Biotie Therapies Update: SYN120 Rights Retained

Biotie Therapies' (F8S.BE) retention of SYN120 rights after Roche (ROG.VX) decided not to opt-in to a development license means the company now has three unencumbered Phase IIready assets available for global licensing. A deal on any of these could extend Biotie’s current cash runway beyond early 2013, although the company may explore other options as additional funds will likely need to be raised this year. The next key catalyst with known timing is the European approval decision for alcohol dependence therapy Selincro, expected by year-end. Approval could mean a Q113 launch, which would trigger an undisclosed milestone payment from partner Lundbeck.


SYN120: Rights returned for strategic portfolio reasons
Various large pharma/CNS specialists are investigating 5-HT6 antagonists, which have potential in cognitive impairment; Lundbeck has recently achieved proof of concept in Alzheimer’s disease. SYN120 is safe/well tolerated, has a wide therapeutic window and confirmed dosing for Phase II. Biotie has been approached by interested parties, although deal timing is uncertain. Other Phase II-ready assets available for partnering include BTT-1023 (H2 start of clinical studies in fibrotic disorders) and ronomilast.

Licensed programmes: Selincro and tozadenant
Commercial success of the two partnered projects has potential to transform Biotie. The EMA approval decision for Selincro (alcohol dependence) by end-2012 should catalyse the share price; potential Q113 launch would trigger a Lundbeck milestone. The next news flow for UCB-partnered tozadenant is the read-out of the Phase IIb trial in Parkinson’s disease (which recently completed enrolment) around end-2012.

Financials: Cash into 2013 with potential for deals
Q1 cash of €25m represents funds into 2013 in the absence of additional receipts. Upfront payments on new licensing deals, milestones from existing partners (Lundbeck on Selincro EU launch, UCB on tozadenant Phase IIb data/Phase III start), and/or an equity raise in 2012 could address Biotie’s funding requirement.

Valuation: €243m rNPV, current EV of €115m
Our new rNPV of €243m (previously €250m) reflects BTT-1023’s re-positioning as a potential fibrotic disease therapy. This valuation only includes the lead indications of Biotie’s five core assets and compares with a €115m EV (excluding the Tekes financial liability, which is only repayable on profitability). Significant potential milestones from Lundbeck and UCB are not captured in this valuation, and thus represent upside.

To Read the Entire Report Please Click on the pdf File Below.