Beefing up its neurology pipeline, Vernalis plc agreed to buy Cita Neuropharmaceuticals Inc. in a potential $64.5 million deal that includes a Phase III candidate in Parkinson's disease.
This acquisition comes two weeks after the Winnersh, UK-based company paid $23 million for U.S. rights to Apokyn, a marketed drug for treating late-stage symptoms of Parkinson's, from Mylan Laboratories Inc., of Morgantown, W. Va., (See BioWorld Today, Nov. 7, 2005.)
"Over the last 18 months, we have been building a portfolio through [mergers and acquisitions] and licensing to strengthen our existing CNS portfolio," said Simon Sturge, Vernalis CEO.
In July, the company paid $21.9 million to acquire Cambridge, UK-based Ionix Pharmaceuticals Ltd., gaining three pain products in preclinical and early clinical development. Vernalis now has two marketed products and a pipeline of candidates ranging the development spectrum, Sturge said.
"We believe that we have the assets now to take the company through to being cash positive," he added, "which we would expect in 2008."
One of the "key rationales" for acquiring Cita was its Parkinson's product, CNP1512, set to begin Phase III studies next year. CNP1512 is an effervescent formulation combining levodopa methyl-ester and carbidopa aimed at reducing the periods of time patients suffer from the debilitating effects associated with Parkinson's.
Cita originally licensed the drug from the Italian company Chiesi Farmaceutici, which gained marketing registration for the product in Italy for Parkinson's patients experiencing motor fluctuations. Vernalis plans to start two 650-patient Phase III trials around the middle of 2006, and those are estimated to take about two years.
"So we would expect filing in 2008 and approval in 2009," Sturge said.
CNP1512 will add to the company's Parkinson's disease franchise that also includes a Phase II candidate, V2006, in development with Cambridge, Mass.-based Biogen Idec Inc. Vernalis holds co-promotion rights to V2006 in the U.S.
Under the terms, Vernalis will pay Cita $29.5 million in stock up front, which is expected to come from the $100 million worth of new shares Vernalis plans to issue following stockholder approval. The remaining $70 million in shares will comprise a placing and open offer to raise funds, Sturge said, adding that the company's market capitalization would increase to about £200 million (US$343 million).
Vernalis also agreed to pay up to $35 million to Cita in six deferred payments, Sturge told BioWorld Today. "There will be three for each of the two products, linked to clinical progress, filing and marketing authorization."
In addition to CNP1512, Cita's pipeline includes CNP3381, a neuropathic pain product set to enter Phase II studies early next year. That product is designed with a dual mechanism of action to work as an N-methyl-D-aspartate glycine (NMDA) antagonist and a monoamine oxidase (MAO)-A inhibitor to control pain in both the peripheral and central nervous systems. It has completed a series of preclinical studies and three Phase I trials, including one that demonstrated superiority to gabapentin, Sturge said.
Following the close of the acquisition, expected on Dec. 14, Cita will become a wholly owned subsidiary of Vernalis, which will retain Cita's Toronto-based facility and most of its small staff to manage clinical work for the two products.
Vernalis is moving forward with its internal development efforts, including an ongoing Phase III program for frovatriptan, a 5-HT 1B/1D receptor agonist approved for treating migraine. That trial is evaluating frovatriptan as a prophylactic in women suffering from menstrually related migraine caused by a drop in estrogen levels during menstruation. One trial has completed, demonstrating that 50 percent of women receiving frovatriptan were headache free, Sturge said. Following a safety study and a confirmatory efficacy study, he said Vernalis plans to file for approval, probably at the end of the first half of 2006.
The company has a 360-patient Phase II study for an nasal delivery opiate analgesic product in post-operative pain, with results expected in the first half of next year. Vernalis also is moving ahead with its stroke program evaluating a thrombolytic treatment aimed at dissolving clots up to nine hours following a stroke, an improvement over the existing tPA treatment that has to be administered within three hours. That product is in Phase II, with data expected next year, Sturge said. He added, "We should have quite a healthy flow of data coming in the near future."