Cambridge NeuroScience Inc. received an equity investment of $10million from Boehringer Ingelheim GmbH as a milestone related toprogress in their collaboration to develop Cerestat for stroke andtraumatic brain injury.
The companies said Thursday Ingelheim is purchasing about 1.2million Cambridge NeuroScience shares at $8.08 per share, about theprice the stock closed at Wednesday. But the investment representeda premium of about 15 percent when the price was negotiated a fewweeks ago, said Harry Wilcox, vice president of businessdevelopment and chief financial officer at Cambridge NeuroScience.
Cambridge NeuroScience (NASDAQ:CNSI) gained 81 centsThursday to close at $8.88.
The Ingelheim, Germany-based pharmaceutical company purchasedabout 1.25 million Cambridge NeuroScience shares as part of a $15million up-front payment when the collaboration began in January1995. When this deal closes Ingelheim will own about 17 percent ofCambridge NeuroSciences' outstanding shares.
Wilcox said Cambridge NeuroScience, of Cambridge, Mass., nowhas received about $34 million from its Cerestat partner and canachieve another $18 million in milestone payments. Ingelheim also isfunding three-quarters of Cerestat development costs. None of thefuture payments will involve equity, he said.
Cerestat is an N-Methyl-D-Aspartate ion channel blocker that'sdesigned to prevent nerve cell death and brain damage followinghead injury or stroke by stopping excessive entry of calcium intonerve cells.
Last month the companies began a pivotal study comparing twodoses of Cerestat to placebo in a trial expected to involve 900 strokepatients. About 700 patients are expected for the pivotal traumaticbrain injury study, which began in March 1996. Both studies could becompleted by the end of 1997.
"We're very pleased to be able to announce this equity investment,"Wilcox said. "We view it as representative of how well ourrelationship with BI is working."
The stroke trial will be conducted at about 100 sites in the U.S.,Canada, Australia and South Africa. Patients are to be treated withinsix hours of the stroke. The primary endpoint will be improvement onthe five-point Rankin Scale 90 days after treatment. The scale relatesto quality-of-life issues for patients, who will be assigned rankings atbaseline and 90 days later.
Wilcox said interim analyses will be conducted for both trials.
The double-blind, placebo-controlled study in traumatic brain injurywill be conducted at about 40 sites in the U.S. and 30 in Europe. (SeeBioWorld Today, March 7, 1996, p. 1.)
Wilcox said the equity investment was not specifically tied to thestart of the Phase III stroke trial. Some parts of the agreement weresubjective, he said, and Ingelheim decided to make the investmentbased on its interpretation. He said future milestones are tied toevents such as completion of Phase III, regulatory filings andapproval. Cambridge NeuroScience has co-promotion rights in theU.S.
After this deal Cambridge NeuroScience will have about 14.8 millionshares outstanding. The company, which had about $18.6 million incash at the end of the second quarter, should have enough money toget into the third or fourth quarter of 1997, Wilcox said. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.