BioWorld International Correspondent

Shares in Newron Pharmaceuticals SpA opened on the Swiss Stock Exchange in Zurich at CHF58 (US$48.20) Tuesday, more than 5 percent above its initial public offering price of CHF55 per share.

The issue of about 2.1 million shares, which was two times over subscribed, yielded gross proceeds of CHF118.12 million, putting it on a par with the IPO completed in April by Manchester, UK-based Renovo Group plc, which up to now had been Europe's largest biotechnology IPO of the year.

The latter company took in £50 million (US$87 million at the time) and a further £7.5 million following the exercise of an overallotment option. Bresso, Italy-based Newron has set aside 322,141 shares to cover overallotments, which, if exercised, would bring in another CHF17.7 million. At present, about 36.9 percent of its equity is in public hands. That would rise to about 40.2 percent if the greenshoe option is taken up.

Newron had raised more than €62 million (US$82 million) in venture capital funding since its establishment in late 1998 via a management buyout of the CNS research center of Pharmacia & Upjohn (now New York-based Pfizer Inc.).

It had around €10 on its balance sheet immediately prior to the IPO. The company, which has 38 employees, will use the cash to fund development of ralfinamide, an ion channel modulator undergoing a Phase II trial in neuropathic pain.

It also plans to start building a sales force in advance of the introduction of its lead product, safinamide, which already has delivered positive Phase III data in Parkinson's disease. It is bringing several new molecules into clinical development next year, and it also is on the lookout for new in-licensing opportunities.

Geneva-based Serono SA recently took on all development costs for safinamide compound, in a deal worth up to $200 million in up-front and milestone payments. Newron has retained an option to co-promote the product in Italy. (See BioWorld International, Oct. 18, 2006.)

The two countries, which have a combined population of almost 100 million people, constitute between 8 percent and 10 percent of the global Parkinson's disease market, Newron CEO Luca Benatti told BioWorld International. "So it's a pretty large market for PD."

Serono and Newron aim to file for safinamide in 2009. Newron plans to start building a sales organization of between 50 and 70 people in late 2008 or early 2009. "This is a very preliminary estimate," Benatti said.

The company does not aim to complete any new in-licensing deals until late 2008, Benatti said. First it aims to move more molecules from its in-house ion channel screening program into the clinic. Several leads currently are undergoing evaluation as potential therapies for CNS indications, such as epilepsy, manic depression and pain. The company aims to select a first development candidate next year.

Lehman Brothers Inc. and Morgan Stanley & Co. were joint global coordinators on the IPO, and the investment syndicate also included Bank Vontobel AG and Sal Oppenheim & Cie.

Newron's shares fell back and closed at CHF53.10 Tuesday.

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