• Lundbeck acquires Paion's remaining rights to desmoteplase for EUR 20.1 million thereby further strengthening the control over desmoteplase

• Desmoteplase may address a significant unmet medical need and has the potential to help more people who suffer from an ischaemic stroke

• Desmoteplase is being studied for the treatment of patients with acute ischaemic stroke 3-9 hours after onset of symptoms.

• No pharmacological treatment is available today that allows patients to reach hospital and be diagnosed and treated within this extended time window

• More than half the patients in the phase III programme have been enrolled in two studies and the first study, DIAS-3, is expected to be completed in the first half 2013

• Submission of MAA and NDA are expected in first half 2014

H. Lundbeck A/S (Lundbeck) and Paion AG (together with its subsidiary Paion Deutschland GmbH., "Paion") today announced that the companies have entered into a definitive agreement under which Lundbeck acquires all of Paion's remaining rights to desmoteplase currently under clinical phase III development for ischaemic stroke. The deal is an all-cash transaction valuing the assets at EUR 20.1 million or approximately DKK 150 million. The Board of directors at Lundbeck and the management and Supervisory Board of Paion AG have unanimously approved the transaction. The acquisition is a logical next step in the development of desmoteplase.

Under the terms of the transaction, Lundbeck will make an initial upfront payment of EUR 18.6 million (or approximately DKK 140 million) immediately upon and shortly after closing of the transaction. The remainder of the purchase price will be held in escrow for one year. The transaction will be financed using currently available cash resources. The acquisition price of the assets will be booked as "Product rights" under intangible assets in Lundbeck's balance sheet. Additional details of the financial terms of the agreement have not been disclosed, but Lundbeck is to pay single-digit royalties on sales as well as certain insignificant milestones to Bayer Pharma AG.
Desmoteplase, the most fibrin-specific plasminogen activator known today, is a genetically engineered version of a clot-dissolving protein found in the saliva of the vampire bat Desmodus rotundus. It has received fast-track designation from the US Food and Drug Administration (FDA) for the indication of acute ischaemic stroke.
Lundbeck presented data at the International Stroke Conference (ISC) in San Antonio, Texas in February 2010, which showed very supportive data for desmoteplase. Post hoc analysis of data from the clinical phase III study, DIAS-2, showed that the subgroup of patients with visible arterial occlusion or high-grade stenosis on baseline angiographies had improved response for desmoteplase over placebo.

The data suggest that patients with a so-called Thrombolysis in Myocardial Infarction (TIMI) score of 0 or 1 revealed lower response rates in the placebo group (18%) and higher response rates in the desmoteplase groups (36% and 27% for desmoteplase 90 µg/kg and 125 µg/kg, respectively).

PAION (ad-hoc announcement)

In 2005, PAION granted Lundbeck exclusive worldwide rights outside the USA to develop and market Desmoteplase to treat acute ischemic stroke. In 2008, this deal was expanded to provide Lundbeck exclusive, global rights to develop and commercialise Desmoteplase. PAION retained an option to participate in commercialising Desmoteplase in German-speaking countries. In 2010, PAION expanded the agreement further and granted Lundbeck research rights and access to potential Desmoteplase follow-on compounds that were identified by PAION as well as patent maintenance rights. With today's agreement, all remaining project rights and the agreement with Bayer are transferred to Lundbeck. An amount of EUR 16.5 million is due at closing which is expected to occur later today; EUR 2.1 million of the remaining amount are due after further data and know-how transfer have been completed, which is expected a short period after the closing. EUR 1.5 million will be placed in escrow for 12 months and is payable thereafter.

In 2008, PAION decided, through the acquisition of CeNeS Pharmaceuticals, to expand in the field of anaesthesia and to de-risk its business by transferring additional rights to Lundbeck through the expanded Desmoteplase licence agreement. With the transaction announced today, PAION has made the strategic decision to continue this path and to completely abandon the high-risk area of stroke and its exposure to the success of Desmoteplase. PAION's focus is now on out-licensing Remimazolam and to position itself as a specialist player in the area of anaesthesia and critical care. The proceeds from the sale of Desmoteplase will be used accordingly.

Based on the results of the market research performed by PAION in 2011, PAION believes that its lead in-house compound, Remimazolam, is an excellent candidate to serve as a platform for PAION to add other commercialisation opportunities in anaesthesia. The near-term goal remains to conclude a partnering agreement for Remimazolam supporting its new strategy. Following the completion of the transaction announced today PAION will have approximately EUR 22.5 million in cash and cash equivalents. This transaction ensures sufficient funding of corporate activities into 2014. This does not include further revenues from existing and future licence agreements. PAION's partnering flexibility for Remimazolam is strengthened significantly by the improved cash position.
 

Sources: Lundbeck / PAION

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