National Editor

As the Phase I trial gets under way to test its gene therapy for Parkinson's disease, Neurologix Inc. said it has entered an agreement to merge with Change Technology Partners, formerly an interactive media company.

Under the terms of the deal, which is expected to close in the fourth quarter, CTP - which recently sold its sole operating subsidiary, Canned Interactive, and now consists mainly of cash - would form a new subsidiary to merge with Neurologix.

All Neurologix securities issued and outstanding at closing will be exchanged for the right to receive shares of CTP's common stock, but the number will depend on the latter's cash, liabilities and commitments when the deal is done. At the end of the first quarter of this year, CTP had $8,484 in cash. Holders of a majority of Neurologix securities have agreed to vote all of their Neurologix capital stock in favor of the merger.

CTP's shareholders are expected to keep as much as 32 percent of the outstanding voting capital stock on a fully diluted basis. The proposed stock-for-stock arrangement, intended as a tax-free reorganization, is subject to CTP shareholder approval. The company's board approved the merger agreement earlier this week.

As part of the merger agreement, CTP has loaned Neurologix $750,000, with a 4 percent annual interest rate and payback due April 30, 2004.

Bottom line: CTP doesn't liquidate, gains a shot at more value for shareholders, and Neurologix gets money to forge ahead with its trials. Mark Hoffman, board member with Fort Lee, N.J.-based Neurologix, told BioWorld Today neither company would comment beyond the details of the arrangement provided in a press release. A letter of intent for the merger was disclosed in June.

Neurologix's approach involves injecting glutamic acid decarboxylase deep into the brain. The GAD gene's product synthesizes y-aminobutyric acid, the major inhibitory neurotransmitter in the brain. Its target: the subthalamic nucleus, which is overactive in Parkinson's disease. (See BioWorld Today, Oct. 18, 2002.)

The FDA gave its nod last summer for Neurologix to launch Phase I clinical trials for the treatment of Parkinson's, and the first such trial is expected to start in the next few months, according to the company's website. Tested will be 12 patients diagnosed with severe Parkinson's of at least five years' duration, for whom current therapies no longer are working.

Neurologix owns or licenses 14 patents and patent applications, several of which support the treatment to be used in this clinical trial. In the preclinical stages, Neurologix also has drug candidates for epilepsy and stroke.

CTP's stock (OTC BB:CTPI) closed Thursday at 4.6 cents, up seven-tenths of a cent, or 18 percent.