Neurogen Corp. is regaining full rights to its corticotrophin releasing factor-based drugs through the dissolution of its partnership with Aventis SA, now part of the new Sanofi-Aventis entity.
Since the merger has been in the works for some time, the move might have been expected for a company in Neurogen's position, but in any case, the Branford, Conn.-based business is eyeing its regained rights as a plus.
"In terms of mergers, it's always difficult to predict what's going to happen," Neurogen President and CEO William Koster told BioWorld Today. "There's no way we could have said that we knew in an absolute sense what would happen."
All matters have been resolved and the program will continue under the watch of Neurogen, which gets all development and commercialization rights to compounds developed to date under the agreement. The collaboration will terminate Dec. 8, three years after it began.
The companies' relationship was centered on the discovery and development of drugs based on corticotrophin releasing factor (CRF) for depression, anxiety and other stress-related disorders. CRF is a neurotransmitter that mediates physiological and behavioral responses to stress. (See BioWorld Today, Dec. 21, 2001.)
Strasbourg, France-based Aventis, which had exclusive worldwide rights to develop and commercialize resulting compounds, had been funding the program and will continue to do so until the termination date, after which Neurogen will assume financial responsibility for research, development and commercialization.
To date, Neurogen had received $22.25 million from Aventis, a total that includes a $10 million up-front fee paid three years ago, a $1 million milestone payment received in the first quarter and $11.25 million in research support.
"That's also in addition to a significant effort that Aventis has put into the program through its own resources," Stephen Davis, Neurogen's executive vice president and chief business officer, told BioWorld Today. "That would probably add a significant amount to that number."
Koster stressed the collaborative nature of the relationship in which both companies worked to progress compounds through early development. He added that through the program, they have developed non-purine molecules as opposed to purine-structured compounds that have been pursued more widely in the industry.
"We've made what we believe to be some fundamental discoveries about these molecules that are unusual," Koster said. "We have compounds that are going through their humps and hurdles, in terms of looking at them in the late stages of lead optimization, and we've brought compounds into the preclinical development cycle."
Having all rights to that battery of CRF-1 compounds, after three years of the Aventis-sponsored partnership, represents a boon for Neurogen's portfolio.
"This presents a very exciting possibility for us," Davis said. "We have a strong balance sheet, and we're in a different position now than we were at the time we partnered this program. Our business plan today is to take programs further into the clinic on our own, and we're well positioned to do that."
With the company's cash reserves in the $160 million range, courtesy of a $100 million private stock sale in the springtime, and a burn rate of about $30 million forecast for this year, he said that Neurogen does not intend to immediately find a new partner. (See BioWorld Today, March 22, 2004.)
"As we go forward with assets like this, we look at the balance between the risk and the amount of capital that will have to be invested vs. the opportunity," Koster added. "That's certainly the basis for what we'll be looking at with the CRF compounds."
In addition to the CRF-1 research, the company's pipeline includes a number of other internal programs.
Earlier this year, a C5a antagonist called NGD 2000-1 failed Phase IIa trials for rheumatoid arthritis and asthma and Neurogen decided to halt the compound's development. But Koster said there were statistically significant results at the highest dosing level in the arthritis study, though the high dosing produced an inhibition of 3A4, which leads to drug-drug interaction side-effects. Related inflammation research continues. (See BioWorld Today, June 17, 2004, and Jan. 14, 2004.)
The company has advanced several MCH-1 antagonists for obesity into late-stage lead optimization, and also has an undisclosed central nervous system disorder program in preclinical development.
The company also is involved in advancing alliance-based programs.
It has a partnership centered on VR1 antagonists with Merck & Co. Inc., of Whitehouse Station, N.J. They are moving forward multiple compounds, all of which remain in preclinical development. With Pfizer Inc., of New York, the company is involved in a relationship to develop GABA agonists.
On Thursday, Neurogen's shares (NASDAQ:NRGN) gained 16 cents to close at $6.51.