ZURICH (Reuters) - Italian drug maker Newron has signed a strategic collaboration and licensing deal for its Parkinson's disease drug safinamide with Italian drugs and chemicals maker Zambon which involves Zambon taking a 9.1 percent stake in Newron.
Newron said in a statement Zambon would make an initial investment of 20 million euros ($26.2 million) to pay for the completion of the drug's clinical development and applications for marketing approval in Europe and the United States.
"We are delighted that Zambon shares our confidence and excitement in the value of safinamide for the treatment of Parkinson's disease," Newron Chief Executive Luca Benatti said in a statement.
The deal includes Zambon making an immediate equity investment in Newron of 726,435 newly issued shares for a fully diluted 9.1 percent shareholding. It has also committed to increase its stake in a future share capital increase.
Newron shares jumped on the deal, trading up 14 percent at 4.14 Swiss francs at 0742 GMT.
"The strategic option is positive for Newron as it provides the financing needed for the completion and filing of Safinamide," said Vontobel analyst Andrew Weiss, who reiterated his 'hold' recommendation on the stock.
The deal comes after Newron said in January it was licensing safinamide to Japan's Meiji Holdings for countries in Asia and expected similar deals for other parts of the world.
Newron is awaiting the results of two late-stage studies of safinamide as an adjunctive treatment for Parkinson's disease, and the results are due in the first half of 2012.
Newron said on Thursday the deal with Zambon gives it an exclusive option, that expires by the end of April, to a license for safinamide for all territories of the world with the exclusion of those covered by the Meiji deal.
Vontobel's Weiss said the fact the option expires by the end of April meant the data of the Phase III studies should be published within the month.
The agreements are a boost for Newron after Finland's Biotie Therapies pulled out of a takeover of the group last year following news it had lost a partnership deal with Germany's Merck KGaA for safinamide.
Newron has said it expects that safinamide will be ready for submission to health authorities by the end of 2012.
($1 = 0.7623 euros)
Reporting by Emma Thomasson; Editing by Mark Potter