WRAL Tech Wire

Targacept lands potential $1.2 billion deal with AstraZeneca

Targacept

On The Web

• Targacept
• Local Tech Wire at Twitter - sign up today for latest news alerts

Site Search

Get the latest news alerts: Follow LTW at Twitter.

Local Tech Wire

WINSTON-SALEM, N.C. - Targacept (Nasdaq: TRGT) has found a commercial development partner for its potential blockbuster depression treatment – and what a partner with a deal announced early Thursday that could be worth more than a whopping $1 billion.

Drug giant AstraZeneca and Targacept announced their partnership to pursue development of the compound TC-5214 with the Winston-Salem firm to receive:

• An upfront payment of $200 million

• An additional $540 million if development, milestone and commercial sales milestones are achieved

• Another $500 million based on other sales milestones

Additionally, Targacept will receive what it called “significant stepped double-digit royalties” on worldwide sales.

Astra Zeneca and Targacept are already partnered on development of a potential treatment for Alzheimer’s and another for treatment of hyperactivity.

In October, Targacept announced strong clinical trial results for the compound, which could combat major depressive disorder (MDD). That news sent Targecept shares to a record high of $24.50 within minutes after trading opened.

The trial news also led to an increase in the stock’s value in the eyes of analysts.
Needham & Co. upgraded Targacept to “buy” from “hold” with a target price of $26 per shares. Needham believes the drug has blockbuster potential.Bret Holly, an analyst at Oppenheimer & Co., said the trial results were “a best case scenario, with the drug’s efficacy far exceeding our already high expectations."

MDD affects more than 42 million worldwide.

“The opportunity to improve treatment in depression is a large one, both commercially and in terms of benefits for patients,” said AstraZeneca Chief Executive Officer David Brennan in a statement. “It’s an area both AstraZeneca and Targacept know well and I’m pleased to be adding another late stage project to our pipeline.”

According to Targacept and AstraZeneca, the global antidepressant market tops more than $20 billion.

Targacept and AstraZeneca will collaborate on a Phase II clinical trial to launch next year and hope to file a new drug application with the U.S. Food and Drug Administration in 2012.

“We are delighted to have selected AstraZeneca to work with us to meet our goal of advancing TC-5214 into late-stage development and bringing a new mechanistic approach for the treatment of depression to the millions of patients who do not respond well to first-line antidepressant therapy and need relief,” said Targacept Chief Executive Officer J. Donald deBethizy in a statement.

“Targacept and AstraZeneca have an established track record of successful collaboration and today’s agreement demonstrates our shared dedication to excellence in the field of neuroscience,” he added.

The two companies have worked together since 2005.

Editor's Blog

The latest blog posts from our WRAL Tech Wire and WRAL editors. Read more articles…