$NHPI Neuro-Hitech, Inc. is an early stage pharmaceutical company engaged in the acquisition and development of therapies for Alzheimer's disease and other degenerative neurological disorders. The Company is focused particularly on technologies that address large unmet medical needs and have the potential to enter clinical development within 12 to 24 months after acquisition, and on driving development in a rapid, cost-effective manner.
The Company's most advanced product candidate, Huperzine A, is in Phase II clinical trials in the U.S. and is being tested for efficacy and safety in the treatment of mild to moderate Alzheimer's disease. Huperzine A is a cholinesterase inhibitor that the Company believes may be effective in the treatment of Alzheimer's disease and Mild Cognitive Impairment ("MCI"), although, to date, its efforts have been focused upon Huperzine A's effectiveness in Alzheimer's disease. Through a collaboration with the Alzheimer's Disease Cooperative Study ("ADCS"), the Company has completed two Phase I studies. ADCS was formed in 1991 as a cooperative agreement between the National Institute of Aging and the University of California San Diego, with the goal of advancing the research of drugs for treating patients with Alzheimer's disease, the National Institutes of Health ("NIH") and Georgetown University Medical Center ("Georgetown").
The Company is also studying the transdermal delivery of Huperzine A. The Company believes that Huperzine A can effectively be delivered transdermally because of its low dosage requirement and low molecular weight. The Company believes that a transdermal patch is the ideal way to deliver any Alzheimer's treatment because the patch may provide the drug for transdermal delivery for up to between three and five days while avoiding the gastrointestinal tract. The Company expects to begin Phase I clinical trial in the first quarter of 2008 and to report study results later that year. Worldwide research thus far suggests that, in addition to Alzheimer's Disease, Huperzine A may be effective in treating other dementias and myasthenia gravis. Also, research suggests that it has potential neuroprotective properties that may render it useful as a protection against neurotoxins, and it has an anti-oxidant effect.
In addition to Huperzine A, the Company is currently working on two major pre-clinical development programs: one for second generation anti-amyloid compounds or disease modifying drugs for Alzheimer's disease and, secondly, development of a series of compounds targeted to treat and prevent epilepsy.
The Company has imported and sold inventories of natural huperzine to vitamin and supplement suppliers to generate revenues. However, the majority of the Company's operations to date have been funded through Company's private placement of equity securities.
History
The Company was originally formed on February 1, 2005, as Northern Way Resources, Inc., a Nevada corporation, for the purpose of acquiring exploration and early stage natural resource properties. On January 24, 2006, the Company entered into an Agreement and Plan of Reorganization (the "Merger Agreement") by and among the Company, Marco Hi-Tech JV Ltd., a privately held New York corporation ("Marco"), and Marco Acquisition I, Inc., a newly formed wholly-owned Delaware subsidiary of the Company ("Acquisition Sub"). Upon closing of the transactions contemplated under the Merger Agreement (the "Merger"), Acquisition Sub was merged with and into Marco, and Marco became a wholly-owned subsidiary of the Company. The Merger was consummated on that date and in connection with that Merger, the Company changed its name to Neuro-Hitech Pharmaceuticals, Inc. The Company subsequently changed its name to Neuro-Hitech, Inc. on August 11, 2006.
Pursuant to the Merger Agreement, at closing, shareholders of Marco received 0.5830332 shares of the Company's Common Stock for each issued and outstanding share of Marco's common stock, par value $.01 per share. As a result, at closing of the Merger, the Company issued 6,164,006 shares of its Common Stock to the former stockholders of Marco, which represented approximately 80% of the Company's outstanding Common Stock following the Merger, in exchange for 100% of the outstanding capital stock of Marco. All references to the "Company" for periods prior to the closing of the Merger refer to Marco, and references to the "Company" for periods subsequent to the closing of the Merger refer to Neuro-Hitech and its subsidiaries.
Marco was incorporated in the State of New York on December 11, 1996. Through 2005, Marco was focused primarily on licensing proprietary Huperzine A technology from independent third-party developers and investigators, including the Mayo Foundation for Medical Education and Research in Rochester, Minnesota (the "Mayo Foundation"), and conducting analytical work and clinical trials of Huperzine A, and until such time operated with no full-time employees and minimal internal resources. In addition, from time to time, Marco imported and sold inventories of natural huperzine and other dietary supplement ingredients to vitamin and supplement suppliers to generate revenues. In 2005, Marco determined to raise additional capital to pursue additional approvals and undertake necessary studies for the development and commercialization of Huperzine A, including securing rights to third-party transdermal patch technology.
Upon the Merger, the Company abandoned the line of business pursued by Northern Way Resources prior to the Merger.
On November 29, 2006, the Company completed an acquisition by merger of Q-RNA, Inc. ("Q-RNA"), a New York-based biotechnology company focused on diseases such as Alzheimer's, epilepsy and Parkinson's disease (the "Q-RNA Merger"), pursuant to the Agreement and Plan of Merger (the "Q-RNA Merger Agreement") with QA Acquisition Corp., a Delaware corporation, QA Merger LLC, a Delaware limited liability company, Q-RNA and Dr. David Dantzker, as the "Representative" of the Q-RNA security holders.
The Merger consideration paid to the Q-RNA securityholders pursuant to the Q-RNA Merger Agreement consisted of an aggregate of: (i) 1,800,000 shares of the Company's common stock, (ii) warrants to purchase 600,356 shares of the Company's common stock at an exercise price of $13 per share, and (iii) warrants to purchase 600,356 shares of the Company's common stock at an exercise price of $18 per share. The Company also assumed Q-RNA options outstanding which upon exercise will be exercisable for 199,286 shares of the Company's common stock.
The acquisition of Q-RNA provided the Company with a pipeline of compounds, many of which have been discovered and developed internally. Among the compounds that Q-RNA believed were ready to move to optimization and pre-clinical development were NHT0012, which is one of a number of second generation disease modifying drugs for Alzheimer's disease that inhibit A-beta and Tau oligomerization and NHT1107, which is one of a large pharmaceutical library of drugs designed for the treatment of epilepsy that offer both anti-ictogenci (ability to treat epilepsy) and anti-epileptogenic (ability to prevent epilepsy) properties.
Description of the Business
Alzheimer's disease and MCI Alzheimer's disease, the leading cause of dementia, is characterized by the progressive loss of memory, thinking (cognitive function) and the ability to perform the activities of daily living (global function). There is currently no cure. According to the Alzheimer's Association and the American Health Assistance Foundation: • Alzheimer's disease currently affects approximately 5 million people in the U.S., including as many as 10% of people age 65 and older and nearly 50% of those age 85 and older. • Worldwide, Alzheimer's disease affects 18 million people, and that number is expected to reach 34 million by 2025. • There are 350,000 new diagnoses of Alzheimer's disease, and 59,000 Alzheimer's disease deaths, per year in the U.S. • Following initial diagnosis, patients live 8 years, on average, but may live up to 20 years with the disease. • Total annual expenditures on Alzheimer's disease in the U.S. exceed $100 billion annually, and the average lifetime cost per Alzheimer's disease patient is $174,000.
The precise physical changes in the brain that produce Alzheimer's disease are complex and not completely understood, but it is generally believed that the misfolding of two proteins, A-beta and Tau, are central to the process. The two best-validated early drug targets for Alzheimer's disease are cholinesterase and the N-methyl-D-aspartate receptor (NMDA-receptor). There are only four commonly-used drugs that the FDA has approved for the treatment of the symptoms of Alzheimer's disease. Although the precise mechanism of action of these four drugs is unknown, three of these drugs are believed to inhibit cholinesterase, and one is believed to inhibit the NMDA-receptor. These four drugs and their respective marketers, FDA approval dates and mechanisms of action are set forth in the following table.
According to Merrill Lynch equity research, the worldwide market for Alzheimer's disease drugs in 2005 was $3 billion, with the largest selling cholinesterase inhibitor, Aricept, generating $1.7 billion of those sales. The market performance of the existing Alzheimer's disease therapeutics is particularly noteworthy given that their clinical performance to date has been modest. Specifically, as stated in their FDA-approved labeling, none of the drugs approved by the FDA to treat Alzheimer's disease has been proven to prevent or change the underlying process of brain deterioration (neurodegeneration) in patients with Alzheimer's disease. Rather, these drugs have been shown only to slow the worsening of the symptoms of Alzheimer's disease-primarily loss of cognitive and global function. Furthermore, in the studies submitted in support of applications for FDA approval of these drugs, none of these drugs was shown significantly to improve both cognitive and global function over a six-month period in the patients studied. Thus, the Company believes that there is room for improvement in this large and growing pharmaceutical market.
In addition to the market for Alzheimer's disease, compounds such as Huperzine A may provide potential benefits to patients diagnosed with MCI by slowing down the advent of Alzheimer's disease or other forms of dementia. According to the Mayo Clinic, MCI afflicts up to 20% of the non-demented population over 65. MCI is a relatively new classification of memory disorder that is characterized by noticeable memory loss, but otherwise normal behavior. According to the Mayo Clinic, MCI converts to Alzheimer's disease at a rate of 10 to 15% a year.
Huperzine A
The Company's decision to begin clinical development of huperzine for Alzheimer's disease and to investigate potential clinical development of huperzine for other neurological indications, was based in part on the following data:
Huperzine A is a compound that is used in China as a prescription drug for treating Alzheimer's disease and other forms of dementia. Clinical trials conducted outside the United States of Huperzine A have been successful, and one Chinese study using the same clinical end points as an FDA-approved study for a leading Alzheimer's disease treatment show Huperzine A to be significantly more efficacious than any treatment currently available on the U.S. market. Both pre-clinical and animal and human clinical studies using United States Food and Drug Administration ("FDA") and other protocol end points conducted both in China and in the U.S. suggest that Huperzine A: • may have significantly longer inhibitory action at lower doses than the other approved drugs for early and middle stage Alzheimer's disease;
• may prove to reduce the unpleasant side effects resulting from use of other approved drugs for early and middle stage Alzheimer's disease;
• may be effective not only in increasing the brain's acetylcholine levels, but also levels of other important neurotransmitters such as dopamine and noradrenaline; • may have high oral bioavailability and good penetration through the blood-brain barrier; and
• may exhibit neuroprotective properties, and may significantly decrease neuronal cell death due to glutamate-induced excitotoxicity.
Although not being pursued by the Company at this time, Chinese clinical studies have indicated that Huperzine A may also have potential in the treatment of myasthenia gravis, a progressive autoimmune disease resulting in neuromuscular failure, which, untreated can lead to blindness and death from respiratory failure. In a 1986 study by Y.S. Cheng et al., it was shown that Huperzine A controlled the clinical manifestations of the disease in 99% of the 128 patients treated. Additional research at the Walter Reed Institute of Research indicates that Huperzine A may also have application as a nerve gas antidote. Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States. The Company believes that huperzine can qualify for orphan drug designation for treating myasthevia gravis.
Future Compounds
The acquisition of Q-RNA provided the Company with a pipeline of compounds, many of which have been discovered and developed by Dr. Donald F. Weaver, an inventor and expert in neuroscience and chemistry. The Company believes these compounds provide it with a robust research and development pipeline. The following compounds are ready to move to optimization and pre-clinical development:
NHT0012 is one of a number of second generation disease modifying drugs for Alzheimer's disease that inhibit A-beta and Tau oligomerization. In vitro studies suggest that these compounds are likely to offer a better pharmacological profile than first generation drugs by having: • Enhanced anti-aggregation activity • Better blood-brain barrier (BBB) penetration • Milder side effect profile
Currently marketed medications only help to control symptoms and do not slow or reverse the progression of the disease. NHT0012 belongs to an emerging class of compounds focused on reducing the progression of Alzheimer's disease while also improving its debilitating symptoms. It is believed that NHT0012 will prevent the formation and breaks down existing neurotoxic amyloid beta aggregates, allowing amyloid peptides to clear from the brain rather than accumulate and form amyloid plaques, a hallmark pathology of Alzheimer's disease.
NHT1107 is one of a large pharmaceutical library of drugs designed for the treatment of epilepsy that offer both anti-ictogenci (ability to treat epilepsy) and anti-epileptogenic (ability to prevent epilepsy) properties. Many of these compounds have proven to be effective in animal model (in vivo) systems conducted at the National Institutes of Health.
Existing medications for epilepsy only control symptoms (i.e. seizures) and do not slow the progression of the disorder. NHT1107 is a prototypic agent in a pioneering class of new antiepileptogenic agents that actually prevent the onset of epilepsy after a brain injury. It is believed that NHT1107 prevents excessive brain excitation that arises from abnormal activities of glutamate and Gamma-Aminobutyric Acid within the injured brain and that culminate in causing epilepsy.
