Cortex Pharmaceuticals Inc. announced Thursday that it isshifting its focus to developing products for Alzheimer's diseaserather than for stroke.
Until now, the Irvine, Calif., neurotech company had put itsown in-house research programs on Alzheimer's, programmedcell death and cognitive enhancers on the back burner. Instead,Cortex focused on its joint development program withAlkermes Inc. of Cambridge, Mass., for calpain inhibitors forpreventing the brain damage caused by stroke and otheroxygen-limiting neurodegenerative disorders.
The aim behind restructuring the agreement with Alkermes,Cortex President Jay Glass told BioWorld, is to free up money,time and human resources to work on its "new programs."
Under the original agreement, Alkermes bought $1.5 millionequity in Cortex and had the right to buy warrants. Cortex wasto receive from Alkermes research payments on calpaininhibitors for acute neural degeneration.
As these drugs moved through the FDA, Alkermes was to payCortex as much as an additional $10 million and Cortex was toreceive royalties on any future sales.
But this meant that Cortex was essentially a contract researchunit for Alkermes, said Glass.
Under the new deal, said Glass, Alkermes has already paidCortex an undisclosed amount of money to expand its options todevelopment rights on all neurological applications of thecalpain inhibitors, although Cortex will continue to fund thework through June 1993.
"The $10 million in milestone payments still exists, and so dothe royalties," Glass said.
Cortex will now focus on Alzheimer's disease.
The company believes that founder and consultant CarlCotman's work has provided it with a good model system forstudying the disease in vitro. His work centers on the role ofbeta amyloid protein in the disease process itself. Cotman, whois a professor at the University of California, Irvine, reportedrecently in the British journal NeuroReport that he hadreproduced in vitro the characteristic pathological changes thatare associated with the cognitive defects seen in patients whohave the disease.
"This is an interesting approach to modeling Alzheimer'sdisease neuritic pathology," said Alzheimer's researcher DennisSelkoe of Boston's Brigham and Women's Hospital.
But other researchers in the field see nothing new about thework.
"We've seen similar observations in our own studies," said IvanLieberburg, Athena Neurosciences Inc.'s vice president ofAlzheimer's research. And John Hardy, who directs Alzheimer'sdisease research at the University of South Florida in Tampasaid that Cotman's research "seems to confirm other people'swork. ... The overall conclusions are the same."
Nevertheless, Cortex's Glass said that "it's time for Cortex tostart moving aggressively in our Alzheimer's program, and weneeded more money to do that."
Analyst Sarah Gordon of Amerindo Investment Advisors Inc.said Cortex "had been operating on a shoestring." She found itscalpain development program very attractive, but she thinks itwill be at least three years before any compound to treat theAlzheimer's will get into the clinic. As for a diagnostic, "it willbe useful to be able to distinguish between people who haveAlzheimer's and those who have another type ofneurodegenerative disease, but does that make a product?"
Scott Hagen, Cortex's chief financial officer, said the newfinancial resources that are coming out of the Alkermesrestructuring will give Cortex "internal flexibility" over the nextsix to nine months.
The company' had approximately $1.5 million in cash at theend of September, Hagen told BioWorld. Its net burn rate hasbeen less than $200,000 a month, and it has 15.5 million sharesoutstanding. "As neurosciences companies go," Hagen said,"we're on the lean and mean side."
The company's stock (NASDAQ:CORX) closed unchangedThursday at $1.50 per share.
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