CoCensys Gets FDA Approval to Test Stroke Treatment on People
IRVINE — CoCensys Inc. said Monday that it has received approval from the Food and Drug Administration to test its stroke treatment drug on people.
Under the development agreement with CoCensys, the decision obligates Swiss pharmaceuticals giant Ciba-Geigy Ltd. to buy $5 million of CoCensys stock.
The news gave CoCensys’ stock a 15.4% boost in Monday’s Nasdaq trading. It gained 50 cents a share to close at $3.75.
The contract with Ciba-Geigy requires the Swiss company to make equity investments in CoCensys at various milestones as the product is developed. With this latest infusion, Ciba-Geigy has invested a total of $7 million in the development of CoCensys’ stroke drug.
The money will be used to conduct the first phase of clinical trials of CoCensys’ drug. When the testing enters its second phase, that will trigger another cash infusion from Ciba-Geigy to carry out those trials.
CoCensys, based in Irvine, also has funds available to finish the testing of its stroke treatment drug from its new sales organization, which has been selling four Ciba-Geigy products since August. Under the terms of the marketing agreement, each company will invest its share of the profit into the development of CoCensys’ stroke treatment.
The company said the sales venture will bring in about $26 million over the next five years that will be split equally between the two partners.
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