BrainCells Inc. announced that it has signed an agreement with Proximagen Group to acquire sabcomeline, a clinical-stage muscarinic partial agonist that has potential in the treatment of various psychiatric and neurologic disorders. Under the terms of the agreement, BrainCells will pay Proximagen an upfront fee and development and sales milestone payments together worth up to $51 million, as well as a royalty on sales, for worldwide development and commercial rights to the compound.

BrainCells leads the scientific research of neurogenesis using its proprietary neural stem cell technology to identify novel compounds for the treatment of neuropsychiatric disorders. In its evaluation of muscarinic agents as a novel approach to treat depression and cognition, BrainCells determined sabcomeline is highly neurogenic in vitro and active in several animal behavioural models. When sabcomeline was combined with an on-market serotonin reuptake inhibitor (SSRI) in animal behavioral models measuring effects on mood and cognition, it showed strong activity and increased neurogenesis, suggesting that there is a synergistic response. Sabcomeline has been shown to be safe and well tolerated in more than 3,000 patients. It has been studied in six phase 3 efficacy studies in Alzheimer's disease and two Phase 2 efficacy studies in schizophrenia.

BrainCells plans to initiate a phase 2 clinical trial to evaluate sabcomeline as augmentation to SSRIs for the treatment of patients with major depressive disorder (MDD). Improvements in cognitive function will also be measured. The use of sabcomeline with SSRIs is covered in a patent issued to BrainCells in March 2010 (U.S. Patent No 7,678,363).

"Based on our investigation of the neurogenic activity of muscarinic agents, BrainCells is pursuing the promising concept of utilizing this class of compounds for the treatment of neuropsychiatric disorders," said Jim Schoeneck, chief executive officer of BrainCells Inc.

"Backed by insights from our neural stem cell platform, we can quickly move into mid-stage clinical trials in this large-market indication. With only 30-40 percent of patients with depression fully responding to treatments currently on the market, the need remains for agents with new mechanisms of action as well as those that have the ability to augment the effect of current treatments," Schoeneck added.

BrainCells Inc. is a drug discovery and development company leading the scientific research of neurogenesis by applying its proprietary human neural stem cell platform technology to identify novel pathways for new therapeutics to treat various central nervous system (CNS) diseases.

Proximagen is a leading biotechnology company committed to developing novel drugs and innovative new treatments for disorders of the central nervous system, bringing new hope to patients and value to its shareholders.