Denmark's NeuroSearch yesterday said it has snapped up Sweden's Carlsson Research for 707 million Danish kroner ($122 million), with the acquisition adding four new drug programmes to its pipeline and being funded primarily by a yet-to-be launched rights issue.

Carlsson focuses on the development of drugs for the central nervous system and will bring a promising raft of candidates into NeuroSearch's portfolio, including ACR16, which is entering Phase III development for the treatment of Huntington's disease and is also in earlier stage trials under a deal with Astellas for use in schizophrenia. The Swedish firm also brings with it ACR325, which is under investigation for combating psychoses and manic depression, and is about to begin human studies, and finally the Parkinson's disease candidate ACR343, which has recently been selected for development.

As part of the 707 million kroner purchase price, an initial cash and share payment of 202 million kroner will be made upfront, with the rest to be paid in either cash or shares - at NeuroSearch's option - on the successful completion of certain product development milestones. The entire acquisition, however, is dependent on NeuroSearch completing a successful share offering in the form of a rights issue, from which it hopes to raise 350-400 million kroner. The financing is expected to complete before the end of the year, while the remaining money will come from milestone payments from license partners.

Said Flemming Pedersen, chief executive of NeuroSearch: “The acquisition of Carlsson Research accelerates the growth we consider necessary to create a new significant pharmaceutical company in Scandinavia.” He added that the firm hopes to complete the development of Carlsson's lead product - ACR16 for Huntington's - in-house and take the product all the way to market alone.

Following the acquisition, Carlsson Research will operate as a fully owned subsidiary of NeuroSearch A/S and will change its name to NeuroSearch AB. The company will continue its current operations and will be under the management of Dr Nicholas Waters, who will also become a member of NeuroSearch's management group.