Cortex Pharmaceuticals

(from NI July/August 2010)

The first half of 2010 has set the stage for Cortex Pharmaceuticals to resurrect itself from its near-death experience of 2009. Following a relatively benign financing courtesy of Korea's Samyang, Cortex consummated a deal with Biovail for the Ampakine/Respiratory depression program. Needing as much upfront cash as possible, they sold the program outright, along with two related compounds, and thus have no royalty rights, only the potential for $15 million in milestone payments. But the $10 million they received upfront will allow them to run the long-awaited Phase II ADHD trial with CX-1739. That trial should begin late 3Q:10, and will take up to a year to complete. The wild card for Cortex is the completion of the seemingly interminable sleep apnea trial, where it has required approximately 20 patients entering screening to produce each trial completer. They have been stuck at fifteen patients for some time, hopefully they will wrap up and unblind the trial in September, regardless of whether they have reached the goal of twenty. Our hope has been that Cortex has stubbornly stayed with its trial this long because of some anecdotal evidence of clinical impact, but that is a hypothesis only. Positive findings--and all they need is a trend with safety, would add an entirely new dimension to the partnering prospects for Cortex.

(from NI January 2010)

2009 could hardly have been uglier for Cortex, ending in their being delisted to the OTC bulletin board. With their backs against the wall fiscally, Cortex twice went to PIPEs on poor terms in order to keep going. They had counted on a sleep apnea trial which turned into a nightmare, the great majority of enrollee candidates not meeting the criteria for trial participation. Which leaves that trial still in process at the end of the year, and expectations for meaningful results pretty much evaporated. Cortex has been similarly delayed in finalizing a partnership (likely for respiratory depression, although a high-impact Ampakine deal is possible) that at one point, appeared to be weeks from consummation. By now, the credibility of that partner has been badly eroded. Cortex ended the year needing to raise money to survive until either that deal is completed (which would allow them to run a Phase II ADHD trial using CX-1739), or to consummate a buyout.

(from NI January 2009)

A program has rapidly emerged aimed at preventing respiratory depression secondary to drug ingestion, specifically opioids used for perioperative or postoperative analgesia. RD occurs in over 10% of such cases, and is addressed at present by the use of naloxone, which undoes both the respiratory depression and the opioid induced analgesia. Two Phase IIa studies completed in Germany confirmed that CX717 prevents RD and maintains analgesia. While the RD market may approach $700 million in the US alone, the more tantalizing possibilities are that an Ampakine could be combined with painkillers to produce a safer analgesic, and that Ampakines might also be a pharmaceutical treatment for sleep apnea. The sleep apnea market represents a multibillion dollar opportunity, and Cortex hopes to run a pilot study during 1Q:09. It should be apparent fairly quickly whether CX717 does impact the frequency of apnea episodes. As seems to perpetually be the case, Cortex's ability to move its pipeline forward is limited by its lack of cash. They would also like to take CX1739, now in Phase I, into an ADHD trial in 2Q:09. The next news of note would be a RD partnership that we hope will be concluded early in 2009.

(Online comment 10/6/08)

Cortex Pharma and Respiratory Depression

Cortex Pharmaceuticals reported very solid efficacy data from their second trial of CX717 in respiratory depression, showing that the drug both prevents RD and (iunlike naloxone, the current treatment for opioid-induced RD) preserves analgesia. This will allow anesthesiologists to not have to subject patients to unmedicated post-surgical pain if respiratory depression occurs--and it occurs far more often than we had ever thought. The incidence varies by setting, and Cortex reports it may be as high as 17%, we think it can be safely estimated as being in the low double-digits--enough to be a safety, quality of care, and liability issue. Given that the data suggests this risk can be avoided via prophylaxis with CX717, we believe that once commercialized, CX717 (or a second-generation Ampakine) will become the new standard-of-care, because no anesthesiologist or hospital will want to justify a patient exposed to either the risk of death or of physically traumatizing and dangerous levels of pain.

Respiratory depression is not something with which NI was familiar when the concept of Ampakine usage therein was first floated last year. But it is familiar to front-line ER docs and surgeons. We witnessed this first hand when speaking with John Greer, who has pioneered the work in this area, at a professional meeting. During the 30 minutes we spoke in front of his poster, three MDs came up at various points, and spontaneously expressed the wish that they had CX717 in their armamentarium. By a rough calculation of the number of crash carts and surgical suites that would have to be equipped with CX717 in the US, NI's estimate a few months back was that just this market alone would be worth $700-800 million annually in the US (due to expirations, restocking would be necessary at least yearly). Cortex and Greer are also looking at the possibility that CX717 might be the first drug to directly address the respiratory issues in sleep apnea, which would jump the annual potential two to three fold, at least.

But beyond this, the Ampakine/RD scenario has one additonal, huge area of potential: the licensing company could develop a combination opioid/Ampakine drug which, via any delivery modality, would be differentiated from all other opioid formulations by this safety margin--the impossibility of inducing respiratory depression. In a nociceptive pain market where the gold standard opioids are almost indistinguishable from each other, and major efforts are going into various permutations of altering duration of effect and vulnerability to abuse, this would represent a unique marketing advantage--and one that no generic could approach for many years.

There is no competing MOA on the horizon, and indeed the role of AMPA circuits in the respiratory Pre-Botzinger Complex may be uniquely suited to this role. We expect that these very clear, clean data will stimulate a very competitive bidding situation vis-a-vis a partnership for Cortex.

(Online 8/6/08)

Cortex today presented Phase IIa data for CX717 in Respiratory Depression. The highest dose (2100mg) hit statistical significance in its effect on RD, even though only seven patients were assessed. The two lower doses did not produce valid data due to 'procedural errors', which does not reflect well on the CRO that did the trial. Had the DSMB not stepped in and revised the execution of the last and highest dose, the trial might have produced a false negative result. But this does provide the POC Cortex needed: the animal models were indeed predictive of human response, even though the experimental model itself had to be revised to meet human subjects safety standards. This makes CX717 and its IV version (and IV successor CX1942) a unique competitor for the highly problematic use of naloxone in cases of opiate induced RD. Adding in the potential of an oral adjunct that prevents RD in ongoing opiate analgesia, which would provide a distinct competitive advantage for the analgesia company marketing it, and one can expect an active partnering environment. Discussions have clearly already been underway, and Cortex's understated CEO was unusually optimistic in discussing prospects for a deal, A second Phase IIa trial will report in the next few weeks, and could potentially (assuming that group carried out the protocol correctly) add to the POC, including the demonstration of analgesia-maintenance.

NI's take is that over the next four months, Cortex will be choosing from three options:
1) A RD only deal for CX717, CX1942, and a low-impact-yet-to-be-named
2) A low-impact deal which covers RD and ADHD, which takes CX1739 as well. Otherwise, Cortex will bring CX1739 into ADHD trials next year.
3) A buyout offer. For example, Cephalon looks like a rational choice given their strong interests in both analgesia and ADHD. They need to update and upgrade their portfolio due to patent expirations. Over Cephalon's history, their preference appears to be to acquire rather than to license. There have been exceptions, but the license for Provigil was followed by the acquisition of Lafon, Actiq was via acquisition, so was their oncology franchise.

In any of these scenarios, Cortex's chronic cash problems will be alleviated, and (unless acquired outright) they will have the resources to develop their 'high-impact' neurotrophic platform for Alzheimer's, Parkinson's, and Huntington's. The recent damage done to the primacy of the amyloid hypothesis will raise the value of such 'ideology-free' strategies for AD--i.e. approaches that do not depend upon a specific causal model for therapeutic effect. RD, ADHD, and neurodegeneration together make for a company valuation far above the $37 million where they started the day.