewed and restructuring is planned.
As at 30 June 2011, the number of personnel at Biotie was 39 and the total number at Newron was 29.
In addition to nalmefene and safinamide, the pipeline currently includes:
SYN-115 (tozadenant), an orally administered, potent and selective inhibitor of the adenosine 2a (A2a) receptor in Phase 2b development for the treatment of Parkinson's disease. Biotie has granted a worldwide licence to UCB Pharma for the development of the compound through Phase 3 trials and subsequent commercialization.
SYN-118 (nitisinone), an orally administered, small-molecule inhibitor of 4-hydroxyphenyl-pyruvate dioxygenase (HPPD4) for movement disorders. SYN118 is subject to an option agreement with UCB.
SYN-120, an orally administered antagonist of the 5-HT6 receptor in development for the treatment of Alzheimer's disease and other cognitive disorders, including schizophrenia. Roche has an option on the development and commercialization of SYN120 following an ongoing clinical imaging study using Positron Emission Tomography.
SYN-117 (nepicastat), an orally administered, potent and selective inhibitor of the enzyme dopamine beta-hydroxylase (DBH) . The compound is in a Phase 2 study, funded by the US Department of Defense, for the treatment of post-traumatic stress disorder (PTSD).
BTT-1023, a fully human antibody against vascular adhesion protein-1 (VAP-1). It has completed two Phase 1b studies in rheumatoid arthritis and psoriasis and Biotie expects to start proof-of-concept clinical studies in selected indications in H2 2012. Biotie has licensed the rights to develop and commercialize its VAP-1 antibody in Japan, Taiwan, Singapore, New Zealand and Australia to Seikagaku Corporation.
Ronomilast, a small-molecule, phosphodiesterase-4 inhibitor (PDE4) in development for the treatment of chronic obstructive pulmonary disease (COPD). Biotie is seeking a partner for further development and commercialization of this product.
The further clinical development of Newron's ralfinamide for pain and psychiatric diseases is currently being evaluated. Newron's additional projects are at various stages of preclinical and clinical development, including HF0220 for neuroprotection, NW-3509 for the treatment of schizophrenia, as well as pruvanserin and sarizotan for the treatment of CNS diseases. Merck Serono will retain buy-back options at attractive terms for each compound upon completion of proof-of-concept trials. Should these options be used by Merck Serono, Newron will have a so-development option.
A pipeline review is expected to be conducted after the closing of the Transaction.
Related: CNS diseases
