Adeona Completes Financing, Offers Alzheimer's Study Update

Ann Arbor-based Adeona Pharmaceuticals Inc. (AMEX:AEN) announced that on July 6, it completed an equity financing of $1 million with a single institutional investor, Seaside 88, L.P.

The financing involved the sale of 1,212,121 registered shares of common stock and no warrants. Enclave Capital served as placement agent and will receive a 7 percent cash commission and 5-year warrants to acquire 60,606 shares of Adeona at $1.32 per share.

The use of proceeds is intended for general corporate purposes.

Separately, Adeona announced the completion of 75 percent enrollment in Part 2 of Adeona's 60 patient clinical study of oral Zinthionein ZC for Alzheimer's disease and mild cognitive impairment. For further information see, http://clinicaltrials.gov/ct2/show/study/NCT01099332.

Adeona is also providing guidance today that it expects to complete the CopperProof-2 clinical study and announce results in the first quarter of 2011. If successful, Adeona or its marketing partners should be eligible to immediately begin marketing Zinthionein ZC as a prescription medical food intended for the dietary management of Alzheimer's and mild cognitive impairment.

The CopperProof-2 study represents the first controlled clinical study of oral zinc therapy for Alzheimer's disease and mild cognitive impairment. Part 2 of the CopperProof-2 study is designed as a 60-subject comparator study. Subjects are randomized on a 50:50 basis to receive either Zinthionein ZC or matching placebo. After 3 and 6 months on clinical trial material, serum measurements of zinc and copper are taken, and any changes in cognitive function using standard clinical tests used in Alzheimer's disease and mild cognitive impairment are recorded.

The completion of 75 percent enrollment follows Adeona's announcement of completion of 50 percent enrollment less than one month ago as well as Adeona's April 14th announcement of positive results from Part 1 of the CopperProof-2 study. Part 1 demonstrated a substantially lower incidence of adverse effects in Alzheimer's disease and mild cognitive impairment subjects (33 percent versus 100 percent) in favor of Zinthionein ZC (containing 150 mg of elemental zinc acetate and 100 mg of cysteine) compared to Galzin (containing either 50 mg or 100 mg of elemental zinc as zinc acetate). Zinthionein ZC also demonstrated superior serum zinc bioavailability in Alzheimer's disease and mild cognitive impairment subjects compared to both the 50 mg and 100 mg dose levels of Galzin®.

"We are very pleased to have Seaside 88 as a new investor in Adeona," said Adeona CEO James S. Kuo, M.D. "We also consider the rapid enrollment in our CopperProof-2 clinical trial as an excellent indication of the high clinical need for a potential disease modifying therapy in Alzheimer's disease and mild cognitive impairment, especially one that is convenient, tolerable and also having a substantial history of safety. Should our CopperProof-2 study prove successful, we believe that Zinthionein ZC is now well positioned to represent the first commercially available disease-modifying therapy for Alzheimer's disease and mild cognitive impairment, a multibillion dollar market opportunity."

Observations by Adeona scientists and other scientists of sub-clinical zinc deficiency in Alzheimer's disease patients plus a body of published literature that chronic elevated copper exposure contributes to the progression of Alzheimer's disease and mild cognitive impairment prompted the present CopperProof-2 clinical study. A small and uncontrolled zinc therapy study in Alzheimer's disease patients published in 1992 demonstrated cognitive improvements in 80 percent of subjects. In some subjects, the improvement was detectable after only 3 months of administering zinc. Due to significant gastrointestinal side effects associated with oral zinc administration, the study was temporarily suspended and injectable zinc was used to finish the study, emphasizing the clinical utility of a convenient and well-tolerated oral zinc therapy such as Zinthionein ZC.

Alzheimer's disease can affect the entire brain but it is particularly associated with loss of tissue in the hippocampus, the area in the brain responsible for several functions including short-term memory retention and processing. The hippocampus has one of the highest concentrations of zinc in the brain. Hippocampal zinc is thought to play a role in hundreds of protective enzymes and other systems, including those that detoxify amyloid beta, an abnormally folded peptide that accumulates in aging and is a biomarker for Alzheimer's disease. When cerebrospinal fluid zinc is low, levels of the particularly toxic beta amyloid 42 are elevated.

Hippocampal zinc serves as a neurotransmitter, and also modulates a specific excitatory neuroreceptor, the NMDA (N-methyl-D-aspartic acid) receptor. If the neuroexcitation goes uncontrolled, there is a derangement of brain tissue function, and possibly neuronal death. By elevating cerebrospinal fluid zinc, NMDA receptor excitation may be better controlled, improving tissue function and thereby acute cognition and tissue survival, as may have been seen in the 1992 study. NMDA-receptor antagonists now available for Alzheimer's, including Namenda and Axura, annually sell an estimated $2.6 billion.

More at www.adeonapharma.com.

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