Cortex Pharmaceuticals Inc. could receive up to $26.5 million tocollaborate with Alkermes Inc. on the development of enzymeinhibitors to treat stroke and other acute degenerativedisorders of the brain, the companies announced Tuesday.

The two-year agreement, announced after the close of themarket, covers three classes of calpain inhibitors, Cortex's leadprogram. Calpain is an enzyme thought to be responsible forthe destruction of nerve cells.

Under the agreement, Alkermes (NASDAQ:ALKS) bought750,000 shares of Irvine, Calif.-based Cortex at $2 per share,less than 5 percent of Cortex shares (NASDAQ:CORX)outstanding. Alkermes also received 1 million three-yearwarrants to buy a share of stock for $3 and 1 million four-yearwarrants for a share at $7.50.

Alkermes of Cambridge, Mass., will provide Cortex with $2million in R&D funding this year and $2.5 million in 1993, plusmilestone payments of up to $10 million. In exchange,Alkermes received a worldwide, exclusive license tomanufacture and market any products resulting from thecollaboration. Cortex will receive sales royalties.

"I like to think this is a model transaction, because a companyour size hasn't stepped into this role before and there's noreason it shouldn't happen," Richard Pops, Alkermes' presidentand CEO, told BioWorld. "We're not relying on our owndiscovery mechanism alone. We're going to go out and activelylook for drug candidates that fit our focus on central nervoussystem disorders."

With $57 million in cash, "we can put together a deal with thesame compelling economics as a big pharmaceutical company,"Pops said. "Cortex gets the benefit of our energy, focus anddrive. Our goal is to have an investigational new drug candidateidentified this year and to be in the clinic in 1993." Once in theclinic, Pops said, Alkermes will be in a position to raise moremoney.

The cash will enable Cortex to restart work, suspended in thepast year, on its other programs in Alzheimer's disease,cognitive enhancers and neuroregeneration, said Jay Glass,Cortex's interim president.

"We expect within two years to have two more of thesecorporate partnering deals done," he said.

Alkermes shares rose $1.50 to $22.25. Cortex stock closed up19 cents at $2.19.

-- Karen Bernstein BioWorld Staff

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