The three-way merger between Finnish biotechnology companies Biotie Therapies Oyj, Oy Contral Pharma Ltd. and its subsidiary, Carbion Inc., remains on track, following Contral's receipt of funding commitments of €15 million (US$14.2 million) from undisclosed Finnish institutional investors.

The deal was conditional on Espoo-based Contral raising the money before the end of June. The offer closes on June 28. (See BioWorld International, April 24, 2002.)

Privately held Contral priced the offering at €5.60 per share. Based on Turku-based Biotie's current share price and on the terms of the merger agreement, that represents a discount of about 30 percent.

"The market situation is very difficult at the moment so I wouldn't say it was a big surprise," Biotie Chief Financial Officer Jari Saarinen told BioWorld International. Biotie and Carbion are now considering a new share issue on the same terms that would be directed at their existing shareholders.

"We will assess the situation in the autumn and decide what to do," Saarinen said. He was unable to estimate how much such an offering would raise. "I don't think it's going to be a very large amount of money - it's more the principle. We want to give the opportunity to our shareholders."

The current offering was directed at Finnish institutions only, partly because of litigation between Biotie and Finland's largest pharmaceutical company, Espoo-based Orion Corp. The dispute, which centered on rights to patents and patent applications associated with Biotie's vascular adhesion protein-1 (VAP-1) program, was settled in the latter company's favor last month. That did not leave the companies with sufficient time to seek international funding in advance of the merger, although adding overseas institutions to its shareholder base remains a priority. "We are planning an international transaction during next year," Saarinen said.

The merger is due to close at the end of October, and the combined entity, which will be called Biotie, is slated to commence trading on the Helsinki stock exchange in November. Saarinen said the enlarged company is funded for the next 12 months. In addition to the new injection of €15 million, Biotie exited the first quarter with €9 million in cash and anticipates an additional €5 million to €6 million in research support from the state.