CEO Interview, Cortex Pharmaceuticals, Inc. - Dr. Mark Varney

• On 3:01 pm EST, Monday November 2, 2009

67 WALL STREET, New York - November 2, 2009 - The Wall Street Transcript has just published its Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This 76-page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Small-Cap Specialty Pharma - Patent Expiration - Pending Health Care Reform - Cultivating And Expanding R&D Pipelines - Chinese Drug Manufacturers - Brisk M&A Activity - Indian Pharma VS. U.S. Pharma - Competition From Generics - FDA Approval Process - Clinical Research Outsourcing Market - Stem Cell-Based Technology - Cancer Radiation Therapy - Expansion Into Asian Markets - Traditional Chinese Medicine VS. Western Medicine In Chinese Pharma

Companies include: Aeolus Pharmaceuticals (AOLS.OB); Nutra Pharma (NPHC.OB); Quick-Med Technologies (QMDT.OB); Abbott Labs (ABT); Alexza Pharmaceuticals (ALXA); AmexDrug Corporation (AXRX.OB); Aurobindo Pharma (AUROBINDOP.BO); BioClinica (BIOC); BioPharm Asia (BFAR.OB); Biocon (BIOCON.BO); Cephalon (CEPH); China Sky One Medical, Inc. (CSKI); Claris Lifesciences (CLARICH.BO); Cortex Pharmaceuticals (COR); Daiichi Sankyo (DSKYF.PK); Dr.Reddy's (RDY); Elan (Elan); Eli Lilly (LLY); Forest (FRX); GeoPharma (GORX); Glaxo (GSK); Glenmark (GLENMARK.BO); Johnson & Johnson (JNJ); Lupin (LUPINSL.BO); Mannatech (MTEX); Matrix Laboratories (ATRIXLAB.BO); Medical Nutrition (MDNU); Merck KGaA (MKGAY.PK); Mylan (MYL); NeoStem (NBS); Novartis (NVS); Pfizer (PFE); Piramal Healthcare (PIRAMALHE.BO); Provectus Pharmaceuticals (PVCT.OB); Ranbaxy (RANBAXY.BO); Salix Pharmaceuticals (SLXP); Shire (SHPGY); Telik (TELK); Winston Pharmaceuticals (WPHM.OB).

In the following brief excerpt from the 76-page report, Dr. Mark Varney, CEO of Cortex Pharmaceuticals, Inc., discusses the outlook for the sector and for investors.

DR. MARK VARNEY, Ph.D., is currently President and Chief Executive Officer of Cortex Pharmaceuticals, Inc. Dr. Varney has spent over 18 years in the pharmaceutical industry. He joined Cortex as Chief Scientific Officer and Chief Operating Officer in January 2006, and he was promoted to President and CEO in August 2008. Prior to joining Cortex, Dr. Varney held senior-level positions at Sepracor, Inc., where he was Vice President and Head of Discovery, and at Bionomics, Ltd., where he was Vice President of Drug Discovery. Upon the acquisition of SIBIA by Merck, Inc., in 1999, he was appointed a Director at Merck's San Diego facility. Prior to SIBIA, he held research positions at Servier in France and Merck Sharp & Dohme in the U.K. Dr. Varney received his B.Sc. in biochemistry with honors from Surrey University, U.K. He completed his Ph.D. and postdoctoral training at Oxford University, U.K. Dr. Varney's career focuses on drug discovery programs for treating schizophrenia, depression, cognitive disorders, anxiety, pain, epilepsy and insomnia. He has been successful in developing drug candidates in several of these disease areas, and has published extensively in peer-reviewed journals. Dr. Varney has also filed numerous patent applications relating to new chemical entities and methods of use.

TWST: Let's start with a brief history of your company, Cortex Pharmaceuticals, as well as an overview of your portfolio of products.

Dr. Varney: Cortex Pharmaceuticals (COR) is a neuroscience company focused on the discovery and clinical development of a technology that we call AMPAKINEs. This platform represents a novel and extremely broad approach to treating both psychiatric and neurological indications. AMPAKINE compounds are small molecules that positively modulate a protein in the brain called the AMPA-type glutamate receptor. Through these interactions, AMPAKINEs amplify communications between brain cells and correct underlying deficits in brain function. As I said, the AMPAKINE platform is extremely broad, and it provides an opportunity for us to focus on several different brain disorders. And really there are three areas in which we focus. The first is diseases associated with deficits in attention, cognition and memory. For example, attention deficit hyperactivity disorder (ADHD), schizophrenia, and Alzheimer's disease. The second area is diseases associated with the central control of breathing or respiration. Now it's known that analgesic drugs such as opioids and anesthetic agents can slow or even stop the breathing of an individual through their actions within the brain. We've shown in clinical studies that AMPAKINEs can prevent opioid-induced respiratory depression, which is the most serious side effect of opioids, without impacting the beneficial, pain-relieving properties of opioids. The third area of focus for us is neurodegenerative diseases that include Parkinson's disease, Alzheimer's disease and a recovery following brain damage, such as stroke. In terms of our most advanced compounds, we have two AMPAKINEs currently in clinical development. Both of them are in Phase II, one of them is called CX717, and this is being targeted to the treatment of respiratory depression. The second compound is called CX1739. This is currently in a clinical study to treat sleep apnea, and they will be going into a second clinical study early next year in adults with ADHD.

TWST: Would you expand on how AMPAKINES work?

Dr. Varney: Cells within the brain called neurons connect to each other, and it's these connections that make us who we are. Now in a typical human brain, there are 100 billion neurons, and these make about 100 trillion connections. The vast majority of these connections use a chemical called glutamate, which acts as the communicator between these brain connections. And the way that glutamate does this is through its interaction with a protein called the AMPA receptor. This is where the AMPAKINEs work. They up-regulate the activity of the AMPA receptor and strengthen the communications between brain cells. The strength of these communications is thought to be the primary mechanism through which memories are encoded in the brain. And so you can see then that if you facilitate these connections, you can potentially strengthen memory and cognition.

TWST: What's the potential market for AMPAKINEs?

Dr. Varney: The worldwide sales of products to treat various CNS indications are in the range of around $80 billion to $100 billion on an annual basis. AMPAKINEs have the potential to treat many of those disorders. And so for example, the ADHD market had sales of over $5 billion in 2008. AMPAKINEs have the potential to be very unique agents in treating ADHD because unlike most of the currently prescribed drugs, the stimulants, AMPAKINEs don't have the same side effect liabilities as stimulants. For example, AMPAKINES don't increase blood pressure or heart rate, and they can potentially address some of the issues in ADHD that are not currently met with existing medication, such as some of the cognitive deficits. We think ADHD would be a very nice market opportunity. A second area that is very exciting is the treatment of sleep apnea. The market potential is predicted to be huge - in the range of $4 billion to $8 billion, in part because there is currently no drug treatment for sleep apnea. And then if you look at the other indication that we're focused on, reversing respiratory depression induced by certain drugs like opioids and anesthetic agents, we undertook a pretty extensive market analysis to try and understand how large that market was and concluded that it was somewhere between $500 million and $1.8 billion. So AMPAKINES have the potential to treat these indications, which represent very large market opportunities.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 76-page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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