Neurogen Corp., which has receivedmore than $50 million since 1992 fromPfizer Inc. for neurological drugdiscovery, will earn another $10.4million over the next two years toextend those efforts targetinganxiety, sleep disorders and cognitionimpairment.

The drug development programs focus onsmall molecule compounds that interactwith gamma aminobutyric acid (GABA)receptors in the brain. Low levels ofthe GABA neurotransmitter areassociated with anxiety and insomniawhile high levels of the amino acidare linked to learning and memoryproblems.

In treating the disorders, Neurogen'sdrug candidates zero in on specificsubtypes of GABA receptors to minimizeside effects that occur with smallmolecule compounds whose interactionis less focused. The company hasidentified different GABA receptorsubtypes involved in each of the threetreatment areas _ anxiety, sleep andcognition.

There are marketed neurological drugsthat target GABA receptors, butNeurogen researchers said thoseproducts are less specific in theiractivities and have unwanted sideeffects, such as causing drowsinesswhen the treatment is aimed atrelieving anxiety.

"What the industry has not been ableto do is sort out the receptorsubtypes and determine which onesaffect anxiety, which ones affectsedation and which ones affectcognition," said Stephen Davis, chieffinancial officer of Neurogen, ofBranford, Conn.

In the collaboration with New York-based Pfizer, Neurogen has developedlead compounds in all three areas.

Neurogen and Pfizer began theirresearch collaboration in 1992 onanxiety and insomnia and expanded itin 1994 to include cognition. Theanxiety and insomnia compounds arepartial agonists to the GABAreceptors, boosting levels of theneurotransmitter. The compounds forcognition are inverse agonists,reducing GABA levels.

Davis said Neurogen has received $53million from Pfizer over the last fouryears. The pharmaceutical firm madeequity investments totaling $23.7million and paid $29.3 million inresearch funding.

With expirations of the 1992 agreementat the end of this year and the 1994alliance in June 1997, Pfizer agreedto pay $5.2 million per year over thenext two years to extend and combineresources on the collaborations.Neurogen also could receive another$16 million in clinical developmentmilestone payments.

In November 1995, Pfizer began aseparate drug discovery program withNeurogen for an obesity treatment. Thedrugs are inhibitors of neuropeptideY1 receptors involved in stimulatingappetite. Pfizer, which owns 21percent of Neurogen, made a $16.5million equity investment in thatalliance.

In the drug development programsextended this week, anxiety is themost advanced, followed by sleepdisorders (insomnia) and cognitionimpairment.

Davis said that after Phase I studieswith one compound, NGD 91-1, foranxiety, Pfizer elected to proceed inclinical development with anotherNeurogen compound, NGD 91-2.

"They are mechanistically identical,"Davis said, "and they hit the sameGABA receptor subtypes, but they arefrom different chemical series."

Pfizer preferred the NGD 91-2formulation over NGD 91-1 afterobserving the former's performance inanimal studies.

"What the public is getting is awindow into small molecule drugdevelopment at pharmaceuticalcompanies," Davis said. "With hormonesand biologics you get one bite at theapple. With small molecules you getmore than one bite."

Based on the Phase I experience withNGD 91-1, Davis noted, Pfizer isexpected to conduct accelerated PhaseI trials with NGD 91-2.

Pfizer also is scheduled to beginclinical trials with one or twocompounds for insomnia in 1997.

"A lead compound for cognitionimpairment is in the queue behind thesleep disorder drugs," Davis said. Acognition-related small molecule wouldbe targeted as treatment for suchdisorders as Alzheimer's andParkinson's diseases.

Neurogen's stock (NASDAQ:NRGN) closedThursday at $18.25, down $0.375.Pfizer was down $2.25 to $81.25. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.