Newron's positive performance undermined by safinamide doubt
This article was originally published in Scrip
Newron Pharmaceuticals posted better than expected revenues of €3.9 million in its 2008 results.
The Italian company beat Piper Jaffray analysts' expectations by €600,000 after it received €2.6 million in deferred licensing income from Merck Serono's up-front payment for the company's deal concerning the Parkinson's disease drug candidate safinamide. Newron also received €1.3 million in R&D tax credits from the Italian and UK governments.
Safinamide recently met its primary endpoint in a Phase III trial by increasing daily "on" time in mid- to late-stage Parkinson's disease patients with motor fluctuations by 1.3 hours. However, Piper Jaffray views this clinical benefit as relatively modest in the context of existing therapies.
The analysts were more optimistic about Newron's other Phase III candidate ralfinamide (NW-129), which is currently in a Phase IIb/III study in 400 patients with neuropathic lower back pain. They believe that a licensing deal for the drug can be secured within the next 12 months.
The analysts concluded that for them to become more positive on Newron, it needs to produce further safinamide data that either give the drug an edge or show that patients had fully exhausted other medicinal options.
Newron's net loss jumped by 48% to €16.4 million, largely due to a 52% increase in R&D expenses, which rose to €12.9 million.
The company expects to start and complete additional trials to allow regulatory filings for safinamide soon. It also expects its 2009 net operating expenses to be below €25 million. Newron ended last year with €41.3 million, beating analysts' expectations by €4.4 million.