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UPDATE 2-Rexahn antidepressant fails in early mid-stage trial

Tue Apr 13, 2010 3:38pm EDT

Rexahn Pharmaceuticals, Inc.

* Overall study fails to achieve statistical significance

* Says patients on 5 mg Serdaxin improved in MADRS scores * Shares down 50 pct (Recasts; adds company comments, updates stock movement)

By Krishnakali Sengupta

BANGALORE, April 13 (Reuters) - Rexahn Pharmaceuticals Inc (RNN.A) said its experimental antidepressant drug Serdaxin did not achieve statistical significance in a mid-stage study, sending its shares down 50 percent in afternoon trade.

The study, however, showed the drug to be safe and well tolerated without the appearance of serious side effects that are commonly linked to certain currently marketed drugs for the treatment of major depressive disorder, Rexahn said in a statement.

"This study was a proof-of-concept study from our perspective. We were looking for a strong signal, which we did get in the severe patient population", President Rakesh Soni told Reuters.

Although the overall study -- on 77 patients -- did not achieve statistical significance, results from the subgroup analysis showed the drug to significantly improve Montgomery-Asberg Depression Rating (MADRS) scores in patients treated with 5 mg of Serdaxin for 8 weeks, compared to a dummy drug.

The MADRS rating is used to measure the severity of depressive episodes in patients with mood disorders.

The company said it plans to start a second mid-stage clinical trial in the second half this year and is currently in talks with several major pharmaceutical companies to co-develop the drug.

Soni said the second mid-stage study will enroll about 400 patients and will evaluate the drug's efficacy against similar drugs.

"We are in talks with several companies, evaluating partnerships, and we expect much higher milestone payments for the drug than what we had with Teva," Soni added.

In 2009, Rexahn entered into an agreement with Teva Pharmaceutical Industries (TEVA.TA) (TEVA.O) for the development of one its preclinical novel anti-cancer compounds, for which it is expected to receive a couple of hundred million dollars in a milestone payments.

Shares of the company fell to $1.82, but recovered some of the losses and were trading down 48 percent at $1.89 in afternoon trade Tuesday on the American Stock Exchange. (Reporting by Krishnakali Sengupta; Editing by Unnikrishnan Nair)