With the drug partnership that had funneled cash to Targacept (NASDAQ:TRGT) now concluded, the drug developer swung to a $12.4 million second quarter loss compared to net income of $14.5 million in the same period a year ago.
Winston-Salem-based Targacept attributed the loss primarily to a decrease of $33.5 million in deferred revenue recognition. Targacept reported no net operating revenues for the second quarter, compared to $33.6 million for the second quarter of 2012.
Until last year, Targacept had been receiving revenue through a development partnership with AstraZeneca (NYSE:AZN) on a compound being studied as a treatment for major depressive disorder. After the compound failed in late-stage clinical trials last year, the companies agreed to end that partnership. The $32.7 million in revenue from that partnership that Targacept recorded for the second quarter of 2012 did not recur this year.
Targacept, which does not yet have any Food and Administration-approved drugs, spent $9.5 million in R&D in the second quarter, down from $12.5 million in the year ago period. The decrease was attributed to the decision last year to focus on certain drug pipeline compounds after concluding the program in major depressive disorder. Targacept has three compounds in mid-stage clinical development. The company expects to report top-line clinical trial results for:
- TC-5619 as a treatment for negative symptoms and cognitive dysfunction in schizophrenia in either December or January
- TC-5214 as a treatment for overactive bladder in the first half of 2014
- TC-1734 in mild to moderate Alzheimer’s disease in mid-2014
