Targacept slashes staff by half in wake of PhIII disaster

The late-stage collapse of Targacept's depression drug--TC-5214--will cost the jobs of close to half of the biotech's staffers, with 65 workers getting pink slips today. The news comes a month after Winston-Salem, NC-based Targacept ($TRGT) and AstraZeneca ($AZN), which had once committed to a $1.24 billion licensing pact on the drug, acknowledged that the treatment had failed the last two of four Phase III studies.

Once considered a bright prospect after upbeat Phase II results, 5214 today looks more like the kind of cautionary tale that has helped drive some of the biggest players out of the neurosciences arena. Depression studies are notoriously unreliable, often scuttled by high placebo responses. But investigators didn't even come close to the goal here: Hitting the primary endpoints in two out of four Phase III trials. The black eye at AstraZeneca, which could ill-afford another pipeline setback, has helped inspire a scramble to in-license other programs.

For Targacept, which had been adding staffers in expectations of a marketing launch, the writing was on the wall once the data hit. But company execs insist that with a cash cache of $220 million, Targacept still has a future.

"This painful step is part of an overall plan to align our resources more closely with nearer-term value creation opportunities," says Targacept CEO J. Donald deBethizy. "We remain well capitalized and focused on operating our business efficiently to ensure we are positioned to exploit our diverse clinical-stage pipeline to bring new medicines to patients." 

Among the departures will be CMO Geoffrey C. Dunbar. The trials chief is retiring at the end of this year.

- here's the press release

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