RespireRx Pharmaceuticals Inc (RSPI)

[gfp927z]

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.