How Far Can This Shot In The Arm Take Cerecor Inc. (NASDAQ: CERC)?

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Cerecor Inc. (NASDAQ: CERC) is the process of developing a drug that is promising to treat alcohol use disorder (AUD). Its lead candidate is CERC-501, which is a kappa opioid receptor (KOR) antagonist.

Cerecor Inc. (NASDAQ: CERC) recently received a $1 million financial shot in the arm in the form of a grant from an agency of the National Institutes of Health (NIH) called the National Institute on Alcohol Abuse and Alcoholism (NIAAA). The grant is designed to support the development of CERC-501, whose target conditions could actually go beyond AUD to include other substance use disorders such as smoking.

It is worth pointing out at this juncture that CERC-501 is currently in Phase 2 study in smoking cessation.

Cerecor Inc. (NASDAQ:CERC) tackling a devastating condition

According to Cerecor, the backing from NIAAA goes a long way to validate the potential benefit of CERC-501 in managing substance use disorder. AUD in particular is a serious problem in the U.S. and elsewhere in the world. NIAAA estimates that more than 16 million people in America are afflicted by AUD, yet available remedies are adequate in addressing the problem.

That explains why it is estimated that close to 90,000 people in the Americas die every year of AUD and other alcohol-related causes. AUD is also a serious burden on the economy because dealing the problem consumes nearly $250 million annually.

Cerecor Inc. (NASDAQ: CERC)’s CEO, Uli Hacksell, said in a statement that the grant from NIAAA augments internal efforts being made by Cerecor to develop CERC-501 to treat substance use disorders. He added that the $1 million funding will enable Cerecor to pursue development of CERC-501 for AUD.

Liquidity boost

Cerecor Inc. (NASDAQ: CERC) finished 1Q2016, its latest reported quarter, with cash balance of $16.6 million, which shrank from $21.2 million in the previous quarter. As such, the $1 million funding from NIAAA should boost the company’s balance sheet flexibility and allow it to pursue for opportunities for CERC-501 and also expand its pipeline.

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