West Coast Editor

Less than two months after Phase II success with its insomnia drug, privately held Hypnion Inc. is being taken over by Eli Lilly and Co. for undisclosed terms.

The compound for transient insomnia, HY10275, hit primary and secondary endpoints in the first Phase II trial at doses of 1 mg and 3 mg. Unlike drugs that act on GABA receptors (and are classed as controlled substances, given their potential for abuse), HY10275 targets histamine H1 and serotonin 5HT2a.

"By their nature, these are mechanisms that should not require the same classification, which is to be scheduled [as a controlled substance]," noted Nick Galakatos, Hypnion's chairman.

"That's the hope," agreed Mark Taylor, spokesman for Lilly. Studies so far have found no reason the FDA would not agree, but Lilly plans more Phase II trials and the final decision on scheduling must be made by regulators later.

"We'll have to see how we would want to design additional studies," Taylor added. "I don't think a decision has been made on that yet," although Lilly intends, if possible, not to limit the drug's use to transient insomnia.

Galakatos said that, after positive Phase II data were disclosed in early January, interest from Lilly and others became clear. "We talked to people about partnerships in a very broad definition of the word," he said.

Hypnion has raised $80 million since its inception in 2000. "There was a lot of capacity to finance the company further," Galakatos told BioWorld Today, but Lilly's expertise in drugs for central nervous system disorders made the takeover a logical step.

Lilly, of Indianapolis, "knew of the company for several years," Galakatos said. "In the early days, there were people [on staff at Hypnion who had been with Lilly], as well as contact made" with the pharma firm.

He described HY10275 as the lead drug in "an extensive program around insomnia" that emerged from Hypnion's Score-2004 in vivo sleep-wake discovery system.

Insomnia lately has been much in the news. Vanda Pharmaceuticals Inc., of Rockville, Md., reported positive Phase III data with the melatonin agonist VEC-162 late last year. Vanda's schizophrenia drug iloperidone also did well in Phase III, and the firm grossed $103.7 million in a January follow-on offering.

Also in January, San Diego-based MediciNova Inc. started a Phase II study of MN-305, a full agonist at the serotonin 5-HT1A receptor. The 75-patient trial will evaluate safety and efficacy of three dosages (1 mg, 3 mg and 6 mg) versus placebo, given about an hour before bed.

The same month, San Diego-based Neurocrine Biosciences Inc. said it will resubmit the new drug application for the immediate-release insomnia drug indiplon during the second quarter without doing another safety and efficacy trial. Indiplon is a non-benzodiazepine agent that acts on a specific site of the GABA-A receptor, designed for use as needed by patients.

Neurogen Corp., of Branford, Conn., in December started a Phase II trial testing the small-molecule GABA agonist NG2-73 against chronic insomnia. As many as 36 patients, up to age 64, are expected to take part, and Brian Lian, analyst with CIBC World Markets in New York, predicted that NG2-73's alpha-3 subunit preference "could lead to a best-in-class agent."

Still, more than a third of Americans are afflicted by one or more of the 80 recognized sleep conditions, according to Hypnion, but only about 15 percent of them take any type of medication.

"Over the past year or so, there were some other programs in wakefulness," a therapeutic space around which such firms as Frazer, Penn.-based Cephalon Inc. were built, Galakatos said. Cephalon's Provigil (modafinil) for narcolepsy sold more than $204 million in the first quarter of last year.

Taylor told BioWorld Today that, within the sleep-disorder space, wakefulness is an indication Lilly wants to explore, although Galakatos said the Lilly takeover is mainly about HY10275.

"In the near term, it's the compound," he said. "Longer term, it's the platform."

Taylor agreed. "We're excited to take a look at the Score platform and see what the potential is there, not only with compounds Hypnion has developed but how that [platform] might be brought into Lilly's pipeline."

Hypnion employs about 25 people. No decision has been made about whether they will be retained or whether the Lexington, Mass., building will be kept, Taylor said.