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Final PhIII results wipe out AstraZeneca, Targacept depression drug

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AstraZeneca ($AZN) and Targacept ($TRGT) made it official today that their partnered depression drug--TC-5214--proved a complete bust in Phase III. The last two of four late-stage studies failed to meet their primary endpoints, extinguishing any hopes for a comeback after the first two Phase III studies ended in failure. 

For AstraZeneca the clinical failures mark the disappointing end to yet another drug prospect for a deal to which it once committed up to $1.24 billion dollars. AZ--which has already signaled that it is winding down much of its neuroscience work in another round of layoffs--is left to face a chorus of critics who have castigated the pharma giant for its failure to assemble a promising late-stage pipeline. For Targacept, the failures put the biotech in a defensive crouch as top execs rallied behind a substantial wall of cash as they prepared for an inevitable reckoning.

"Since the readout from the first RENAISSANCE program outcomes, we have been carefully scrutinizing all aspects of our business to prepare for this contingency, and we will announce our plans by the end of April," said Targacept CEO J. Donald deBethizy in a prepared statement. "Targacept has built a deep and mechanistically diverse clinical pipeline, and, with multiple NNR Therapeutics in Phase II development in areas of large medical need and commercial opportunity and over $225 million in cash, we are well positioned for future success."

It's unlikely that many analysts were caught unawares by the failure. While it's not unusual to rack up a loss or two in late-stage depression studies, which can often be torpedoed by unusually high placebo responses, back-to-back failures left only dwindling hope for a turnaround. The failure of the study also marks another big setback for Targacept, which lost a major partnership with GlaxoSmithKline ($GSK) last year as that company led the exodus from the CNS arena.

- here's the press release

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