NeuroSearch establishes credit facility of DKK 50 million to finance a programme for the purchase of own shares to hedge milestone payments

NeuroSearch has established a credit facility of DKK 50 million to finance a
programme for the purchase of own shares to cover expected future milestone
payments. The credit facility has been established on ordinary bank financing
terms and with a guaranteed duration of two years. 

An investment bank has been appointed to arrange the programme in compliance
with European Commission Regulation No 2273/2003 of 22 December 2003, also
referred to as the so-called “Safe Harbour” rules for the purchase of own
shares. 

The main reason for establishing a share purchase programme is NeuroSearch's
expectations that, in a foreseeable future, additional success based milestone
payments will become due under the agreement with the sellers of Carlsson
Research AB, which was acquired by NeuroSearch in 2006. These contingent
payment obligations amount to a total of SEK 200 million (DKK 140 million)
distributed in two equal payments relating to either first commercial sale or
first application for market registration of ACR16, being in pivotal Phase III
development for Huntington's disease, and to first Phase II dosing with ACR325.
According to the terms of the agreement, these payments can be settled either
in NeuroSearch shares or in cash and thus own treasury shares may be used as
payment. 

It is of utmost importance for NeuroSearch's management to assure the best
possible protection of the company's shareholder value. This includes
continuous optimisation of the company's capital structure, and NeuroSearch
believes a fully financed share purchase programme to be expedient in the
current situation where the company's share price has been significantly
reduced over a period of time despite of a markedly maturing of the product
pipeline. This is also based on the expectation that data from the ACR16 Phase
III Huntington's study will be available in less than a year and form the basis
for a submission of a market application for the company's first commercial
product. 

Mr Thomas Hofman-Bang, Chairman of the Board of Directors of NeuroSearch, says:
“In agreement with the executive management, the board of directors has
evaluated the possibility of hedging the remaining payment obligations to the
sellers of Carlsson Research, which - if being met - are bound to expectedly
considerable value creating events. Furthermore, it is our opinion that we help
secure our shareholders' value in the best possible way by establishing this
guaranteed structure for the purchase of own shares. It is very satisfactory
that we have succeeded in obtaining this without further charge to our capital
base and general operations.” 


Flemming Pedersen
CEO


Contact person:
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 5103 


Safe Harbour regulation and NeuroSearch's share purchase programme
In accordance with the Safe Harbour rules, the maximum of NeuroSearch shares
that can be bought back in one single trading day under the programme may not
be greater than 25% of the average daily trading volume of NeuroSearch shares
in the 20 preceding trading days on NASDAQ OMX Copenhagen A/S. 

Further, shares acquired under the programme may not be bought at a price
exceeding the higher of: (i) the share price of the last independent
transaction and (ii) the highest independent bid on NeuroSearch's shares on
NASDAQ OMX Copenhagen A/S at the time of the transaction. 


NeuroSearch  -  Company profile
NeuroSearch (NEUR) is a Scandinavian biopharmaceutical company listed on Nasdaq
OMX Copenhagen. The company's core business covers the development of novel
drugs, based on a broad and well-established drug discovery platform focusing
on ion channels and central nervous system (CNS) disorders. A substantial share
of the activities is partner financed through strategic alliances with Eli
Lilly and Company and GlaxoSmithKline (GSK) and a license collaboration with
Abbott. The drug pipeline comprises seven clinical (Phase I-III) development
programmes: ACR16 for Huntington's disease (Phase III), tesofensine for obesity
(Phase III ready), ABT-894 for ADHD (Phase II) in partnership with Abbott,
ACR325 to treat dyskinesias in Parkinson's disease (Phase II ready), ACR343 for
schizophrenia (Phase I), ABT-560 for the treatment of various CNS disorders
(Phase I) in collaboration with Abbott, and NSD-788 for anxiety/depression
(Phase I). In addition, NeuroSearch has a broad portfolio of preclinical drug
candidates and holds equity interests in several biotech companies.