Local Tech Wire

WINSTON-SALEM, N.C. – (NASDAQ: TRGT) earned a net profit of $3.8 million in the second quarter, up from a loss of $9.7 million a year earlier, according to this week’s earnings announcement.

For the year to date, the Winston-Salem biotech has had net income of $10.6 million, compared to a loss of $14.3 million in the first six months of 2009.

The positive income momentum comes from revenue being recognized from a licensing and development partnership with pharmaceutical giant AstraZeneca for a drug candidate targeting Major Depressive Disorder.

AstraZeneca has made a $200 million upfront payment to Targacept as part of that deal, and $36 million of that revenue has been recognized on the books so far this year.

Targacept CEO Don deBethizy said that drug started a Phase 3 clinical trial in June. Three more product candidates are currently in Phase 2 testing, and a fourth is scheduled to start a Phase 2 trial by the end of the year, he said.

"We continued this quarter to execute on an aggressive operating plan for 2010 and passed an important company milestone with the timely initiation in June of the Phase 3 development program for TC-5214 as an adjunct to anti-depressant therapy for major depressive disorder," said deBethizy.

"Three additional product candidates in Phase 2 development for cognitive disorders and a fourth targeted for inflammatory disorders that we expect to enter Phase 2 before the end of the year highlight the depth of our pipeline of NNR Therapeutics," he added.

Targacept is developing a diverse pipeline of innovative NNR Therapeutics for difficult-to-treat diseases and disorders of the nervous system. NNR Therapeutics selectively modulates the activity of specific neuronal nicotinic receptors, a unique class of proteins that regulate vital biological functions that are impaired in various disease states.

Targacept was established in 1997 and currently has 117 employees.

The company’s IPO was completed in April 2006.

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