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Absolutely. Thanks for figuring it out. That's why it was germane to the Biovail release--the money comes from them--and not to Cortex, since they don't receive any of it.
NeuroInvestment
I played a small matchmaking role, introducing two companies to Cortex and the RD partnership concept last summer. Biovail was one of them. But I have no way of knowing whether it was Biovail, Company B, or some other entity that was the company that was initially in such a big hurry, and then slowed to a halt. Once these companies sign CDAs, nothing gets said--I did not know that this deal was in the works, until it was announced.. We are not ever going to hear any details about the process by which the deal was done. Doesn't particularly matter much either. I will say this: All the trashtalk about Cortex management dragging their feet, not putting effort into partnering, just sitting around collecting paychecks; was itself pure garbage.
P.S. Gfp--thanks for pointing out the added detail available on the Biovail PR--Cortex doesn't mention anything about royalties, but there is this item about 'low single digit' royalties on 'net sales to third parties.' More questions for Monday, though those numbers are probably not material for many years, if ever.
NeuroInvestment
'allowed to' is a curious turn of phrase, as opposed to 'Cortex retains all SA rights'--so you are quite right, that will be an excellent question for the CC.
Biovail has an established psychiatry sales force for depression, and they are adding psychosis to that with pimavanserin. So they would be a candidate for adding yet another psych indication, like ADHD, because the same sales force can deal with all.
RD tx (and their recently inlicensed AZ=004 for agitation) will be sold primarily to hospitals. Whereas SA would be an outpatient prescriber base, and would need a separate sales force. That would be the question they'd face. The one option they have ruled out is developing a sales force for primary care, and the question is: How much of the SA market would be accessed through non-PCP's?
NeuroInvestment
<<Corx had to sacrifice their future crop on their richest soil to stay independent>>
A dubious conclusion. CX-1739 is their most valuable compound (the oral, not IV), and they retain full control over that asset.
One can differ over whether RD was their "most valuable tract"--I certainly don't agree. ADHD and other psychiatric indications would be the potentially most valuable. SA would also be more valuable IF a signal of benefit is seen. Which remains to be seen.
You really cannot assess the overall 'cost' of the neurorespiratory program that sprang from the Greer alliance until the SA data is in. Your allocation of all expenses and financings to RD is also specious, since it has been SA which has been the trial focus for fifteen months. Until you know how that turns out, all calculations are provisional.
<<other than this one-time financial boost, Corx stands to gain virtually nothing else. What you see is what you get>>
Yes: a nondilutive ten million dollars, which along with warrant conversions, should allow them to (by my guesstimate) complete a CX-1739 ADHD trial. If that works, trading RD for ADHD will have been an excellent move.
NeuroInvestment
Pretty much correct. Samyang kept them from sinking, but Samyang is not particularly a known entity here. Biovail on the other hand is the hottest commodity in the CNS partnering world--because they have that rare combination of resources and the intent to acquire. I have jokingly told their CSO that sitting with him at a meeting is like sitting next to the Pope, watching a steady stream of supplicants approaching--on their knees. That's not far from the truth. Which is one reason--there must be others, but I likely will never know what they were--this process took so long to unfold. They are not a huge company, it's not like a BP with many BusDev teams working simultaneously. So with literally hundreds of projects being brought to them, everything slows down. This is the third deal they have completed in three months, the fifth in a year.
Given that the Biovail CSO was previously the CSO at Amgen, and head of neuroscience at Lilly, this does give Cortex a freshening up in terms of credibility. What is also important is that, by this time, Biovail could have held Cortex's feet to the fire even more (I suspect they drove a tough deal, hence the absence of royalties) in terms of the upfront, but this was better than expected. And Cortex can now move ahead with its real inhouse priorities. They now have a degree of control over their fate we have not seen for several years.
NeuroInvestment
<<Volume should be astronomical>>
Remember that this Board is the most Cortex-centric environment in the world outside of the company itself. This is a hugely positive development for Cortex, but it is not as if the world has been waiting by the phone hoping something would happen. So interest, and volume, in an OTC stock that has been on life-support for a long time, may take a while, or a lucky media break, to happen.
NeuroInvestment
I would trade going into Phase II in RD for Phase II in ADHD any time, without hesitation. As we discussed here, the trial design for RD is ambiguous--how do you find enough 'rescue' situations to reach critical mass for demonstrating efficacy? The trial design for ADHD is very clearcut, they've already done it with CX717. I suppose that, if Biovail is taking in "hundreds of millions" by 2018-20 that I might feel a pang--but then again, by then Cortex could be taking in even more from a partner's sales in psychiatric disorders, beginning but not ending with ADHD. That's a trade I would definitely make, and I'm glad they did.
NeuroInvestment
Biovail thinks they have found another respiratory context for Ampakines, and since it would mean nothing to Cortex other than some small part of that milestone package, it's not high profile to me at the moment.
NeuroInvestment
There are no royalties, because this is a sale of those compounds, albeit with a license for these respiratory indications only. Cortex went for more money upfront, rather than waiting for royalties from sales in 2016 and beyond. There are very modest milestones along the way, but the story is the upfront payment, and what Cortex did not have to give up: CX-1739, sleep apnea, and the high impacts. Back when we discussed the RD indication, and as time went on, the conjecture was on upfront payments in the $5 million range. With their cash dwindling again, and along with it, Cortex's leverage, I was becoming worried that if there was a RD deal, they'd receive even less, $3-4 million, and would have to throw in SA for nothing.
So if you believe, as I do, that CX-1739 in ADHD (and perhaps in sz, depending on what Merck ends up doing with that license, which at the moment seems to be in limbo), and the high impacts, are the most important Cortex components, this deal gives them enough cash--when one also figures on some warrant conversions--to get that the project with the most nearterm leverage accomplished, an ADHD trial.
Count me as someone who is extremely happy with this Biovail transaction.
NeuroInvestment
OT: Silenor
I'm not totally surprised, in that there wasn't a great reason to NOT approve Silenor, it isn't a near duplicate of something on the market already, like Fanapt was (and even that was approved). On the other hand, the general sense in the industry was that the FDA had taken a dislike to Silenor, there wasn't a strong case FOR approval either--they had never cut Somaxon any slack--until now. There's a fair amount of skepticism about its prospects for sales, but certainly it should be big enough to get a specialty company to market it.
Personally, I'll be waiting for the next quarterly SEC filing to see how much they paid their consultant for FDA services rendered. Vanda paid $5 million for their's--if I were Somaxon's, I'd have a healthy fee attached to product approval. The big questions in the industry will be- Was it the same guy who got Fanapt through? Is it Paul Leber? If we give him a chunk of the Company, or our firstborn child, or anything else he wants, will he shepherd our NDA through approval?
Re: Cortex
I don't think Samyang is manipulating anything--as Enemem noted, the stock price is static because there's no news. And the anxiety is rising as April 15 approaches.
NeuroInvestment
I don't know what the composition-of-matter patent life is, but the Alza OROS formulation of the drug undoubtedly has much better patent life than that--I'd have to find old notes from talking with Gallen to recall exactly what--but Covidien (aka Mallinckrodt, was spun out from Tyco) would not have paid $55 million thus far, with all the launch process still to go--if they only had three years to play with.
NeuroInvestment
I followed Neuromed for a long time, and know this program fairly well( it was a relatively later inlicensing)--I agree with that clinician's opinion. This is from NI's 2009 pain review:
<<JNJ’s ‘OROS’ reformulation of extended release hydromorphone was launched in the EU, but the FDA wanted another pivotal trial in the US. Neuromed Pharmaceuticals licensed that program, and has recently completed that Phase III for ‘Exalgo’, hitting all endpoints. The OROS formulation has advantages in terms of abuse-resistance and effect-duration that could give it a substantial advantage in the US market, and its pace of uptake in Europe may augur for healthy adoption in the US. But first they must submit the response to the previous ‘Approvable’ letter during 2H:09, and then wait for approval, by mid-2010. The next step will be to sign a pharma marketing partner, which should not be a problem, given its OROS heritage and solid data package.>>
They have that partner, Covidien, and the FDA gave them less hassle than I had expected. Frankly, I had never paid attention to CombinatoRx until the merger, but the Neuromed components are appealing.
NeuroInvestment
This is NI's 2009 review of Alzheimer's:
<<A UCLA neurosurgeon published a report last year that weekly perispinal Enbrel improved cognitive functioning in a Physician-IND trial involving 12 patients. Families were quoted as remarking on their loved ones becoming immediately more verbally responsive, and neuropsych testing was cited as showing improvement. However, in looking at the limited neuropsych data made public, the publicity appears to outweigh the benefit. On the most sensitive measure of verbal memory administered (and only partially administered, it appears that the best measures of delayed recall were either not done, or not reported), immediate recall appeared to improve from profoundly awful to truly awful. In an open-label experimental therapy, patients and families are prone to placebo effects, and in a trial where the investigator makes $10,000-40,000 per procedure, the risk of a global placebo effect is high. The mechanism makes less sense than the global placebo effect hypothesis.>>
NeuroInvestment
Blade:
1) Generally, when an asset is returned, the data usually goes with it. But I don't know if there are ever contractual exceptions.
2) There are programs working on antiinflammatory and antioxidant approaches. And I have seen some of these retrospective studies that link use of one class of drug or other to decreased/slowed AD onset. But nothing has been proven prospectively. Flurizan was a COX-inhibitor, and thus is an antiinflammatory--though it was also believed to be a gamma secretase inhibitor, hence its Phase III program. It failed completely. There have also been trials of antioxidants that have not come to fruition. The metal-binding approach from Prana is thought to have antioxidant effects, the data was not positive enough to get a partner. Either or both of these may be downstream points of intervention, perhaps in combination. But amyloid has continued to be the dominant motif.
NeuroInvestment
The problem was that the two early partnerships, with Servier and Organon, were indication-based, regardless of the compound in question. So Cortex could not outlicense a later compound for neurodegeneration, schizophrenia, or depression. Big chunks of territory unavailable to a licensee. That's different from outlicensing specific molecules for a specific indication(s), which is the usual industry practice. It's highly unlikely they can outlicense CX1739 to two different partners for two different indications (e.g. ADHD and SA), but if they can, more power to them. That does not cede control of their other compounds.
<<I've long advocated for an across-the-board low-impact outlicencing strategy, in exchange for good upfronts and royalties. This would stabilize corx's bottom line, and would allow it to focus on high-impact development>>
If someone wanted to do this, maybe it's worth looking at. But that has not been the pattern in BP partnering, I'm at a loss to think of a deal where a BP licensed an entire CNS platform for all indications--do you know of one?
NeuroInvestment
(OT:MDVN)I had hoped to be wrong. This is only going to make it harder for small companies in CNS, especially in Alzheimer's.
NeuroInvestment
That's where I was going with the post just preceding yours: If someone with some substance sees a glimmer of an interesting topic amidst the flotsam and jetsam, restate it and I'll grapple with it as time permits. Otherwise, I'll assume it's the usual.
NeuroInvestment
<<Amateurs>>
The irony of your affixing this label on to someone working in the CNS pharma area, when your judgments are based on the most superficial and simplistic grasp of what is involved....well it's a veritable magnetic North Pole of irony, a new compass point for those seeking examples of unintended self-parody. The unfunny thing is--you don't seem to have any idea just how little you know.
NeuroInvestment
In a conversation I had last year with a Big Pharma BusDev group about Cortex, they referred to the "fragmented" Ampakine rights with a tone of complete dismay. It's a complication they aren't used to seeing in an asset. So this does remove one obstacle 'down the road'--when, if the plan pans out (knocking on wood wherever available) they seek to partner CX-1739 for ADHD. It could expand into a broader psychiatric partnership that would not currently be possible.
NeuroInvestment
It can be fairly argued that the rights are worth more to Cortex than to Merck, since Cortex has a later-generation compound than Schering-Plough had.
The question is-what was in the original Cortex/Organon contract? I don't know if Cortex can disclose that--it's probably redacted, subject to CDAs on both sides--without Merck's permission. The possibilities are:
1) Without any clinical trials in process or planned, the assets would be considered 'abandoned', and subject to return to Cortex. This would be nice, but I have the feeling it might not be so simple.
2) What would Merck want for them, if they are for sale? They probably aren't of value to anyone else, GSK is already working on Ampakines for sz. But they are to Cortex, since they are bound by the Organon contract. My guess is that Merck would---since they are now of no value to them--consider selling them back for a tiny royalty slice from any future Cortex revenues in sz or depression.
NeuroInvestment
Your inability and/or unwillingness to process information and incorporate it into your perspective lost its "comedic" value some time ago.
NeuroInvestment
Blade:
When I saw this yesterday, my first look was to see if the Ampakines were listed. Nothing cited at all for depression or ADHD. The SP drug in Phase II for schizophrenia is a glycine transporter inhibitor, the Merck drug isn't defined, but my guess is that it's a mGluR targeting drug.
Schizophrenia, insomnia, migraine (probably a doomed compound), Parkinson's. Nothing else for neurology/psychiatry in development.
Merck has cut back overall in CNS, and is not developing the Ampakines. This raises two questions:
1) What does this say about the trial results for Org26596? My take on it is that it means that the results were not spectacular--but it doesn't necessarily mean they were a failure (they may have been, but even 'middling' results might not have saved them). Merck, like other BPs, is cutting back on CNS therapeutic areas (GSK just eliminated depression and pain). They may have made a strategic decision to not pursue dep/ADHD. Interestingly; for those who bemoan Cortex not pursuing Alzheimer's, Merck isn't either.
2) If Merck isn't going to develop Ampakines, what happens to the sz/dep rights? Most partnership deals include some clause regarding the return of rights not being exercised--up until this time, there has always been a clinical trial in process or planned by Organon-Schering Plough. Now there isn't.
NeuroInvestment
<<And I don't want to hear about PRANA on the other side of the globe. >>
Actually, I think it would be more honest for you to admit that you don't want to hear anything that doesn't fit your prefabricated version of reality.
NeuroInvestment
You posted that interesting article along with my quote. Can you clarify what you think the former has to do with the latter?
NeuroInvestment
A point which apparently continues to elude you. Maybe someone else wants to play, this is getting tedious. Again.
NeuroInvestment
And ignoring contextual realities is intellectually lazy. All areas in all BPs have been fighting for position in a shrinking vessel: the two areas on the ascendant have been oncology and diabetes. Overall in 2009, CNS partnering proceeds were up--but it was because of large companies being willing to pay for later-stage programs, not those in earlier stage.
RD does not fall neatly into any major category, so it would already be handicapped. Midsize companies are just impacted, even if differently. To the degree to which they too look to Big Pharma for partnering, be it for development or marketing, that support has been in question. And the pain companies who might be considered the most likely midsize partners for RD have been impacted by a regulatory factor: The FDA clamping down on analgesic product approvals, demanding REMS plans in the face of the abuse epidemic. Which jeopardizes their revenue potential, which means they are less willing to invest money they aren't sure they'll have. In this kind of environment, from which no company is immune, there is at best a delay, at worst a contraction.
Even in Alzheimer's, your chosen example, there are companies with Phase II efficacy data that have not been able to obtain a partner over the last eighteen months.
NeuroInvestment
<<"the internal state of the CNS pharma industry." The latter should not be the cause of Corx's difficulty in forming an RD partnership (for indications with no current treatment, and similarly, no competition)>>
That's an absurd conclusion.You don't think that the internal state of CNS Pharma industry (partly in response to macro 'flux' in the economy, health care policy, and regulatory bodies) does not have an impact upon partnership tactics, choices, and timeframes in specific areas? Or to put it another way: You think that the level of competition in a specific therapeutic area can insulate Business Development in that area from the effects of these factors?
Give that some thought.
NeuroInvestment
Sure--but it doesn't carry the out-of-this-world cachet of "$330 million". That's why milestone figures are often called 'BioBucks"--because they aren't, and never will be, real money.
NeuroInvestment
This has nothing to do with RD--ARDS is an acute inflammatory lung disease. Ten seconds of Googling prior to emptying both barrels might have been a good idea.
You should also try to discriminate upfront payments from milestones. $330 million in Biobuck potential milestones doesn't say anything about Big Pharma's 'pockets'--watch the upfronts.
Postscript: I see that Athero already provided a more substantive clarification,
NeuroInvestment
I'm not going there. Each to his or her own.
NeuroInvestment
Again? Go back and restate what has been discussed here over many months about the internal state of the CNS pharma industry? For someone who cites Pfizer's share price, and valuation changes for a handful of small companies who have had NDAs filed or approved, as somehow being relevant to the partnering environment for Cortex?
It would be like trying to have a coherent discussion with Glenn Beck about health care reform. Not worth the expended oxygen.
NeuroInvestment
<<I don't know what 'facts' you are referring to>>
True. You clearly do not.
NeuroInvestment
Just to note: I've seen reports of RD resulting from epidural fentanyl or morphine as well, so that may reduce, but does not completely eliminate, the risk.
NeuroInvestment
If I were a potential RD partner, I'd be proposing a more backloaded deal than Cortex would like. In other words, putting more milestone weight on the clinical advent of CX-717 IV, or of another compound from your list. The IV form of CX717 will start its own patent clock, and I don't think the 3 months at high doses of CX717 primate artifact finding, which spooked Psychiatry, is going to be an insurmountable obstacle for one-use CX717, oral or IV, when assessed by the Analgesia division.
But then again, I thought the SA study would be a quick and easy read of CX717 in that disorder, so......
NeuroInvestment
Excellent point. I don't know what the higher-risk subgroups might be, I'd suspect obesity,cardio problems,sleep apnea (correlated with obesity), age, but it's not my area. I'd been thinking about Entereg for preventing postoperative ileus, but I gather the incidence there is close to 50%.
So one would have to identify a higher risk subgroup where RD is less rare, and thus prophylaxis justified. I'd wonder what incidence base rate would be seen as sufficient--could one parse out a subgroup with a 25% incidence rate, and without taking it to an absurd level of specificity? ('trial will enroll only patients with a BMI of over 35, who are over 75 years of age, have a history myocardial infarction, and have been diagnosed with OSA...')
NeuroInvestment
First of all, I chose that number somewhat arbitrarily, but you can see the rationale due to the probable baserate. And I don't see why that necessarily translates into 10-20,000 for Phase III. Depends on what the Phase IIb shows. If it is OK at p=.04 (again, I have no idea what the variance in these populations would be), you'd probably do two Phase IIIs with slightly larger sample sizes to be on the safe side.
But even if you needed 5000 patients total: It's a straightforward trial, no dropouts over time, since there is no time lapse before measures are taken, perhaps an extra measure of oxygenation (maybe Athero or DavidAl know to what degree oxygenation is monitored in various surgical settings). Compared to long duration dementia trials, to use that example again, this is less arduous than it seems; and given that what's at stake could in theory be a prophylaxis that would become a routine surgery component, there is a potential payoff. But you are correct, in that the sheer scale of trial to test this drug in relation to rare but dangerous events is a likely reason that this has been a tough 'sell.'
NeuroInvestment
If its a PhIIb, you don't need statistical significance per se (though you'd certainly prefer to see it), just confirmation that the dosing is right for the population(s) being assessed. If it was my PhIIb to design, I'd envision 1000 patients undergoing surgery--whether it would be better to focus on a subgroup receiving a certain type of surgery and/or anesthetic protocol, I don't know enough to say.
If you think that there might be a surgical baserate of 5% (that varies by setting), you'd expect 25 RD episodes in the half of the sample receiving a placebo RD-prophylaxis, and hopefully, zero RD episodes in the CX717 group. If you in fact saw that clear a split, it would probably reach p=.05. But I don't know if you can expect 100% success in preventing RD, and I am pretty sure the base rate of RD in the placebo group will be reduced by virtue of the fact that anesthesiologists will probably be more attentive, more likely to sidestep RD because they are part of a trial.
The question of how many enrollees would be necessary to power a Phase III would be determined by the Phase IIb data. It's not a prohibitively expensive model, since you are just assessing respiratory function during and immediately after surgery, there's no need to follow patients for a long duration (like the six months or more for an Alzheimer's trial).
The advantage that this has over testing CX717 as a rescue med is that in a rescue trial, there are medical and ethical issues attached to NOT providing the known rescue med (naltrexone for opioid induced RD)--withholding it and giving an alternative that has not yet been proven to reverse RD means exposing patients to the risk of hypoxia. I suppose you could focus on patients receiving propofol, where there is no rescue med at present, but that restricts the patient population to a group that has not yet been tested in Phase IIa.
NeuroInvestment
None of these are new questions.
Anesthesiologists and hospital risk managers would look at prophylaxis differently. Avoiding even a 5% chance of a life-threatening RD episode, and huge legal exposure, would have clinical and fiscal value.
We look at the FDA's risk-benefit calculus differently.
The Phase IIb trial design issue is insurmountable for Cortex, with its limited resources. It is not insurmountable for a larger company.
NeuroInvestment
I have to give you credit: You never let facts get in the way of your opinions.
NeuroInvestment
As has been noted before: oral CX717 is usable on an acute basis--and thus could be tested as prophylaxis as preventing perisurgical RD.
NeuroInvestment