- NeuroSearch exercises option to issue shares worth EUR 5 million to GlaxoSmithKline
- The share issue will consist of 345,238 new shares at a price of DKK 107.84 per share
- NeuroSearch will receive additional EUR 4 million in cash upon Phase I initiation

Copenhagen, Denmark | August 4, 2009 | NeuroSearch (NEUR) has successfully completed the preclinical development of NSD-721, a selective GABAA receptor modulator, and is now advancing this novel drug candidate into clinical studies for the treatment of social anxiety disorder under the alliance with GlaxoSmithKline (GSK). An Investigational New Drug (IND) application has been filed and approved, and NeuroSearch plans for the initiation of Phase I studies with NSD-721 within the near future.

Under the terms of the alliance agreement, upon the filing of an IND application for NSD-721 NeuroSearch has the option to issue new shares to GSK at market price with a value of EUR 5 million, equal to DKK 37 million, based on the EUR:DKK exchange rate of the Danish Central Bank as of 31 July 2009. Hence, NeuroSearch has decided to issue 345,238 new NeuroSearch shares to GSK to be subscribed at a price of DKK 107.84 per share, corresponding to proceeds of DKK 37,230,500 (EUR 5 million) to NeuroSearch.

Further, under the agreement NeuroSearch will receive EUR 4 million (DKK 30 million) as milestone payment upon the initiation of Phase I studies with NSD-721.

The alliance with GSK covers a number of drug candidates, including NSD-721. Under the terms of the alliance agreement, NeuroSearch has the option to issue new shares to GSK at market price for a total amount of up to EUR 20 million (DKK 149 million), to be exercised in four equal tranches upon the filing of IND applications for drug candidates developed under the agreement. Furthermore, NeuroSearch is entitled to milestone payments of up to EUR 109 million (DKK 812 million) plus royalties of net sales per product developed and marketed under the agreement.

Flemming Pedersen, CEO at NeuroSearch comments;
“We are very pleased to announce the advancement of the novel drug candidate NSD-721 into clinical development for the treatment of social anxiety disorder under our alliance with GSK. The related income and financing of EUR 9 million in total adds to our already strong financial capabilities and allows us to progress both NSD-721 and other valuable assets in our pipeline.“

The issue of new shares to GlaxoSmithKline (GSK)

The 345,238 new NeuroSearch shares to be issued to GSK will be subscribed at a price of DKK 107.84 per share of DKK 20 nominal value. The subscription price is calculated as the average closing price of NeuroSearch’s shares within a 30 days period prior to 3 August 2009.

The 345,238 new shares will be issued without pre-emption rights for NeuroSearch's current shareholders. The issue has been decided by NeuroSearch’s Board of Directors on the basis of Article 5 of NeuroSearch’s Articles of Association authorising the Board of Directors to increase the share capital of NeuroSearch. The new shares will rank pari passu with and have the same rights as the existing shares in NeuroSearch.

Registration, admission to trading and official listing of the new shares
The new shares will be registered with VP Securities Service (‘Værdipapircentralen’). The new shares will be admitted to trading and official listing on the Nasdaq OMX Copenhagen exchange under the ISIN code of NeuroSearch’s existing shares (ISIN code DK0010224666) once they have been registered with the Danish Commerce and Companies Agency ('Erhvervs- og Selskabsstyrelsen'). Admission to trading and official listing of the new shares will take place as soon as possible after the registration of the new shares with the Danish Commerce and Companies Agency.

NeuroSearch’s issuing agent is Nordea Bank Danmark A/S.

Expected timetable for the capital increase:

NeuroSearch maintains its financial guidance for 2009 of an expected loss before financials and other shares of results in the region of DKK 350 million.

SOURCE: Neuro Search

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