The Special K connection: Naurex spotlights another promising NMDA depression drug

Just a few months after heralding some strong data for their lead depression drug, Naurex has wrapped a Phase II study of its number two NMDA treatment after getting the positive efficacy data it was looking for--while continuing to set the stage for a possible IPO in its near future.

Naurex CEO Norbert Riedel

The Evanston, IL-based biotech turned heads last fall when it rolled out an $80 million financing round. The funding arrived just weeks ahead of positive Phase IIb data for GLYX-13, an NMDA modulator that has been attracting careful attention for a therapeutic approach that is designed to safely hit the same target as ketamine, better known on the street as the party drug Special K.

In this new Phase II study, Naurex's follow-up program for NRX-1074 also breezed past the placebo arm, posting a 7-point improvement over a placebo based on industry-standard HDRS-17 rating scale scores, with an average 14-point reduction over baseline. Investigators used an IV formulation of the drug in order to monitor the drug's performance so it could better choose the right dose for the next oral study, according to Naurex CEO Norbert Riedel.

Riedel noted that the depression effect seen in the drug arm after 24 hours was similar to what you might expect after several weeks on existing treatments. The data suggests that a single dose has a fast impact, then the patient's symptoms return to baseline after about three days, which investigators believe fits the profile for a drug that could be dosed daily.

Depression remains a huge target for the drug developers still left in the field. Placebo effects have torpedoed a whole series of experimental late-stage drugs, pushing big players like AstraZeneca ($AZN) to the sidelines. The standard R&D strategy for depression calls for a slate of late-stage studies in order to scrape up with enough positive data to take to regulators. And existing therapies often offer little more than a crap shoot for patients who often cycle through one drug after the next.

For big pharma players like Johnson & Johnson ($JNJ), finding a commercially workable version of ketamine--which has repeatedly demonstrated its ability to rapidly lift depression among a large group of severely depressed and sometimes suicidal patients, but is linked to frequent psychotic episodes--has become a prized goal. The durability of Naurex's GLYX-13 data, which Riedel says is due to the fact that its drugs are NMDA modulators, instead of crude blockers, has stood out.

The goal here is to craft a partial impact on the target, he says, without just slamming the target.

With these two drugs, says Riedel, Naurex has a chance to develop GLYX-13 as a once-weekly therapy for prolonged treatment of patients who don't respond adequately to the drugs now available. And NRX-1074 could be a daily oral drug that is being advanced for first-line use in major depression, where physicians are looking for a quick response. Add in a preclinical program headed for Phase I, he says, and he believes the biotech should have the kind of pipeline needed to stage an IPO, perhaps as early as May or June of this year.

Riedel isn't committing the company to any specific timeline on an IPO, but he also hasn't shied away from expressing his interest in raising cash on the public market. And there's also the chance of doing a deal for the drug as well. But the CEO is concerned that the market shows signs of overheating.

Some biotech valuations, he notes, "are completely out of mind."

With a Phase III program looming for GLYX-13 and its follow-up drug advancing closely behind it, Riedel believes that Naurex can escape the need for recruiting a big patient population. Better drugs that stand out more easily can steer clear of the placebo effects that scuttled so much work in the field. But they will still have to clear a very high regulatory hurdle that has proved fatal to a whole host of drug development programs.

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