Swiss biotech Serono, which is in the process of being acquired by German drugmaker Merck KGaA, has dipped into its cash reserves to license a drug for Parkinson’s disease currently in Phase III testing.

Safinamide, developed by Italy’s Newron Pharmaceuticals, has already shown promise in a Phase III study in 270 early-stage Parkinson’s disease patients in which the drug was added to standard treatment with an oral dopamine agonist. The study showed that safinamide was well tolerated and associated with a clinically relevant and statistically significant improvements in motor function, response rates and activities of daily living, as well as some encouraging effects on cognition.

The drug is an alpha-aminoamide derivative, which can be delivered orally and combines dopamine reuptake inhibition with blockade of monamine oxidase type B – both of which boost dopamine levels in the brain, with inhibition of glutamate.

The hope is that the drug will be able to interfere with the so-called ‘glutamate cascade’, which contributes to the progressive neurodegeneration seen in Parkinson’s disease, Alzheimer’s disease and other cognitive disorders. Serono also has rights to the drug in these other indications.

Under the terms of the agreement, Serono will make an upfront payment and additional milestone payments to Newron of up to $200 million based on defined development and commercialisation achievements, as well as royalties on sales.