Cerecor Inc. closed the first tranche of a $32 million series B Monday with plans to advance CERC-301, its experimental adjunctive therapy for patients with severe major depressive disorder (MDD) who haven't adequately responded to other therapies and are considering suicide. The funds also will fuel Cerecor's selection by year-end of a lead and backup molecule from its catechol-O-methyltransferase (COMT) inhibitor platform, targeting conditions characterized by impairment of executive function and working memory.

New Enterprise Associates, Apple Tree Partners and MPM Capital led the round, which provided the Baltimore-based company with $16.3 million to wrap up its ongoing phase II trial of CERC-301 and produce data by the end of the year. Next up, Cerecor will move the drug into a dose-ranging study to confirm futility and maximum tolerated dose, co-founder and CEO Blake Paterson told BioWorld Today.

Paterson said the second tranche of the series B will be provided at the discretion of investors in the round.

CERC-301, fast-tracked by the FDA in November, is a selective NMDA receptor subunit 2B (NR2B) antagonist. The drug acts quickly and, while building on a growing body of clinical data about the use of intravenous (I.V.) ketamine in treating depression, takes a more selective approach, giving it a much-improved safety profile and avoiding the hallucinations seen with I.V. delivery.

"If you only go after the NMDA receptors that carry the NR2B subunit, you get a cleaner response without dissociative side-effects," Paterson said.

Paterson and colleagues from Johns Hopkins University founded Cerecor in May 2011 in response to the high failure rates they saw in neuroscience development. With big pharma running for the doors at the time, Paterson characterized the company as a contrarian play. With MDD therapies often limited by modest response rates, poor remission rates, slow onset of action and problematic side effects, Cerecor saw an opportunity to take a rigorous approach to clinical development with a more focused goal in mind: treating a very specific subgroup of patients with high need.

Seeing its opportunity, in April 2013 Cerecor acquired rights to MK-0657, a drug Merck & Co. Inc. initially had developed for Parkinson's disease and already had carried through five early stage studies. (See BioWorld Today, April 22, 2013.)

In addition, Cerecor already has some human data on the drug's performance in hand. The National Institute of Mental Health conducted a pilot study in five patients with treatment-resistant depression (TRD), finding CERC-301 was well tolerated. Despite the small sample size, the company said the results suggested that an oral formulation of CERC-301 may have rapid antidepressant properties in TRD patients.

Research showing NMDA receptor involvement in the pathology of depression has grown in recent years and NMDA channel blockers such as ketamine, as well as antagonists specific for NR2B, have shown promise for providing quick and profound improvement in patients with severe depression.

Several companies have identified the potential for NR2B as a salient mechanism of action for depression, according to Cortellis Clinical Trials Intelligence, but no program is advanced as Cerecor's CERC-301. Astrazeneca plc developed but later abandoned lanicemine AZD-6765. Evotec AG's EVT-100 series remains licensed to Janssen Research & Development LLC, which is reportedly pushing ahead with that program. Mnemosyne Pharmaceuticals Inc. and Bristol-Myers Squibb Co. also have depression-targeted programs.

By creating the first oral drug that selectively targets the NR2B subunit of the NMDA receptor, Cerecor hopes to maintain the quick and strong effects of that approach while providing a drug suitable for chronic treatment.

Cerecor's COMT inhibitor platform, the other key component of the company, may also improve the lot of patients with mental illnesses, such as schizophrenia, Parkinson's disease and impulse control disorders, Paterson said.

While current COMT inhibitors such as tolcapone have poor risk-benefit profiles, Paterson said, Cerecor has identified molecules with promising potency, selectivity and brain penetration as well as minimal toxicity liability.

Although the company is narrowing down its leads, Paterson declined to say which indication the company will focus on first.

In other financings news:

Auris Medical Holding AG, of Zug, Switzerland, set terms for its initial public offering, upsizing the potential raise from $86.25 million to $95.2 million by offering 6.9 million common shares priced in a range of $10 to $12 apiece. In its F-1/A filing, the company said it plans to grant underwriters the option to purchase up to approximately 1 million additional shares to fill overallotments. Auris plans to list on Nasdaq as EARS. The company has phase III trials of lead candidate AM-101 under way in the U.S. and Europe in patients with acute peripheral tinnitus. Jefferies LLC and Leerink Partners LLC are joint bookrunners for the proposed offering, with JMP Securities LLC and Needham & Co. LLC as co-managers. (See BioWorld Today, March 11, 2014, and July 1, 2014.)

Cardiome Pharma Corp., of Vancouver, British Columbia, closed a senior, secured term loan facility of up to $22 million to be made available to the company by Midcap Financial LLC in two tranches with an interest rate of the London Interbank Offered Rate, or LIBOR, plus 8 percent. Cardiome plans to use proceeds of the first tranche of $12 million for working capital and general corporate purposes, including the expansion of its sales and marketing efforts for atrial fibrillation drug Brinavess (vernakalant) and antiplatelet drug Aggrastat (tirofiban) in Europe and other parts of the world and for development and regulatory costs of intravenous and oral vernakalant. The second tranche of up to $10 million is available to support a product or company acquisition. The loan carries a term of 48 months and is secured by the company's assets. (See BioWorld Today, Nov. 30, 2013.)

Phosphagenics Ltd., of Melbourne, Australia, raised A$12.2 million (US$11.4 million) of its A$16.3 million capital program through the institutional placement of 153 million shares at A8 cents apiece. The company plans to raise another A$3 million from a share purchase plan offered to existing shareholders at the same price.

Sage Therapeutics Inc., of Cambridge, Mass., said the underwriters of its initial public offering exercised in full their option to purchase an additional 750,000 of the company's common shares (NASDAQ:SAGE) at the offering price of $18 apiece, generating another $13.5 million and bringing the company's total raise to $103.5 million. J.P. Morgan and Goldman, Sachs & Co. acted as joint bookrunners, with Leerink Swan as lead manager and Canaccord Genuity Inc. as co-manager. (See BioWorld Today, July 21, 2014.)