Firm will focus on two joint development alliances and two wholly owned programs while cutting back on discovery efforts.

Memory Pharmaceuticals has decided to cut its overall headcount by 20%, reduce it discovery research efforts, and instead focus on certain development programs.

The company’s shares were initially rocked in March 2007 when its candidate for mania in bipolar disorders failed in a Phase IIa trial. The firm’s stock dropped from $3.13 to $1.95 in the first day after the announcement. Then in October, the firm’s value took another hit, when the same compound, MEM 1003, failed a mid-stage investigation in Alzheimer’s disease. Share price went down to $1.06 with this failure. Memory Pharmaceuticals did not report any plans for MEM 1003, an L-type calcium channel modulator.

The company says that it will maintain capabilities in CNS drug discovery with an eye on long-term growth. Near-term and mid-term efforts, though, will focus on the two partnered programs with Roche and Amgen as well as two of its internal development initiatives.

Under the realignment of resources, Memory Pharmaceuticals has amended its PDE10 inhibitor collaboration with Amgen, which focuses on certain neurological and psychiatric disorders. Memory Pharmaceuticals will commit and fund certain preclinical research and provide increased access to its screening technologies over the next year.  In exchange, the firm will receive increased milestone payments. In addition, the parties expanded the scope of compounds eligible for higher tier royalties.

The nicotinic alpha-7 receptor agonist alliance with Roche will also remain as one of Memory Pharmaceuticals’ foci. The most advanced compound is MEM 3454, which is in mid-stage trials for Alzheimer’s and schizophrenia. The firms recently reported adding a biomarker study to the schizophrenia program. Memory Pharmaceuticals also expects to complete Phase I studies for MEM 63908 and report results in the fourth quarter.

Memory Pharmaceuticals’ wholly owned initiatives include a PDE4 inhibitor program and a 5-HT6 antagonist program.  The firm believes that PDE4 inhibitors could be beneficial in treating cognition-related CNS disorders and inflammatory diseases.  Lead compound, MEM 1414, is expected to progress into a Phase IIa trial by the end of 2008. The firm is investigating 5-HT6 antagonists for Alzheimer’s disease, schizophrenia, attention deficit disorder, and obesity.  The program should advance into clinical trials by the end of 2008.

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