Washington Editor

The FDA is holding up Phase IIa plans for Memory Pharmaceuticals Corp.'s MEM 3454 in Alzheimer's disease, a development that arose concurrent with the company's closing of a $26.7 million financing.

That money is tabbed for funding the nicotinic alpha-7 receptor partial agonist, among other things, but the clinical hold could slow those spending plans as the FDA further reviews toxicology data. Management at the Montvale, N.J.-based company is hopeful that the study could begin as planned by the end of the year.

The agency is seeking to reconcile updated toxicology reports that were submitted with a revised investigational new drug application filed last month with those included in the initial application filed in May. It seems that FDA reviewers did not know to look for changes.

"We did not point to them perhaps as clearly as we should have," Jzaneen Lalani, Memory's vice president of legal affairs, said of the miscommunication. The "bottom line," she added, is that the agency was unable to complete its review of the updated toxicology analyses in time to clear the trial's protocol.

The toxicology reports in question stem from 13-week studies in rats and dogs. May's IND included early data and initial draft interpretations of those findings, but the company voluntarily withdrew the entire submission to resolve an impurity found in MEM 3454's manufacturing process. Last month's IND, filed after that production problem was cleared up, included near-final data and more thorough analyses.

"The data [have] not changed," Lalani said, "it's the interpretations that have changed."

She declined to describe specific differences in the context and understanding of the toxicology data, but noted that the FDA cannot yet have any issues with the findings because its reviewers haven't been able to tackle the matter. But Lalani said final toxicology data and interpretations are in hand at the company, which expects to submit that material early next month. If acceptable, the study could begin by the end of this year or early next year if the holidays retard the initiation process.

In the meantime, the agency has deferred assessing the trial's investigator's brochure pending receipt of the additional information.

Of note, the clinical hold was not related to the aforementioned manufacturing issues with MEM 3454, which is seen as a potential treatment for a couple of central nervous system indications. The company has resolved those concerns around possible impurities in a solvent used to produce an initial batch of the drug.

Memory's management believes that no additional studies or data will be required to address the FDA's questions, and getting the trial under way remains a top priority.

The company's private placement included 23.2 million common shares at $1.11 and warrants for another 7.1 million shares exercisable at $1.33 apiece. It represents the first tranche of a recently reported financing deal for $32.2 million in gross proceeds, with another $5.5 million through the sale of 5 million shares in the second tranche still to come. That remains subject to stockholder approval, and the company plans to soon call a special shareholder meeting to address the matter. Lalani said the meeting should come before Jan. 5.

Initial terms of the financing were released last week, and the company's management said the new capital would be used mostly for MEM 3454 and MEM 1003, a neuronal L-type calcium channel modulator that's in a pair of Phase IIa trials, along with other research and development efforts. The added money should more than double the company's cash reserves, which were reported at $32.1 million on June 30. (See BioWorld Today, Oct. 10, 2006.)

On Tuesday, Memory's stock (NASDAQ:MEMY) traded down 5 cents to close at $1.31.

Portola Closes $20M Debt Deal

Portola Pharmaceuticals Inc. is bringing in $20 million through a debt financing from Hercules Technology Growth Capital Inc.

Terms of the deal weren't disclosed, but the added capital should boost the private biopharmaceutical company's efforts on therapies for cardiovascular and vascular disease. South San Francisco-based Portola has two clinical drug candidates: an oral Factor Xa inhibitor in a Phase II trial for the prevention of deep-vein thrombosis in patients undergoing knee surgery, and a direct acting, orally available ADP receptor antagonist in multiple Phase I trials. In addition, its preclinical efforts are focused on the platelet and signaling pathways that mediate inflammation and thrombosis.

Hercules, of Palo Alto, Calif., is a specialty finance company that provides debt and equity growth capital to venture capital- and private equity-backed life science and technology companies.

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