Cortex second-quarter net loss decreases to $0.04 per share

Aug 16 2010

Cortex Pharmaceuticals, Inc. (OTCBB: CORX) reported a net loss applicable to common stock of approximately $2,454,000, or $0.04 per share, for the quarter ended June 30, 2010, compared with a net loss applicable to common stock of approximately $2,778,000, or $0.06 per share, for the corresponding prior year period.

“Following the Biovail transaction, Cortex retains its rights to the majority of its AMPAKINE compounds for the treatment of neurodegenerative diseases and psychiatric disorders, indications that have historically been a focus of the Company's portfolio.”

For the three months ended June 30, 2010, the Company's total operating expenses increased only slightly from those for the corresponding prior year period, reflecting an increase in administrative consulting that was partially offset by a decrease in clinical development expenses for CX1739.

Cortex President and CEO, Mark Varney, Ph.D., commented, "We continue to conduct our proof-of-concept Phase IIa clinical study with CX1739 in patients with moderate-to-severe sleep apnea and anticipate receiving top-line results from the study by late summer 2010. Cortex also plans to initiate a Phase IIa trial with CX1739 in adults with ADHD."

Dr. Varney added, "As announced, in March 2010, we sold our rights to CX717 and certain other AMPAKINE® compounds to Biovail Laboratories International SRL (Biovail) as a potential treatment for respiratory depression and vaso-occlusive crises associated with sickle cell disease. Cortex received $9,000,000 of the $10,000,000 up front purchase price from Biovail upon execution of the asset purchase agreement and will receive an additional $1,000,000 upon the completion of the specified transfer plan or September 25, 2010, whichever is later. The agreement with Biovail also includes milestone payments of up to $15,000,000 based upon defined clinical development of the subject AMPAKINE compounds."

Dr. Varney also stated, "Following the Biovail transaction, Cortex retains its rights to the majority of its AMPAKINE compounds for the treatment of neurodegenerative diseases and psychiatric disorders, indications that have historically been a focus of the Company's portfolio."

For the six months ended June 30, 2010, the Company reported net income applicable to common stock of approximately $3,141,000, or $0.05 per share, compared with a net loss applicable to common stock of $5,946,000, or $0.12 per share, for the corresponding prior year period, with the difference primarily reflecting revenues from the Company's March 2010 transaction with Biovail. The net loss applicable to common stock of $0.12 per share for the six months ended June 30, 2009 includes non-cash charges of approximately $832,000, or $0.02 per share, related to the beneficial conversion feature of preferred stock issued in April 2009.

For the first half of 2010, the Company's total operating expenses increased from those for the corresponding prior year period due mostly to increased administrative expenses incurred in connection with the transaction with Biovail, as partially offset by savings from the reduction in force that the Company implemented in mid-March 2009 and the timing of clinical development expenses for AMPAKINE CX1739.

Interest expense for the current year periods includes non-cash charges related to the June 2010 conversion of the promissory note issued to Samyang Optics Co., Ltd. ("Samyang") of Korea. As reported earlier, the convertible note was issued in connection with the Company's $1,500,000 private placement to Samyang in January 2010.

In connection with the conversion of the promissory note, in June 2010 the Company issued to Samyang 10.4 million unregistered shares of the Company's common stock at an effective conversion price of $0.147 per share and two-year warrants to purchase up to an additional 4.1 million unregistered shares of the Company's common stock at an exercise price of $0.206 per share. Cortex has no obligation to register the shares issued in connection with the conversion of the promissory note or the shares underlying the issued warrants.

As announced earlier, shortly after the end of the second quarter Cortex was awarded a grant by The Michael J. Fox Foundation for Parkinson's Research to test selected compounds from its AMPAKINE platform for their ability to restore brain function in animal models of Parkinson's disease. If successful, the work could lead to a neuroprotective treatment with the potential to slow or stop the course of Parkinson's disease — something no currently available therapy has been proven to do.