Nyxis Neurotherapies Inc. plans to begin clinical trials in the third quarter of NT-13, the first of a family of compounds developed by Chicago-based Nyxis called glyxins, which act as a modulator, through the glycine site, of the NMDA receptor.

Nyxis said preclinical studies showed NT-13 significantly enhanced learning and memory, protected neural tissue during stroke and alleviated neuropathic pain. It is in the neuropathic pain indication that NT-13 is scheduled to enter clinical trials later this year.

“We just recently completed toxicity studies in two animal models [for NT-13], which showed that it is nontoxic, which is extremely promising,” CEO Christopher Price said.

Joseph Moskal founded the company in 1994. Moskal is the chief scientific officer at Nyxis, although he works full time at the Falk Center for Molecular Therapeutics at Northwestern University in Chicago. Price is the only full-time employee, with two part-time employees and help from consultants. Ultimately, after completing a fund raising, Price said he hopes to shed its “virtual” structure and build a nucleus of four or five employees.

Nyxis was built on MADCP technology (monoclonal antibody-derived custom peptides platform), which supports the creation of unique peptides and mimetics targeting specific brain receptors and ion channels.

“MADCP is a way of taking monoclonal antibodies and genetically engineering them so they do not lose the high specificity that monoclonal antibodies have, but become much, much smaller and are able to cross the blood-brain barrier,” Price said. “So, our compounds are unique in that they are highly specific, but they can also get into the brain and act therapeutically.”

NT-13 was designed as a partial agonist with the ability to both stimulate and inhibit the activity of the central nervous system’s NMDA receptors, which are known to play a significant role in multiple neurological conditions, the company said.

Five million people suffer from neuropathic pain in the United States, and the existing treatments typically with antidepressants and opioids not only can have nasty side effects but also may not ease the pain, Price said.

“Our approach is a new approach, and if our compound has efficacy, which we believe it does, it is a multibillion-dollar market opportunity,” Price said.

Nyxis is in the process of trying to raise $1.5 million to fund the Phase I trial, Price said. The company has enough cash to complete the investigational new drug submission and for operating expenses through early 2003.

“The economic climate is such at the moment that it’s extremely difficult,” Price said, explaining that despite the difficulty, the company is talking with venture capitalists and high-net-worth individuals. The money is needed not only to fund a Phase I trial, but also for additional preclinical studies.

Price said he is in conversations with companies that might be interested in a licensing deal. Although it creates more value for a company to wait as far along in clinical trials as possible, Price said the major goal is to create value for shareholders. He estimated the cost of doing the Phase I trial at $500,000 and $4.5 million to complete Phase II trials.

“Over the next couple of years, we would like to get to the point where NT-13 is in trials and has shown efficacy in humans,” Price said, noting that his two other major objectives over the next 12 to 24 months are to have an active ongoing development program at Nyxis and to have corporate strategic partners.