Neurogen Corp. said Friday that it could receive up to $50million under a development and commercialization agreementit has signed with Pfizer Inc. to develop drugs to treat anxiety.
The deal is Neurogen's first corporate partnership.
Pfizer will fund a five-year joint research and developmentprogram at Neurogen, which also will receive milestonepayments and sales royalties. In exchange, Pfizer receivedworldwide manufacturing and marketing rights to oneanxiolytic drug developed through the collaboration.
New York-based Pfizer is also purchasing 1 millionunregistered Neurogen shares (NASDAQ:NRGN), equal to 11percent of the 8.8 million shares outstanding after the deal.Pfizer paid the market price at the time the deal was made,within the past 30 days, said Thomas Paulson, Neurogen vicepresident of finance. The stock has closed between $15.50 and$18.50 in that period. The shares closed up $1.38 on Friday at$18.63.
Neurogen's lead compound is NGD 91-1, which the companyhopes will enter the clinic in the second half of the year. Pfizerhas rights to the compound, but can opt for another compounddeveloped under the collaboration, Paulson said.
NGD 91-1 is an anxiety-reducing compound that interacts withreceptor subtypes of the gamma-aminobutyric acid (GABA)receptor family. According to Neurogen, animal studies showedthat the drug is as effective as benzodiazepines such asdiazepam (generic for Valium) and Xanax, but without sideeffects such as drowsiness. Benzodiazepines work at GABAreceptor sites, but less selectively, causing side effects. NGD 91-1 operates at only 15 percent to 20 percent of GABA sites,Paulson said.
Pfizer (NYSE:PFE) has a major effort under way in the CNS area,said spokesman Brian McGlynn. Its Zoloft anti-depressant, aserotonin reuptake inhibitor, received FDA marketing approvalin December. The company is also conducting research onsubstance P, a neurotransmitter implicated in paintransmission. Pfizer is also collaborating with Natural ProductSciences Inc. of Salt Lake City, using its spider venom-basedcompounds to develop drugs for stroke and neuropsychiatricdisorders.
Pfizer's other biotech partnerships include one with CaliforniaBiotechnology Inc. to treat type II diabetes and with OncogeneScience Inc. to develop cancer therapies.
-- Karen Bernstein BioWorld Staff
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