SOURCE: Biotie Therapies Oyj
January 10, 2011 20:35 ET
Biotie and Synosia to Combine to Create a Leading CNS Development Company, Conference Call Tuesday, 11 January, 3:00 p.m. Central European Time
TURKU, FINLAND--(Marketwire - January 10, 2011) -
BIOTIE THERAPIES CORP. STOCK EXCHANGE RELEASE 11 January 2011 at 00.55
a.m. (Helsinki time)
Biotie and Synosia to Combine to Create a Leading CNS Development Company,
Conference Call Tuesday, 11 January, 3:00 p.m. Central European Time
Biotie Therapies Corp. ("Biotie" or "Company") (NASDAQ: BTH1V) and Synosia
Therapeutics Holding AG ("Synosia") jointly announce today the signing of a
combination agreement through which Biotie will issue 161,448,371 shares to
the shareholders and warrant holders of privately-owned Synosia in an
acquisition of the entire issued share capital and outstanding warrants of
Synosia (the "Transaction").
The combined entity includes a promising pipeline of nine clinical-stage
drug candidates; a significant international presence with operations in
Finland, The United States and Switzerland, and an experienced management
team and Board of Directors.
The Transaction remains subject to approval by the extraordinary general
meeting ("EGM") of shareholders of Biotie to be held on 1 February 2011.
The combined clinical development pipeline includes nalmefene, Biotie's
Phase 3 product candidate for the treatment of alcohol dependence, which
recently reported positive results from the first two Phase 3 trials
conducted by its partner Lundbeck and is on track for submission for
approval in Europe in the second half of 2011. Synosia brings a broad
pipeline of innovative central nervous system (CNS) product candidates and
a recently announced partnership with UCB Pharma SA ("UCB") that included a
$20 million equity investment and has potential for $725 million in
milestone payments plus royalties. This collaboration covers SYN-115, a
novel adenosine A2a receptor antagonist for Parkinson's disease in Phase 2
and SYN-118, a potential first-in-class hydroxyphenyl-pyruvate dioxygenase
(HPPD) inhibitor intended for movement disorders also in Phase 2.
Timo Veromaa, President and Chief Executive Officer (CEO) of Biotie
commented: "We are very excited to announce this compelling business
combination, bringing together an outstanding pipeline and complementary
drug development expertise. Through this transaction we establish Biotie as
a global leader in CNS drug development."
Ian Massey, President and CEO of Synosia stated: "We are enthusiastic to
join forces with Biotie and confident that the combined entity has the
right capabilities and infrastructure to maximize the value for
shareholders and deliver innovative products to patients."
About the New Organization
Under the combination agreement, Timo Veromaa, will continue as President
and CEO of Biotie. Synosia's CEO, Ian Massey, will become Chief Operating
Officer and President, US Operations, a newly created position.
Synosia's Chief Medical Officer (CMO), Stephen Bandak, will become Biotie's
CMO. Chris Piggott, Biotie's Chief Business Officer will continue in this
role in the combined entity.
Biotie's Chief Financial Officer (CFO), Thomas Taapken, will continue in
his role through the closing of the transaction and until 1 April 2011,
when he will leave the Company for personal reasons. Ulla Sjöblom, Biotie's
Vice President, Finance, will serve as acting CFO from 1 April 2011 until a
new CFO is appointed.
It will be proposed at Biotie's EGM in February that Biotie's Board of
Directors is augmented by the addition of the following Synosia board
members: Brad Bolzon, Ismail Kola, Guido Magni and Andy Schwab.
In addition, Bill Burns, until recently CEO of Roche Pharmaceuticals, will
be proposed to join Biotie's board. Bill led the global pharmaceuticals
division for eight years through some of its most significant milestones,
including the short-form merger acquisition of Genentech.
All these individuals have given their consent to stand for election at the
It is intended that Peter Fellner will continue as Chairman of Biotie's
Board of Directors and that Brad Bolzon will serve as Deputy Chairman.
Pauli Marttila and Riku Rautsola have decided to step down from the Biotie
board at the EGM.
Biotie's Chairman, Peter Fellner stated: "We all thank Pauli Marttila and
Riku Rautsola for their valuable contribution to the company during their
many years of service and wish them well."
Brad Bolzon, Chairman of Synosia's Board of Directors, paid tribute to
those who had supported Synosia through its rapid growth: "We have
benefitted from an outstanding board of seasoned investors in life sciences
and an experienced management team, who together established a new paradigm
of efficient drug development in CNS. We look forward to being part of this
exciting new entity."
The Boards of Directors of both Biotie and Synosia unanimously support the
proposed combination of companies.
The EGM is to be convened for 1 February 2011 to resolve on the issuance of
new shares in Biotie in connection with the Transaction and to take certain
other decisions required for the completion of the Transaction. Biotie will
publish an invitation to the EGM separately which will contain full details
of the proposed resolutions. Existing Biotie's shareholders, representing
more than thirty (30) per cent of the Company's total number of votes, have
agreed to vote in the EGM in favor of the Transaction.
Biotie reported revenues of EUR 1.5 million for the first three quarters of
2010. Liquid assets were EUR 8.9 million, as at 30 September 2010. Biotie's
research and development costs from continuing operations for the same
period amounted to EUR 4.4 million.
Synosia reported revenues of EUR 1.1 million and liquid assets of EUR 34.6
million for the same period, and had research and developments costs of EUR
On a pro forma basis, the combined entity would have had revenues of EUR
2.6 million from continuing operations in accordance with IFRS in the first
three quarters of 2010. On a combined basis, liquid assets without pro
forma or IFRS adjustments would have been EUR 43.5 million as at the end of
Certain debt repayments will be made by Synosia prior to the completion of
the transaction, which will reduce liquid assets on a combined basis by
approximately EUR 8.8 million after the completion of the transaction.
Research and development costs incurred for the continued operations on a
combined basis for the first three quarters of 2010 would have been EUR
12.5 million without pro forma or IFRS adjustments. Biotie earnings per
share will be affected by the transaction as the revenues and results of
Synosia and Biotie are combined to consolidated financial statements, and
on the other hand as Biotie will issue new shares to the shareholders of
The unaudited pro forma financial information on Biotie for the nine months
ending on 30 September 2010 and the full year 2009 will be available in the
listing prospectus intended to be published by Biotie on or about 1
About the Combined Pipeline
The combined product pipeline represents a strong and balanced portfolio of
novel drugs for diseases with high unmet medical need. Key features are
_ Nalmefene: Novel, oral opioid receptor antagonist in Phase 3 clinical
trials with partner Lundbeck. As-needed dosing offered by nalmefene could
dramatically alter the way alcohol dependence is treated. Recent results
from the first two of a total of three Phase 3 trials reported positive
results in helping patients reduce alcohol consumption. A final Phase 3
trial (ESENSE2) is expected to complete Q2 2011.
_ SYN-115: Potent and selective inhibitor of the adenosine A2a receptor
with class-leading profile for the treatment of Parkinson's disease.
SYN-115 is the first potential new mechanism in 20 years in Parkinson's
with the potential to impact motor and non-motor symptoms and be disease
modifying. Phase 2a completed successfully and Phase 2b trial planned to
start H1 2011. This program is partnered with UCB.
_ SYN-118 (nitisinone): Already approved and marketed product for an orphan
disease indication (Orfadin®) by Swedish Orphan Biovitrum. The combined
entity will have rights outside orphan disease indications and plans to
leverage this product as a new treatment for Parkinson's disease that could
be complementary to
SYN-115. A placebo-controlled Phase 2a study in Parkinson's disease is
ongoing with data expected H1 2011. UCB has an option to license this
_ SYN-120: Orally available inhibitor of 5-HT6 receptors in the CNS with
potential to be a best-in-class treatment for cognitive disorders, such as
Alzheimer's disease. This product has completed single and multiple
ascending dose Phase 1 studies and is currently in studies to establish
therapeutic dose due to report in H2 2011. Roche has an opt-in right after
completion of the ongoing studies.
_ SYN-114: Orally bioavailable potent and selective antagonist of the 5-HT6
receptor. SYN-114 has completed Phase 1 single and multiple ascending dose
studies and is a back-up compound to SYN-120.
_ SYN-117 (nepicastat): Orally available inhibitor of dopamine metabolism
(dopamine betahydroxylase) in Phase 2 trials for post-traumatic stress
disorder which are funded by the US Department of Defense.
_ SYN-111 (rufinamide): Sodium channel blocker marketed by Eisai as an
adjunctive therapy for Lennox Gastaut Syndrome. The combined entity will
seek opportunities to evaluate this compound for the treatment of bipolar
_ VAP-1 antibody: First-in-class monoclonal antibody targeting vascular
adhesion protein-1 (VAP-1). The product is well tolerated and has shown
encouraging activity in Phase 1b trials for rheumatoid arthritis.
Preparations for Phase 2 development are ongoing. In parallel, Biotie is
considering potential partnerships for this product.
_ Ronomilast: A Phase 2 ready, potentially best-in-class
phosphodiesterase-4 (PDE4) inhibitor for chronic obstructive pulmonary
disease (COPD). Biotie is considering potential partnerships for this
About the Transaction
New Shares to be issued and transaction to be approved by the EGM
In consideration of Biotie acquiring the entire issued share capital and
outstanding warrants of Synosia, Biotie will issue 161,448,371 new shares
to Synosia shareholders and warrant holders (the "Consideration Shares").
Based on Biotie's closing share price on 10 January 2011 of EUR 0.58, the
Transaction is valued at EUR 93.6 million. In addition, 14,912,155 shares
will be issued to Synosia to be held in treasury and used to satisfy future
potential exercise of Synosia's options (the "Additional Treasury Shares"
and together with the Consideration Shares, the "New Shares").
Subsequent to the subscription and registration of the New Shares, the
aggregate number of Biotie shares in issue will be 352,364,457. The
following table outlines the pre- and post-transaction capitalization
Biotie Pre-transaction Capitalization
Biotie's shares and votes outstanding 161,256,847
Biotie's treasury shares 14,747,084
Biotie's total shares in issue 176,003,931
New Shares to be Issued
Consideration Shares to be issued to Synosia shareholders and
warrant holders 161,448,371
Additional Treasury Shares to be issued to Synosia in
connection with option scheme 14,912,155
Total New Shares 176,360,526
Post-transaction Capitalization (prior to conveyance of shares
to Synosia option holders)
Total shares and votes post-Transaction (excluding treasury
shares held by Biotie's group companies) 322,705,218
Total shares post-Transaction 352,364,457
The Transaction is subject to the necessary resolutions passed by Biotie
shareholders at the EGM to be held on 1 February 2011, and certain
additional conditions described below. The Transaction will be completed as
soon as the EGM has passed the resolutions necessary for the completion of
the Transaction, provided that also the other prerequisites for the
completion are fulfilled. Once registered with the Finnish Trade Register,
the New Shares will rank pari passu in every respect with the existing
shares in Biotie.
Subsequent to the completion of the Transaction, Biotie will apply to list
the New Shares on NASDAQ OMX Helsinki Oy. Trading of the New Shares is
expected to commence after their registration with the Finnish Trade
Register. Biotie will publish a prospectus in relation to the listing of
the New Shares on or about 1 February 2011. The prospectus will be
available in the Finnish language on Biotie's web site, on or about 1
February 2011 and at the offices of Biotie, in Turku, Finland.
Execution of Combination Agreement
Biotie, Synosia and Synosia's shareholders and warrant holders have today
entered into a Combination Agreement, which sets out the terms and
conditions of the Transaction. The Combination Agreement includes
conditions to the completion of the Transaction. Such conditions include
(i) the availability of necessary authorisations, (ii) the approval by the
Finnish Financial Supervisory Authority of the prospectus in relation to
the listing of the issued shares, (iii) the absence of breach of agreement
or material adverse effect on the respective assets, businesses, financial
condition or results of operation of Biotie and/or Synosia, (iv) Synosia's
option plan having been amended to reflect the transfer of Biotie's shares
instead of Synosia shares to option holders upon exercise of the option
rights, and (v) certain other conditions. The Combination Agreement also
contains stipulations governing the conduct of Biotie and Synosia prior to
the completion of the Transaction, the cooperation of the parties for the
purposes of preparing necessary filings and documents to complete the
Transaction and the possible termination of the Combination Agreement for
example on the basis of material adverse effect in the respective
businesses of Biotie or Synosia.
In the Combination Agreement, it is agreed that the shares issued to
Synosia shareholders and warrant holders may not be transferred during a
period of twelve (12) months from the completion of the Transaction without
the prior written consent of the Board of Directors of Biotie, however
provided that the above transfer restrictions do not apply in relation to
certain situations such as offers made for Biotie shares that would result
in the offer or obtaining control of Biotie, or disposals required by any
law, competent authority or court order.
Expected Timetable of Certain Events
10 January 2011 Combination Agreement signed
10 January 2011 Invitation to the EGM of Biotie
1 February 2011 EGM of Biotie
(approx.) 1 February 2011 New Shares subscribed
(approx.) 1 February 2011 Listing Prospectus will be available
(approx.) 2 February 2011 New Shares registered with the Finnish Trade
(approx.) 3 February 2011 Admission to trading of the New Shares
Nomura Code Securities Ltd. have acted as financial advisers to Biotie,
while Hannes Snellman Attorneys Ltd., Vischer Ltd and Morrison & Foerster
LLP have acted as the company's legal advisers.
Wedbush PacGrow Life Sciences have acted as financial advisers to Synosia,
while Bird & Bird Attorneys Ltd. and Blum & Grob Attorneys at Law Ltd have
provided legal advice to Synosia in connection with the transaction.
Biotie is a specialised drug development company focused on central nervous
system and inflammatory diseases. It has several innovative small molecule
and biological drug candidates at different stages of clinical development.
Biotie's products address diseases with high unmet medical need and
significant market potential, including addiction and broad range of
inflammatory conditions such as rheumatoid arthritis or chronic obstructive
pulmonary disease (COPD). The most advanced product nalmefene for alcohol
dependence is currently in Phase 3 clinical development by licensing
partner H. Lundbeck A/S. Biotie is based in Turku, Finland and its shares
are listed on NASDAQ OMX Helsinki Ltd.
For more information, please refer to www.biotie.com
Please see Appendix 1 below for more information on Synosia.
In Turku, 10 January 2011
Biotie Therapies Corp.
Board of Directors
For further information, please contact:
Virve Nurmi, Investor Relations Manager
tel. +358 2 274 8911, e-mail: email@example.com
NASDAQ OMX Helsinki Ltd
An analyst and media conference call will take place on Tuesday, January
11, 2011 at 3.00 p.m. Central European Time. The conference call will be
held in English.
Callers may access the conference directly at the following telephone
numbers: US: +1 212 444 0481, UK: +44 (0)20 7138 0824 and Finland: +358
(0)9 2319 4345 access code 8664658. Lines are to be reserved ten minutes
before the start of conference call. The event can also be viewed as a live
webcast at www.biotie.com. An on demand version of the conference will be
published on Biotie's website later during the day.
In case you need additional information or assistance, please contact:
Virve Nurmi, IR Manager Biotie Therapies, Tel +358 2 2748 911, email
Appendix 1 - Information on Synosia
Synosia Therapeutics Holding AG is a biopharmaceutical company focused on
developing and commercialising innovative and clinically-differentiated
products for neurodegenerative and psychiatric disorders. Synosia was
founded around a portfolio of clinically enabled compounds licensed from
Roche, Novartis, and Syngenta. Over the last four years, Synosia has
conducted 10 clinical studies on five compounds and, based on the data
obtained, has prioritised the portfolio of compounds to progress into more
advanced stages of development.
Synosia is now focusing primarily on the development of SYN-115 and SYN-118
for Parkinson's disease, and SYN-120 for the treatment of cognitive
disorders associated with Alzheimer's and schizophrenia.
Synosia Therapeutics Holding AG licensed SYN-115 from Roche and SYN-118
from Syngenta and maintains development and commercialisation rights to
SYN-120 was licensed from Roche and Roche retains an opt-in right on this
On 12 October 2010, Synosia Therapeutics Holding AG announced a strategic
partnership with UCB where Synosia has granted UCB a license for exclusive,
worldwide rights to SYN-115 and an option to rights to, SYN-118, for
non-orphan indications. Under the agreement, UCB made an equity investment
totalling $ 20 million in Synosia Therapeutics Holding AG, and agreed to
pay up to $ 725 million in potential regulatory and commercial milestone
Synosia Therapeutics Holding AG is domiciled in Basel, Switzerland. All
significant operations of Synosia Therapeutics Holding AG are conducted by
its wholly owned subsidiaries, Synosia Therapeutics, Inc. based in the
United States and Synosia Therapeutics AG based in Switzerland. The
commercial registry code of Synosia Therapeutics Holding AG is
CH-270.3.013.998-7 and the accounting period is a calendar year.
The management of Synosia Therapeutics Holding AG consists of the following
Name Year of birth Position Joined company
Ian Massey, D.Phil. 1950 President and CEO 2006
MB BS MRCP 1950 CMO 2007
On 30 September 2010, Synosia Therapeutics Holding AG and its subsidiaries
had 17 employees.
Prior to the transaction, the largest shareholders of Synosia Therapeutics
Holding AG by means of basic equity holdings are:
Funds owned or managed by Versant Ventures 21.3%
Funds owned or managed by UCB 19.6%
Funds owned or managed by Novo A/S 16.3%
Funds owned or managed by Abingworth Management 10.4%
Funds owned or managed by 5AM Ventures 10.4%
Funds owned or managed by Investor Growth Capital 9.5%
Funds owned or managed by Aravis 6.0%
In connection with the transaction, the distribution of the new shares to
be issued to Synosia's shareholders and warrant holders is based on their
relative holdings in Synosia Therapeutics Holding AG. In such a
distribution, the following groups may receive a quantity of shares in
Biotie that corresponds to more than 5% of the total number of shares and
votes in Biotie after the transaction:
Funds owned or managed by Versant Ventures
Funds owned or managed by UCB
Funds owned or managed by Novo A/S
Funds owned or managed by Abingworth Management
Funds owned or managed by 5AM Ventures
The aforementioned estimate is based on the market value of Biotie's shares
at the time of signing of the Combination Agreement.
Certain financial information regarding Synosia
The following table presents selected financial information on Synosia as
at and for the nine months ended on 30 September 2010, as at and for the
six months ended on 30 June 2010 and 2009 and as at and for the financial
years ended on 31 December 2009, 2008 and 2007. This information has been
derived from Synosia's unaudited interim financial reports and audited
financial statements for the corresponding financial periods.
Synosia's unaudited interim financial statements as at and for the nine
months ended on 30 September 2010 and as at and for the six months ended 30
June 2010 (with comparative information for the six month period in 2009)
and Synosia's audited financial statements as at and for the years ended 31
December 2009 and 2008 (with comparative information for 2007), have been
prepared in accordance with accounting principles generally accepted in the
United States of America (US GAAP).
The figures presented in this stock exchange release, including the
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum of the numbers in a column or
row may not conform exactly to the total figure given for that column or
row. In addition, certain percentages presented in this stock exchange
release reflect calculations based upon the underlying figures prior to
rounding and, accordingly, may not conform exactly to the percentages that
would be derived if the relevant calculations were based upon the rounded
The exchange rates used to translate CHF to euros are as follows: average
rate for 1 January to 30 September 2010 of 1.400217 for income statement
data and closing rate at 30 September 2010 of 1.3287 for the balance sheet
Income Statement Data
1 January - 1 January - 1 January -
30 30 30 June
September September 2010 2009
(unaudited) (unaudited) (unaudited) (unaudited)
(EUR in (CHF in
Partnering revenue 1,139 1,595 - -
Grant revenue 67 94 - -
Total revenues 1,206 1,689 - -
development 8,073 11,304 6,174 7,031
administrative 2,381 3,334 1,965 2,559
expenses 10,454 14,638 8,139 9,590
Operating loss (9,248) (12,949) (8,139) (9,590)
Interest income 21 29 25 83
Interest expense (915) (1,282) (904) (995)
Other income/(expense) (2,249) (3,149) 431 375
Net Loss (12,392) (17,351) (8,587) (10,127)
Less: Net loss
attributable to the
interest - - - 101
Net loss attributable
AG (12,392) (17,351) (8,587) (10,026)
1 January - 31 December
2009 2008 2007
(audited) (audited) (audited)
Partnering revenue - - -
Grant revenue - - -
Total revenues - - -
development 12,771 13,882 7,464
administrative 3,674 7,308 4,639
expenses 16,445 21,189 12,103
Operating loss (16,445) (21,189) (12,103)
Interest income 131 439 978
Interest expense (1,912) (1,342) (43)
Other income/(expense) (106) (997) 14
Net Loss (18,332) (23,090) (11,154)
Less: Net loss
attributable to the
interest 200 245 313
Net loss attributable
AG (18,132) (22,845) (10,841)
Balance Sheet Data
September September 30 June
2010 2010 2010 2009
(unaudited) (unaudited) (unaudited) (unaudited)
EUR in (CHF in
Current assets 38,773 51,518 20,624 39,786
Non-current assets 88 117 160 256
Total Assets 38,861 51,635 20,784 40,042
Current liabilities 11,791 15,667 8,961 4,735
Non-current liabilities 6,228 8,275 7,974 14,583
Total liabilities 18,019 23,942 16,935 19,318
Total Synosia Therapeutics
Holding AG shareholders'
equity 20,842 27,693 3,849 20,792
Non-controlling interest - - - (68)
Total shareholders' equity 20,842 27,693 3,849 20,724
and shareholders' equity 38,861 51,635 20,784 40,042
2009 2008 2007
(audited) (audited) (audited)
Current assets 28,998 34,116 24,511
Non-current assets 197 300 137
Total Assets 29,195 34,415 24,648
Current liabilities 6,080 3,353 1,795
Non-current liabilities 10,712 16,171 563
Total liabilities 16,792 19,524 2,358
Total Synosia Therapeutics
Holding AG shareholders'
equity 12,538 14,891 22,290
Non-controlling interest (135) - -
Total shareholders' equity 12,403 14,891 22,290
and shareholders' equity 29,195 34,415 24,648