BioWorld International Correspondent
One more big deal. That's all that separates Danish CNS drug developer NeuroSearch A/S from financial security, the company said when issuing interim results last week.
The Ballerup-based firm is eyeing a broadly based strategic alliance with a major pharmaceutical company, which it said would secure its future until 2007, when it expects to have its first products on the market.
"NeuroSearch has experienced a rapidly growing interest from several pharmaceutical companies for a wide range of our R&D programs and technologies. We now have an opportunity for concluding several program agreements with various pharma companies," company President and CEO J rgen Buus Lassen said on a conference call. However, he added, the company has opted to pursue a broadly based strategic agreement with one major player. "We are negotiating with some strong international potential alliance partners."
The company also issued new guidance, lowering its projected loss for the year from between DKK120 million and DKK140 million to approximately DKK50 million (US$7.7 million). It expects to have around DKK230 million (US$32.2 million) in cash at year's end, which represents little change from its opening position at the start of the year.
Several factors have contributed to the improved outlook. Based on current licensing negotiations, the company said it anticipates DKK100 million in revenues for the year, an improvement of DKK40 million from an earlier forecast. It also revised downward by DKK10 million projected losses from its portfolio of spin-out companies, and it has added DKK31.5 million to the book value of its 6.5 percent stake in Bavarian Nordic A/S, a Copenhagen-based vaccine specialist whose share price has doubled since January.
NeuroSearch plans to offload those shares once they have climbed to what it regards as an acceptable level. "We would like the upside and the value for NeuroSearch to be much better than it is now," company Chairman Asger Aamund said on the call. The stock is currently priced on a P/E ratio of 3, which, he said, is not a fair reflection of the company's prospects. "The NeuroSearch board will sit tight and watch for when the optimum time will come for selling the shares - and this is not now."
Investors cheered the news, pushing the company's share price up to DKK116.50 at Friday's close, up more than 15 percent from the week's opening position.
However, one analyst, who declined to be named, took a more skeptical view. "As I see it, the most interesting product in the company [NS2330] is already partnered with Boehringer Ingelheim." However, Henrik Simonsen, an analyst at Nordea Securities' Copenhagen office, had a more upbeat assessment. Its candidate treatment for attention deficit hyperactivity disorder, NS2359, is still not partnered. "That's one of the most interesting compounds I would think," he told BioWorld International.