Memory Pharmaceuticals Corp. is restocking its bank account with up to $11 million and has signed an expanded development agreement with F. Hoffmann-La Roche Ltd. as it announced plans to move its MEM 3454 drug into further trials for treating cognitive impairment associated with schizophrenia.

The Monvale, N.J.-based company entered into a definitive stock purchase agreement to sell up to $6 million of common stock, principally to the Stanley Medical Research Institute. The three-tranche private placement will provide funding for a Phase IIa trial of MEM 3454, which is expected to begin in the fourth quarter.

The company expects to close the first tranche around June 20 and will issue 694,444 shares at a price per share of $2.88, a 17 percent premium over the average closing sale price for the 10 days prior to the date the agreement was signed. The company has the option, in its discretion, to sell up to an additional $4 million of its stock to the investors in two equal installments upon achieving predefined milestones related to the Phase IIa trial. The second and third tranches also will be priced at a 17 percent premium over the average closing sale price for the 10 days immediately prior to the company's achievement of the specified milestones.

In addition, Memory has amended a loan agreement with Hercules Technology Growth Capital Inc., garnering an extra $5 million to support the upcoming trial.

Memory also altered two previous deals with Roche. It expanded its nicotinic alpha-7 receptor agonist agreement, with the new deal requiring the Basel, Switzerland, company to make an additional milestone payment to Memory upon completion of the Phase IIa trial to maintain its existing license to MEM 3454. The company said the extra milestone payment is expected to cover the expenses related to the Phase IIa trial.

Memory also said it has restructured a PDE4 inhibitor collaboration with Roche, regaining all worldwide rights to the program, with Roche relinquishing all license and options rights, including those related to compounds MEM 1414, which is in Phase I for Alzheimer's disease, and MEM 1917, which is in preclinical stage for Alzheimer's. Memory will make unspecified milestone payments to Roche on achieving certain development, regulatory and sales events of PDE4 compounds and will pay royalties to Roche on worldwide sales of marketed products from the program.

In March, Memory took a 35.8 percent stock hit on news that its calcium channel modulator, MEM 1003, failed to demonstrate efficacy in treating acute mania in patients with bipolar disorder. The latest news did little to assuage investors, as its shares (NASDAQ:MEMY) lost 4 cents Tuesday to close at $2.53.