Monday, February 20, 2012

Neuronex to be acquired by ACOR for up to $133M

CED Member and central nervous system therapies company Neuronex is set to be acquired by Acorda Therapeutics (NASDAQ:ACOR) in a deal valued up to $133M. Acorda acquires an epilepsy treatment nearly ready for filing with the U.S. Food and Drug Administration as a component of this deal.

 Neuronex is currently privately held, and will receive just $2 million up front. It is critical for the company, based in Morrisville, North Carolina, to hit important business development and sales milestones on the company's lead compound--a nasal spray version of the seizure medication diazepam.

New York based Acorda Therapeutics said in regulatory filings that Neuronex's nasal diazepam (referred to as DZNS) fits into the company's neurology drug portfolio. Acorda's top drug, Amphyra, generated $210.5 million in 2011 revenue.

Neuronex must still clear a few development and regulatory hurdles in order to get DZNS on the market.

Neuronex licensed DZNS from South Korean drug company SK BioPharmaceuticals. That license gave Neuronex worldwide rights to the compound except for some Asian countries. Under Neuronex’s agreement with SK, Neuronex must pay SK up to $8 million upon reaching development milestones, plus another $3 million in sales milestones. SK is also due royalties on sales. If Acorda completes its acquisition of Neuronex, Acorda assumes responsibility for all financial obligations to SK.

The agreement calls for Acorda to cover the estimated $1.2 million in R&D work leading up to the pre-NDA meeting. Acorda has contributed $500,000 of that amount so far. After the NDA meeting, Acorda can complete the Neuronex acquisition by paying Neuronex another $6.8 million. Both sides retain rights to terminate the deal. If that happens, Neuronex can keep any money paid prior to the closing as a break-up fee. Should Acorda close the deal, it takes over all responsibility for developing, financing and commercializing the diazepam nasal spray. Neuronex would then stand to collect up to $18 million in development milestones. The big money will come after the drug is commercialized. Neuronex could gain up to $105 million in sales milestones, plus royalties from sales.

Neuronex was founded in 2010 by the former management team of Addrenex Pharmaceuticals, led by CEO Moise Khayrallah.