Washington Editor

Memory Pharmaceuticals Corp.'s stock dipped by 9 percent Friday on news that a Phase IIa Alzheimer's study would not begin as planned this month.

Its shares (NASDAQ:MEMY) were down 17 cents to $1.70 because of FDA concerns over potential impurities in the clinical material to be used in MEM 3454, the company's lead nicotinic alpha-7 receptor partial agonist. The trial has been put off until later this year.

Memory President and CEO Jim Sulat said the issue should be resolved quickly.

"Using our current analytic methods, the impurity is undetectable," he told BioWorld Today. "But the potential for the impurity does exist."

To rectify the matter, the company is considering whether to use a batch of MEM 3454 produced using a different process than that originally proposed for the Phase IIa trial, a change that could address the agency's concerns. That new process, Sulat said, "eliminates even the potential for this impurity."

Memory, of Montvale, N.J., is looking to keep the MEM 3454 ball rolling in the wake of positive Phase I data generated earlier this year.

Multiple trials demonstrated the safety and tolerability of various doses of the compound, and the 15-mg dose in particular provided a strong hint at its potential efficacy. When administered daily for 13 days, it showed a statistically significant effect on the Quality of Episodic Secondary Memory scale, one of the study's primary efficacy variables.

That 15-mg dose is to be tested in the eventual Phase IIa trial, as are 5-mg and 50-mg doses, all in daily administrations. Other details of the study's protocol have yet to be disclosed, since its design remains under FDA review.

Of note, MEM 3454 could be licensed by F. Hoffmann-La Roche Ltd. per terms of a long-standing collaboration focused on Memory's nicotinic alpha-7 receptor agonists. The neuronal nicotinic alpha-7 receptor, which is found principally in the brain, has a number of properties that suggest it might play a unique role in neuronal function, including synaptic plasticity and cytoprotection.

Roche, of Basel, Switzerland, has an option to assume MEM 3454's development when the compound reaches Phase IIb. At that point, a milestone payment of an undisclosed amount would be due to Memory, which has footed the bill for the product's development to date and will continue to do so through Phase IIa. (See BioWorld Today, Sept. 19, 2003.)

Sulat said he doesn't expect the potential impurity issue to impact his company's relationship with Roche.

Memory lost $8.2 million in the quarter ended March 31, at which time it had $36.5 million in cash, cash equivalents and marketable securities.

A second drug from the partnered program, MEM 63908, is in preclinical development for Alzheimer's. A number of other earlier-stage compounds also are coming forth under the agreement.

Earlier this year, the partners amended their collaboration to expand the development of nicotinic alpha-7 agonists for diseases in all indications, for either human or veterinary use.

The new terms call for Memory to conduct Phase I trials, and Roche will assume responsibility for later-stage development and commercialization. Memory has the potential to receive about $2.3 million in research funding next year upon the achievement of defined preclinical milestones, and will receive milestone payments upon the achievement of development, regulatory and sales events for drug candidates that progress under the collaboration. (See BioWorld Today, March 1, 2006.)

However, MEM 3454 was excluded from the amendment and its development remains under the original terms. In addition to Alzheimer's, Memory is considering developing that compound for schizophrenia and attention deficit-hyperactivity disorder in adults. Decisions to broaden MEM 3454's usage are "being made together" by the partners, Sulat said, although it ultimately is up to Roche to opt into wider development.

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