Lundbeck is investing 10 million euros to buy a stake in Biotie Therapies Corp, its partner on the investigational alcohol dependence drug Selincro.
The deal represents 4.6% of the total equity capital in Biotie and a 25% premium to the Finnish biotech's share price on September 6. In connection with the deal, the terms of the companies' pact concerning Selincro (nalmefene) has been amended.
Now, the royalties on the sales in markets outside the European Union, the European Free Trade Area and the USA are being decreased "in order to support the possible launching of the product for these markets" by Lundbeck. Biotie may also receive an additional sales milestone of 5 million euros in Japan.
All this means that Biotie is now eligible for up to 89 million euros in upfront and milestone payments (from 84 million euros previously), plus royalties. It has already received 12 million euros.
Lundbeck filed a marketing authorisation application for Selincro, a new opioid system modulator, with the European Medicines Agency in December 2011 and a decision is expected in the fourth quarter. Head of R&D at Lundbeck, Anders Gersel Pedersen, said "we are now at a stage where we can start the discussions around the development strategy outside Europe and we are therefore pleased that we can amend the licensing agreement [and make]the equity investment in Biotie".
Biotie financing brings in extra 20 million euros
In a good day for its bank balance, Biotie also noted that it has raised 20 million euros in a private placement with institutional and strategic investors.
Chief executive Timo Veromaa said the additional funds of 30 million euros from Lundbeck and through the financing "gives us new opportunities now as we are approaching significant commercial and clinical development milestones". It also "solidifies our financial position in discussions with potential commercial partners".
After Selincro, Biotie's next product is tozadenant, an oral selective inhibitor of the adenosine 2a receptor which is in Phase IIb trials for Parkinson's disease and is partnered with UCB. In June this year, Biotie got the rights back from Roche to SYN120, a novel selective 5-HT6 receptor antagonist, but is hopeful of licensing the compound which could be a potential treatment for Alzheimer's disease, schizophrenia and other conditions.