Pappas Capital Announces the Passing of…

CeNeRx, expecting trial results and drug partner in 2012, raises $4.8M

Central nervous system drug development company CeNeRx BioPharma is developing an antidepressant whose novel mechanism causes fewer side effects, and the company is now in active talks with large pharmaceutical companies who could take the candidate, called TriRima, into phase 3 studies.

“We’re looking forward to (trial) results and a deal in 2012,” said CeNeRx CEO Barry Brand.

The Cary, North Carolina company has closed on a fundraise of $4.8 million that the company will apply to its portfolio of central nervous system drug candidates, chiefly TriRima, which is set to complete phase 2b trials early next year. Existing investors Perseus Soros Biopharmaceutical Fund, L Capital Partners, Pappas Ventures and Omega Funds all participated in the latest round. CeNeRx has raised more than $55 million to date.

TriRima is in a class of drugs called reversible inhibitors of monoamine oxidase, or RIMAs. The drug candidate works by blocking monoamine oxidase, an enzyme whose elevated levels are linked to depression. TriRima could be the first RIMA drug available in the United States.

CeNeRx is developing TriRima as a new drug for treatment-resistant depression. The current first line of antidepressants are selective serotonin reuptake inhibitors, or SSRIs, and serotonin-norepinephrine reuptake inhibitors, or SNRIs. But an estimated 30 percent to 50 percent of depression patients don’t respond to those drugs. Right now, the alternatives are atypical antipsychotics, which carry riskier side effects. TriRima would be a bridge between the safer first line of drugs and the more dangerous atypical antipsychotics, said Brand, a former GlaxoSmithKline (NYSE:GSK) executive who oversaw commercialization of several GSK antidepressants that include Paxil, Wellbutrin and Zyban.

TriRima is also safer in another regard. Because it has a different mechanism than a second major class of antidepressants called monoamine oxidase inhibitors, it does not lead to a potentially dangerous interaction with certain foods. MAO-Inhibitor antidepressants can affect the enzyme that metabolizes a compound called tyramine, found in fermented foods such as cheese and wine. That interaction, sometimes called a “cheese effect,” can cause a dangerous buildup of tyramine, which in turn increases cardiovascular risks.

There is considerable interest in developing novel antidepressants that comprise an estimated $20 billion market worldwide. But success in the field is far from assured. Winston-Salem, North Carolina-based Targacept (NASDAQ:TRGT) is in a high-profile partnership with AstraZeneca (NYSE:AZN) to develop TC-5214 for major depressive disorder. Targacept last month announced that the compound failed in the first of four phase 3 clinical trials for the compound.

CeNeRx’s compound appears promising, at least right now. The company is featured in the December report NeuroPerspective, published by NI Research. The report notes that RIMA drugs have shown a better side-effect profile in drugs that are now available in Europe.

“CeNeRx has put an exceptional amount of planning and care into the execution of the TriRima PhaseIIb, particularly in terms of monitoring patient enrollment and treatment compliance,” the report said. “While nothing is guaranteed in depression, this is a relatively high-likelihood-of-success trial.”

Before any partnership deals are struck, large pharmaceutical companies will be looking to see TriRima’s trial results. Many large pharmas have pared back their neurosciences operations. GSK in the last year has implemented cuts in neurosciences research as part of a review of its R&D efforts. Novartis (NYSE:NVS) recently announced it would close its neuroscience research facility in Switzerland. While Brand said he could not disclose which companies CeNeRx has spoken to, he said big pharma’s neuroscience R&D cuts mean that they’ll be looking to a small biotech such as CeNeRx to fill their pipeline.