NeoTherapeutics Alzheimer's therapy AIT-082 could enter Phase I through NIH by year-end.

NEOTHERAPEUTICS AIT-082 COULD ENTER PHASE I FOR ALZHEIMER's BY YEAR END under the auspices of the National Institute on Aging's Alzheimer's Disease Cooperative Study Unit, according to a prospectus for NeoTherapeutics' initial public offering. NIA "has committed to fund and conduct two Phase I clinical trials" and is funding, with the National Institute for Mental Health, production of AIT-082 for clinical trials, the prospectus states.

AIT-082 is derived by linking the "natural non-toxic purine compound" hypoxanthine with the antiarrhythmic procainamide. Hypoxanthine has the "ability to facilitate passage through the blood-brain barrier" and procainamide "has been shown to have memory-enhancing effects," the prospectus adds. NeoTherapeutics speculates that oral AIT-082 activates genes in the brain for the production of nerve growth factor, neurotrophin-3 and fibroblast growth factor, and "can augment the activity of NGF." Neurotrophins themselves are not orally active and do not pass the blood-brain barrier, the prospectus explains.

NeoTherapeutics grossed $20.5 mil. from the IPO. "The company has no current anticipated sources of funding beyond the proceeds from this offering," the prospectus states. The IPO will provide "at least 12 months" of funding.

The Newport Beach, Calif.-based company sold 2.5 mil. units in the IPO, with an additional 200,000 purchased by the underwriters in exercising an overallotment option. Each unit, consisting of one share of common stock and one warrant to purchase one share of common stock, was priced at $7.60. Paulson Investment and First Colonial Securities managed the offering.

NeoTherapeutics is headed by members of the Glasky family. President, CEO and Chairman Alvin Glasky, PhD, has led the company since the inception in 1987 of Advanced Immunotherapeutics, which became Americus Funding Corporation, and then NeoTherapeutics. Prior to 1987, Glasky was executive director of the American Social Health Association and president of Newport Pharmaceuticals.

Glasky's wife, Rosalie, and son, Mark, are secretary/treasurer and a director of NeoTherapeutics, respectively. Glasky's daughter Michelle Glasky, PhD, is director of scientific affairs. Alvin Glasky's brother Sanford owns 7% of the company after the IPO; Alvin Glasky is the largest shareholder, with 25.1%.

AIT-082 is "the only product for which the company expects to file an IND in the foreseeable future," the prospectus states. In addition to Alzheimer's disease, NeoTherapeutics believes AIT-082 has potential utility in spinal cord injury, amyotrophic lateral sclerosis, stroke and memory impairment of aging. A follow-on compound, AIT-034, is in preclinical development for Alzheimer's. The company also is studying compounds linking hypoxanthine with serotonin and dopamine.

NeoTherapeutics does not plan to seek a corporate partner for AIT-082 in the U.S., although the company expects to find partners for later compounds, according to the prospectus.