NeuroSearch A/S - Q3 report 2011


Announcement
17.11.2011
 

Below please find the first part of the NeuroSearch Q3 report 2011. The full report is available in the enclosed pdf file.

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NeuroSearch (NEUR) is committed to creating a profitable, specialty pharmaceutical company building on the platform that the company would achieve from marketing of Huntexil®(pridopidine).

On 27 September, NeuroSearch provided an update on the Huntexil® development programme for the treatment of motor symptoms associated with Huntington’s disease. At the same time, the company announced a comprehensive restructuring and controlled discontinuation of the company's other activities in order to optimise financial and managerial resources to complete the development and marketing of Huntexil®.

In the future, the company's financial guidance and reporting will make distinction between loss from continuing operations and loss from discontinuing activities.

The Board of Directors today considered and adopted the company’s interim report for the nine months ended on 30 September 2011. An operating loss of DKK 337 million was reported for the first three quarters (a loss of DKK 126 million in the same period 2010). One-off costs with no cash effect of approximately DKK 240 million incurred in Q3 are related to the restructuring and relate to impairment of goodwill, intangible assets and property, plant and equipment.

Net financials for the period amounted to DKK 36 million (net financials of DKK 20 million in the same period 2010).

Discontinuing activities amounted to a loss of DKK 345 million for the period (a loss of DKK 111 million in the same period 2010) concerning costs from loss-making collaborations, salaries to employees under notice, leasing obligations, etc.

On 30 September 2011, the company’s cash and cash equivalents including securities totalled DKK 305 million (DKK 569 million at 30 September 2010). Securities primarily consist of highly liquid short-term bonds. In addition, NeuroSearch will receive a total of DKK 46 million in payments for staff working on projects under the alliance with Janssen. Moreover, the company has unused credits of DKK 29 million.

Financial expectations for 2011
NeuroSearch maintains its financial expectations for the full year 2011 as announced by the end of September in connection with the restructuring of the company. For the full year 2011, NeuroSearch forecasts an operating loss of approximately DKK 370 million of which approximately 240 million represent one-off costs with no cash effect. In addition, NeuroSearch forecasts a loss relating to discontinuing activities of approximately DKK 345 million in 2011.

Value of cash and cash equivalents including securities are expected to be in the range of DKK 230 million by the end of 2011.

Financial expectations for 2012
For 2012, the company foresees an operating loss relating to the continuing activities in the range of DKK 150-175 million. No other costs are expected in connection with discontinuing activities in 2012.
 

Important events in Q3

  • On 27 September, NeuroSearch announced a comprehensive restructuring, which – when fully implemented in 2013 – will result in an organisation of approximately 35 employees. The aim of the restructuring is primarily to focus the company's financial and managerial resources on the final development and marketing of Huntexil®.
     
  • On 27 September, NeuroSearch also announced the company's plans for the next development step for in the form the Phase III Prime-HD study. This study is planned to enrol approximately 630 Huntington patients who will be dosed with placebo, 45 mg Huntexil® or 67.5 mg Huntexil® – all twice daily. The primary study endpoint will be the Total Motor Score (the TMS).

    Prime-HD is planned for initiation during the first half of 2012, provided that funding for the completion of the study is secured by then.
     
  • The Multiple Ascending Dose (MAD) study, whose aim is to test the effect of high doses of Huntexil® in healthy volunteers, was initiated at the end of September, and NeuroSearch expects to be able to report results from this study in Q1 2012.
     
  • The Open HART study, the safety extension study which was planned and initiated following the end of the North American HART study, has continued its enrolment of patients, and as of 14 November, 109 former HART-study patients continued their treatment with Huntexil®. NeuroSearch plans to continue the enrolment until mid-December 2011.
     
  • The compassionate use programme, which followed the MermaiHD extension study, has now enrolled 130 patients who receive treatment with Huntexil®.
     
  • Earlier this year, NeuroSearch and all other shareholders sold Sophion Bioscience A/S to Biolin Scientific AB. The company's profit from the sale amounts to DKK 41 million of which DKK 32 million were received in September 2011, and the remaining DKK 9 million are expected to be received before the end of 2012.

 
Events after the balance sheet date

  • The announced restructuring will result in a reduction of the employee headcount to a size necessary to primarily continue the development and marketing of Huntexil®. All affected employees were given notice of termination at the end of October 2011. An important part of those employees has been given extended notice in order for NeuroSearch to be able to observe the company's obligations relating to the alliances with Lilly and Janssen.
     
  • On 8 November, the MermaiHD study was published in the distinguished medical journal The Lancet Neurology, and the journal found the article worthy of a separate press release.
     

Patrik Dahlen, CEO of NeuroSearch, states as follows in connection with the release of the Q3 report:
"The restructuring of the company progresses as planned. All affected employees have been given notice and have dealt with the situation in a very professional way. The work of bringing Huntexil® to the market runs according to plan and the next important step will be our interaction with the FDA which will determine the last details in our Prime-HD study protocol".


Patrik Dahlen
CEO

 

Teleconference
NeuroSearch will host a conference call today at 9.30 am CET (8.30 pm UK time, 3.30 am New York time) during which the Q3 report will be presented. Participating in the call will be CEO Patrik Dahlen and EVP & CFO René Schneider.

The conference call will be conducted in English and the dial-in numbers are: 

UK and international: +44 207 509 5139
US: +1 718 354 1226
Denmark +45 3271 4767

Listening to the teleconference is also possible via the company’s website.

The corresponding presentation will be available at the company's website at the time of the teleconference.


Contact persons
Patrik Dahlen, CEO, telephone: +45 4460 8214 or +45 2629 7296
René Schneider, EVP & CFO, telephone: +45 4460 8700 or +45 2911 2097



About NeuroSearch
NeuroSearch is a European-based biopharmaceutical company listed on NASDAQ OMX Copenhagen A/S (NEUR) and specialising in central nervous system (CNS) disorders. The vision is to develop NeuroSearch into a profitable specialty pharmaceutical company. The strategy is primarily to complete the development and subsequently to market Huntexil®, a unique drug in clinical Phase III for the treatment of the motor symptoms of Huntington’s disease.
Among discontinuing activities, NeuroSearch also has a portfolio of assets for outlicensing or divestment. This includes tesofensine which has shown outstanding efficacy in the treatment of obesity, the Integrative Screening Process (ISP), which is a proprietary systems biology approach, as well as a broad range of ion channel technologies and patented compounds identified as ion channel modulators.

NeuroSearch, building

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