Even though Neurogen Corp. said Thursday it entered a multimillion-dollar deal to develop stress-related drugs with Aventis Pharma SA, the companys stock steadily declined upon news that its anxiety disorder drug failed to meet Phase IIa endpoints.
Neurogens stock (NASDAQ:NRGN) closed Thursday at $16.65, down $3.15, or 15.9 percent.
The generalized anxiety disorder drug, referred to as NGD 91-3, is in development with Pfizer Inc., of New York. NGD 91-3 is one of several drug candidates that work through selective modulation of the neurotransmitter system known as GABA (gamma aminobutyric acid) being developed for treatment of neuropsychiatric disorders with Pfizer.
Progress may have temporarily slowed with Pfizer, but the Aventis collaboration which already netted Neurogen a $10 million initial payment is just getting off the ground. The latter focuses on drugs for depression, anxiety and other stress-related disorders that are based on Neurogens preclinical corticotrophin-releasing factor (CRF1) antagonist compounds. Aventis, of Frankfurt, Germany, has licensed this entire class of compounds, including the lead candidate, NGD 98-2.
By serendipity, these two events occurred simultaneously, said Bill Koster, president and CEO of Branford, Conn.-based Neurogen. Even though the Phase IIa trials are still undergoing further analysis, what we decided to do was announce both occurrences together in the spirit of complete and accurate disclosure.
When Koster spoke with analysts and reporters Thursday morning, he and others on the management team were confident that the setback with NGD 91-3 would not cripple the relationship with Pfizer.
In fact, the companies have a longstanding, multimillion-dollar relationship that dates back to 1992 and has included drugs to treat insomnia, Alzheimers disease and obesity. To date, Pfizer has paid Neurogen $60 million in research and development costs. (See BioWorld Today, June 19, 1999; Nov. 6, 1998; Dec. 11, 1997; and Feb. 10, 1992.)
While data from the Phase IIa trial of NGD 91-3 is preliminary, Jim Cassella, Neurogens vice president of clinical development, said, We believe these findings will represent the outcome of the trial. While the analysis is wrapping up, we will be exploring possible next steps to be taken with the compound.
Officials at Neurogen said participants tested at the high dose of NGD 91-3 did show a trend toward efficacy, but failed to achieve statistical significance.
However, of particular interest is that the trend toward efficacy of subjects treated with the high dose was not associated with adverse effects of sleepiness, lack of coordination or dizziness that were experienced by the subjects taking Xanax, Kostner said.
Cassella said the purpose of the NGD 91-3 program was to develop a drug like Xanax (Pharmacia Corp., Bridgewater, N.J.) that did not produce the undesirable effects.
The six-week Phase IIa trial evaluated about 280 patients who were divided into four groups of 70, receiving either of two dosages of NGD 91-3, Xanax or placebo. Pfizer conducted the trial, which was a randomized, double-blind, placebo-controlled evaluation of safety, pharmacokinetics and efficacy of patients with generalized anxiety disorder.
High Hopes For Aventis Pharma Deal
By signing a deal with Aventis, Koster said, were creating one of the largest and most experienced discovery and development forces in the industry on CRF1 antagonists.
Antagonists block or inhibit effects of a neurotransmitter on neural receptors and the corticotrophin-releasing factor is a neurotransmitter that mediates physiological and behavioral response to stress. According to Neurogen, blocking CRF1 receptors is an innovative approach for treatment of stress-related disorders.
During the conference call, Steve Davis, Neurogens executive vice president and chief business officer, wouldnt say when Phase I trials are expected to begin.
Davis characterized the three-year deal as Neurogens most lucrative.
Aside from the $10 million initial payment, Davis said Neurogen would receive cash payments based on achievements of certain milestones in research and development. Aventis gains exclusive worldwide development, manufacturing, marketing and sales rights to compounds that come to market and has agreed to pay Neurogen royalties based on sales. Aventis will develop and commercialize products resulting from the deal.
Before signing on with Aventis, Davis said Neurogen looked at several other potential partners. But we were particularly impressed with Aventis clinical development expertise as well as the chemistry between the research teams, he said. This is such a critically important ingredient in any collaboration and we feel very good about the common commitment we have to advancing CRF1.
Neurogens decision to partner was based on its business strategy. There are two reasons we are partnering. One is resources. We want to be sure we have the resources to exploit the chemical we have discovered, and take advantage of the competitive position, particularly at a time when other programs at Neurogen are advancing and need resources as well.
Second, the CRF1 program for depression will involve large clinical trials, it will be a substantial effort. Our strategy overall is to maintain a mix of proprietary programs where we further invest our own capital together with partner programs.
In other business, Pfizer is conducting a Phase IIa study of Neurogens Alzheimers product. Pfizer also is conducting preclinical studies of candidates for insomnia.