Cortex Pharmaceuticals Inc. raised $19 million in a private placement with plans to advance Ampakine compounds into the clinic.
"I think it's the biggest financing Cortex has ever put together, so it's a very significant step," said Roger Stoll, president and CEO of the Irvine, Calif.-based company. "We have a lot of compounds in preclinical development and we weren't able to move those forward and take them into the clinic."
With the financing, the company expects to move CX717 into a Phase I trial for Alzheimer's disease and mild cognitive impairment. It will be the second compound that the company has moved into the clinic, although Cortex abandoned the first compound as it did not show as much promise, Stoll said. CX717 will be Cortex's lead compound.
"That compound is a particularly attractive one [because of data] from all of the animal models, including some primate data," Stoll told BioWorld Today. "We now have the wherewithal to really move it along quickly. It's a very big event. It could put us on the map."
The company placed 6.9 million shares of stock at $2.75 each, as well as five-year warrants to purchase an additional 4.5 million shares of common stock at an exercise price of $3.25 per share. Rodman & Renshaw Inc., of New York, served at the placement agent in the financing, which included new and existing institutional investors.
Aside from advancing its preclinical compounds, Stoll said the financing enables the company to possibly partner its lead product. "It reinforces our ability to potentially do a licensing deal with a major pharmaceutical company," he said.
The company also intends to pursue moving an Ampakine compound into clinical development for the treatment of fragile X syndrome and narcolepsy.
With the $19 million financing, a recent $2 million milestone payment from a partner and a $5 million financing conducted last August, Cortex has enough money to carry it for about three years, Stoll said.
Earlier this month, Cortex received the $2 million milestone payment from NV Organon, of Oss, the Netherlands, when Organon retained the worldwide rights to develop and commercialize Ampakine to treat depression. NV Organon has a worldwide exclusive license for selected Ampakine compounds to treat schizophrenia and depression. Organon's Ampakine Org 24448 is in Phase II trials for schizophrenia.
Aside from its agreement with Organon, Cortex also has an agreement with Les Laboratoires Servier, of Paris. Servier plans to develop and commercialize the Ampakine technology to treat declining cognitive performance associated with aging and neurodegenerative diseases. Servier has rights to commercialize the technology in Europe, Asia, the Middle East and several South American countries. Servier selected Ampakine CX516 as its lead Phase II Ampakine compound in June 2002. It expanded its agreement with Cortex in October 2002 with its decision to evaluate Ampakine compounds to treat anxiety disorders in it territory.
Cortex's Ampakine compounds have treated memory, cognition and impact disorders ranging from autism, fragile X syndrome and attention deficit hyperactivity disorder to age-associated, memory-impairment disorders. The drugs also have shown promise in the treatment of psychiatric disorders such as schizophrenia and depression. The disorders targeted by Cortex constitute a $35 billion market segment.
Ampakine compounds enhance memory and cognition by acting on chemical pathways.
The company's stock (AMEX:COR) closed Friday at $2.86, down 14 cents.