Targacept Trades Rights to Some Compounds to AstraZeneca
Targacept Trades Rights to Some Compounds to AstraZeneca [Winston-Salem Journal, N.C.]
From Winston-Salem Journal (NC) (March 5, 2013)
March 05--Targacept Inc. said Tuesday it has altered its licensing agreement with AstraZeneca PLC yet again, this time trading the rights for some of its drug compounds.
Targacept, based in downtown Winston-Salem, said AstraZeneca has been involved in a collaborative research and license agreement since December 2005.
In the latest agreement, AstraZeneca has been given the right to develop and commercialize Targacept’s AZD1446 compound, which targets Alzheimer’s disease. Previously, AstraZeneca’s rights with certain neuronal nicotinic receptor (NNR) therapeutics were limited to cognitive disorders and schizophrenia.
"The modifications to our agreement remove contractual barriers and enable us to pursue AZD1446 and the other compounds that we have licensed from Targacept wherever the science leads us, which we believe increases our chances for clinical success," Dr. Mike Poole, the head of AstraZeneca’s Neuroscience Innovative Medicines unit, said in a statement.
In exchange, AstraZeneca has relinquished its licensing rights for Targacept’s alpha7 NNR therapeutics compounds targeting cognitive disorders in schizophrenia, such as TC-5619. Targacept expects results from a Phase 2b clinical trial by the end of this year. The TC-5619 compound also is being studied as an Alzheimer’s treatment.
The transfer also affects compounds TC-1734, also known as AZD3480, which is in a Phase 2b clinical trial for mild to moderate Alzheimer’s disease.
The changes mean Targacept can research and commercialize those compounds on its own at its expense. The company projected in February that it would have at least $135 million in cash and investments at year’s end compared with $180 million on Dec. 31.
"We are pleased to regain unencumbered rights to exploit the alpha7 target, as recent advances have provided clinical evidence of its relevance in both schizophrenia and Alzheimer’s disease," said Dr. Stephen Hill, Targacept’s president and chief executive.
"As appreciation of the potential therapeutic benefits of this mechanism grows, we believe our leadership position and library of novel compounds will serve us well. Sadly, new treatment options for Alzheimer’s disease have been elusive, while the need for patients and their caregivers remains immense."
Kimberly Lee, an analyst with Janney Montgomery Scott, said the agreement changes "could be promising for Targacept, although some may view the pullout as a lack of validation of the mechanism of action." Lee explained the mechanism of action as "meaning the target pathway of the drug and the way the drug works."
Targacept said in February that besides trials involving TC-5619 and TC-1734, it plans to begin a Phase 2b study in the first half of the year on TC-5214 as a treatment for overactive bladder.
"We have a strong pipeline of Phase 2b programs representing three distinct nicotinic receptor mechanisms targeting areas where the unmet need is great and current therapies, where they exist at all, are limited," Hill said.
The Targacept-AstraZeneca collaboration has been fluid in recent years, particularly after AstraZeneca terminated its licensing agreement for the TC-5214 compound in April.
The compound had been Targacept’s most promising research, touted by analysts as a potential billion-dollar drug discovery until it failed in 2011 and 2012 to make a difference compared with a placebo in four Phase 3 clinical trials for major depressive disorder.
In response, Targacept eliminated 65 jobs in April and another 26 in October. It also closed its laboratory operations last year. Altogether, the company’s workforce has shrunk from 142 to 43 in the past 12 months.
Ketan Desai, an analyst with Seeking Alpha, said in May it is unlikely that Targacept would be able to land another potential billion-dollar collaboration with a pharmaceutical company.
"That’s not to say it’s impossible, but Targacept has had a serious blow to its reputation and has to work hard to get it back," Desai said. "It has made the right decision to focus on clinical trials that can produce results sooner rather than pursuing new research that could take 5-10 years to show a benefit."
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Posted: March 2013