Newron to acquire Swedish neurogenesis company NeuroNova AB

Newron to acquire Swedish neurogenesis company NeuroNova AB

    Highly innovative Phase II compounds targeting neuronal stem cells and motorneurons
     --Potential next generation PD treatment
     --ALS orphan drug candidat
    Fully funded Phase II development steps in two indications
     --Up to €16m of cash/commitment
    Two prime investors to take stakes in Newron
     --Investor AB
     --HealthCap

Milan, Italy, June 13, 2012 – Newron Pharmaceuticals S.p.A. ("Newron"), announces today that the company has signed an agreement with the key shareholders of Stockholm-based privately-owned NeuroNova AB ("NeuroNova") for the acquisition of up to 100% of the shares of NeuroNova, in an all-share transaction valuing NeuroNova at €15.4m (at closing share price June 11, 2012).

The transaction adds two highly innovative Phase II compounds from NeuroNova to Newron's CNS portfolio. NeuroNova, founded by scientists from Karolinska Institutet, has extensive experience in the field of neurogenesis. The company's compounds act by generating new progenitor cells and protecting existing neurons with the potential to benefit patients with progressive neurodegenerative disorders.

At closing of the transaction, Newron will benefit by cash and commitments of up to €16m. These funds are sufficient to provide for a Phase II PoC study in Parkinson's disease (PD) as well a Phase I/II study in Amyotrophic lateral sclerosis (ALS), in addition to the related corporate operations. Investor and HealthCap, holders of more than 90% of NeuroNova's total shares, will become shareholders in Newron and each may nominate a representative to Newron's board of directors. The transaction is conditional on the approvals under Italian law, including an independent appraisal, and approval by Newron's shareholders. It is expected to close in August 2012.

If acceptance from 100% of the NeuroNova shareholder is achieved, NeuroNova's shareholders will receive 3,935,773 newly issued Newron shares, representing a holding of 33% in Newron's issued and outstanding share capital post the transaction.

At closing, NeuroNova will be restructured and free of debt. NeuroNova's development activities will continue under Anders Haegerstrand, the current CSO of NeuroNova.

Stefan Weber, Newron's CEO, stated: "This transaction is exciting, as it brings together global development expertise, a new generation of compounds that could alter the treatment of neurodegenerative disorders, material funding and two leading investors in a company listed on one of the leading life science stock exchanges."

Ravi Anand, Newron's CMO, added: "NeuroNova greatly enriches the CNS portfolio of Newron. sNN0031, a platelet-derived growth factor, stimulates the proliferation of neuronal stem and progenitor cells and improved motor performance in various models of PD, and has shown potentially beneficial effects in patients with PD. sNN029, a vascular endothelial growth factor, is being developed for the treatment of patients with ALS, an orphan indication that results in premature mortality. The compound has been differentiated from other growth factors in models of ALS, and has provided preliminary evidence of activity in patients with ALS. Placebo-controlled PoC trials are in planning for both compounds."

Ulf Ljungberg, President and CEO of NeuroNova, commented: "It is the logical next step to NeuroNova to combine our advanced pipeline and know-how, originally stemming from research at Karolinska Institutet and developed by our team in the recent years, with a larger player in the CNS field, adding to Newron's advanced PD treatment, safinamide, clinical development experience and the resources of a publicly listed entity. This is a strong platform on which to build the critical mass this industry is looking for."

Jakob Lindberg from Investor: "Both Investor and HealthCap fully endorse the strategic fit of this transaction. We value Newron's expertise in taking compounds from clinical stages to regulatory filing, and support the concept of building a European CNS player that could benefit both patients and our stakeholders."

About NeuroNova's development candidates

sNN0031 is a novel drug candidate for the treatment of moderate to severe stage Parkinson's disease that is designed to act on neural stem and progenitor cells in the brain. In animal models of Parkinson's disease, treatment with sNN0031 restores motor function and improves neurochemical deficits. In a Phase I/II trial in patients with PD, it was well tolerated and demonstrated preliminary beneficial effects on biochemical markers of the degenerating dopamine system in PD patients. The product is comprised of the naturally occurring protein PDGF-BB (platelet-derived growth factor BB) formulated for intracerebroventricular (ICV) delivery. The intended therapy involves short-term continuous infusion of sNN0031 into the ventricular lumen, in order to optimize PDGF-BB access to the lateral ventricular walls of the brain where the targeted stem and progenitor cells reside. sNN0031 holds the potential to halt and even reverse disease progression, a much-needed improvement over currently available treatments, which only address the symptoms of Parkinson's disease.

sNN0029 is a novel drug candidate for the treatment of amyotrophic lateral sclerosis (ALS) that has demonstrated in preclinical in vivo studies the ability to slow disease progression and increase life span. In a phase I/II trial in patients with ALS, patient recruitment and treatment for the formal three months safety evaluation has been completed. Patients are offered and are currently receiving continued treatment. Short and long term safety and potential beneficial effects are under evaluation. The pharmaceutical formulation contains vascular endothelial growth factor (VEGF) protein, a naturally occurring protein scientifically proven to be an important survival factor for motor neurons. The intended therapy involves direct infusion of sNN0029 into the cerebrospinal fluid (CSF) that circulates around the brain and spinal cord by intracerebroventricular (ICV) administration. sNN0029 is intended to slow the progression of the disease, which will potentially meet an enormous medical need for patients diagnosed with ALS.

About Investor

Founded by the Wallenberg family a hundred years ago, Investor is the leading owner of high quality Nordic-based international companies. Through board participation, our industrial experience, network and financial strength, we strive to make our companies best-in-class. Our holdings include Atlas Copco, ABB, Ericsson and Mölnlycke Health Care.

 

About HealthCap

HealthCap is a family of multi stage venture capital funds, investing internationally in life sciences. With committed capital of EUR900 m, HealthCap is the largest specialized provider of venture capital within life sciences in the Nordic countries and one of the largest independent actors in the sector inEurope.

About Newron Pharmaceuticals

Newron (SIX: NWRN) is a biopharmaceutical company focused on novel therapies for diseases of the Central Nervous System (CNS) and pain. The Company is headquartered in Bresso nearMilan,Italy. Phase III trials of safinamide for the treatment of Parkinson's disease (PD) have recently been completed and Newron anticipates a potential filing in the EU and US, in 2013. Zambon Group has the rights to commercialise safinamide globally, excludingJapanand other key Asian territories, and Meiji Seika has the rights to develop and commercialise safinamide inJapanand other key Asian territories. Newron's additional projects are at various stages of preclinical and clinical development, including HF0220 for neuroprotection, ralfinamide for pain, NW-3509 for the treatment of schizophrenia, as well as pruvanserin and sarizotan for treatment of CNS diseases.

www.newron.com

 

For more information, contact:

 

Media

Investors and analysts

Italy

Stefan Weber - CEO

Phone: +39 02 6103 46 26

E-mail: [email protected]

UK/Global media

Julia Phillips

FTI Consulting

Phone: +44 (0) 20 7269 7187

 

Switzerland

Martin Meier-Pfister

IRF Communications

Phone: +41 43 244 81 40

Stefan Weber - CEO

Phone: +39 02 6103 46 30

E-mail:  [email protected]

 

Important Notices

This document contains forward-looking statements, including (without limitation) about (1) Newron's ability to develop and expand its business, successfully complete development of its current product candidates and current and future collaborations for the development and commercialisation of its product candidates and reduce costs (including staff costs), (2) the market for drugs to treat CNS diseases and pain conditions, (3) Newron's anticipated future revenues, capital expenditures and financial resources, and (4) assumptions underlying any such statements. In some cases these statements and assumptions can be identified by the fact that they use words such as "will", "anticipate", "estimate", "expect", "project", "intend", "plan", "believe", "target", and other words and terms of similar meaning. All statements, other than historical facts, contained herein regarding Newron's strategy, goals, plans, future financial position, projected revenues and costs and prospects are forward-looking statements.

By their very nature, such statements and assumptions involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described, assumed or implied therein will not be achieved. Future events and actual results could differ materially from those set out in, contemplated by or underlying the forward-looking statements due to a number of important factors. These factors include (without limitation) (1) uncertainties in the discovery, development or marketing of products, including without limitation negative results of clinical trials or research projects or unexpected side effects, (2) delay or inability in obtaining regulatory approvals or bringing products to market, (3) future market acceptance of products, (4) loss of or inability to obtain adequate protection for intellectual property rights, (5) inability to raise additional funds, (6) success of existing and entry into future collaborations and licensing agreements, (7) litigation, (8) loss of key executive or other employees, (9) adverse publicity and news coverage, and (10) competition, regulatory, legislative and judicial developments or changes in market and/or overall economic conditions.

Newron may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements and assumptions underlying any such statements may prove wrong. Investors should therefore not place undue reliance on them. There can be no assurance that actual results of Newron's research programmes, development activities, commercialisation plans, collaborations and operations will not differ materially from the expectations set out in such forward-looking statements or underlying assumptions.

Newron does not undertake any obligation to publicly up-date or revise forward looking statements except as may be required by applicable regulations of the SIX Swiss Exchange where the shares of Newron are listed.

This document does not contain or constitute an offer or invitation to purchase or subscribe for any securities of Newron and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

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