Targacept scuttles diabetes drug program in fresh setback

A beleaguered Targacept ($TRGT) took one step forward and two steps back today, killing a development program for TC-6987 as a treatment for type 2 diabetes while signaling that a separate study for the same drug hit its primary endpoints in a mid-stage study for asthma.

Investigators for the Winston-Salem, NC-based Targacept had been hoping to track a significant improvement in fasting plasma glucose among the patients taking the treatment in the Phase II diabetes trial. But when that didn't pan out, Targacept decided to dump the diabetes work and push ahead on asthma.

"The exploratory asthma trial of TC-6987 as an adjunct to a low-dose inhaled corticosteroid showed a drug effect that was seen at the first assessment point, 30 minutes after initial dosing, and was sustained throughout the duration of the study, suggesting that TC-6987 has promise and may also have benefit in a monotherapy setting," said James F. Donohue, a professor at the University of North Carolina School of Medicine.

News of the diabetes setback cost Targacept another bite out of its share price this morning. Its shares have been battered in recent days after its depression drug TC-5214--partnered with AstraZeneca ($AZN)--failed the last two of four late-stage studies. With an 0-and-4 record in Phase III, Targacept was forced to write off a program that AstraZeneca had offered to pay more than a billion dollars for in milestones.

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