Memory Pharmaceuticals Corp. has announced an update on the investigational new drug application (IND) filed in September 2006 with the US Food and Drug Administration (FDA) for MEM 3454. The FDA has advised the company that in order to fully review the toxicology reports that were submitted with the IND, the agency requires further explanations of revisions that were made to those reports since they were submitted with the company's first IND for this trial in May, and as a result the proposed phase 2a clinical trial for MEM 3454 in Alzheimer's disease has been placed on clinical hold. The FDA has also deferred assessment of the adequacy of the Investigator's Brochure for the trial pending submission of the additional information.

Memory Pharmaceuticals also reported that the FDA confirmed that the clinical hold was not related to any manufacturing issues with MEM 3454 and that the potential impurities issue, previously raised by the FDA in connection with the company's first IND for the proposed phase 2a clinical trial of MEM 3454, had been adequately resolved.

The company believes that no additional studies or data will be required to address the FDA's questions and that, as a result, it should be able to provide to the FDA, by early November, the information necessary to facilitate the FDA's review.

"Commencing the phase 2a trial of MEM 3454 in Alzheimer's disease is a top priority, and we are committed to resolving this issue as quickly as possible and, ideally, in a timeframe that would enable us to still initiate the phase 2a clinical trial for this drug candidate near the end of the year," stated Jim Sulat, president and chief executive officer of Memory Pharmaceuticals. "We continue to believe that MEM 3454 has the potential to offer a new approach for the treatment of debilitating central nervous system disorders based on the safety and pharmacokinetic results of the phase 1 trial of MEM 3454, coupled with the positive cognitive data generated in that trial."

Separately, the company announced the closing of the first tranche of its recently announced private placement of common stock, raising gross proceeds of approximately $26.7 million. Under the terms of the transaction, Memory Pharmaceuticals issued approximately 23.2 million shares of common stock and warrants for the purchase of approximately 7.1 million additional shares of common stock at an exercise price of $1.33 per share. The closing of the second tranche, which is expected to raise an additional $5.5 million through the sale of approximately 5.0 million newly issued shares, is subject to stockholder approval and the company intends to call a special stockholders meeting to approve the second tranche as soon as practicable.

MEM 3454 is a partial agonist of the nicotinic alpha-7 receptor. The nicotinic alpha-7 receptor is a highly specialized receptor found in the CNS. Compounds acting on this receptor could be beneficial in the treatment of Alzheimer's disease and schizophrenia, as well as other psychiatric and neurological disorders. MEM 3454 is the company's lead drug candidate from its nicotinic alpha-7 agonist program. Memory Pharmaceuticals is developing MEM 3454 as potential therapy for Alzheimer's disease and considering developing the compound as a treatment for schizophrenia.