Newron to resubmit acquisition of Swedish neurogenesis company

Newron to resubmit acquisition of Swedish neurogenesis company

NeuroNova AB to its shareholders

Following discussions with key shareholders, an amended agreement to be
proposed to EGM/AGM in December 2012

NeuroNova's highly innovative Phase II compounds target neuronal stem cells
and motorneurons

Potential next generation PD treatment

ALS orphan drug candidate

Fully funded Phase II development steps in two indications

EUR16m of cash and commitments

Two prime investors to take stakes in Newron

Investor AB

HealthCap

Milan, Italy, October 31, 2012 - Newron Pharmaceuticals S.p.A. ("Newron"),
announces today that the company has signed an amended agreement with the key
shareholders of Stockholm-based privately-owned NeuroNova AB ("NeuroNova") for
the acquisition of up to 100% of the shares of NeuroNova, in an all-share
transaction valuing NeuroNova at EUR15.5m (at closing share price Oct. 17,
2012). The amendment became necessary after the original agreement narrowly
missed support by the required 2/3 majority in a Sept. 19 shareholders'
meeting and reached its long stop date of September 30. It follows
constructive discussions with key shareholders of Newron and was approved by
unanimous decision of Newron's Board of Directors.

The transaction will add two highly innovative Phase II compounds from
NeuroNova to Newron's CNS portfolio. NeuroNova, founded by scientists from
Karolinska Institutet, has extensive experience in the field of neurogenesis.
The company's compounds act by generating new progenitor cells and protecting
existing neurons with the potential to benefit patients with progressive
neurodegenerative disorders.

On closing of the transaction, Newron will benefit through cash and
commitments of EUR16m. These funds are deemed to be sufficient to provide for
a Phase II PoC study in Parkinson's disease (PD) as well as a Phase I/II study
in Amyotrophic lateral sclerosis (ALS), in addition to the related corporate
operations. Investor and HealthCap, holders of more than 90% of NeuroNova's
total shares, will become shareholders in Newron and together may nominate one
representative to Newron's board of directors. The transaction is conditional
on the approvals under Italian law, including an independent appraisal, and
approval by Newron's shareholders. It is expected to close by year's end 2012.

If acceptance from 100% of the NeuroNova shareholders is achieved, NeuroNova's
shareholders will receive 2,375,000 newly issued Newron shares, representing a
holding of 21.3% in Newron's issued and outstanding share capital post the
transaction.

At closing, NeuroNova will be restructured and free of debt. NeuroNova's
development activities will continue under Anders Haegerstrand, the current
President of NeuroNova.

Stefan Weber, Newron's CEO, stated: "We are excited to resubmit this
transaction to shareholders and are confident of their support. The
acquisition allows Newron to expand its development pipeline by two highly
innovative compounds, coming with the funds to develop these compounds to the
next value inflexion point. At the same time, we will strengthen our
shareholder structure, now with lower dilution to our existing shareholders".

Jakob Lindberg from Investor: "Both Investor and HealthCap remain convinced of
the strategic fit of this transaction. We value Newron's expertise in taking
compounds from clinical stages to regulatory filing, and support the concept
of building a European CNS player that could benefit both patients and our
stakeholders."

Rolf Stahel, Newron's Chairman of the Board, commented: "I am delighted that
we have succeeded in getting to an amended agreement on the acquisition of
NeuroNova which we now believe should be acceptable to all key shareholders.
The board has agreed to review the number of the previously proposed up to 9
board members and will make recommendations to the shareholders at the 2013
AGM.

About NeuroNova's development candidates

sNN0031 is a novel drug candidate for the treatment of moderate to severe
stage Parkinson's disease that is designed to act on neural stem and
progenitor cells in the brain. In animal models of Parkinson's disease,
treatment with sNN0031 restores motor function and improves neurochemical
deficits. In a Phase I/II trial in patients with PD, it was well tolerated and
demonstrated preliminary beneficial effects on biochemical markers of the
degenerating dopamine system in PD patients. The product is comprised of the
naturally occurring protein PDGF-BB (platelet-derived growth factor BB)
formulated for intracerebroventricular (ICV) delivery. The intended therapy
involves short-term continuous infusion of sNN0031 into the ventricular lumen,
in order to optimize PDGF-BB access to the lateral ventricular walls of the
brain where the targeted stem and progenitor cells reside. sNN0031 holds the
potential to halt and even reverse disease progression, a much-needed
improvement over currently available treatments, which only address the
symptoms of Parkinson's disease.

sNN0029 is a novel drug candidate for the treatment of amyotrophic lateral
sclerosis (ALS) that has demonstrated in preclinical in vivo studies the
ability to slow disease progression and increase life span. In a phase I/II
trial in patients with ALS, patient recruitment and treatment for the formal
three months safety evaluation has been completed. Patients are offered and
are currently receiving continued treatment. Short and long term safety and
potential beneficial effects are under evaluation. The pharmaceutical
formulation contains vascular endothelial growth factor (VEGF) protein, a
naturally occurring protein scientifically proven to be an important survival
factor for motor neurons. The intended therapy involves direct infusion of
sNN0029 into the cerebrospinal fluid (CSF) that circulates around the brain
and spinal cord by intracerebroventricular (ICV) administration. sNN0029 is
intended to slow the progression of the disease, which will potentially meet
an enormous medical need for patients diagnosed with ALS.

About Investor

Founded by the Wallenberg family a hundred years ago, Investor is the leading
owner of high quality Nordic-based international companies. Through board
participation, our industrial experience, network and financial strength, we
strive to make our companies best-in-class. Our holdings include Atlas Copco,
ABB, Ericsson and Mölnlycke Health Care.

About HealthCap

HealthCap is a family of multi stage venture capital funds, investing
internationally in life sciences. With committed capital of EUR 900 m,
HealthCap is the largest specialized provider of venture capital within life
sciences in the Nordic countries and one of the largest independent actors in
the sector in Europe.

About Newron Pharmaceuticals

Newron (SIX: NWRN) is a biopharmaceutical company focused on novel therapies
for diseases of the Central Nervous System (CNS) and pain. The Company is
headquartered in .Bresso near Milan, Italy. Phase III trials of safinamide for
the treatment of Parkinson's disease (PD) have recently been completed. Based
on the phase III results of safinamide, Newron is working to expedite the
global filing of the compound, together with its partners. Zambon Group has
the rights to commercialise safinamide globally, excluding Japan and other key
Asian territories, and Meiji Seika has the rights to develop and commercialise
safinamide in Japan and other key Asian territories. Newron's additional
projects are primarily addressed towards highly promising rare diseases and
are at various stages of preclinical and clinical development, including
sarizotane for Rett's syndrome, ralfinamide for specific pain indications, and
NW-3509 as potential first add-on therapy for the treatment of schizophrenia.
www.newron.com

For more information, contact:

Media                       Investors and analysts
Italy
Stefan Weber - CEO          Stefan Weber - CEO
Phone: +39 02 6103 46 26    Phone: +39 02 6103 46 30
E-mail: pr@newron.com       E-mail: ir@newron.com
UK/Global media
Julia Phillips
FTI Consulting
Phone: +44 (0) 20 7269 7187
Switzerland
Martin Meier-Pfister
IRF Communications
Phone: +41 43 244 81 40

Important Notices

This document contains forward-looking statements, including (without
limitation) about (1) Newron's ability to develop and expand its business,
successfully complete development of its current product candidates and
current and future collaborations for the development and commercialisation of
its product candidates and reduce costs (including staff costs), (2) the
market for drugs to treat CNS diseases and pain conditions, (3) Newron's
anticipated future revenues, capital expenditures and financial resources, and
(4) assumptions underlying any such statements. In some cases these statements
and assumptions can be identified by the fact that they use words such as
"will", "anticipate", "estimate", "expect", "project", "intend", "plan",
"believe", "target", and other words and terms of similar meaning. All
statements, other than historical facts, contained herein regarding Newron's
strategy, goals, plans, future financial position, projected revenues and
costs and prospects are forward-looking statements.

By their very nature, such statements and assumptions involve inherent risks
and uncertainties, both general and specific, and risks exist that
predictions, forecasts, projections and other outcomes described, assumed or
implied therein will not be achieved. Future events and actual results could
differ materially from those set out in, contemplated by or underlying the
forward-looking statements due to a number of important factors. These factors
include (without limitation) (1) uncertainties in the discovery, development
or marketing of products, including without limitation negative results of
clinical trials or research projects or unexpected side effects, (2) delay or
inability in obtaining regulatory approvals or bringing products to market,
(3) future market acceptance of products, (4) loss of or inability to obtain
adequate protection for intellectual property rights, (5) inability to raise
additional funds, (6) success of existing and entry into future collaborations
and licensing agreements, (7) litigation, (8) loss of key executive or other
employees, (9) adverse publicity and news coverage, and (10) competition,
regulatory, legislative and judicial developments or changes in market and/or
overall economic conditions.

Newron may not actually achieve the plans, intentions or expectations
disclosed in forward-looking statements and assumptions underlying any such
statements may prove wrong. Investors should therefore not place undue
reliance on them. There can be no assurance that actual results of Newron's
research programmes, development activities, commercialisation plans,
collaborations and operations will not differ materially from the expectations
set out in such forward-looking statements or underlying assumptions.

Newron does not undertake any obligation to publicly up-date or revise forward
looking statements except as may be required by applicable regulations of the
SIX Swiss Exchange where the shares of Newron are listed.

This document does not contain or constitute an offer or invitation to
purchase or subscribe for any securities of Newron and no part of it shall
form the basis of or be relied upon in connection with any contract or
commitment whatsoever.

Press release (PDF)

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