TRGT -14% p/m..AstraZeneca PLC (AZN) and partner Targacept Inc. (TRGT) Tuesday said they're scrapping plans to develop an experimental antidepressant designed to mimic some of nicotine's mood-elevating effects, after a remaining late-stage clinical trial failed.
The experimental drug, TC-5214, failed to outperform a placebo pill in patients with severe depression. The two companies said they consequently will not pursue a regulatory filing for the medicine.
AstraZeneca paid the U.S. biotech $200 million upfront for the rights to TC-5214 in 2009, a steep price for a pharmaceutical licensing deal. The agreement was seen as a risky but interesting bet on a disease that several companies have stopped investing in due to the difficulty of finding effective treatments. But the product's prospects slid when the first two trials failed last November and December.
"This doesn't come as a surprise, given that previous studies had failed and analysts had reduced expectations accordingly," Jefferies International said in a note.
AstraZeneca, Britain's second biggest drug maker, had hoped TC-5214 would help its efforts to bring new products to market that can help offset looming patent expirations for current best-sellers. The group will now take an impairment charge of $50 million, representing the remaining value of TC-5214, which has already seen earlier writedowns after two previous Phase III studies also missed their targets.
The decision to give up on the experimental antidepressant is a major blow for Targacept because TC-5214 is its lead product candidate.
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