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Executive Summary

CAMBRIDGE NEUROSCIENCE DEVELOPING WARNER-LAMBERT's PRAMIRACETAM as an adjunct to electroshock therapy for severe depression, the start-up firm disclosed in a preliminary prospectus for a $ 32 mil. initial public offering. A licensing agreement with Warner-Lambert gives Cambridge NeuroScience (CNS) exclusive rights to the nootropic drug in the U.S., Japan and other non-European markets, as well as access to Warner-Lambert's preclinical and clinical data. CNS plans to begin pramiracetam Phase III trials within the next 12 months and apply for orphan drug status to receive seven- year exclusivity in the U.S.; the product's patent expires in 1996. The agreement with Warner-Lambert is the first step in the five-year-old firm's strategy to help fund R&D by acquiring near- term or already-marketed products in niche neuropsychiatric markets. As an adjunct to electroshock therapy, pramiracetam would be used concomitantly on a daily basis for two to three weeks. Warner-Lambert abandoned the drug as a treatment for Alzheimer's disease due to "mixed results" in Phase II trials. The Italian co- developer of the drug, Mennarini, is still working to evaluate the drug for "chronic organic brainsyndrome," Warner-Lambert told analysts in November ("The Pink Sheet" Nov. 5, p. 12); an NDA was filed in Italy in June 1990. Mental illness is one of three areas of focus for the CNS R&D program. The firm is developing neuroprotective compounds to treat stroke and traumatic brain injury, antipsychotic compounds for schizophrenia, and growth factors for neurodegenerative diseases. CNS expects to file INDs in 1992 for two small molecule compounds: CNS 1102 to reduce brain damage immediately following stroke, and CNS 1044 to treat schizophrenia with an improved side effect profile from that of currently available drugs. CNS 1102 is designed to reduce cell death after a stroke or injury to the head or spine by blocking the NMDA-ion channel to prevent the inward flow of calcium ions. Animal studies have demonstrated that rats treated with CNS 1102 had "one-half the brain damage" of untreated rats 24 hours after a major artery to the brain was blocked, the prospectus states. Spider venoms are another potential method for limiting brain cell death being explored by the firm. CNS filed a patent earlier this year for CNS 2103, a "highly active small molecule" derived from spider venom, which has been "identified as a neuronal calcium channel antagonist," the firm reported. A synthetic calcium channel blocker is also under development and CNS expects to file an IND in 1993. Spider venom for stroke-related cell injury is an area of active research at several industry labs. Pfizer is collaborating with Atlanta-based Natural Product Sciences on a project to study spider toxins for stroke treatment ("The Pink Sheet" April 29, In Brief). CNS 1044, the lead antipsychotic compound at the company, does not interact with dopamine receptors, which are believed to be the cause of side effects such as tardive dyskinesia. Two independent labs have confirmed that CNS 1044 is active in tests to predict antipsychotic efficacy, and some of the studies required for an IND submission have beenpleted, the firm said. CNS is hoping to generate $ 29 mil. in proceeds after expenses from its initial public offering of 2 mil. shares at an estimated price of $ 12 per share. Since its founding in 1986, the firm has raised $ 17.1 mil. through private placements and received $ 1.7 mil. in federal research grants. After the offering, the Cambridge, Mass.-based company will have 6.8 mil. shares outstanding; Warburg Pincus and Harvard University's Aeneas Venture will control 34.5% and 12.6% of the company, respectively. CNS Chairman Alan Dalby will own 3.5% and President and Chief Operating Officer Elkan Gamzu, PhD, will have a 2.9% stake. Dalby, 54, joined the firm in 1987 after nearly 30 years at SmithKline Beckman. Gamzu came on board in October 1989; he was previously VP-drug development for Parke-Davis and continues as a Warner-Lambert consultant for the Alzheimer's drug Cognex (tacrine). CNS is collaborating with the Ludwig Institute for Cancer Research in London to develop three growth factors for treating neurodegenerative diseases. The firm is also supporting research at Columbia University and the Massachusetts Institute of Technology on cell death genetics research.

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