Cortex Awaits the FDA's Decision Regarding ADHD Drug

Cortex (NYSE:COR) and its investors are still waiting (patiently or otherwise) for the FDA to determine the fate of CX717 – specifically, the agency's willingness to allow for higher doses of the drug candidate to be studied in a Phase 2b trial in adults with ADHD. Back in March of 2006, shares of Cortex briefly traded above $5 per share, after it reported encouraging results among 22 adults with ADHD who completed the Phase 2a trial in the CX717 high-dose (800 mg twice daily) group. Since the low-dose (200 mg twice daily) group did not yield significant results in the same trial, the pending FDA decision is crucial to future commercial development potential of CX717 because of the urgent need for a safe, non-stimulant treatment option in the huge, growing market for the treatment of ADHD.

Specifically, the Phase 2a study demonstrated that CX717 was effective at the higher dose, well-tolerated, and produced no increase in heart rate or blood pressure, which is a major advantage over the majority of existing ADHD drugs which are strong stimulants such as Ritalin and Adderall. Non-stimulant treatment options such as Strattera have other risks, such as the potential for liver damage and suicidal thoughts. If Cortex receives clearance from the FDA to move on with the Phase 2b study for higher doses of CX717 in adult ADHD; it opens the way for a major partnership deal that could easily exceed the company's current market cap of just over $100 million.

Concerning the timeline for an FDA decision, Cortex submitted a data package to the agency on April 18 which provides concrete evidence that the specific brain tissue specimen changes seen in animal toxicology studies are a post-mortem fixation artifact unrelated to the drug and are not found in the tissue of the animal while it is still alive. This post-mortem fixation artifact previously caused the FDA to put CX717 on complete clinical hold until the agency partially lifted the hold on lower doses only last October. The CX717 dosing restrictions agreed upon in this ruling prevent Cortex from pursuing a Phase 2b study for the lucrative ADHD indication.

However, the exact timing of this FDA ruling is unclear, as original guidance from management placed a likely decision in about 60 days or around June 18. As that deadline passed with no ruling, it is apparent that the FDA is busy with higher priority deadlines such as the PDUFA dates for NDA filings, which would take precedence over the decision on CX717 since the clinical hold was already lifted last October and the current submission only involves a petition to allow for higher doses of the drug to be studied. With Cortex currently trading at a market cap barely above $100 million, the shares are poised to move much higher once the FDA lifts the high-dose clinical hold on CX717 due to the enormous commercial potential and need for a safe and effective non-stimulant ADHD drug treatment option. If the company gets this crucial endorsement from the FDA, it should easily eclipse its previous high of $5 per share.

Beyond the tremendous potential for CX717 in the treatment of ADHD, Cortex has other compounds in earlier stages of development. Studies of the company’s high impact Ampakine drug CX929 have demonstrated encouraging results in mice with the Huntington’s Disease gene. This compound has shown the ability to restore depressed levels of BDNF (brain derived neurotrophic factor) back to normal and has caused significant behavioral improvements in transgenic mouse models of Huntington’s Disease. Remaining near-term catalysts for Cortex beyond CX717 include the low-impact Ampakine CX701 which the company expects to move into Phase 1 clinical trials this month pending favorable preclinical toxicology results. Other objectives for Cortex include the possibility for a new research and development collaboration for its high-impact Ampakine compounds and the potential for in-licensing of a new Phase 2 non-Ampakine orphan drug.

Disclosure: Author has a long position in COR

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