Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
One would have to say that for pure entertainment value, Cortex has been right up there with Cell Therapeutics and Pharmos. Stoll may not be colorful like Bianco or Gaddy, but Cortex's science has been more interesting.
>>> If not Stoll, then who? <<<
IMO, investors have themselves to blame. It's the investor's responsibility to understand the massive risks they're taking when they buy a tiny microcap. No one is forced to play at the bio roulette table.
Daviddal, In retrospect, one of the aspects of the non-Ampakine in-licensing idea now seems a little suspicious to me, since Dr. Stoll first mentioned this idea out of the blue at a conf call/presentation last year. This was way before the FDA red-flagged CX-717, but probably not too long after Cortex likely saw the histo finding in the primate. Not knowing exactly what it was or what had caused it, but thinking that it might represent a possible major problem down the road, perhaps that prompted Dr. Stoll to start thinking about diversifying into a completely different non-Ampkaine area, just in case. While that may or may not have been the main reason for his interest in a non-Ampakine in-license, the desire to proactively diversify Cortex's drug development was in retrospect not a bad idea.
I personally think Dr. Stoll has done a fine job overall. With extremely limited funds, he had little choice but to put all the eggs in the CX-717 basket and then roll the dice. He rolled many successful passes with CX-717 before hitting trouble. I really thought we were in the clear with CX-717 safety-wise. I don't think we can really blame Stoll for the current situation, since it just boils down to a lead compound running into trouble, and that's the risks one takes with microcap bio stocks.
Daviddal, OT - Concerning "the cretin emphasis" - in defense of Crete, I've been there and it's not that bad a place :o) Crete was once the center of a very advanced civilization (Minoans), though it later became a rustic backwater, which I assume is where the negative connotations of "cretin" come from. Today, Crete is a pretty nice place.
Neuro, From your experience with other small bio companies, I was wondering how often microcaps tend to do a shelf vrs the regular PIPE approach? I've seen numerous larger companies go the shelf route, and I assumed there must have been some barrier to tiny companies doing it. Thanks Neuro.
Well, the market response to the shelf looks pretty bad. I was surprised at the size of it, thought as you said, Stoll can just do a portion at a time. That flexibility could be a significant advantage to Cortex, though on the other hand Wall St may just figure that Cortex will quickly issue additional portions from the shelf if/when the stock moves up, so that creates a big potential overhang to mute any future up moves.
I figured this financing situation would get ugly. Once the stock finally bottoms though, the bigger question is our path forward for CX-717 - does it have a future for outlicensing. Objectively, I've basically written off ADHD, but AD might still be viable depending on the extent of the dosing liberalization. Even without CX-717, the N.Amer Neurodegenerative rights still represent value to Organon, though it would be a shame to lose that last remaining prize during a period of financial desperation. Ah, the joys of biotech...
OT - An article on generics. It will be interesting to see how the proposals to allow generic biotech drugs will fare. Unlike traditional small molecule drugs, many biotech drugs are complex proteins. It will be extremely difficult to demonstrate that a generic protein is the exact chemical equivalent of the original approved drug, without doing extensive clinical trials. Very slight diffences in chemical structure could produce vastly different actions in the body. Investment-wise, I like the generics industry, but getting generic biologics may be a tough road -
>>> Democrats' Rx? Generics
Copycat Drugs May Get Boost to Rein In Health-Care Costs
By ANNA WILDE MATHEWS
November 21, 2006
Newly empowered Democrats' vow to cut health-care costs might spell bad news for the brand-name pharmaceutical industry, but their efforts could provide new momentum for the generic-drug rivals' agenda.
Boosting the generics industry may prove to be the most politically palatable way to follow up on the party's campaign promises. That's because making more room for generics is meant to cut prices through increased competition -- a solution that is easier to sell as pro-market than other proposals Republicans will portray as precursors to federal price controls. In addition, some legislation that must be renewed in 2007, including laws providing vital funding to the Food and Drug Administration and encouraging studies of drugs' use in children, could provide gridlock-proof vehicles for generics provisions.
"Overall, because of the shift in Congress, next year could be the most important year to the generics industry since 1984," when Congress passed the law that opened the door to the modern generics business, says Jake Hansen, a vice president at generics maker Barr Pharmaceuticals Inc., of Woodcliff Lake, N.J.
The most important question will likely be how and whether to create a legal pathway for the FDA to approve generic versions of biotechnology drugs. The 1984 law that created a framework enabling the FDA to approve generic drugs focuses on traditional, chemically derived drugs such as Prozac, but didn't give the agency a way to approve generic versions of most biotech products. Now, the issue will get a push from several key Democrats, though it will be difficult to pass such a complicated and contentious change in 2007.
An array of other measures aimed at smoothing the way for traditional generic drugs will also get attention, and could well be tucked into broader bills next year. Among them are proposals to limit branded-drug company tactics that thwart generic competitors, such as licensing additional companies to sell their drugs and thus diluting the profits to be made from copying them [so-called authorized generics].
The FDA generics office is likely to get more funding to speed its reviews now that the Democrats are in charge, and there may be limits put on FDA petitions filed by brand-name makers that can delay generic-drug approvals. Another likely goal for Democrats: shortening a six-month period of exclusive marketing that branded-drug makers get in exchange for their pediatric research, a benefit that can be worth billions of dollars because it delays generics competition.
Makers of traditional chemical generics sell versions that can be substituted for the originals, typically at a substantially lower price. The generics companies have far smaller development costs, since they don't have to duplicate years of research and regulatory review borne by branded-drug makers.
A number of Democrats who have been allies of the generics makers are slated for positions that could help in pushing forward such changes. In the Senate are Vermont's Patrick Leahy, the expected Judiciary Committee chairman, as well as high-profile lawmakers such as New York's Hillary Clinton and Charles Schumer. Sen. Edward Kennedy of Massachusetts, who will head the health committee, is among the key Democrats who have signaled that health-care costs will be a major focus for next year.
Sen. Herb Kohl, a Wisconsin Democrat who is expected to head the Senate Appropriations subcommittee that handles the FDA's funding, says, "We really want to promote the use of generics because of the savings."
In the House, California Rep. Henry Waxman, a sponsor of the 1984 generics law, will be chairman of the Government Reform Committee, while FDA appropriations will go through a subcommittee headed by Connecticut Rep. Rosa DeLauro. The generics makers count some Republican supporters as well: Mississippi's Trent Lott, who will be the new Republican whip in the Senate, co-sponsored a bill supported by the industry last year with Michigan Democrat Debbie Stabenow.
"I'm obviously supportive of whatever we can do to make generics more available," says Democratic Rep. Frank Pallone of New Jersey, who may become chairman of the House Energy and Commerce health subcommittee. Drug prices are the kind of "affordability issue" that drew votes to Democrats, he says, adding that he supports the idea of generic biotech drugs. Mr. Waxman, with Sens. Schumer and Clinton, has introduced a bill to create a generic biotech pathway, which he says is "very, very much needed."
Generics makers are leaning on a coalition that has worked in the past, drawing on big employers and others scared by rising health-care costs. European regulators, meanwhile, have already begun crafting guidelines for what they call "biosimilars."
The generics makers' pitch is simple, and likely to resonate with many lawmakers: Helping them means lower drug costs, and doesn't involve government-imposed price controls or the controversies surrounding imported medicines.
The generics industry complains about remaining "loopholes" in law and regulation exploited by branded-pharmaceutical makers to delay generic competition. On the issue of generic biotech drugs, they argue that they can safely create copies without duplicating all the expensive studies done by the original manufacturers. "Right now, there's a regulatory monopoly" for biotech drugs, says Kathleen Jaeger, chief executive of the Generic Pharmaceutical Association.
Branded-drug companies defend their tactics. In a statement, the Pharmaceutical Research and Manufacturers of America says licensing additional competitors increases competition and brings down prices beyond the introduction of a generic version. The group also says the FDA needs to consider safety issues raised by petitions before it approves a drug, and such petitions allow consumers and others to "present their views on important FDA issues."
The biotech industry, for its part, is pushing its own case on Capitol Hill. One argument: Science isn't advanced enough for generics makers to produce truly identical duplicates of their medications. It is likely to get a good hearing from Democrats as well as Republicans, partly because of its strong base in Democratic stronghold states of California and Massachusetts.
Some biotech officials argue that generics makers will need to redo all the studies performed by the original manufacturer, in order to guarantee their copycat products are effective and safe for patients. That would likely eliminate much, or all, of the price advantage offered by the generics rivals. "There is no way to characterize a biological," says James Greenwood, a former congressman who heads the Biotechnology Industry Organization, a trade group.
Biotech companies also argue that their products take longer to develop, and are often tested for use in fighting more illnesses than traditional drugs. For small start-ups, they say, generic competition could be devastating. So if legislation moves forward, they will press for trade-offs such as extra years of exclusive marketing. Such a compromise was the basis for the 1984 passage of the generics bill.
"I would like to see Congress be fair to the innovators," says Jim Green, a senior vice president of Biogen Idec Inc., of Cambridge, Mass. "The level of research-and-development investment in the next product is not going down."
<<<
Thanks Dew. I wonder if the buyers of shelf offerings will tend to be the same mix of institutions that were previously participating in the PIPEs (hedge funds), or perhaps a shelf offering might tend to attract more mutual funds or individuals? Also, will the use of attached warrants to sweeten the deal still be as necessary I wonder? Also, I assume that a shelf offering goes out at a set price, with the same terms/incentives to all participants? Thanks for your insights.
Here's the Shelf Registration press release. This approach appears to have some clear advantages over raising money via a standard PIPE. If there are any financial types out there who are familiar with the shelf approach vrs traditional PIPEs, I'm curious as to how Cortex could pull off this type of financing this time but not previously -
Cortex Files Shelf Registration Statement
Tuesday November 21, 8:30 am ET
IRVINE, Calif.--(BUSINESS WIRE)--Cortex Pharmaceuticals, Inc. (AMEX: COR - News) announced that it has filed with the Securities and Exchange Commission a universal shelf registration statement on Form S-3 which, when declared effective, will permit Cortex, from time to time, to offer and sell up to $35 million in aggregate amount of its securities, which may consist of common stock, preferred stock, warrants or any combination of the foregoing. The shelf registration statement also includes up to 104,000 shares of Cortex common stock to be offered by certain selling stockholders upon exercise of warrants.
The shelf registration statement, once effective, is intended to provide Cortex flexibility to facilitate the periodic sale of its securities, subject to market conditions and Cortex's future financing needs. Cortex plans to use the proceeds from the sales of its securities under this registration statement to accelerate development of its AMPAKINE® technology, for working capital and for other general corporate purposes, which may include financing potential acquisitions of technologies that complement its current business. Cortex will not receive any proceeds from sales of common stock by the selling stockholders.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer of these securities will be solely by means of the prospectus included in the registration statement and any prospectus supplement that may be issued with respect to such offering.
Cortex Pharmaceuticals, Inc.
"Prolonged activation of their AMPA-GluR causes Ca2+ overload, resulting in excitotoxic death."
It's not impossible that the explanation for our histopath cellular changes could be as simple as this, especially when one considers that the histo finding apparently occurs only at extremely high doses over extending periods (2 weeks of mega dosing in rats, and 13 weeks in monkeys). Oligodendrocyte neural cells that are early in their development are particularly susceptible to this excitotoxic related cellular death -
Here's the full excerpt from the Ampakine site Erbse just posted -
Chemistry of Ampakines
--------------------------------------------------------------------------------
Ampakines are molecules that positively modulate a-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid (AMPA)-type glutamate receptors.
Cells of the oligodendroglial lineage express Ca2+-permeable alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionate-preferring glutamate receptors (AMPA-GluR) during development. Prolonged activation of their AMPA-GluR causes Ca2+ overload, resulting in excitotoxic death. Oligodendroglial progenitors and immature oligodendrocytes are susceptible to excitotoxicity, whereas mature oligodendrocytes are resistant. An unresolved issue has been why Ca2+-permeability of AMPA-GluR varies so markedly with oligodendroglial development, although the level of expression of edited GluR2, an AMPA-GluR subunit which blocks Ca2+ entry, is relatively constant. To address this question, we performed Ca2+ imaging, molecular and electrophysiological analyses using purified cultures of the rat oligodendroglial lineage. We demonstrate that transient up-regulation of expression of GluR3 and GluR4 subunits in oligodendroglial progenitors and immature oligodendrocytes results in the assembly by these cells, but not by oligodendroglial pre-progenitors or mature oligodendrocytes, of a population of AMPA-GluR which lack GluR2.
This stage-specific up-regulation of edited GluR2-free, and hence Ca2+-permeable, AMPA-GluR explains the selective susceptibility to excitotoxicity of cells at these stages of oligodendroglial differentiation, and is likely to be important to these cells in the trans-synaptic Ca2+-signaling from glutamatergic neurons, which occurs in hippocampus
Ampakines are a structurally diverse family of small molecules that positively modulate α-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid (AMPA)-type glutamate receptors, and thereby enhance fast, excitatory transmission throughout the brain. Surprisingly, ampakines have discrete effects on brain activity and behavior. Because their excitatory synaptic targets mediate communication between cortical regions, serve as sites of memory encoding, and regulate the production of growth factors, ampakines have a broad range of potential therapeutic applications. Several of these possibilities have been tested with positive results in preclinical models; preliminary clinical work has also been encouraging.
Daviddal, Back in my bio-gambling days, I used to dream about being able to load up big on Cortex in the $1s. Ironically, now that the opportunity is here, I'm way too chicken to do it.
Thanks Dew. Something else I've wondered about is why a company like Cortex couldn't have done shelf offerings in the past, instead of the usual PIPEs? Shelf offerings would seem to have lots of advantages, among them flexibility and the ability to raise money quickly to take advantage of a temporarily surging stock price. I always figured that there must be some significant obstacles to microcaps like Cortex doing shelf offerings, otherwise this would be the preferred route for raising money. I wonder why Cortex is able to go the shelf offering route this time but not in the past? Thanks for any insights.
I always thought that with a shelf offering, the company could issue any portion of the amount authorized at any time, with the price for those shares being roughly correlated with the share price at that time. For example, the company could sell a portion now at/near the current low share price, and then say if the stock doubled in price at some later date, the company could then issue/sell more shares at that higher price. However, the Cortex document says that the price can never exceed $1.655 (?) Anyone out there understand how these shelf offerings work? Thanks.
Here's that S-18986 MCI trial, from the Clinical trials.gov site. It's surprisingly large (400 patients, though perhaps they're expecting a lot of dropouts), and has both high and low dose cohorts. I thought the 12 month dosing regimen was very surprising, since we had previously heard rumblings that S-18986 may have had some side effect problems. MCI is a tough indication, since as we saw with the CX-516 study, MCI patients tend to be sensitive to side effects (perhaps because unlike AD patients, their cognitive symptoms aren't yet very severe, making them less motivated to stay on the treatment). If S-18986 causes nausea or headache problems, it's going to be tough to keep these folks on drug for a whole year -
Efficacy and Safety of S18986 in the Treatment of Mild Cognitive Impairment Patients
This study is currently recruiting patients.
Verified by Servier September 2005
Sponsored by: Institut De Recherche International Servier
Information provided by: Servier
ClinicalTrials.gov Identifier: NCT00202540
Purpose
The purpose of this study is to demonstrate a long term efficacy of S18986 versus placebo on episodic memory performance in patients with MCI
Condition Intervention Phase
Mild Cognitive Impairment
Drug: S18986
Phase II
MedlinePlus related topics: Mental Health; Neurologic Diseases
Genetics Home Reference related topics: Neurologic Diseases
Study Type: Interventional
Study Design: Randomized, Double-Blind, Placebo Control, Parallel Assignment
Official Title: Efficacy of 15 Mg and 50 Mg of S18986 on Cognitive Symptoms in Mild Cognitive Impairment Patients Treated Over a 12-Month Oral Administration Period
Further study details as provided by Servier:
Primary Outcomes: Episodic memory
Secondary Outcomes: Other cognitive domains, activities of daily living, global impression of change, MRI, safety.
Expected Total Enrollment: 450
Study start: June 2005
Eligibility
Ages Eligible for Study: 55 Years and above, Genders Eligible for Study: Both
Criteria
Inclusion Criteria:
Memory complaint
Acetylcholinesterase inhibitors stopped at least 3 months before selection
Exclusion Criteria:
Dementia
Parkinson's disease
Vascular disorder
Depression
Epilepsy
Location and Contact Information
Please refer to this study by ClinicalTrials.gov identifier NCT00202540
Bruno Vellas, MD + 33 5 61 77 76 49
France
Hôpital la Grave-Casselardit, Toulouse, 31000, France; Recruiting
Bruno Vellas, MD + 33 5 61 77 76 49
Study chairs or principal investigators
Bruno Vellas, MD, Study Chair, Hôpital la Grave-Casselardit, Toulouse
More Information
Study ID Numbers: CL2-18986-009
Last Updated: September 12, 2005
Record first received: September 12, 2005
ClinicalTrials.gov Identifier: NCT00202540
Health Authority: France: Afssaps - French Health Products Safety Agency
ClinicalTrials.gov processed this record on 2006-11-17
Bladerunner, Assuming Org-26576 is a Cortex-developed compound, it's not likely a high impact. As Daviddal said, it may just target areas of the brain believed to be more involved in Depression. Unlike Schizophrenia, which shouldn't require a high impact, Depression should theoretically be better treated with a compound that can upregulate neurotrophins (the neurogenesis angle). Depression is one of the tougher indications for clinical trials, since placebo effects can reportedly be up to 50%.
One thing we may be able to glean from the doses used in the glucose utilization study, is that Org-26576 may be somewhat more potent than Org-24448. It also acts at more areas of the brain.
BTW, Organon does have a compound library of their own, based on their comp of matter patents. Servier also has some compounds of its own too, like S-18986 (a benzothiadiazine). Servier decided to move ahead with that compound instead of using a Cortex compound (Cortex offered CX-717 to Servier years ago, when it was still preclinical), possibly because S-18986 is more neurotrophic than Cortex's low impacts, and perhaps also because Cortex's high impacts aren't yet ready for clinical trials (Servier has been funding Cortex's high impact development program for years, but that research funding agreement ends next month). One would expect S-18986 to have more side effects than a low impact like CX-717, so I was surprised to see Servier dosing S-18986 for 12 months in their current 400 patient MCI Phase 2. After the CX-516 MCI debacle, there was a long multi-year delay before Servier started this S-18986 trial, leading to speculation that S-18986 was in trouble. I guess not, assuming the folks at Servier haven't been drinking too much Merlot again.
Neuro, So Org-26576 is definitely a Cortex-developed compound (as opposed to being from Organon's own labs)? Thanks.
Striaterminalis, As I understand it (Neuro will correct this if it's wrong) - while Organon owns the global Schizo and Depression rights, they can only commercialize a compound if that compound was included in the original agreement with Cortex (regardless of whether it's a high or low impact). To commercialize a new compound that wasn't part of that agreement, Organon would have to hammer out an updated/modified agreement with Cortex, or risk being sued by Cortex/UCI. Servier is in a similar situation with S-18986, since it wasn't part of the original Servier/Cortex agreement (S-18986 is currently in a large MCI Phase 2).
Likewise, Cortex can develop all the new copounds it wants, but we can't commercialize them globally for Schizo or Depression, or ex-N.America for Neurodegenerative/Anxiety, since those territories are owned by Organon and Servier respectively. Cortex would have to license the new compounds to Organon or Servier for the new compounds to be commercialized in those indications/territories.
The Cortex/UCI cognition use patent is unusually broad, covering ANY compound that works via AMPA upmodulation to improve cognition/memory (that would include any/all AMPA upregulating compounds from Lilly, Glaxo, Boehringer Ingelheim, Sanofi-Aventis, or anyone else). Cortex also has a broad use patent covering Neurotrophin Upregulation (BDNF, NGF, GDNF, etc), and others for Endocrine Modulation, Sexual Dysfunction, and co-use with ACHase inhibitors.
Daviddal, Concerning Org-26576, are you sure it upregulates BDNF? Also, just wondering if you or Neuro remember if the original Organon deal with Cortex included other compounds other than Org-24448? Thanks.
Neuro, BTW, Since it was someone from another company who you discussed the calpain topic with, they may not have encountered calpain related activity because all the other (non-Cortex) Ampakine programs out there chiefly use compounds related to cyclothiazide, and as we know from the calpain papers, cyclothiazide doesn't activate calpain activity.
The only compound we know of that activates calpain activity is CX-614, and it's from Cortex's benzamide family (a benzoxazine). While CX-614 and CX-717 act at different sites on the receptor, the two compounds do have the deactivation mechanism in common (unlike cyclothiazide).
However, another angle to consider is that calpain activity is associated with normal LTP / memory formation. Dr. Lynch discussed this in his calpain related paper. Several other research papers have noted that cyclothiazide does not appear to have the same positive effect on LTP that Cortex's benzamides do. So this might be another explanation as to why CX-614 activates calpain while cyclothiazide doesn't -- that the increased calpain activity is brought on primarily by increased LTP activity, and cyclothiazide simply doesn't upregulate LTP very much. If that's the case, then a potent low impact like CX-717 would also be expected to increase calpain activity significantly, just like CX-614 does (since both strongly upregulate LTP). Of course, whether or not this increased calpain activity is detrimental over time, causing histolological cellular changes, is another question.
Thanks Neuro. I remember after the first calpain paper was published, you commented on it on the YH board, saying your first reaction was "uh oh", or words to that effect (I assume since calpain/spectrin has been linked to cellular damage associated with Stroke, TBI, etc). Just curious if you can remember calpain/spectrin being connected to drug development in the past? Thanks.
Daviddal, Yes, we're in totally uncharted waters with AMPA upmodulation from a science perspective. The risk of a brand new platform is added to the already huge risk of being in the neurological subsector. Investment-wise, it doesn't get much riskier than Cortex.
In the end, the mistake is in expecting to make big money investing/speculating in this sector. There's way too much luck required. As I see it, the only rational way to deal with biotech is to either - 1) follow it for fun, or 2) if you must invest, use a mutual fund/ETF. Admittedly that's extremely boring, so if one insists on picking individual stocks, then diversification is essential (6,8, 10+ stocks), or you'll eventually get your head handed to you. Cortex's implosion is not a catastrophe if it's part of a well diversified portfolio.
Neuro, Just wondering where you first heard about the finding being seen in a *single* monkey? During the May SHM conf call most of the Q+A was not audible for those of us listening at home, so I assume Stoll said it there? I don't remember him publicly saying it was a single monkey at any other time, and I've taped every presentation/conf call that has been webcast over the internet or has been available over the phone. Or perhaps Stoll mentioned the "single monkey" topic during a private conversation?
The other thing I don't remember him saying (prior to the recent October conf call) was that the finding was seen in the longer term 13 week primate study. Before the October conf call, I didn't even know Cortex had done a 13 week primate study. We (or at least I) were under the impression that Cortex had originally only done 3 month studies in rats and dogs (and shorter term studies in rats and primates). So we/I assumed the finding was seen in one of the shorter term studies, based on the "acute" phrase used in the original press release (Piros also seemed to be under this false impression). Had I known that the finding was seen in a longer term 13 week study, that would have changed my analysis of the situation (for what that's worth).
I remember you said that you had brought up the calpain/spectrin topic to someone at Cortex, and they said they didn't think it was a problem (this was prior to the clinical hold). However, since neither Cortex nor their histopathologists now seem to have the foggiest idea what's causing the cellular changes, we really can't rule out the calpain/spectrin phenomenon as the cause. Reading the full text of the two major calpain papers, it doesn't look like this phenomenon is definitively limited to high impacts as we had previously thought (Dr. Rogers suggested it was a high impact phenomenon at the 12-05 SHM Q+A). A large component of CX-614's mode of action involves inhibition of receptor deactivation, as do the low impact Ampakines. The impression I had previously was that the high impact mode of action involved primarily inhibition of desensitization (as in Lilly's compounds, and also the benzothiadiazines). But the prototypical high impact cyclothiazide doesn't cause calpain/spectrin activity (!) Instead, calpain activity appears to be possibly linked to the deactivation mode of action, which is exactly the opposite of what one might have expected (since inhibiting desensitization is clearly linked to excitotoxicity, which is/should be linked to calpain/spectrin activity). At the time the calpain papers came out (last year), they apparently hadn't yet tested low impacts like CX-717 for calpain activity.
FWIW, I think it's way too early to rule out calpain/spectrin as the cause of our mysterious cellular finding, although since Cortex hasn't even disclosed if the finding was seen in CNS tissue or not, we're essentially groping in the dark. It would fit on some levels - causing microscopically visible cellular changes, occurring at higher doses, and being partially reversible after cessation of the drug. Why calpain activity wouldn't occur with cyclothiazide is a real mystery, since one would have expected it theoretically to occur most with that compound. Bottom line I guess, is that bio science (and investing) is full of surprises.
OT - Concerning investing in general, I'm currently listening to the audiobook versions of "The Intelligent Investor" by Benjamin Graham, and "One Up On Wall Street" by Peter Lynch (free from the library). These are excellent, particularly for investors interested in picking individual stocks (although I'm now a dollar cost averaging index fund maven myself). I doubt either Graham or Lynch would be prowling the biotech waters, but their general insights are well worth reading. The updated forward to Graham's book discusses the emotional limitations common to most investors, observing that the problem is "not in our stars, or our stocks, but in our selves". I can certainly vouch for that.
MarketFest, I'm not ruling out the possibility that something underhanded is going on here, with the FDA favoring the interests of large pharmas like Lilly and Glaxo. The regulators are only human, and large pharma companies have a lot more clout than small fry like Cortex. It's not impossible that strings are being pulled behind the scenes, though one would hope that's not the case. More likely, the FDA is just being hypercritical at a time when they're under severe criticism, especially with ADHD related drugs. The neuro division is also currently in disarray since it's recently been split into two separate divisions.
I got a taste of just how petty and biased the FDA can be (or appear to be) when listening to a webcast of an FDA panel considering Celgene's Revlimid several years ago. Amazingly, this was actually webcast. The FDA panel members sounded anything but objective, with some sounding like Celgene lackeys, and others like they hated Celgene's guts and had it in for them. Not exactly the high minded objectivity one would want from a regulatory agency dealing with important life saving medicines.
I should have added that I'm not expecting significantly better results in these new tox studies than what was seen in the original ones. The results might be modestly better, but it seems unrealistic to expect vastly better results. While strange things can and do happen, we investors have to play the odds, so I figure the most likely scenario goes something like this -
1) Cortex does a medium size PIPE by early '07, this at least gives us enough money to get through 2007.
2) New data looks similar to the old data, perhaps slightly better.
3) In Q2 we get the word from the FDA on dosing liberalization.
4) AD looks potentially viable, and by Summer or so a deal is done with either a BP or Organon for CX-717/N.Amer Neurodegenerative. Even if AD doesn't look particularly viable for CX-717 dosing-wise, Organon might still be interested in the N.Amer Neurodegenerative rights since they have Org-24448.
Speculating further, one important question is whether to try to carve ADHD out of the deal, in hopes of advancing a backup (CX-701) with the goal of doing another pharma deal for ADHD in a couple years. That would be a very attractive way to go if possible. Of all the indications, ADHD is the one we are most sure about based on the stellar Phase 2a results. Dealing ADHD away for cheap to a BP whose main interest is in AD doesn't make much sense. As I see it, keeping ADHD/CX-701 inhouse would be greatly preferred over 1) a non-Ampakine in-license, or 2) CX-701/orphan or Sleep Related (although these should also be carved out, I doubt Cortex will have sufficient cash available to do both ADHD and an orphan program simultaneously).
Another key question is what to do with the high impacts. Some possibilities - a) include it in the CX-717/N.Amer BP deal, or preferably b) keep it in-house, get the lead compound (CX-929) into the clinic, and then license it to the pharma partner in a year or two.
One of the key factors that everything hinges on is the viability of CX-717 for AD at the currently allowed human dosing levels (we investors don't know what those levels are). Dr. Stoll said that the current dosing restrictions should "comfortably" allow continued AD human trials (extrapolating the doses which were effective in animal AD models to humans (1-3 mg/kg in animal models)). While this may be theoretically true, if the highest dose allowed in humans for longer term dosing is only say 200 mg, then I wouldn't hold out much hope for success in AD. We investors really need to get a much better idea of the actual human dosing levels currently allowed under the FDA restrictions, not just for a single dose study like the PET study, but for longer term studies. This is info that we don't have, and such info is critical in our determining if an AD deal is really feasible or not, and how much dosing liberalization it would take to make it feasible.
Jerry, I figure that before any deal happens, Cortex and BPs at a minimum need to first see the new tox data (which should happen by year end). Then, depending on those results, we have various possible scenarios, from worst to best -
1) New data is even worse than old data, CX-717 is dead.
2) New data is same as old data. Dosing limits stay the same (AD possibly viable, ADHD non-viable).
3) New data slightly better than old data. Dosing limits lifted modestly (AD probably viable, ADHD still non-viable).
4) New data moderately better than old data. Dosing limits lifted moderately (AD clearly viable, and ADHD possibly viable).
5) New data strongly better than old data. Dosing limits lifted almost completely (AD and ADHD both viable).
Of course getting the various data results listed above doesn't necessarily guarantee any particular FDA response on dosing liberalization, so a pharma partner may want to wait for the actual FDA decision (Q2-07) before doing the partnership. Cortex may also want to wait, since with a good FDA decision in hand we could drive a harder bargain in our BP negotiations (of course on the other hand, we could have what we think is good new data and still get the cold shoulder from the FDA, which all has to be factored into our deal making strategies with BPs).
Here's a link to general info on Memantine / Namenda. In addition to being an antagonist of the NMDA glutamate receptor, it also apparently has some effects on the serotonin/5HT and ACH/nicotinic systems -
http://en.wikipedia.org/wiki/Memantine
Jerrydylan, As I understand it, in AD there are several processes going on that relate to the glutamatergic pathways, including - 1) Some degree of excitotoxicity brought on as the disease process causes cellular destruction, similar to what happens in stroke and traumatic brain injury, with a resulting disruption in the calcium ion balance (Memantine / Namenda targets this imbalance/excitotoxicity, by reducing glutamatergic activity at the NMDA receptor). And 2) - The widespread destruction of neurons reduces the overall level of neural communication in the brain generally (fewer neurons, fewer interneural connections, etc), which impairs brain functioning.
Upregulating the glutamatergic pathways with an Ampakine might theoretically be expected to worsen #1 (excitotoxicity), except for the fact that a) Ampakines are allosteric, and as such don't initiate new neural activity on their own (as an agonist would), but instead merely amplify the existing normal neural activity, and b) low impact Ampakines like CX-717 don't induce excitotoxicity at therapeutic doses. (An AMPA or NMDA direct agonist, on the other hand, would be expected to worsen the level of excitotoxicity in AD patients, and thus would probably be contraindicated). Also, an Ampakine would improve #2 above, by getting the most out of the remaining healthy neurons/neural connections.
Of course if we go a step further and use a high impact, then we would expect a much larger effect due to the upregulation of brain neurotrophins like BDNF, which are neuroprotective / neuroregenerative.
With all the pharma interest in high impacts, I think it's safe to say that no matter what ultimately becomes of Cortex as a company, the high impact approach will be fully explored by Big Pharma. One way or another, they're going to advance this technology as long and as far as it takes to see if it works. It would be that big of a breakthrough, and the scientific and financial rewards are unbelievably enormous, since the platform could apply to virtually all neurodegenerative diseases. In the end there's possibly a Nobel prize up for grabs too.
Horselover, Concerning the Euro patent challenge, I don't have the exact dates, but it seems like it's been several years since Glaxo joined the challenge, and Lilly was challenging for several years before that (losing in their first attempt). Neuro probably has more precise dates.
There was a guy over on Yahoo ("Orange45" I think) who was very knowledgeable about bio patents, though I couldn't seem to locate his posts on Yahoo with the busyant function.
It seems like it's been around 1.5-2 years since we discussed Glaxo entering the picture, and at that time there were guestimates that a resolution might take perhaps 2-5 years. Dr. Stoll discussed the topic several times back then, and basically said that there was no way to accurately estimate when a resolution would come. When the Euro patent was upheld the first time around, the news came out of the blue, and the stock moved up dramatically.
It's apparently easier to challenge patents in Europe than in the US, which is presumably why Lilly challenged there. They might conceivably try to challenge in the US someday, or perhaps go after a different patent, like the neurotrophin upregulation broad use patent.
Jerrydylan, Biotech is probably the riskiest sector of the stock market. And the neurological area is one of the riskiest subsectors of biotech. Beyond that, how about going with a tiny underfunded microcap, with a brand new unproven technology platform. Then place a massive bet on that company. Mega-high risk? You've come to the right place.
Of the bio stocks I still follow, Cortex is the riskiest. GTCB was previously tied for that spot, but with their European approval, they are now considerably safer, though still very high risk due to their small size and reliance on a risky sepsis program for Atryn.
Instead of investing in individual bio stocks, I've opted for the bio ETFs (BBH, IBB). For equity exposure I use the Vanguard Target Retirement 2045 Fund, which indexes 70/20/10% in US stocks/Intl stocks/bonds, and this rounds out my bank CDs. (Dull I know, but this is the first year I'm ahead for the year since 2003, so I guess it's working).
FWIW, I still follow some bio stocks though -
Biomarin
Cortex
Cubist
Celgene
Durect
Exelixis
Genzyme
Gilead
GTCB
Idenix
Medarex
MGI Pharma
PDLI
Pain Therapeutics
Senomyx
Teva
Vertex
Daviddal, In the Roth presentation, Dr. Stoll said they were initiating another type of AD study (an "MEG" study, see slide 25), in addition to trying to complete the PET study. I'm not familiar with what MEG is however.
What I think is most likely to happen is that Cortex won't do any deals until after getting the word from the FDA on dosing liberalization (approx Q2/May). Then Cortex and BPs will know where we stand with CX-717, and will proceed from there. In the meantime (by early '07), Cortex will have to bite the bullet and do an unfavorable PIPE.
Dr. Stoll had little choice but to roll the dice with CX-717, and essentially base the company's survival on the success of the compound. Cortex's limited resources simply couldn't support a deeper pipeline. CX-717 could have bombed out earlier, but it sailed successfully through Phase 1 and the numerous Phase 2a trials before getting into trouble. It's too early to throw in the towel, since CX-717 could still emerge as viable if the dosing restrictions are sufficiently liberalized. The way I see it, there are 3 potential scenarios, based on the degree of dose liberalization allowed by the FDA -
1) ADHD is viable - we're back in business, the stock price moves up strongly, and a large BP deal occurs.
2) ADHD isn't viable, but AD is - this seems like the most likely scenario. Cortex does a N.Amer AD/Neurodegenerative deal with a BP or Organon.
3) Neither ADHD or AD are viable - this spells serious trouble.
Objectively, #2 seems the most likely. Cortex might still get halfway decent upfronts, and the stock price could rebound considerably. One question with this scenario is whether to include ADHD in the BP deal to get a bigger deal (perhaps along with a backup compound), or to try to carve ADHD out along with the orphan indications. If Cortex can carve out ADHD, that would provide another excellent shot at ADHD with a backup like CX-701, and a nice future pharma deal/payday a few years down the road. If ADHD isn't carved out, then we have to advance a backup compound for an orphan or Sleep Related, and/or go with the non-Ampakine in-license route.
Money is the lifeblood of bio companies, even more important than good science, since with enough money one can always in-license or buy someone elses promising pipeline. A bio company can never have enough cash. Consider Celgene - riding high, but they still went out and raised a cool BILLION recently. Smart bio CEOs get the money when the getting is good. The cruel irony is that it's always easier to raise money when you don't need it.
Jerrydylan, Here's a list of the AMPA upmodulating activity going on out there, based on the various company's comp of matter patents. Glaxo reportedly teamed up with NeuroSearch several years ago for compounds (#5 below), but I haven't seen any clinical trials on the Clinical Trials.Gov site yet (I don't think trials show up there until Phase 2 however). Several years ago, Glaxo joined Lilly in challenging the Cortex/UCI broad use patent in Europe (Lilly previously challenged but was unsuccessful) -
1) CORTEX - Generally termed "Benzamides", they include Benzoylpiperidines (CX-516, CX-546), Benzoxazines (CX-614), Benzothiadiazoles, Acylbenzoxazines, Carbonylbenzoxazines, Benzofurazans (CX-717, CX-691/Org-24448). Also, Dr. Lynch was recently involved in preclinical papers on benzothiadiazines, and also on Stargazin, which is a Transmembrane AMPA Receptor Regulatory Protein (TARP), which is involved in the surface delivery and anchoring of AMPA receptors, and which may act as an AMPA upmodulator.
2) ORGANON - Org-24448 (developed by Cortex), Benzoxazepines, Benzoxathiazepines, Pyrido/Thieno-Oxazepine derivatives.
3) SERVIER - Benzothiadiazine and Thiadiazine derivatives (S-18986 for example, which is currently in a large MCI Phase 2).
4) LILLY - Biarylpropylsulfonamides (for example LY-404187, LY-503430, LY-451395 (which failed in AD Phase 2), and LY-392098).
5) NEUROSEARCH (collaborating with GLAXO) - Benzothiazine and Benzothiadiazine derivatives.
6) BOEHRINGER INGELHEIM - Napthothiazine related compounds, a preclinical paper was recently published on a compound called BIIR-777.
7) NPSP/ALLELIX - Arylpropylsulfonamides and Cyclopentanes. Allelix also appears on Lilly's Diabetes patent. Allelix also has patented some of the polynucleotide sequences which code for specific AMPA receptors, enabling Allelix to produce CNS cell lines that are useful in research.
8) EUROCELTIQUE SA / formerly "COCENSYS"(?)- Benzopyran and Benzothiopyran related compounds.
9) RETT CORP - Aminobenzenesulfonamide derivatives.
10) Sanofi-Aventis - Dipyrazoles (preclinical paper published recently).
11) Lifelike Biomatic - (Dr. Baudry's company) - They have patents attempting to cover subtherapeutic doses of just about all AMPA upmodulators when used in combination with "Nemdakines", which are NMDA receptor upmodulators. They're also trying to patent compounds resulting from the fusion of the active moieties of AMPA and NMDA upregulators into a single molecule.
12) Stargazin - Transmembrane AMPA Receptor Regulatory Proteins (TARPS). There is considerable activity going on by various research groups (see more in the Cortex section above).
Dr. Tracy may be aware of other possible AMPA upmodulating programs out there. The high level of activity and sheer number of companies/compounds now pursuing AMPA modulation is a far cry from the mid-1990s when most researchers were highly skeptical over this approach. It appears that "there's gold in them there hills", so we'll see who gets to the finish line first. Cortex could sure use a motivated BP partner with deep pockets to speed up the process.
Jerrydylan, Concerning why high impacts are taking seemingly forever to develop, some backround -
Upregulating glutamate pathways in the brain was not widely pursued years ago because just about everyone thought it would by definition lead to horrendous excitotoxicity. Overactive glutamatergic pathways were known to be associated with epileptic seizures, and with glutamate toxicity in stroke and traumatic brain injury, as cellular damage released excess calcium ions into the surrounding tissues. So it was generally believed that upregulating glutamate/AMPA pathways would almost certainly induce excitotoxicity / seizures.
Dr. Lynch was the lone voice in the wilderness - he believed that there might be a way to upregulate glutamate pathways safely, and Dr. Rogers helped him design the compounds to do it, beginning with the structure of aniracetam (a pyrrolidinone) and building from there. Over a period of years, Cortex was able to assemble its broad use patent estate and vast compound library chiefly because no one else in the pharma world believed it could work.
Cyclothiazide was also known to have the ability to upregulate AMPA activity, and Lilly got into the act with their biarylpropylsulfonamide compounds, and Servier with benzothiadiazines, both structurally related to cyclothiazide.
As it turned out, the cyclothiazide related compounds did tend to cause excitotoxicity. However, Cortex had some compounds that were able to upregulate AMPA activity without causing excitotoxicity - the "low impact" group of compounds like CX-691/Org-24448 and CX-717. No other company appears to have anything like these. Cortex also was spending a lot of time developing high impacts, but decided to advance the low impacts first clinically since they appeared far safer. Lack of money has always dogged Cortex from the beginning though, so it hasn't been possible to optimally fund both high and low impact programs over the years.
The plot thickens however, since it was found that while the low impacts upregulate AMPA activity in the hippocampus and thus improve memory/cognition, it take a high impact to significantly upregulate brain neurotrophic factors like BDNF, which are key to neuroprotection / neuroregeneration. But while the high impacts have enormous clinical potential in treating neurodegenerative diseases, they tend to be associated with excitotoxicity, and therein lies the rub.
So besides inadequate funding, there are lots of science related obstacles to overcome with the high impact approach. Not only is there excitotoxicity, but there is also the feedback loop phenomenon, which causes upregulated BDNF levels to drop back to normal after prolonged dosing with a high impact. Using intermittent burst dosing with a short acting high impact compound, we may be able to get around this feedback loop problem, but this all takes lots of time and money - something chronically in short supply at Cortex, unfortunately.
Scollins, It looks that way. The company may see the new tox data prior to the PIPE, but the FDA decision on liberalizing the dosing restrictions should come after the PIPE.
Summarizing, a likely timeline -
1) By year end/early '07 - Cortex sees new tox data.
2) By year end/early '07 - Cortex does PIPE.
3) By end of Q1-07 - Cortex submits full package of new tox data to the FDA.
4) In Q2-07 - FDA gives decision on dosing liberalization.
5) What happens then depends on the FDA's decision. If the dose is liberalized a lot, CX-717 can go into ADHD trials again, and be partnered with a BP as such. If the dose is not liberalized, or only modestly, CX-717 may still be viable for AD, and can be partnered on that basis.
Wildcards - As mentioned previously, in the next several months, instead of doing a PIPE, Cortex could raise money by doing a CX-717/N.Amer Neurodegenerative deal with Organon or a BP. Organon/the BP would have available to them the new tox data, but not the FDA's decision on dose liberalization.
Thanks Aiming. Pheew, saved from the gulag, that was a close one! My big mouth will be my undoing yet.
It looks like the Democrat's big victory isn't sitting too well with the Pharma sector, which gapped down big yesterday, and is down again today. The US is where Big Pharma makes most of its profits (by far), so some of that may be in jeopardy with Hillary and Ted Kennedy back in control. Perhaps the drug companies will now be forced to innovate more, and take a chance on new platforms instead of relying on the safer "me-too" drug approach. Well, maybe.
Concerning the timing of the financing, Dr. Stoll said cash will be approx $9-10 mil at year end. One question is whether to wait for the new tox data, or else just do the PIPE prior to that. In the R+R presentation, he said that the physical part of the new tox studies is completed and they are in data analysis. That being the case, he should have some preliminary idea of the results by year end, so perhaps he'll just wait a couple more months before pulling the trigger on the PIPE. In the recent conf call, he said that the complete package of data should be submitted to the FDA by the end of Q1-07 for their evaluation, with their decision on dosing liberalization coming after that. I doubt Stoll can afford to wait until April/May to do the financing, so I'm figuring it'll happen between now and January.
Another question is how much money to raise. Figuring the PIPE goes through at $1.50 (oh, the humanity), it'll take a jaw dropping 10 million shares to raise a paltry $15 mil.
Another approach would be to raise say only $10 mil now at $1.50, in hopes of being able to get the rest later on better terms. Pretty depressing, but the alternatives are limited - do an N.Amer Neurodegenerative deal with Organon or a BP, or sell the company outright. The Organon idea might not be so bad, particularly if Cortex is able to carve out ADHD and some orphans.
Davey, That's a good idea. I'd also like to get my post off of I-Hub before the Feds see it and put me on their "no fly" list (or worse).
Jerrydylan, Here's a summary of the May '07 Cortex $2.50 options -
$2.50 calls - open interest 719, last trade at .30 cents on 10-30-06.
$2.50 puts - open interest 1582, last trade at .75 cents on 10-30-06 (prior to the 10-30-06 trade, the last open interest figure I saw was 213, so that's a fair size jump).
The next highest open interest figures are in the Nov '06 $2.50 calls (625), the Feb '07 $2.50 calls (664), and the Feb '07 $5.00 calls (711)
These Cortex options seem very illiquid, with huge bid/ask spreads. With the stock price so low, buying the common might be a better alternative strategy, rather than going the option route, especially if things take longer than expected. Dr. Stoll estimated that they would be getting the full package of new tox data submitted to the FDA by the end of Q1-07, and with the potential for FDA dawdling, that could conceivably push the FDA decision timetable past May (plus I don't think we have the 30 day decision guarantee that the FDA gave last time).
OT - Aiming, I don't know if you still follow PTIE, but today they announced a new in-licensed program - in metastatic melanoma cancer of all things, which was a surprise. Some of the folks at PTIE apparently have past connections with Albert Einstein College (and some of PTIE's existing programs have links to there as well). The new program is an armed MAB (antibody armed with a radioactive uranium isotope). I guess PTIE needed to expand their pipeline, and they have the money from the King deal to do it. I still follow PTIE loosely, since Remoxy still looks like a quasi-sure thing (also - Durect, the inventor of the abuse resistant gel technology, will get royalties from Remoxy sales, so I follow them somewhat also).
Looks like someone recently took a fair sized position in the May '07 $2.50 puts -
http://www.amex.com/
(click on options on the left, and then type in COR about halfway down the page).