August 15, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BALTIMORE, MD – One day after the abrupt resignation of Chief Executive Officer Uli Hacksell, Cerecor Inc. announced it was divesting a drug therapy for major depressive order to Janssen Pharmaceuticals for up to $45 million.
Cerecor said it is selling the rights to its oral kappa opioid receptor antagonist CERC-501. Under terms of the deal Janssen, a division of Johnson & Johnson (JNJ), will provide Maryland-based Cerecor with $25 million in up front funding. There is a potential Janssen could pay Cerecor an additional $20 million in regulatory milestone payments. Of that initial $25 million, Cerecor said $3.75 million will be deposited into a 12-month escrow to secure future indemnification obligations to Janssen.
Shares of Cerecor spiked Monday after its announcement, climbing to 67 cents. However this morning share prices are down to 56 cents as of 10:34 a.m.
Cerecor has been developing CERC-501 for MDD as well as substance abuse disorders. In its announcement, the company said CERC-501 has been observed to have activity in animal models of depression, substance withdrawal and dependence, and has been generally well-tolerated in five human clinical trials.
Although Hacksell provided his resignation that was effective immediately on Monday, he still provided a statement regarding the sale. The statement, which was seemingly made prior to his resignation, still lists Hacksell as president and CEO of the company.
“We believe the sale of CERC-501 is mutually beneficial to Cerecor and Janssen” Hacksell said in the statement. “For Cerecor the sale provides an important cash infusion and the consequential opportunity to add additional resources into the development of our remaining assets, CERC-301, CERC-611 and CERC-406, and the potential expansion of our drug candidate portfolio. I also believe that the neuroscience expertise and strength of Janssen will be instrumental in achieving the full medical and commercial potential of CERC-501.“
On Monday, Hacksell stepped down from his role as CEO. He is remaining as the company’s chairman of its board of directors. John Kaiser, chief business officer of Cerecor, has been appointed Interim CEO.
Under the terms of the agreement, Janssen will assume the ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. In December, CERC-501 failed a Phase II trial to treat nicotine withdrawal. The company had been preparing for a Phase II/III trial testing CERC-501 as an adjunctive treatment for MDD.
Cerecor’s lead drug candidate is CERC-301, an antagonists of the N-methyl-D-aspartate (“NMDA”) receptor, which Cerecor currently intends to explore as a novel treatment for orphan neurological indications. In November 2016, CERC-301 also missed the mark in a mid-stage trial treating MDD. Cerecor is also developing two pre-clinical stage compounds, CERC-611 and CERC-406.
Following the divestment of CERC-501, Cerecor said it will evaluate its current portfolio for potential new indications, focusing on orphan neurologic diseases, and to identify potential new product candidates that could be in-licensed.