Although Cortex's (AMEX:COR) attention deficit hyperactivity disorder (ADHD) drug, CX-717, was put on clinical hold, recent findings could lift the freeze and get the drug back on track for FDA approval.

Back in March of 2006, shares of Cortex approached $5 per share, after it reported positive results in a small clinical study of CX-717. Results showed that the drug was safe, effective, well-tolerated, and produced no increase in heart rate or blood pressure -- a major advantage over the majority of existing ADHD drugs (e.g. Ritalin and Shire's (NASDAQ:SHPGY) Adderall), which are strong stimulants with occasional cardiovascular side effects. Non-stimulant treatment options such as Lilly's (NYSE:LLY) Strattera carry other risks, such as suicidal thoughts and liver damage.

On April 18, Cortex submitted a data package to the FDA providing convincing evidence that the specific brain tissue specimen changes seen in animal toxicology studies -- which previously caused the FDA to put CX-717 on clinical hold -- are a postmortem fixation artifact unrelated to the drug, and are not found in the tissue of the animal while it is still alive. The FDA partially lifted the clinical hold on CX-717 last fall, but dosing restrictions in this ruling prevent Cortex from pursuing further studies for the lucrative ADHD indication. 

With shares of Cortex currently changing hands at around $2.50, and a market cap of only $100 million, this news represents an excellent opportunity for speculative biotech investors. The FDA should respond to Cortex by mid-June, and will probably lift the current high-dose restriction imposed on CX-717. If the company gets this crucial endorsement from the FDA, it should quickly move back above its previous $5 per share.

The ADHD indication is pivotal to the future development of CX-717 and Cortex, because it opens the way to major partnership deals with larger biotech companies or big pharma. The treatment of ADHD represents a large, growing market in the United States, especially since currently approved drugs are riddled with major safety issues.

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Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives and works in the small Pennsylvania town of Portage. He invites your comments and feedback. Mike does not have a position in any company mentioned here. Eli Lilly is an Income Investor selection. The Fool has a disclosure policy.