Washington Editor

FDA-imposed dosing limits are preventing Cortex Pharmaceuticals Inc. from more broadly studying CX717 in humans for now, causing the company's stock to lose more than a third of its value Friday, although the agency lifted a seven-month clinical hold on the drug in the process.

The shares (AMEX:COR) fell $1.20 to close at $1.85, a 39 percent plunge, after CEO Roger Stoll detailed the investigational compound's "conservative" dosing curbs.

Without divulging a specific ceiling, he told investors on a conference call that the limits would allow Cortex to test it only in Alzheimer's patients, for which lower amounts are acceptable to see a treatment benefit. But that also means that the company, of Irvine, Calif., would not be able to continue clinical testing of CX717 in attention deficit hyperactivity disorder (ADHD) for the near term, because those patients necessitate higher doses that exceed the FDA boundaries.

"We had to accept their dose limitations," he said, in order to get the agency to remove a clinical hold on the product that's been in place since March. So Cortex received "half a loaf instead of a full loaf," Stoll added.

He said Alzheimer's studies require doses between 1 mg/kg and 3 mg/kg, while ADHD trials necessitate a dose range of 10 mg/kg to 20 mg/kg.

Going forward, Stoll said the company plans to ask the agency to "liberalize" its dose restrictions after completing additional animal toxicology studies that already are under way. More specifically, Cortex expects three-month tox trials in both monkeys and rats to generate complete reports for the FDA by the end of next quarter in order to expand to higher dosage levels and begin ADHD testing again.

Prior to the clinical hold, which resulted from animal toxicology findings rather than clinical testing problems, the company had reported positive Phase IIa results in adults with ADHD, an indication to which potential partners had been attracted, Stoll said. He noted "tremendous interest" in CX717 for both Alzheimer's and ADHD, but conceded that "it doesn't make much sense" to form a collaboration at the moment.

Stoll also indicated that Cortex likely would seek some form of financing next quarter, since no partnership funding is expected anytime soon. The company had about $15.5 million in cash reserves through June 30. To date, Cortex has spent about $2.5 million in "additional unplanned funds" related to CX717's clinical hold, he said.

Preliminary toxicology findings from animal studies should start coming in near the end of this year, though such data would be used to inform the company and not get submitted to the FDA.

CX717 is an ampakine compound, a class of drugs that enhance memory and cognition by acting on chemical pathways that impact at least 85 percent of all the neurotransmission occurring in the brain.

Stoll noted that because the technology relates to "a new science," there would be bumps in the road. In addition, he noted that if the FDA again rejects Cortex's plans for testing higher CX717 doses in ADHD patients, the company would have "a roadmap" for backup compounds already in development.

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