Biotie to acquire CNS and inflammation specialist elbion GmbH

 

Biotie to acquire CNS and inflammation specialist elbion GmbH -

Nomura Code acted as exclusive financial adviser to elbion NV, parent company of elbion GmbH

Biotie Therapies Corp ("Biotie" or the "Company") has today entered into an agreement with privately held elbion NV to acquire its wholly-owned subsidiary elbion GmbH. In exchange Biotie will issue 46,802,967 new shares to elbion NV (the "Exchange Offer"). In connection with the Exchange Offer, certain shareholders of elbion NV have committed to invest an aggregate amount of EUR 3.3 million into the combined entity (the "Offering", together with the Exchange Offer the "Transaction"). The Transaction is subject to the necessary resolutions passed by Biotie and elbion NV shareholders at the general meetings to be held on 14 November 2008 and 10 November 2008, respectively.

elbion GmbH is a pharmaceutical research and development company based in Radebeul, Germany, originally founded through a management buy-out from the German industrial group Degussa AG and subsequently financed by an international syndicate of venture capital investors in 2004.

Following the Exchange Offer, elbion GmbH will be a wholly-owned subsidiary of Biotie. The combined entity will focus on research and development of drugs for central nervous system disorders (addiction, psychotic illnesses) and inflammatory diseases (e.g. rheumatoid arthritis and psoriasis) with high unmet medical need. The combined entity will have a strong and balanced pipeline with first-in-class compounds at various stages of clinical development; many programmes have already been validated by top-tier pharma partners such as Roche, Wyeth and Lundbeck.

"Bringing together the outstanding pharmaceutical development capabilities and strong clinical pipelines of both companies will create a European leader in the CNS and inflammation market", said the Chairman of Biotie, Mr Juha Jouhki. Mr Luc Philips, the Chairman of elbion NV stated that "this business combination is a unique opportunity to combine complementary programmes and capabilities with sufficient financial means to reach key value inflection points".

Biotie has obtained commitment from certain shareholders of elbion NV, namely Burrill & Company, TVM Capital and AGF Private Equity, to subscribe for an aggregate amount of 7,305,733 new shares in Biotie at a subscription price of EUR 0.4517 per share which equates to a total subscription value of EUR 3.3 million payable in cash. The subscription price per share corresponds to the trade-volume weighted average of the Company's share price during the 20 trading days up to and including 22 October 2008.

The current shareholder of elbion GmbH, elbion NV, has undertaken to provide additional capital to elbion GmbH prior to the completion of the Exchange Offer for an aggregate amount of EUR 1.8 million.