Biotie snares Newron CNS pipeline in $63M share/CVR deal

Finland's Biotie Therapies has struck a deal to acquire Newron Pharmaceuticals ($NWRN) for up to $63 million worth of shares. The tie-up--which includes a significant amount tied up in CVRs--creates a single biotech with a significant pipeline of CNS treatments, including two late-stage programs for Parkinson's disease and alcohol independence.

"We see this transaction as a win-win for both companies' shareholders and it confirms Biotie as a key consolidator of high-quality CNS assets," says BioTie CEO Timo Veromaa. "We look forward to optimising the combined robust product pipeline to create value for our shareholders, partners and other stakeholders."

Newron investors may not see it in quite the same light. The developer has reported losses totaling about $60 million over the past two years as it advanced its pipeline projects. But Milan, Italy-based Newron ran into trouble in the spring of 2010 when its late-stage pain drug, ralfinamide, failed a Phase IIb/III study for neuropathic pain. The company ordered a restructuring in mid-2010 to conserve cash.

Those investors now stand to get up to $52 million worth of Biotie shares on the transaction, with another 17 million shares coming as contingent value rights--CVRs--based on a slate of milestone achievements.

Newron's lead drug, safinamide, is an oral, once daily add-on treatment for Parkinson's disease. Data on two late-stage studies are due to arrive in the first half of 2012. This past spring the company reported that the treatment lowered patients' dyskinesia when it was combined with the commonly used levodopa. The treatment is partnered with Merck Serono.

- here's the press release

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