Call it collateral — though perhaps temporary — good fortune.
When Alkermes $ALKS whistled up an instant spike for their share price on positive Phase III data for their depression drug ALK-5461, shares of microcap Cerecor $CERC also ignited. The stock had bounced up 56% in premarket trading because it has a mid-stage drug, CERC-501, that has the same mechanism as the Alkermes candidate.
Just like ‘5461, CERC-501 is a kappa opioid receptor antagonist. And while no two drugs are necessarily exactly alike, the resemblance was good enough for investors looking for other benefactors of this data.
Cerecor’s bounce is good for a multimillion-dollar boost in its market cap, if it sticks (watch that number, the boost was fading fast in early trading this morning). That’s many times the $1 million the Baltimore-based biotech paid Eli Lilly up front to land rights to this drug back in February of 2015.
“We were happy with the deal terms,” CEO Uli Hacksell tells me this morning. (And who could doubt that today?) Lilly was willing to practically give this one away (my words) because of the pharma giant’s intention to pursue another enormous Phase III program for its Alzheimer’s drug solanezumab (his words). CERC-501 was either going to be out-licensed or shelved.
Ironically, Cerecor is not currently testing their drug for depression. But it is engaged in a mid-stage program that ranges from smoking withdrawal to anxiety, cocaine addiction and PTSD.
“Our intention is to start a Phase II study next year in depression for 501 as well,” adds the CEO. Hacksell, the former CEO of Acadia, which finally capped a lengthy quest for an approval of the antipsychotic Nuplazid earlier this year.
Now Hacksell says he’s bullish that his rival to ‘5461 can help replace the antipsychotics that come into play when patients with depression fail the first rounds of suggested treatments.
Time will tell. In the meantime, Cerecor is awaiting the full data set from Alkermes’ third Phase III with plans to soak up as many lessons as possible for its own development campaign.
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