Newron Pharmaceuticals of Italy has signed an agreement with key shareholders for the acquisition of up to 100% of the shares of Stockholm-based privately-owned NeuroNova, in an all-share transaction valuing the company at $19.4 million (closing share price June 11, 2012).
The transaction adds two highly innovative phase II compounds to Newron's CNS portfolio. NeuroNova, founded by scientists from Karolinska Institutet, has extensive experience in the field of neurogenesis. The company's compounds act by generating new progenitor cells and protecting existing neurons with the potential to benefit patients with progressive neurodegenerative disorders.
"NeuroNova greatly enriches the CNS portfolio of Newron. sNN0031, a platelet-derived growth factor, stimulates the proliferation of neuronal stem and progenitor cells and improved motor performance in various models of PD,” said Ravi Anand, Newron's CMO. “sNN029, a vascular endothelial growth factor, is being developed for the treatment of patients with ALS... Placebo-controlled PoC trials are in planning for both compounds.”
At closing, Newron will benefit by cash and commitments of up to $20 million. These funds are sufficient to provide for a phase II proof-of-concept study in Parkinson's disease and a phase I/II study in Amyotrophic lateral sclerosis (ALS), in addition to the related corporate operations. Investor and HealthCap, holders of more than 90% of NeuroNova's total shares, will become shareholders in Newron and each may nominate a representative to Newron's board of directors.
"This transaction is exciting, as it brings together global development expertise, a new generation of compounds that could alter the treatment of neurodegenerative disorders, material funding and two leading investors in a company listed on one of the leading life science stock exchanges,” said Stefan Weber, CEO of Newron.
The transaction, expected to close in August 2012, is conditional on the approvals under Italian law, including an independent appraisal, and approval by Newron's shareholders. If acceptance from 100% of the NeuroNova shareholder is achieved, NeuroNova's shareholders will receive 3,935,773 newly issued Newron shares, representing a holding of 33% in Newron's issued and outstanding share capital post the transaction.
At closing, NeuroNova will be restructured and free of debt. NeuroNova's development activities will continue under Anders Haegerstrand, the current CSO of NeuroNova.