LOUISVILLE - Sleep apnea drug development company Pier Pharmaceuticals Inc. was acquired by Cortex Pharmaceuticals Inc. in Irvine, California, for about $2.5 million in stock earlier this month.

Cortex (OTC: CORX) purchased Louisville-based Pier through an all-stock transaction in which Pier's former owners receive a 41 percent stake in Cortex, Mark Varney, chief executive at Cortex, said Tuesday. Cortex's market capitalization is about $6 million, Varney said. Pier became a subsidiary of Cortex.

Pier's license of some patents from the University of Illinois to treat obstructive sleep apnea was a key piece of the transaction, Varney said. Peter Letendre, former president and chief executive of Pier, was the company's only employee, Varney said. Letendre will join the eight-member Cortex board and will serve as a consultant to Cortex, Varney said.

No drug is available currently to treat sleep apnea, which affects an estimated 18 million people in the United States. That's why Cortex is working on drug development, Varney said. A mask device for people to wear while they're sleeping only gets used by about half of the patients who receive them, he said.

Pier did a small clinical study with positive results for 22 patients with obstructive sleep apnea, Varney said. The drug dronabinol was used in the study, Varney said. Cortex also is focusing on drugs that treat respiratory depression, where a person stops breathing during sleep as a side effect of taking various opiate drugs, Varney said.

Going forward, Cortex will hold a new drug trial for obstructive sleep apnea patients that uses dronabinol. The trial will be entirely funded by a National Institute of Health grant of nearly $5 million, the company said in a press statement.