Biopharmaceutical firm said Wednesday it would stop development of a potential drug it was researching in partnership with

The compound called TC-6499, was intended to treat neuropathic pain. Phase I testing showed that the drug results “do not project a therapeutic margin sufficient to support further development.”

In December, Targacept (Nasdaq: TRGT) said it would not pursue further development of a potential treatment for schizophrenia after the drug failed to produce “statistical significance” in a clinical trial.

Targacept and its partner AstraZeneca, which paid for the trial and rights to the compound known as AZD3480, said the compound did not meet trial targets for improvement in cognitive functions.

GSK and Targacept formed a drug development alliance in July of 2007 that focuses on neuronal nicotinic receptors (NNRs). Five targets for the program include pain, smoking cessation, addiction, obesity and Parkinson’s disease.

Targacept is focused on research into NNRs. They are a class of proteins in the nervous system that control levels of chemical messengers such as dopamine. According to Targacept, nicotine has been linked to over-stimulation of dopamine in brain regions that are involved in feelings of reward and pleasure.

“While we are disappointed not to be moving TC-6499 forward, we have learned a great deal about the NNR targets involved in perception of pain,” said J. Donald deBethizy, Targacept’s chief executive officer. “Importantly, our alliance with GlaxoSmithKline continues to make progress as we remain focused on advancing programs in smoking cessation, obesity, Parkinson’s disease, addiction and pain. We are fortunate to have a pipeline of NNR therapeutics representing multiple opportunities for future success.”