J&J deal gives Cerecor much-needed cash infusion
- Uli Hacksell, the head of biopharma Cerecor Inc., has retired and stepped down from his role as CEO, citing the successful sale of a depression drug candidate to Johnson & Johnson and resulting cash infusion.
- J&J subsidiary Janssen Pharmaceuticals, Inc. bought rights to Cerecor's mid-stage CERC-501 for $25 million upfront and a potential $20 million in future regulatory milestone payments. Just under $4 million of the cash upfront will be held in escrow as collateral against future indemnification obligations to Janssen.
- Separately, Cerecor also completed a $5 million private offering with Armistice Capital, adding two directors to its board. Hacksell, who has been in his post since January 2016, will be replaced by Cerecor's chief business officer John Kaiser, who will serve on an interim basis during the search for a new CEO.
Cerecor has had a challenging year.
In November 2016, shares in the Baltimore, MD-based company dropped more than 50% on disappointing Phase 2 results for its oral, NMDA receptor antagonist CERC-301 in major depressive disorder. Cerecor's share value has never recovered and remains nearly 90% below its late November levels.
CERC-501, the object of the deal with J&J, has faced setbacks as well. Data released in December 2016 showed the candidate did not meet its primary objective in a Phase 2 trial for nicotine withdrawal. Cerecor then switched tracks to focus on major depressive disorder.
The injection of cash should help stabilize the company, which is planning further clinical studies for CERC-301 and another candidate called CERC-611. Cerecor expects post-deal cash holding to fund operating expenditures at least through 2018.
Cerecor also indicated it would continue business development, suggesting further deals could be on the horizon.
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