BioWorld Today Correspondent

To say that Timo Veromaa, CEO of Biotie Therapies Oyj, was not best pleased with Merck Serono SA's surprise decision to exit a partnership with Newron Pharmaceuticals SpA on the Parkinson's drug safinamide would be an understatement. The timing of the announcement – smack in the middle of Biotie's proposed takeover of Newron – "is completely unorthodox," he told BioWorld Today. "To drop the ball right in the middle of [a pivotal Phase III program] is astonishing."

Shares in Milan, Italy-based Newron (ZURICH:NWRN) fell by almost 15 percent Friday to close at CHF3.92 (US$4.43). Shares in Turku, Finland-based Biotie (HELSINKI:BTH1V) closed at €0.46 (US$0.64), down 4 percent.

Safinamide is being developed as an adjunct to dopamine agonist therapy in early stage Parkinson's and as an adjunct to levodopa therapy in mid-to-late-stage Parkinson's. Phase III trials in each indication, which are, respectively, called Motion and Settle, are due to report data next April or May.

Merck Serono, a division of Darmstadt, Germany-based Merck KGaA, remains contractually committed to the program until next April. It is budgeting costs of around €40 million for the fourth quarter of this year.

"It's difficult to understand why they didn't wait for the MOTION or SETTLE data," Newron CEO Luca Benatti told BioWorld Today.

Merck Serono made the decision, it said, because it believes that "safinamide has a more limited market potential than originally anticipated." In 2006, it entered a development agreement with Newron worth up to $200 million in upfront and milestone payments.

Newron shareholders are due to vote on Biotie's stock-based offer on Oct. 31. The deal was initially valued at €37.4 million (US$50.7 million), with another €7.2 million available in milestones linked to the submission of regulatory filings for safinamide. (See BioWorld International, Sept. 28, 2011.)

Merck Serono's move has the potential to scupper the deal, which was expected to close by the year end. "This kind of event would enable us to walk away unharmed," Veromaa said, although he offered no indication that he planned to take that option. "It's still new – we are reflecting on this new turn."

The main problem for Biotie is that the program would need additional cash – for regulatory filings and for commercialization – far sooner than expected. Moreover, upwards of $180 million in milestones is now off the table. However, Merck Serono's exit opens up possibilities as well.

"It puts the economics in a completely new position. The upside will be much, much higher," Veromaa said.

Positive Phase III data could also flush out an alternative partner. "I would be rather confident that there would be another taker for a product that is going into registration for Parkinson's," Veromaa said.

But Biotie's immediate priority is to understand the cost implications of Merck Serono's unexpected – and unwelcome – move.

"It's poor corporate citizenship," Veromaa said.