Pfizer To Pay Neurogen $12M In Deal Extension

Neurogen Corp. and Pfizer Inc. extended by two years and $12.5 million their longstanding pact in gamma aminobutyric acid (GABA) neurotransmitter receptor drug programs for anxiety, sleep disorders, and cognition enhancement, adding depression as a new target.

Pfizer will provide Neurogen with $6.24 million per year in additional research funding through 2000.

"Our partnership with Pfizer in GABA ranks among the longest continuous relationships in the business," said Amy Enders, spokeswoman for Branford, Conn.-based Neurogen. "It goes all the way back to 1992, and there have been several extensions in between. In addition, we have a $60 million research deal with [Pfizer, of New York] for obesity that dates back to 1995."

Since the collaborations began, Pfizer has purchased about 2.84 million shares of Neurogen stock, or 20 percent of the company. To date, it has paid Neurogen $64 million in the programs, which focus on small molecule compounds that interact with GABA receptors in the brain. Low levels of the GABA neurotransmitter are associated with anxiety and insomnia, while high levels of the same amino acid are linked to learning and memory problems.

The anxiety and insomnia compounds are partial agonists to the GABA receptors, boosting levels of the neurotransmitter, and the compounds for cognition are inverse agonists, reducing GABA levels.

In treating the disorders, Neurogen's drug candidates zero in on specific subtypes of GABA receptors to minimize side effects that occur with small molecule compounds, whose interaction is less focused. The company has identified different GABA receptors involved in each of the three treatment areas - anxiety, sleep and cognition - and in preclinical research found that the anxiety compound had some effect on depression as well.

In 1992, Neurogen announced its first corporate partnership, a $50 million deal with Pfizer to develop and commercialize compounds for cognition enhancement and anxiety. Pfizer bought $13.75 million worth of stock, or 11 percent of the company. The five-year joint research program called for Neurogen to receive milestone payments and sales royalties.

As part of the agreement, Pfizer licensed the rights to NGD 91-1, an anxiety-reducing compound that interacts with receptor subtypes of the GABA receptor family. (See BioWorld Today, Feb. 10, 1992, p. 1.)

In June 1994, the companies agreed on a second collaboration - for sleep disorders - which brought another $20 million into Neurogen's coffers, including Pfizer's of $9.9 million purchase of Neurogen's stock. Pfizer committed to paying $4.6 million for 1992 through 1995 for research. (See BioWorld Today, June 13, 1994, p. 1.)

In December 1996, the companies merged the 1992 and 1994 agreements and added two more years to the collaboration, to the tune of $5.2 million per year for research funding. Neurogen received $11.5 million in that extension. By that point, Pfizer had bought $23.7 million worth of equity and paid out almost $30 million in research funding. (See BioWorld Today, Dec. 13, 1996, p. 1.)

Together, the deals are worth "almost $100 million," Enders said, adding that compounds from the partnership are "in the clinic or about to be soon."

The collaboration's lead candidate, NGD 91-2 for anxiety, is being tested in a Phase I situational anxiety trial, expected to end by the first quarter of 1999, if not by year's end. Trials in single and multiple dosing have already finished. Neurogen plans to enter Phase II trials by mid-1999.

This compound has also performed well in animal models of depression and may be advanced in that indication. "We're not sure how it will play out," Enders said.

Another drug, NGD 97-1 for cognition enhancement, is in preclinical trials and the company expects to enter Phase I trials with it in Europe early next year. NGD 96-1 for insomnia will start a Phase I study in the U.S. next year as well.

Neurogen's stock (NASDAQ:NRGN) closed Thursday at $16, up $1.50. n