Bloomberg News

Biotie Courted by Potential Partners for Alzheimer’s Drug

February 21, 2012

(Updates with closing share price in seventh paragraph.)

Feb. 20 (Bloomberg) -- Biotie Therapies Oyj, the drugmaker that developed an anti-alcoholism medicine with H. Lundbeck A/S, has been approached by multiple potential partners for its experimental treatment for Alzheimer’s disease, Chief Executive Officer Timo Veromaa said.

Through the acquisition of Synosia Therapeutics last year, Turku, Finland-based Biotie gained access to several drugs in development including SYN120, an Alzheimer’s medicine licensed from Roche Holding AG in 2009. Roche has a one-time option to take back rights for SYN120 after evaluating data from an early- stage study to be released this quarter, Veromaa said in a telephone interview Feb. 16.

“A number of reputable, highly interested pharma companies” have approached Biotie about the drug in the event that Roche opts not to exercise the option, Veromaa said.

Biotie, GlaxoSmithKline Plc, Pfizer Inc. and Lundbeck are among the drugmakers developing treatments to improve cognition for Alzheimer’s patients by targeting 5-HT6 receptors in the brain. About 18 million people worldwide have Alzheimer’s disease, and the population may almost double to 34 million by 2025, according to the World Health Organization.

Blocking 5-HT6 receptors results in increased concentrations of acetylcholine and glutamate, chemicals that aid learning and memory processes, according to Biotie.

“5-HT6 appears to be one of the hot targets in terms of symptomatic treatments for Alzheimer’s,” Veromaa said. “Cognition improvement agents will be part of treatment protocol for many, many years to come.”

Development Goals

Biotie rose 4.1 percent to close at 51 cents in Helsinki trading, giving the company a market value of 197.7 million euros ($262 million).

If Roche exercises its option, Biotie will receive an undisclosed payment and will be eligible to receive additional amounts if development and commercialization goals are met, Veromaa said. Biotie also is entitled to royalties on sales.

Roche in September regained rights to another Alzheimer’s treatment from Evotec AG, which will potentially receive $820 million if development and sales goals are met.

Evotec’s drug, EVT 302, is a disease-modifying therapy to slow the illness’s progression rather than treating symptoms. Future therapies for Alzheimer’s are likely to combine both types of treatments, Veromaa said.

Biotie is awaiting regulatory approval for nalmefene, a drug to reduce the urge to binge drink. Copenhagen-based Lundbeck submitted it for European Union approval in December. If the product is cleared, Biotie may receive as much as 84 million euros in payments from Lundbeck in addition to royalties on sales. Lundbeck will present detailed late-stage study results on March 5, Veromaa said.

Parkinson’s Drug

Biotie is also developing a treatment for Parkinson’s disease, SYN115, which it licensed to Brussels-based UCB SA. Biotie can receive as much as $370 million if goals for the product are met, Veromaa said. Data will be presented from a mid-stage study in the first half of next year, he said. UCB owns 8 percent of Biotie.

The U.S. Department of Defense is funding clinical trials for another drug, SYN117, to treat post-traumatic stress disorder in civilian and military populations. About 300,000 soldiers returning from Afghanistan and Iraq, or about one fifth of veterans from those conflicts, suffer from the disorder, according to the Rand Corp. Eight percent of the U.S. civilian population is also affected, Veromaa said.

Credit for Pipeline

Biotie’s stock is undervalued because investors aren’t taking those partnerships into account, said Otello Stampacchia, managing partner of Omega Funds, which invests in Biotie. “We like the caliber of their collaborations and their portfolio, which is diversified,” he said. “At the moment, the market is only looking at nalmefene. I don’t think people are looking at the pipeline at all.”

Given its relationships with Roche, Lundbeck and UCB, should any of the products in collaboration prove to be commercially successful, a takeover of Biotie “would definitely be a possibility several years out,” said Samir Devani, an analyst at Nomura Code Securities Ltd. in London who recommends buying the shares.

Biotie ended an agreement in October to acquire Newron Pharmaceuticals SpA after Merck KGaA said it would return full global rights for safinamide, a treatment for Parkinson’s disease, back to the Italian biotech company in April. Biotie is looking at other opportunities in neurological disorders, Veromaa said.

“We’ve tried to do our share in consolidating the industry into more fundable entities that can then develop into sustainable companies,” he said. “That’s why we have a rather broad pipeline with highly differentiated products.”

--Editors: Phil Serafino, Tom Lavell

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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