NeuroSearch announces drug discovery and development alliance with Eli Lilly and Company
The collaboration will focus on new CNS therapeutics based upon defined ion channel targets
NeuroSearch is eligible to receive equity payments and research funding of up to USD 30 million (DKK 175.1 million) over the three years of the alliance
The alliance builds upon know-how and intellectual property from both NeuroSearch and Lilly
NeuroSearch has signed an agreement with Eli Lilly and Company (Lilly) to form a three-year drug discovery and development alliance to investigate a defined number of undisclosed ion channel targets for their potential in treating various central nervous system (CNS) disorders. The aim of the collaboration is to discover and develop new medicines based on novel approaches to specific ion channel modulation. The collaboration will comprise intellectual property and know-how from both NeuroSearch and Lilly.
Under the terms of the agreement, NeuroSearch is eligible to receive up to USD 13 million (DKK 75.9 million) from Lilly in upfront fees and research funding over the next three years, of which USD 5 million (DKK 29.2 million) will be paid up front. Lilly will also make a USD 17 million (DKK 99.2 million) equity investment in NeuroSearch.
NeuroSearch will be responsible for the drug discovery programmes under the collaboration and potentially early development of novel drug candidates. Lilly will have various options to exercise license rights to individual compounds covered by the agreement and related intellectual property. Upon exercise of license rights, Lilly will be responsible for all subsequent development and commercialisation activities. For each product, successfully developed and commercialized under the alliance, NeuroSearch may be entitled to milestone payments of up to USD 320 million (DKK 1,868.2 million) plus royalties on the product's global sales.
Flemming Pedersen, CEO of NeuroSearch commented:
"We are very proud to have agreed on this broad based collaboration with Lilly for the discovery and development of new and better medicines based on novel approaches to ion channel modulation - being one of NeuroSearch's core areas of expertise. Our collaboration is structured to secure both a balanced risk sharing and very attractive long term revenue, if our efforts are successful, as well as significant near term financing to NeuroSearch."
William Chin, M.D., Lilly vice president, discovery research and clinical investigation commented:
"We are excited to partner with NeuroSearch, whose expertise in ion channel modulation will bolster our efforts to discover and develop promising CNS therapies. The equity stake we are taking in NeuroSearch is also an excellent example of our corporate strategy as a fully integrated pharmaceutical network (FIPNet), where we are collaborating with researchers beyond our walls to deliver improved outcomes to individual patients."
The issue of new shares to Lilly
Lilly's USD 17 million (DKK 99.2 million) equity investment will be made through subscription of 530,745 new NeuroSearch shares of DKK 20 nominal value each. The shares will be subscribed at an agreed price of DKK 187 per share of DKK 20 nominal value each. The subscription price is calculated as the average closing price of NeuroSearch's shares for the 30 trading days prior to signing the agreement plus an agreed, undisclosed premium.
The 530,745 new shares will be issued without pre-emption rights for the company's current shareholders. The issue has been decided by NeuroSearch's Board of Directors on the basis of Article 5 of NeuroSearch's Articles of Association authorising the Board of Directors to increase the share capital of the company. The new shares will rank pari passu with and have the same rights as the existing shares in the company.
Registration, admission to trading and official listing of the new shares
The new shares will be registered with VP Securities Service (‘Værdipapircentralen'). The new shares will be admitted to trading and official listing on the Nasdaq OMX Copenhagen exchange under the ISIN code of the company's existing shares (ISIN code DK0010224666) once they have been registered with the Danish Commerce and Companies Agency ('Erhvervs- og Selskabsstyrelsen'). Admission to trading and official listing of the new shares is expected to take place no later than on 4 March 2009.
NeuroSearch's issuing agent is Nordea Bank Danmark A/S.
Expected timetable for the capital increase
Date Event
17 Feb 2009 Decision by NeuroSearch's board of directors to exercise its authorisation to increase the share capital
17-27 Feb 2009 Payment.
Registration of the new shares with the Commerce and Companies Agency as well as issue and registration of the new shares with VP Securities Services.
No later than
4 March 2009 Admittance for trading and official listing of the new shares with the Nasdaq OMX Copenhagen exchange.
NeuroSearch will disclose financial guidance for 2009 in connection with the company's 2008 full year announcement on 4 March 2009.
Thomas Hofman-Bang
Chairman of the Board
Contact persons:
Flemming Pedersen, CEO, telephone: +45 4460 8214 or +45 2148 0118
Hanne Leth Hillman, Vice President, Director of Investor Relations & Corporate Communications, telephone: +45 4460 8212 or +45 4017 510