Allergan to Acquire Naurex

Allergan plc a leading global pharmaceutical company, and Naurex Inc., a clinical-stage biopharmaceutical company developing transformative therapies for challenging disorders of the central nervous system, have announced that they have entered into a definitive agreement under which Allergan will acquire Naurex in an all-cash transaction. Under the terms of the agreement, Allergan will acquire Naurex for a $560 million upfront payment net of cash acquired, $460 million of which is payable upon the closing of the acquisition and $100 million of which is payable by January of 2016 (or upon the closing if the closing has not occurred by such time), as well as potential R&D success-based and sales-threshold milestone payments. The Company remains committed to de-leveraging to below 3.5x debt-to-EBITDA by the end of the first quarter of 2016.

The acquisition will also add Naurex's development product NRX-1074, a next-generation drug candidate, the intravenous form of which has shown rapid and robust antidepressant efficacy in an initial single-dose Phase 2 study.  NRX-1074 is also an orally bioavailable drug candidate which is in Phase 1 studies. Rapastinel and NRX-1074 are both targeted modulators of the N-methyl-D-aspartate (NMDA) receptor. Both therapies have been found to be well-tolerated in all studies to date, with no drug-related serious adverse events or any of the dissociative side effects typically seen with NMDA antagonists.

"The acquisition of Naurex is a great fit for Allergan and a compelling and exciting investment. We expect Naurex will enhance Allergan's mental health portfolio and build on our strategy to lead in this important therapeutic area," said Brent Saunders, CEO and President of Allergan. "Naurex's unique pipeline comprises compounds that utilize a new mechanism to target areas of significant unmet medical need in Major Depressive Disorder (MDD), including severe and/or treatment-resistant depression. These highly differentiated compounds will immediately bolster our exceptional mental health pipeline."

"Our team at Naurex has been successful in bringing these two highly innovative treatments for depression through proof-of-concept clinical trials," said Norbert Riedel, Ph.D., President and CEO of Naurex. "We recognized that Allergan's deep commitment and experience in mental health position them particularly well to progress these programs through further clinical development and into commercialization. This transaction also enables us to leverage our proven team and technology to continue innovating in this space through the spin-out of Naurex's platform and initiation of a research collaboration with Allergan, a credible and committed partner in the field."

Naurex has built a platform for discovering drugs that enhance synaptic plasticity, or strengthen the network for neural cell communication. Molecules discovered by Naurex achieve this through a novel mechanism that modulates the NMDA receptor – rather than shutting it down – resulting in drugs that are both highly effective and well-tolerated. Naurex's discovery platform has yielded a rich pipeline of NMDA receptor modulators, including subtype-selective molecules, with the potential to treat a broad set of psychiatric and neurologic disorders. Immediately prior to the closing of the acquisition, Naurex will spin-out this discovery platform into a new company. Allergan and this new company will enter into a research collaboration focused on the discovery and early development of innovative small molecule NMDA receptor modulators for the treatment of certain psychiatric and neurologic disorders. Allergan will receive first right to in-license a defined number of drug candidates resulting from the collaboration for certain indications. Further details on the new company will be shared at a later date.

"Rapastinel and NRX-1074 offer the potential for faster onset of action, equal or greater efficacy and a more favorable safety and tolerability profile than traditional anti-depressants," said David Nicholson, EVP and President of Global Brands Research and Development for Allergan. "If approved, they will provide a significant and complementary addition to our world-class CNS and mental health portfolio. Our ongoing research collaboration will also position us to continue to leverage Naurex's innovative drug discovery platform to drive further long-term value and provide patients with needed treatment options in this important therapeutic area."

About Rapastinel (GLYX-13)

Rapastinel (GLYX-13) is a novel NMDA receptor modulator being developed as an adjunctive treatment for difficult-to-treat major depressive disorder. Unlike most currently approved antidepressants, which act on serotonin and related neurotransmitter pathways in the brain, rapastinel works through an entirely different mechanism, mobilizing glutamate pathways to enhance synaptic plasticity and improve the communication between neuronal cells.

In Phase 2b clinical trial results presented at the Annual Meeting of the American College of Neuropsychopharmacology last year, it was demonstrated that repeat-dose adjunctive treatment with rapastinel resulted in robust and sustained antidepressant effects in subjects with inadequate responses to their current antidepressants. Rapastinel was well-tolerated with no drug-related serious adverse events reported, including no sign of the psychotomimetic, or psychosis-like, effects associated with NMDA receptor antagonists such as ketamine. These data confirmed the efficacy and safety results from an earlier Phase 2 single-dose study of rapastinel, which also documented the drug's rapid onset of antidepressant activity in as little as two hours.  Naurex has completed an end-of-Phase 2 meeting with the U.S. Food and Drug Administration and the Phase 3 program is expected to begin in 2016.