Cerecor, a Baltimore pharmaceutical company planning an initial public stock offering, has launched a new clinical study of an antidepressant it says can help patients who aren't responding to standard treatments.

The company is conducting a randomized double-blind experiment to test a drug known as CERC-301 on 104 subjects who are experiencing severe depressive episodes despite receiving other treatments. It is a Phase 2 clinical trial, which means it is seeking to prove the drug triggers a biological response and has some effectiveness compared to a placebo.


Cerecor licensed the drug from Merck & Co. and is seeking to fill a gap in the $11 billion market for antidepressants. It wants to parlay that opportunity into a $32 million IPO.

CEO Dr. Blake Paterson, who previously led another Baltimore pharmaceutical startup, Alba Therapeutics, said the drug has the potential to be as effective as ketamine, a similar drug that is administered intravenously, but with fewer side effects because CERC-301 is taken orally.

Paterson was not available to be interviewed because the company is in a quiet period mandated by the U.S. Securities and Exchange Commission ahead of its stock sale.

Judith Costello, acting executive director of BioMaryland, a state organization promoting the biotechnology industry, said the Phase 2 trial is an important milestone, as drugs face a long road from the lab to the pharmacy.

"We're excited they're ready to go to the next step," she said. "That means their technology is getting close to its potential to help patients like you and me."

Since its inception in 2011, Cerecor has spent $34 million on research and development, but with no products approved for commercial sale, has not reported any revenue, according to documents the company filed with the SEC. The company employed 11 people as of May 31, six of them devoted to research and development, according to the documents.

The company has several other drugs in its pipeline: CERC-501, a treatment for psychiatric and substance-use disorders; CERC-406, a treatment for memory loss or difficulty concentrating in patients with depression; and COMT Inhibitor Platform, a new generation of compounds that could improve the brain's executive function and may be effective for treating diseases such as Parkinson's.

But CERC-301 is its leading drug candidate. The drug has helped the company sell $51.1 million in stock and debt, with its most recent round of fundraising totaling $32 million. Bethesda venture capital firm New Enterprise Associates led the July 2014 investment alongside Apple Tree Partners and MPM Capital.

The drug is classified as an inhibitor of a neurological receptor known as N-methyl-D-aspartate, or NMDA. The category also includes ketamine, more commonly used as an anesthetic and known among recreational drug users as Special K. But it also is seen as a promising fast-acting antidepressant, though it is not approved by the Food and Drug Administration for that use.

"Recent data suggest that ketamine, given intravenously, might be the most important breakthrough in antidepressant treatment in decades," wrote Thomas Insel, director of the National Institute of Mental Health, in a blog post last October.

Cerecor argues that its drug holds similar potential because it uses the same biological pathway as ketamine, but that it avoids ketamine's side-effects, which can include increases in blood pressure, intoxication and hallucinations.

The company has not disclosed a timeline for its stock offering or any proposed price for its shares. It intends to trade on the Nasdaq exchange under the symbol CERC.

Meanwhile it already is planning for more trials, expecting to launch another Phase 2 study in the second half of 2016 testing multiple dosage levels of CERC-301 on subjects who are not responding to other treatments for severe depressive episodes.

Cerecor officials anticipate receiving results from that study in early 2018, after which the company plans to discuss Phase 3 studies and manufacturing activity with the FDA, according to SEC filings.