Announcement
23.12.2011
Late September, NeuroSearch A/S (NEUR) announced a focusing of the company's resources on the final development of Huntexil®. In continuation of this decision, NeuroSearch and the sellers of Carlsson Research have renegotiated and agreed on changing some of the terms of the share purchase agreement entered into in 2006 including the outstanding success-based milestone payments. The modified share purchase agreement will optimise the company's financial flexibility and possibility of further advancing the development towards marketing of Huntexil®.
NeuroSearch acquired Carlsson Research and thereby also Huntexil® (pridopidine), ordopidine and seridopidine. The related share purchase agreement included a number of amounts payable from NeuroSearch to the sellers of Carlsson Research upon the successful attainment of certain milestones and of these the following were still outstanding:
| Milestone 2 | Ordopidine – Partnership agreement signed – 50% of initial payment estimated at SEK 100 million to come from a license partner | SEK 50 million |
| Milestone 6 | Ordopidine – First dosing in Phase II study | SEK 100 million |
| Milestone 7 | Huntexil® – First registration application or marketing approval | SEK 100 million |
The modified terms imply a cancellation of milestone 2 and 6 above, a modification of milestone 7 and an introduction of two new milestones, 8a and 8b, which relate to Huntexil®. As a consequence, the following milestones are now outstanding:
| Milestone 7 | Huntexil® – First registration application | SEK 100 million |
| Milestone 8a | Huntexil® – First marketing approval in an EU or EFTA country | SEK 75 million |
| Milestone 8b | Huntexil® – First marketing approval outside the EU or EFTA | SEK 75 million |
NeuroSearch may choose to pay the above milestones in cash or in NeuroSearch shares.
Status for ordopidine and seridopidine
NeuroSearch still owns all rights to ordopidine and seridopidine and as a consequence of the modified terms, NeuroSearch may at the company's sole discretion decide upon the next development steps for these compounds. Both compounds belong to the class of dopidines and the related patent family is important to NeuroSearch. The company now awaits the results of the ongoing toxicological studies and has so far decided not to initiate Phase II studies with any of the projects.
Financial expectations for 2011
NeuroSearch maintains its expectations for the operating result as announced in the company's Q3 report. 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.
In 2009, NeuroSearch established a credit facility to acquire own shares to pay for expected future milestone payments. As part of the optimisation of the capital structure, NeuroSearch will settle this credit facility. Consequently, the corresponding value of cash and cash equivalents are expected to be at least DKK 200 million by the end of 2011.
CEO of NeuroSearch, Patrik Dahlen, comments as follows in connection with the signing of the agreement:
"We are pleased with the new agreement with the sellers of Carlsson Research which gives us full freedom to deal with seridopidine and ordopidine in the best possible way without obligations towards the sellers of Carlsson Research. NeuroSearch may now focus the company's resources on Huntexil®, which both we and the sellers of the Carlsson Research strongly believe will make a difference for patients and society".
Patrik Dahlen
CEO
Contact person:
René Schneider, EVP & CFO, telephone: +45 2911 2097
About NeuroSearch
NeuroSearch A/S (NEUR) is a European-based biopharmaceutical company listed on NASDAQ OMX Copenhagen A/S 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.
