Merck Serono’s decision to hand Phase III safinamide back to Newron constitutes material adverse effect, Biotie claims.
Shares in Newron Pharmaceuticals were down over 13% by mid-day in Europe, on the news that Biotie Therapies had backtracked on its €45 million share-based deal to acquire the Italian firm. Biotie’s decision to terminate the merger plan, which was made public in September, follows Newron’s announcement a week ago that Merck Serono, its global partner for the Phase III Parkinson disease therapy safinamide, would pass the drug back to Newron in April 2012.
Biotie says that under terms of the merger plan and combination agreement the return of safinamide rights to Newron constitutes a material adverse effect and gives it the right to cancel the deal. Biotie will, as a result, be entitled to receive a €1.5 million break-up fee.
Newron, meanwhile, has put a slightly different spin on events, saying that regaining global commercial rights to safinamide will open up “substantial opportunities to create value for its shareholders.” The firm estimates that a registration dossier for the drug will be ready for submission to drug regulators in key markets by the end of 2012, pending results from the Phase III Motion and Settle studies, which are scheduled to report during the first half of next year. “To companies with commercial capabilities, this offers an extremely attractive opportunity in a focused specialist market,” notes Luca Benatti, Newron CEO.
Merck Serono’s decision to give up its rights to safinamide resulted from what the Merck KGaA division said was an ongoing review of its R&D pipeline and the belief that the drug had a more limited market potential than originally anticipated.