Danish biopharmaceutical firm NeuroSearch A/S, of Ballerup, raised DKK128.6 million (US$14.9 million) in a private placing with institutional investors to fund in-house development of its candidate drug for Alzheimer¿s disease, NS2330.

The move follows the company¿s announcement earlier this month of positive news in a double-blind, placebo-controlled Phase II study involving 32 patients. Patients in the two highest dosage groups displayed significant improvements of major components of cognitive function, both at the end of the four-week study and at follow-up two weeks later.

Despite interest from potential partners, the company has decided to complete its Phase II development program on a solo basis, NeuroSearch President and CEO Jorgen Buus Lassen told BioWorld International. ¿We can save valuable time, and we can also get a better potential agreement,¿ he said.

In addition to conducting further Phase II trials for dose optimization and efficacy, the company also will undertake in vivo carcinogenic studies in animals since, if successful, NS2330 will be administered chronically.

The company aims to enter Phase III trials by the third quarter next year. ¿We expect that we will have an agreement before we initiate Phase III,¿ said Buus Lassen. Maintaining an active Phase II development program in the meantime will improve the company¿s negotiating position, he added.

NS2330 addresses a market currently dominated by acetylcholinesterase inhibitors, such as Tokyo-based Eisai Co. Ltd.¿s drug, Aricept, which have combined annual sales of US$840 million, according to NeuroSearch. ¿If we can prove we have a superior efficacy to Aricept [marketed and distributed by Pfizer Inc., of New York] we expect we can expand the market,¿ Buus Lassen said. ¿Our drug has a different mechanism of action,¿ he added.

Acetylcholinesterase inhibitors act by blocking the enzyme that breaks down the neurotransmitter acetylcholine, levels of which are reduced in Alzheimer¿s patients. Their administration is dose limited, however, because of side effects, Buus Lassen said. NS2330 acts on three neurotransmitters, blocking reuptake of noradrenaline and dopamine and increasing acetylcholine release via an indirect mechanism. Moreover, the company has not yet detected any side effects in patients.

Investors in Denmark, Sweden, Finland, Germany, Belgium and Switzerland supported the recent placing, which comprised 643,000 new shares priced at DKK200 per share. Danske Securities A/S, of Copenhagen, acted as global coordinator and bookrunner and Handelsbanken Investment Banking, a division of Svenska Handelsbanken AB, of Stockholm, acted as co-lead manager. The company now has 7,079,833 shares outstanding.

The share placing was two times oversubscribed, despite a difficult market for biotechnology stocks in Denmark. ¿It is certainly not very receptive, but most of the investors like this story,¿ Buus Lassen said.

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