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Cortex, Massachusetts Firm Settle Rights Dispute : Pharmaceuticals: The Irvine biotech company issues $1-million note to retain rights to drug.

October 08, 1995

IRVINE — Cortex Pharmaceuticals Inc., a small biotech firm, and Alkermes Inc. of Cambridge, Mass., said Friday that they have settled a lawsuit over development of a drug to treat cerebral blood vessels, and ended a related licensing agreement.

In 1992, Cortex licensed Alkermes to develop a drug that inhibits the human enzyme calpain for treatment of such conditions as a stroke or head injury.

A year later, Alkermes sued Cortex in federal court in Massachusetts, contending that Cortex's research on uses of the drug for cerebral vasospasm violated Alkermes' exclusive right to develop applications for neurological disorders.

Two weeks ago, the court denied a Cortex request to transfer the suit to California and the companies quickly moved to settle, said D. Scott Hagen, Cortex's chief financial officer.

Under the settlement, Cortex issued a $1-million note, payable with interest in three years, to Alkermes. Cortex, which regains the rights to the technology, agreed to make future payments to Alkermes if Cortex enters into a strategic alliance or sells calpain-inhibiting drugs.

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