Biotie Therapies’ Options Expand On Nalmefene And Tozadenant Progress

Finland's only publicly listed biotech, Biotie Therapies, is reviewing its licensing and M&A options in niche CNS areas as product milestone payments and equity investments expand its cash runway.

The past six months have seen something of a turnaround in the fortunes of the Finland-based biotech Biotie Therapies Corp.

"We are now a company in transition, with cash, options and good news on our product pipeline, and we have to leverage our position wisely," said company Chief Executive Timo Veromaa.

Strategic business options now being considered include pursuing further licensing opportunities in the small-molecule CNS area and possible acquisitions – Biotie acquired Synosia Therapeutics Inc. in Jan. 2011, so has past experience in this field (Also see "Biotie To Combine With Synosia To Form A "Global Leader" In CNS Drug Development" - Pink Sheet, 11 Jan, 2011.). Biotie might also look at moving its products further along the path to market, rather than licensing them to pharma companies for Phase III, Veromaa said in an interview with “The Pink Sheet”.

EU Positive On Lead Product

The major piece of good news sparking the change in outlook at Biotie was the positive EU opinion on Dec. 14, 2012 on its lead product, the alcohol dependence therapy nalmefene, which will be marketed by development partner Lundbeck Inc. as Selincro (Also see "EU's CHMP Clears Selincro And Perjeta, Rejects Kynamro And Fanaptum" - Pink Sheet, 14 Dec, 2012.).

Biotie expects Selincro to be given final approval by the European Commission in the next several months, and it should be made available on several European markets by the summer of 2013. "I've been associated with nalmefene for almost 10 years, so it is gratifying that we are now getting this product to the market," Veromaa said.

Lundbeck has been doing preparatory work with payers and pricing authorities for the past two years, and expects to invest heavily in marketing, Veromaa noted. Selincro is a new treatment concept, and although peak sales could reach €320 million ($425 million), this peak will be reached slowly, he added.

New Parkinson's Therapy

The second recent piece of good news for Biotie was the positive top-line Phase IIb data received at the start of December 2012 on its second project, the adenosine 2a antagonist, tozadenant, in patients with Parkinson's disease.

In a Phase IIb study conducted in 420 patients with Parkinson's in six countries, tozadenant met all primary endpoints and multiple secondary endpoints, and the most likely dose for a Phase III trial was also identified, Veromaa reported. The results have been submitted for presentation at the American Academy of Neurology meeting in San Diego at the end of March.

The Belgian pharmaceutical company UCB SA is now considering whether to exercise its 2010 option to take over development of the product and to start Phase III trials (see deal). If it does, Biotie will receive a significant milestone payment, which will add to the €41 million ($55 million) cash pile it had at the end of the third quarter last year. UCB will also take on all future development costs for tozadenant.

Adenosine 2a antagonism could be the first new mechanism of action for Parkinson's disease therapies to be developed in 20 years, and tozadenant has the potential to be one of the first with good efficacy and tolerance to reach the market, Veromaa said.

A third project, the dopamine beta-hydroxylase inhibitor nepicastat, is expected to enter a Phase II trial this quarter in patients seeking treatment for cocaine addiction, funded by the U.S. National Institute of Drug Abuse. However, top-line results from a Phase II study of nepicastat in patients with post-traumatic stress disorder suggested it was ineffective in such patients, and the company is reviewing its next steps in that indication.

A fourth product, a serotonin 5HT6 antagonist, SYN120, is ready for a Phase II trial in dementia.

The candidate medicine could have beneficial effects on cognition in Alzheimer's patients and others with CNS disorders, and is not expected to be associated with the cardiovascular adverse effects of earlier generations of 5HT6 antagonists. This is one project that Biotie could take further along in development, and perhaps all the way to the market, Veromaa said. A decision on this will be made in the coming months.

Cash Worries Negated

The seemingly good current prospects for Biotie are a marked change from its position six months ago, when the company, which is listed on the Nasdaq OMX Helsinki stock exchange, was worrying about its short cash runway.

It was only in September 2012 when Lundbeck took a €10 million equity investment in the company, at a 25% premium, in return for a lower royalty rate in Japan and other Asian markets for nalmefene, that Biotie’s fortunes started to change .

Lundbeck's investment then prompted several financial institutions to invest a total of €20 million in Biotie, which included the investor Invesco Private Capital, which upped its stake to 17% of the company, Veromaa noted.

"Some years ago, we had the feeling that we might have been better off as a private company. But in this day and age, with the financial crisis, I don't think we would have been able to finance the company to the same extent if we weren't a publicly listed company," commented Veromaa.

Biotie is the only listed biotech company in Finland. Perhaps as a consequence, it has an avid following in the country, with more than 11,000 retail shareholders, which have provided reasonable liquidity.

And with Invesco as the largest shareholder, and UCB, with a 9% to 10% stake, it hasn’t suffered from a lack of visibility, and Veromaa is not particularly keen on joining other exchanges: "We could add London but it wouldn't add new shareholders, and jumping into a U.S. listing is not something we currently want to do."