Market Overview and Business Strategy

The AMPAKINE platform addresses large potential markets. According to research data from IMS Health, in 2006 the total worldwide sales for central nervous system products to treat brain-related disorders and diseases exceeded $105 billion of which $82 billion represents the segment of the market in which Cortex’s AMPAKINE technology could play a role. This market segment increased by 9.9% over the previous year sales.   For the larger indications such as Alzheimer’s disease and ADHD, Cortex aims to develop molecules to proof-of-concept stage and then to seek partners for later stage clinical development that will require sizable, expensive Phase III clinical trials, and very large sales forces to achieve significant market penetration. At the same time, the Company plans to develop compounds internally for a selected set of indications, many of which will allow us to apply for “Orphan Drug” status. Such designation by the Food and Drug Administration (the “FDA”) is usually applied to products where the number of patients in the United States in the given disease category is usually less than 200,000. These Orphan Drug indications typically require more modest investment in the development stages, follow a quicker regulatory path to approval, and involve a more concentrated and smaller sales force targeted at selected medical centers in the U.S. The key indications that the Company plans to pursue internally include Huntington’s disease, Fragile X syndrome and Rett’s syndrome.