CoCensys Reaches Deal to License Experimental Anxiety Drug

IRVINE — CoCensys Inc. said it licensed its experimental drug for treating anxiety to a division of American Home Products Corp.’s in an agreement valued at as much as $59 million.

Under the accord, the Wyeth-Ayerst division will pay an upfront licensing fee of $5 million; $3 million a year for as many as three years to support development of other compounds; and as much as $40 million if milestones in the anxiety drug’s development are met.

American Home Products, based in Madison, N.J., also agreed to buy $5 million in convertible preferred shares of CoCensys. The stock is convertible after two years at the market price.

The agreement is the Irvine-based biotechnology company’s largest to date.

The compound under development is called Co 2-6749. It’s a synthetic version of a class of compounds known as epalons. The epalon receptors in the brain play a calming role and are different from the receptors that existing anxiety medications target, the company said.

CoCensys shares fell 6 cents to $4.06, while American Home Products shares rose $1.125 to $72.875.

CoCensys develops and markets products to treat neurological and psychiatric disorders. Last month, Swiss drug maker Novartis ended an agreement to develop a compound to treat stroke and traumatic brain injuries after disappointing results from initial safety trials.