Healthcare Industry News: Neuren Pharmaceuticals
News Release - July 31, 2007
Neuren to Obtain Late Stage Compound Through Hamilton Pharmaceuticals AcquisitionTwo leading life science VCs to invest US$3m in Neuren Key Points:
Acquisition of a compound - Motiva - with successful safety and Phase II efficacy data in human clinical trials
US Investigational New Drug ('IND') application currently active Strengthens Neuren's position as key player in the CNS field
Two leading life science VCs to invest US$3 million in Neuren
Neuren will have one Phase III and three Phase II studies in 2008, with results expected in early 2009
SYDNEY, Australia, July 31 (HSMN NewsFeed) -- Neuren Pharmaceuticals (ASX: NEU ) today announced that it will acquire Hamilton Pharmaceuticals ("Hamilton") in a transaction that will provide Neuren a late stage compound with proven human efficacy and add three leading life science investors as shareholders in Neuren. The acquisition represents a major milestone for Neuren and will position the Company as a key player in the central nervous system ("CNS") field, specializing in cognitive and psychological effects of CNS injury.
Under the binding term sheet, the acquisition is to be implemented using Neuren scrip only, with no cash payment to be made by Neuren. Neuren will acquire 100% of Hamilton, whose principal asset is Motiva, in exchange for US$4.4 million in Neuren ordinary shares at the average closing share price for the last five trading days (the "Purchase Share Price") prior to today's announcement. Two Hamilton investors, Vivo Ventures and CNF Investments, will also invest US$3 million into Neuren.
In addition, contingent Motiva related milestones to Hamilton are as follows:
-- Successful completion of Phase II - US$0.5 million in warrants to purchase Neuren ordinary shares at the Purchase Share Price
-- Initiation of a Phase III pivotal study - US$0.5 million in warrants to purchase Neuren ordinary shares at the Purchase Share Price
-- First filing of a New Drug Application ("NDA") or equivalent - US$1 million of Neuren ordinary shares at the then market share price when the milestone is reached
-- First approval of NDA or equivalent - US$2 million of Neuren ordinary shares at the then market share price when the milestone is reached
The three major venture capital investors from Hamilton, Vivo Ventures of Palo Alto, California, CNF Investments of Bethesda, Maryland and Index Ventures of Geneva, Switzerland, will become shareholders in Neuren through the transaction. These companies are leading life sciences investors with funds of more than US$2 billion under combined management. The managers of these funds have a strong focus and experience in CNS drug development.
Upon the closing, Vivo Ventures and CNF Investments will invest US$3 million in Neuren by way of a convertible note which will convert to ordinary shares on the same terms provided to investors in the next major fundraising.
Hamilton shareholders have unanimously approved the acquisition, and Neuren will seek approval from its own shareholders prior to completion of the transaction. The definitive legal agreement is being prepared. Ongoing operating costs for Hamilton are negligible and Neuren will not be retaining any Hamilton management.
Through the acquisition, Neuren will obtain a Phase IIb compound - Motiva - which is being developed for psychological and cognitive disorders resulting from stroke, traumatic brain injury, Alzheimer's and Parkinson's disease. The compound already has proven human safety and efficacy in 1,700 patients. Exclusive rights to develop and commercialize Motiva intellectual property in the US and EU were licensed by Hamilton from Daiichi Pharmaceutical Company in 2004.
Motiva's mode of action increases neurotransmitter concentrations in the cortex of the brain. The drug has clinical efficacy signals in post-stroke depression (see appendix for details). This class of compounds, called acetams, includes approved drugs with sales in excess of US$700 million in the first half of 2007, including levetiracetam (Keppra, UCB Pharma) and piracetam (Nootropil, UCB Pharma). Motiva is protected by more than 40 issued patents, three of which have issued in the US. The broad range of activity associated with increased concentrations of cortical neurotransmitters has potential applicability to a number of CNS indications.
Motiva has been studied in two randomized clinical trials (RCT) which showed clinically and statistically significant efficacy of the drug. In 2006, a third trial in post-stroke patients was suspended due to poor Contract Research Organisation ("CRO") execution. Motiva's approved IND application from the US Food and Drug Administration remains open and there are sufficient quantities of Motiva available to complete a Phase II trial.
Neuren intends to conduct a larger Phase II trial of Motiva with a broader range of endpoints and tighter patient attributes in 2008. Neuren will thereby be conducting one Phase III trial and three Phase II trials in 2008, all focusing on cognitive and psychological effects of acute CNS injury, with results expected by early 2009.
Commenting on the pending acquisition, David Clarke, Neuren's CEO and Managing Director, said: "This is a major step forward in Neuren's strategic development. It adds an extremely promising compound to our portfolio and, at the same time, significant representation and commitment by world-class life sciences investors. This transaction confirms Neuren's intent to be a significant player in the CNS sector of the global biotechnology industry."
Mr. Robert Flanagan, a managing partner of CNF Investments and Board Member of Hamilton Pharmaceuticals, said: "We are pleased to be forming this relationship with Neuren. Neuren clearly brings the capabilities and commitment not only to develop Motiva but also to maximize the value of their promising pipeline. We look forward to a productive and exciting association."
About Neuren Pharmaceuticals
Neuren Pharmaceuticals (ASX: NEU ) is a biopharmaceutical company developing novel therapeutics in the fields of brain injury and diseases and metabolic disorders. The Neuren portfolio consists of six product families, targeting markets with large unmet needs and limited competition. Neuren has three lead candidates, Glypromate and NNZ-2566, presently in clinical trials to treat a range of acute neurological conditions, and NNZ-2591 in preclinical development for Parkinson's and other chronic conditions. Neuren has commercial and development partnerships, including with the U.S. Army Walter Reed Army Institute of Research, Metabolic Pharmaceuticals, UCLA Medical Center and the National Trauma Research Institute in Melbourne.
For more information, please visit Neuren's website at www.neurenpharma.com
Source: Neuren Pharmaceuticals
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