NeuroSearch announces drug discovery and drug development alliance with Janssen Pharmaceutica NV

Hvidovre, DENMARK

-  The alliance builds on strong scientific commitment from both companies,
focusing on the development of new CNS medicines based on joint expertises in
neuroscience discovery 

-  To NeuroSearch, the alliance will bring guaranteed income and funding of EUR
32 million in the first three years, including an upfront equity investment of
EUR 10 million and a share put option of EUR 5 million 

-  For each compound successfully commercialised under the alliance,
NeuroSearch will receive milestone payments plus  royalties on global sales 

Copenhagen, 17 August 2009 - NeuroSearch A/S (NEUR) has signed a drug discovery
and drug development agreement with Janssen Pharmaceutica NV (Janssen), an
international pharmaceutical company under the Johnson & Johnson group. Under
the agreement, NeuroSearch and Janssen will collaborate to discover, develop
and commercialise new medicines to treat various central nervous system (CNS)
diseases based on the companies' joint expertises in the field of neuroscience.
 Initially, the agreement will run for three years with an option to Janssen to
extend the alliance with up to two years against additional funding to
Flemming Pedersen, CEO of NeuroSearch commented:
“We are very proud to announce this alliance with Janssen and excited about the
prospects of working jointly with a company with such a rich history in
neuroscience discovery. As the alliance builds on combined drug discovery
expertise and activities, we see it as an optimal frame work for the
development and commercialisation of new and better CNS medicines, As such, we
believe the agreement will significantly boost our pipeline of products
representing a substantial value potential for NeuroSearch. Under the
agreement, NeuroSearch is eligible to more than EUR 200 million (> DKK 1.5
billion) in milestone payments plus attractive royalties for each successfully
launched product.” 

Under the terms of the agreement, NeuroSearch is eligible to receive a total of
EUR 32 million (DKK 238 million) from Janssen, of which EUR 17 million (DKK 127
million) will be as upfront payment and research funding and EUR 15 million
(DKK 112 million) as an equity investment in NeuroSearch. Upon signing of the
agreement, NeuroSearch will receive EUR 5 million (DKK 37.2 million) as upfront
payment with EUR 12 million (DKK 89 million) in research funding for the three
years to be paid in 2010 and 2011.  Also upon signing, Johnson & Johnson
Development Corporation (JJDC) will subscribe for EUR 10 million (DKK 74,4
million) of new NeuroSearch shares and grant NeuroSearch an option until and
including 30 April 2010 to sell an additional number of new shares to JJDC
worth EUR 5 million (DKK 37.2 million). 
NeuroSearch will be responsible for the drug discovery programmes as well as
for the early development of the drug candidates stemming from the alliance.
Janssen will have various options to exercise license rights to the individual
compounds covered by the agreement and related intellectual property. Upon
exercise of license options, Janssen will be responsible for and finance all
subsequent development and commercialisation activities. For each product,
successfully developed and commercialised under the alliance, NeuroSearch will
be entitled to milestone payments of up to EUR 213 million (DKK 1,586 million)
plus double-digit royalties on global sales. 

The issue of new shares to JJDC:
JJDC's initial EUR 10 million (DKK 74.4 million) equity investment in
NeuroSearch will be made through subscription of 618,562 new NeuroSearch shares
of DKK 20 nominal value each. The shares will be subscribed at a market price
of DKK 120.35 per share of DKK 20 nominal value each, calculated as the simple
average of the daily average price per NeuroSearch share on each of the 10 last
trading days prior to (and excluding) the date for signing the agreement as
published on the website of NASDAQ OMX Copenhagen A/S at the end of each such
trading day. 

The new shares will be issued without pre-emption rights for the company's
current shareholders. The issue has been decided by NeuroSearch's Board of
Directors on the basis of Article 5 of NeuroSearch's Articles of Association
authorising the Board of Directors to increase the share capital of the
company. The new shares will rank pari passu with and have the same rights as
the existing shares in the company. 

Furthermore, NeuroSearch has been granted an option to sell additional shares
to JJDC worth EUR 5 million (DKK 37.2 million) at market price up to and
including 30 April 2010. NeuroSearch is not obliged to exercise the option. 

Registration, admission to trading and official listing of the new shares:
The new shares will be registered with VP Securities Service
(‘Værdipapircentralen'). The new shares will be admitted to trading and
official listing on the NASDAQ OMX Copenhagen exchange under the ISIN code of
NeuroSearch's existing shares (ISIN code DK0010224666) upon registration with
the Danish Commerce and Companies Agency ('Erhvervs- og Selskabsstyrelsen').
Admittance for trading and official listing of the new shares is expected to
take place on 27 August 2009. 

NeuroSearch's issuing agent is Nordea Bank Danmark A/S. 

Expected timetable for the capital increase:

Date / Event:

17 August 2009
Decision by NeuroSearch's Board of Directors to exercise its authorisation
under the Articles of Association to increase the share capital. 

24 August 2009
Registration of the new shares with the Commerce and Companies Agency as well
as issue and registration of the new shares with VP Securities Services. 

27 August 2009
Admittance for trading and official listing of the new shares with the NASDAQ
OMX Copenhagen exchange. 

NeuroSearch retains its financial guidance for the full year 2009, expecting a
loss before financials and other shares of results in the region of DKK 350

Flemming Pedersen

Contact persons:
Flemming Pedersen, CEO, telephone: +45 2148 0118
Hanne Leth Hillman, Vice President, Director of Investor & Capital Market
Relations, telephone: +45 4017 5103 

About NeuroSearch  
NeuroSearch (NEUR) is a Scandinavian biopharmaceutical company listed on NASDAQ
OMX Copenhagen. The core business of the company covers the development of
novel pharmaceutical agents, 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, Janssen Pharmaceutica and
GlaxoSmithKline (GSK), and a license collaboration with Abbott. NeuroSearch's
pipeline of drug candidates comprises seven clinical (Phase I-III) development
programmes: Pridopidine (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 Ib), ACR343 for schizophrenia (Phase II ready), 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.


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