Biotie Therapies — Update 19 January 2016

Biotie Therapies — Update 19 January 2016

Biotie Therapies

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Biotie Therapies

Biotie strikes Acord(a) with PD franchise

Acorda cash offer

Pharma & biotech

19 January 2016

Price

€0.28*

Market cap

€302m

*opening price on 19 January, post-deal announcement

Gross cash (€m) at Q315

84

Shares in issue

1,089.6m

Free float

90%

Code

BTH1V (OMX)

BITI (NASDAQ)

Primary exchange

OMX, Helsinki

Secondary exchange

NASDAQ GM

Share price performance

Business description

Biotie Therapies is a Finnish/US biotech company focused on CNS disorders. Selincro for alcohol dependence is partnered with Lundbeck and launched in Europe. Parkinson's therapy tozadenant has entered Phase III; two other programmes are in Phase II studies.

Analysts

Christian Glennie

+44 (0)203 077 5727

Lala Gregorek

+44 (0)203 681 2527

Biotie Therapies is a research client of Edison Investment Research Limited

Acorda Therapeutics has made an all-cash offer for Biotie at €0.2946 per share, a 95% premium to the previous close price, valuing the company at €321m (ex. options). Our last published valuation was €0.28/share. The timing of the deal is relevant in the context that the primary Phase III study for tozadenant in Parkinson’s disease (PD) patients is in early stages of recruitment and preliminary data are not expected until end 2017. Biotie’s board has recommended the offer and shareholders representing 59% of the outstanding shares have undertaken to accept Acorda’s proposal.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/14

14.9

(7.6)

(0.02)

0.0

N/A

N/A

12/15e

3.8

(32.3)

(0.05)

0.0

N/A

N/A

12/16e

N/A

N/A

N/A

N/A

N/A

N/A

Note: *PBT and EPS are normalised; financial forecasts (FY16 onwards) are withdrawn.

Following highly positive results from a pivotal 240-patient Phase IIb with tozadenant, an orally potent and selective adenosine A2a receptor antagonist, Biotie initiated a 450-patient Phase III study (TOZ-PD) in July 2015 in mild- to moderate-PD patients experiencing motor fluctuations on levodopa. With estimated cash of €74m at end 2015, Biotie had sufficient funds to complete the TOZ-PD to data read-out by end 2017/early 2018, but not to fund the requisite second Phase III safety study, to be initiated post TOZ-PD read-out, to generate the 1,500 unique patient exposures required to gain FDA approval.

CNS-focused Acorda is a logical acquirer, having also purchased Civitas Therapeutics in 2014 for its Phase III PD asset CVT-301 (inhaled L-dopa formulation). Biotie is also developing SYN-120 (oral 5-HT6/5-HT2a dual receptor antagonist for Parkinson's-related dementia in Phase II), BTT1023 (anti-VAP-1 antibody for primary sclerosing cholangitis in Phase II), and receives royalties from Lundbeck on EU sales of Selincro (alcohol dependence).

Our previously published rNPV of Biotie’s key assets – tozadenant, Selincro and SYN-120 (excludes BTT1023) – plus €74m gross cash was €0.28/share. We note the 95% premium and that Biotie’s stock has largely been range bound at €0.15-0.25 over the last 18 months. The deal is expected to close in March 2016.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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