By Brady Huggett
NV Organon licensed Cortex Pharmaceuticals Inc.'s Ampakine technology, picking up an option in depression laid out in their previous schizophrenia agreement.
In January 1999, the companies entered an exclusive worldwide license agreement allowing Organon, of Oss, the Netherlands, to develop and commercialize the Ampakines for the treatment of schizophrenia. The original deal provided Organon with an option to license Ampakines for depression, but stated it must do so within a set time limit.
"Back in 1998, there wasn't much data that AMPA reception modulation would be useful for treating depression," said Vincent Simmon, president and CEO of Cortex. "[Organon] was interested in the area, and we were beginning to get some data but didn't have very much. They wanted to have the right to look into depression."
From that time until signing the option, Simmon said Cortex accrued data that made Organon a believer.
"Over the last two years we have done a lot more work in animal models," he said. "It's been clear for the past year that our molecules do have activity. We've known for some time that [Organon] has been interested in a specific molecule for [depression]."
Under the terms, Organon, a unit of Akzo Nobel, is subject to annual spending requirements for research and development on Ampakines for depression. There also are milestone components based upon clinical development and royalties on worldwide sales. All of this isn't new - it was worked into the original deal in 1999 as a possibility and the only question was if Organon would exercise its option.
"All the terms were negotiated and we have all the same royalty rates as in schizophrenia," Simmon said, adding that the depression deal "doubles the amount of milestones we may be eligible for" from Organon.
The work the companies have done in schizophrenia, Simmon said, has been "very successful" to date. Organon chose a molecule to put into the clinic with the projection for Phase II around May or June of 2001. The Phase I initiation triggered a $2 million milestone to Cortex.
"They haven't finished the Phase I yet," he said. "But they are moving very quickly and have an aggressive time model to move this compound into the marketplace."
Cortex's class of pharmacological compounds was licensed from the University of California. Ampakines enhance the functioning of the AMPA type glutamate receptor by increasing the amount of current flow that takes place when glutamate binds to the receptor at the synapse of neurons. When the AMPA receptor-modulating compound binds to the receptor and glutamate is present, there is a resulting increase of ion flow into the cell, causing a measurably greater electrical charge than normal and thereby transmitting a stronger signal. The loss of signals between brain cells is believed to be responsible for memory difficulties associated with Alzheimer's disease and decreased glutamate communication is believed to contribute to cognitive dysfunction in schizophrenia.
"This is a whole new pharmacology," Simmon said. "There aren't any molecules that work by this mechanism being sold for medicinal use."
The deal, like many in biotechnology, said Simmon, is success based.
"As long as they are moving compounds through the clinic, then fine," he said. "If they are happy and we are happy, then things go forward."
Cortex's stock (OTCBB:CORX) gained 15.6 cents Wednesday to close at $2.531.