AstraZeneca finally bails on troubled Targacept after years of failure

Targacept CEO Stephen Hill

After 9 years of fruitless work on treatments for Alzheimer's disease and depression, AstraZeneca ($AZN) is dissolving its partnership with Targacept ($TRGT), leaving the battered biotech to pick up the pieces of its dwindling pipeline.

Targacept disclosed its partner's impending departure in a terse SEC filing, saying that AstraZeneca exercised its termination clause on Wednesday, and, in 90 days, the pair's oft-amended agreement will be null. AstraZeneca will hand back any and all compounds it hasn't already surrendered, Targacept said, including AZD1446, a once-promsing treatment for Alzheimer's.

AstraZeneca's final exit comes as little surprise considering the pair's record of clinical failure. The antidepressant TC-5214, another pillar of their collaboration, endured four Phase III setbacks that forced Targacept to cut its payroll and refocus its R&D efforts in 2012, and TC-1734, another Alzheimer's treatment, failed to beat out placebo in a late-stage study of its own. AstraZeneca handed both of those drugs back to Targacept last year, and, in February, the company cut its ties with another slew of undisclosed early-stage candidates in a broad housecleaning effort.

And Targacept's efforts to find silver linings haven't fared any better. After AstraZeneca ditched TC-1734, the biotech pressed on with a Phase IIb trial to see whether the drug could beat Eisai and Pfizer's ($PFE) now-generic Aricept (donepezil) in Alzheimer's patients, an effort that ended in failure over the summer. And it's a similar story for TC-5214: Moving on from treating depression, Targacept tried it out in a Phase IIb against overactive bladder, recording another miss as the drug failed to meet its primary endpoint in July.

That leaves the Winston-Salem, NC, biotech with just one clinical candidate on its books: TC-6499, which is in a Phase I/II exploratory trial in& diabetic gastroparesis.

Now CEO Stephen Hill, intent on rebuilding Targacept's promise, is looking beyond the company's home base of nicotinic receptor treatments.

"Continuing our strategic planning and business development efforts of the last several months, we are focused on selectively fortifying our pipeline with non-nicotinic opportunities and intend to engage our major shareholders in this process," Hill said in a statement attached to the company's second-quarter results, released in August.

- read the filing

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