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In recent days, two Rockville biotechs — Neuralstem and Rexahn Pharmaceuticals — have reported nailing down stock sales of $10 million each to institutional investors.

Neuralstem is developing stem cell treatments for central nervous system problems such as spinal cord injuries, Huntington's disease and amyotrophic lateral sclerosis. It is currently conducting a phase 1 trial for its ALS treatment; results from the two-year study in Atlanta are expected in about 18 months, said Richard Garr, the company's president and CEO.

The company soon expects to file investigational new drug applications with the Food and Drug Administration to begin trials on its stem cell treatment for chronic spinal cord injury, plus a small-molecule drug treatment for Alzheimer's disease and/or depression, he said.

"We now have the funding — we already have the science and preclinical work — to push the products into clinical trials," Garr said of the $10 million infusion. "We're transitioning from a development to a clinical stage company with multiple products. Running such trials simultaneously is expensive."

Neuralstem officials are "encouraged," by the stock deal, he said, because it involves "well-respected, established, large institutional investors."

The company reported a first-quarter net loss of $6.8 million, versus a profit of $905,678 in the prior-year quarter, with no revenues either quarter. Its stockholder equity on March 31 totaled $5.0 million.

Rexahn Pharmaceuticals is working on treatments for cancer, including pancreatic cancer, and central nervous system disorders such as Alzheimer's disease, sexual dysfunction and depression. The company plans to use net proceeds from the offering — about $9.45 million — on its lead clinical programs, including its phase 2 clinical study program of Serdaxin, Zoraxel and Archexin.

"The investment is a definitive positive for the company," Ted Heum Jeong, senior vice president of finance for Rexahn, said in an e-mail to The Gazette. "The market is generally beginning to appreciate the upside of Rexahn, which is considerable given that we are in phase 2 development of three unique drugs that address large markets."

In the first quarter, Rexahn reported a net loss of $1.6 million, versus a net loss of $1.5 million in the prior-year quarter. Revenues totaled $18,750, level with a year earlier. In its nine-year history, the company has lost $37.9 million, according to a filing with the Securities and Exchange Commission. Its stockholder equity at March 31 totaled $8.4 million.

"The swift closing of the transaction confirms the fact that Rexahn's drugs have significant promise and gives them additional funds with which to conduct and complete clinical trials for Serdaxin [for depression and Parkinson's trials] along with Zoraxel, for erectile dysfunction," said analyst Rob Goldman of Goldman Small Cap Research of Baltimore in an e-mail.

Garr said he hopes the Neuralstem deal signals a loosening of the biotech investment climate, "but it's hard to tell."

"It probably says larger [investors] are better than smaller," he said. "At that tier, there seems to be demand."

Jeong also was cautious in his assessment.

"The investment climate is still difficult for many biotech companies," Jeong said. "But for biotechs that have well-targeted drugs with good proof-of-concept data, money is available. Rexahn clearly falls into this camp."

Goldman agreed.

"Generally speaking, the environment for small biotechs has slipped in recent weeks as evidenced by lower volumes," Goldman said. "However, the appetite for small biotech deals that are later stage, and therefore carrying less risk, remain strong."

Rexahn might be considered in that category, as its treatments are entering later-stage trials, he said.