Merck Serono returns rights to Parkinson's drug to Newron

Merck Serono has decided that the experimental Parkinson's disease drug safinamide won't be as strong a commercial drug as once thought. The company, a unit of Germany's Merck KGaA, has handed back its rights to the program to Milan, Italy-based developer Newron Pharmaceuticals.

For Newron, the timing of Merck Serono's decision seems unfortunate. Finland's Biotie Therapeutics agreed to buy Newron in a stock deal worth $63 million announced last month. Safinamide, which is in late-stage development for use as an add-on to levodopa to treat the neurological disorder, is Newron's lead drug. The lead program that Biotie agreed to take in last month is looking a lot different without Merck Serono on board. Newron and Biotie plan to "evaluate" the situation, Newron said in a statement today.

Merck Serono, which gained rights to the Parkinson's drug in 2006, stated that "safinamide has a more limited market potential than originally anticipated by the company." The drugmaker plans to cut support of the Phase III program after April 2012, costing the firm €40 million. The company made the decision to shed the program through a review of its pipeline. Merck Serono is still partnering with Newron on a pair of other experimental CNS drugs called pruvanserin and sarizotan.

Merck Serono is among a host of pharma outfits that have chopped programs from their pipelines over the past year amid a number of factors such as limits on R&D spending in certain areas and governments such as Germany's holding new drugs to higher standards before agreeing to pay for them. The development of neuroscience drugs has been hit particularly hard, with companies such as GlaxoSmithKline ($GSK) and Sanofi ($SNY) ordering cutbacks in early R&D of CNS drugs.

- here's Merck Serono's release
- read the Reuters report

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