AstraZeneca ($AZN) has back-to-back setbacks to report on a pair of key drug development programs. The pharma giant reported that it's burying the ovarian cancer drug program for olaparib after concluding that a mid-stage trial failure made it impossible for investigators to push ahead to the next stage. And investigators had more bad news to report to AstraZeneca and Targacept ($TRGT) about TC-5214, their partnered drug for depression. The treatment flunked its second of four Phase III trials, signaling some deep trouble for a treatment AstraZeneca promised to pay up to $1.24 billion for in their pact.
Those trial woes prompted AstraZeneca to add a $381.5 million impairment charge to its fourth quarter numbers, with $96.5 million of that representing the rapidly dwindling chance of success for the anti-depressant.
The trial failures mark another setback for the development execs at AstraZeneca, who have been struggling to overcome a lackluster record in the clinic. And it's another major blow to Targacept, which already had to deal with the departure of GlaxoSmithKline ($GSK) in the biggest biopharma deal breakup of 2011. Targacept's already battered shares fell 27% this morning.
"AstraZeneca seems to have had more than its fair share of misfortune when it comes to the development pipeline," Barclays Capital noted. "Additional development failures increase the probability that management will reassess the likely return on investment from additional R&D investment and cut costs further."
As in the first Phase III study, TC-5214 could not beat out a placebo in treating depression. Their target measure was a change in the Montgomery-Asberg Depression Rating Scale total score after eight weeks of treatment with TC-5214 as compared to placebo.
Back in 2009 olaparib, a PARP inhibitor, had been one of the stars of the ASCO show, as investigators unveiled significant tumor shrinkage. And the pharma giant isn't giving up on either program. Olaparib will be studied in other cancers while the TC-5214 treatment still has two other late-stage studies to complete.