By Brady Huggett

Pharmos Corp. initiated a pivotal Phase III study in Europe with dexanabinol for the treatment of traumatic brain injury, a study designed to support a new drug application to the FDA.

"We feel one study will be sufficient if the protocol meets the requirements," said Gad Riesenfeld, president and chief operating officer of Pharmos. "The study will start in Europe and will take place in 40 centers there. We hope to enroll around 300 to 400 patients there and then continue the enrollment here in the United States."

Finland, France, Germany, the Netherlands, Italy, Spain, Belgium and the United Kingdom, along with Israel, will participate in the study. Another 30 centers will be involved when enrollment commences in America and the total enrollment will be about 860 patients. Pharmos will collaborate with the European Brain Injury Consortium and the American Brain Injury Consortium on the study, including recruitment efforts.

Riesenfeld said the patients will be recruited into the study as they arrive at trauma centers after sustaining head injuries.

"An hour or two after the patient has been injured they will be tested to see if they meet the criteria for the study," Riesenfeld said. "Three to four hours after the injury, they will receive dexanabinol. The patients will then be checked at one month, three months and after six months."

Recruitment can be difficult when patients are suffering from severe head injuries and not alert. And the window for giving dexanabinol is relatively short, in the big scheme of things.

"The injection has to be given within six hours," said Bob Cook, vice president of finance and chief financial officer at Iselin, N.J.-based Pharmos. "And we have to get consent to include them in the study. It depends on the country, but usually that consent comes from the next of kin. But we have found that six hours is plenty of time to get everything done."

Dexanabinol's six-hour window is actually what sets it apart from other compounds aimed at treating traumatic brain injury. Dexanabinol is an optic isomer, arranged as a mirror image of THC, the active molecule of the cannabis plant. Its design prevents dexanabinol from binding with the cannabinoid receptors in the brain, thereby allowing the compound to be used therapeutically and without psychotropic side effects.

"Other compounds that have been tested have not had the six-hour window," Riesenfeld said. "Most of the other compounds were effective between 15 minutes and two to three hours. We think other compounds have failed because they were tested in humans after six, eight and 12 hours [following injury]."

Dexanabinol has three mechanisms of action: It's an anti-oxidant, an anti-inflammatory compound, and an N-methyl-D-aspartate antagonist. Riesenfeld said dexanabinol is the only compound that has these mechanisms of action that has been tested for the treatment of traumatic brain injury.

Pharmos also is developing dexanabinol for stroke, and that should be ready to enter Phase II trials in four to five months, Riesenfeld said. It has research and development programs for its other cannabinoid compounds, in various stages of preclinical testing for stroke, multiple sclerosis, pain and other neuro-inflammatory-related indications.

As for the pivotal brain injury study, Riesenfield said, "We have a timeline, but this may change. We should complete all enrollment late next year and we should submit formally to the FDA by the end of 2003."

Financially, Cook said Pharmos has enough in the tank to finish the race.

"We closed 2000 with about $26.5 million in cash and a modest stream of revenue from an ophthalmic program with Bausch & Lomb," he said. "To get to an NDA filing will cost about $20 million. We feel we have enough resources to fund the ongoing activities and push the other indications along."

Pharmos has two ophthalmic products on the market, but the significance of getting dexanabinol approved should not be underestimated, Riesenfeld said.

"It is critically important," Riesenfeld said. "It has a potential for several hundred millions in sales. We are not dependent on it because we have other products on the market, but the market for dexanabinol in the U.S. is $500 million and the same outside the U.S., so we are thinking of a billion dollar market."

Pharmos' stock (NASDAQ:PARS) climbed 31.25 cents Wednesday, or about 18 percent, to close at $2.031.