Biotech startup bags $7M stake needed to in-license PhII Merck anti-depressant

A biotech with close ties to Johns Hopkins has snagged an added $6.8 million in backing, which will be used to in-license an antidepressant out of the Merck ($MRK) pipeline and prep it for a Phase II study.

The Baltimore-based Cerecor is embracing the depression field at a time several Big Pharma companies have been backing--or running--away from what's developed into an R&D minefield. A little more than a year ago the company raised $22 million in its first round of venture funding. But despite the involvement of some high-profile researchers and entrepreneurs, it's kept a decidedly low profile, never identifying who's bankrolling the company.

The fresh injection of cash leaves Cerecor prepping for a mid-stage study of CERC-301, the new name for what had been MK-0657, an NR2B agonist that Merck had studied for Parkinson's before deciding to pass the baton. That program now follows the lead, FP01 for cough. And there's additional preclinical work being done in schizophrenia.

The biotech is run by Blake Paterson, the founder and former CEO at Alba Therapeutics, which developed a new drug for celiac disease that was in-licensed by Shire ($SHPG) in a $325 million deal. He was replaced as CEO in 2008 by one of the venture groups which supported the company. And one of the co-founders is Barbara Slusher, the director of the Johns Hopkins Brain Science Institute's NeuroTranslational Drug Discovery Program. The board includes some recognizable faces, including Sol Barer, the former CEO of Celgene ($CELG). Another board member, Isaac Blech, is credited with helping to establish Celgene, ICOS and Nova Pharmaceutical. 

"We are delighted by the response to our offering, as it continues to confirm the quality of our company, our pipeline and our team," stated Paterson. "We now intend to complete the necessary steps to move CERC-301 into a planned Phase II study, expected to begin in 4Q2013. The trial would evaluate the compound's potential as a new, selective, orally-available, rapid-acting antidepressant, which holds promise for patients whose depression is not responding to their current therapy."

Cerecor claims that it's developed a new method for controlling the placebo response in ant-depression trials, one of the key threats that has scuttled repeated efforts in the field.

- here's the press release