Newron raises CHF26M to wrap up PhII schizophrenia trial, late-phase CNS study

Newron Pharmaceuticals (SWX:NWRN) has tapped investors for CHF 26.1 million ($26.6 million) to see it through to data readouts on a couple of key pipeline programs. The funding extends Newron’s financial runway out beyond the completion of a Phase IIa schizophrenia trial and Phase II/III orphan CNS disease study.

Milan, Italy-based Newron raised the money through a private placement that offloaded 1.3 million shares at CHF 19.75 apiece, a 13.4% discount to the price the stock has traded at recently. Newron investors responded by driving down the share price by close to 15%, but the stock recovered as the morning wore on. And if the private placement leads to positive clinical data, today’s dip could be wiped out and then some.

With lead candidate Xadago on the market in parts of Europe and heading toward an FDA decision in the U.S., the focus at Newron is on a pair of follow-up programs. The more advanced of the two candidates is sarizotan, an agonist of serotonin receptor 5-HT1A Newron licensed from Merck KGaA. Earlier this year, Newron moved sarizotan into a potentially pivotal Phase II/III trial in Rett syndrome, a genetic CNS disorder that causes abnormal breathing patterns.

Newron has penciled in a July 2017 finish for the 129-person trial. By then, Newron will know the outcome of its other clinical-stage bet, a Phase IIa trial of evenamide in schizophrenia patients. The trial is designed to show whether the sodium channel blocker is safe and can improve the suicide severity scores of patients with chronic schizophrenia. Newron expects to have data on the drug, which emerged from its own ion channel program, by the end of the year.

The money is due to last Newron through to beyond the delivery of data from both clinical trials, according to finance VP Roberto Galli, who said in a statement the company is now funded “well through 2018.” With the outcome of the two clinical trials and the FDA decision on a resubmitted NDA for Parkinson’s disease drug Xadago all due to take place by the time the money runs out, the long-term prospects of Newron will take shape in the current financing window.