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CORTEX AMPAKINE IND FILING FOR COGNITIVE ENHANCER

Executive Summary

CORTEX AMPAKINE IND FILING FOR COGNITIVE ENHANCER is projected for the second quarter of 1994, according to a recent schedule of the Irvine, Calif. company's research projects. Cortex Pharmaceuticals' lead candidate for treatment of mild dementias is the product of a program that has generated 150 compounds which act directly on the AMPA receptor in the cerebral cortex. The chief investigator for the project is one of the company founders, Gary Lynch, PhD, a professor of psychobiology at the University of California-Irvine. Cortex recently completed two private placements totaling $14.4 mil.: $13.75 mil. from a placement of 13.75 mil. shares handled by Vector Securities and an off-shore sale of 517,884 newly-issued shares to four investors at $1.28 per share. Those sales rescued the six-year-old company from the cash shortage facing many start-ups of its generation. Working capital had dropped to $1.14 mil. as of March 31 of this year. The company previously has projected that it would need over $8 mil. to fund operations through December 1994. In addition to the first clinical trials on its ampakine compound, the company anticipates two other IND filings in 1994: Vasolex, a calpain inhibitor to prevent smooth muscle contraction and vasospasm; and Restenex, a calpain inhibitor for use against restenosis. The first project could go into early clinicals before the middle of 1994; the second project is planned to begin clinicals during the final quarter of the year. The vasospasm indication is aimed at a patient population estimated at about 80,000 per year in the U.S. The development of the calpain inhibitor projects was complicated by a suit filed Nov. 19 in Boston federal court by Alkermes. Under a January 1992 agreement, Alkermes was funding the early stage work on calpain inhibitors in return for exclusive worldwide rights to the calpain projects in three categories: acute neurodegenerative CNS disorders; chronic neurodegenerative CNS disorders; and peripheral neurodegenerative disorders. Alkermes had provided $3.6 mil. in funding plus a $1.5 mil. equity investment as part of the agreement for the calpain inhibitor research. The suit filed for Alkermes by the Boston firm of Hamilton, Brook, Smith & Reynolds and the Philadelphia firm of Ballard Spahr Andrews & Ingersoll maintains that the vasospasm indication falls within the terms of the licensing agreement. "Any doubts in the investment community about the scope of the exclusive license granted Alkermes could inhibit Alkermes' ability to raise the funds necessary for it to develop" its calpain inhibitor projects, the suit argues. In a Nov. 22 press release, Cortex contends that "cerebral vasospasm is a disorder of the vascular system, not the nervous system, and that it therefore does not fall under the rights granted to Alkermes." Cortex defines the primary area of interest of the previous collaborative work with Alkermes as the limitation of brain damage following stroke. Alkermes assumed development of the CNS indications when the collaborative project ended on June 30 of this year. Cortex does not have a corporate partner for the development of the ampakine compound. However, the firm has said that it intends to seek corporate partners to conduct clinical trials and manufacturing for its compounds. An announcement that it was seeking coporate partners for the calpain inhibitor for vasospasm was one of the events apparently triggering the Alkermes suit. Cortex recently recruited ex-Glaxo exec Alan Steigrod to be president of the firm. Steigrod is generally credited with establishing the comarketing agreement for Zantac with Roche that helped that product supplant Tagamet as the leading ulcer therapy in the U.S. The private placements were raised based on animal study results with the ampakine product that showed improved memory function in rats for knowledge memory and working memory. The ampakines also have shown in vitro activity in human brain slice studies. Cortex is also working on compounds developed by another company cofounder, Carl Cotman, PhD, to prevent the development of beta amyloid plaques in the brain that may lead to development of Alzheimer's disease. The company is understood to be seeking corporate partners for three specific projects in that area.
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