By Mary Welch
In an effort to ¿focus assets,¿ CoCensys Inc. cut staff by nearly 40 percent, a move expected to save the Irvine, Calif., company about $3.5 million per year.
¿Companies in our position either focus their efforts or defocus and go into other avenues,¿ said Joann Data, executive vice president, product development and regulatory affairs. ¿We are staying focused. All the projects we have in development are ongoing. We are down to bare bones and we¿re leveraging our assets.¿
The restructuring led to the elimination of 34 positions in drug development and administration. The company now has 55 full-time employees, including its entire research and discovery staff, largely dedicated to drug discovery. As a result of the action, the company will recognize a charge of $1.1 million to $1.3 million in the second quarter of fiscal 1999.
The company currently has $9 million cash on hand, which should last at least through the year, Data said.
CoCensys is meeting today with Nasdaq officials, who on April 9 had temporarily halted the stock¿s trading. One of the problems was that the stock often traded below the exchange¿s minimum bid price requirement of $1 per share.
¿It¿s never a done deal and we¿re going to put our best case forward,¿ Data said. ¿We¿re presenting very confidential information [to Nasdaq] and we believe we have the cash to carry the stock forward.¿
In an effort to boost the stock¿s price, the company effected a one-for-eight reverse split of its common shares on April 15. Currently there are 4.3 million shares outstanding.
A skeleton clinical development staff will remain to manage compounds that are in development, both at CoCensys and with corporate partners Wyeth-Ayerst Laboratories, a Radnor, Pa., division of American Home Products Corp., and Parke-Davis, an Ann Arbor, Mich., division of Warner-Lambert Co.
Wyeth-Ayerst is working with CoCensys to develop analogues of naturally occurring neuroactive compounds for the treatment of anxiety. Parke-Davis and CoCensys are trying to identify and develop subtype-selective NMDA receptor antagonists for the treatment of a variety of neurological and psychiatric diseases. Senju Pharmaceutical Co. Ltd., of Osaka, Japan, and Parke-Davis also are partnered with CoCensys for the exploration of ophthalmic indications of CoCensys¿ glutamate receptor antagonist compounds.
¿Our drug discovery efforts have always been focused on neurology, and as we discover potential compounds and products we will try to license them out early,¿ Data said. ¿We are in serious talks with several potential partners.¿
Company Has Plenty In Pipeline
The company, which posted a first-quarter 1999 loss of $2.8 million (82 cents per share), has several compounds in various stages of development. Its lead compound is ganaxolone for epilepsy. Ganaxolone, a synthetic version of naturally occurring neuroactive steroids known as epalons, suppresses inflammation in the lining of the brain.
The compound showed promising Phase II results when compared to placebo. Patients receiving the placebo were twice as likely to suffer a seizure than those given ganaxolone orally. (See BioWorld Today, Nov. 10, 1997, p. 1.)
In addition, there is a pediatric epilepsy trial ongoing in France, with one patient ¿well into the three-year mark of the trial. The molecule has shown potential for both adults and children and should be further developed,¿ Data said. The company is ¿actively¿ seeking a partner for this indication.
Ganaxolone, however, failed in a Phase II trial to reduce migraine headache pain. (See BioWorld Today, Oct. 19, 1998, p.1.)
Another product, Licostinel, is in Phase I/II trials for stroke. ¿We have some initial proof of concept in this molecule but we don¿t have the funding to complete it,¿ Data said. ¿It¿s on cash-hold instead of clinical hold.¿
The company has received a ¿fair amount of interest¿ in its efforts to license out another compound, CCD 3693, a hypnotic for insomnia, she said. CCD 3693, an epalon, is designed to enhance the activity of gamma-immunobutyric acid, an inhibitory neurotransmitter in the central nervous system.
CoCensys signed a potential $80 million deal to develop CCD 3693 with G.D. Searle & Co., of Skokie, Ill., which made an up-front payment of $10 million. Searle, which later merged with Monsanto Co., of St. Louis, returned all rights to CoCensys last year. Monsanto, it turned out, already markets Ambien for insomnia. (See BioWorld Today, May 22, 1996, p. 1, and Aug. 3, 1998, p. 1.)
The company also is seeking partners for its sodium channel blockers for neuropathic pain.
CoCensys¿ stock (NASDAQ:COCND) closed Wednesday at 96.88 cents, up 9.38 cents. n