Updated with Targacept stock offering
WINSTON-SALEM, N.C. ( TheStreet) -- Investor expectations for Targacept's (TRGT - Get Report) experimental depression drug are moving higher in lockstep with the company's stock price as a key data presentation nears.
On Oct. 15, researchers will be releasing detailed findings from a phase II study of Targacept's depression drug TC-5214 at a neuroscience conference in Chicago.
Targacept announced July 15 that TC-5214 was able to improve the symptoms of depression in patients who don't respond well to Celexa, a currently prescribed antidepressant marketed by Forest Labs (FRX). Since that announcement, Targacept shares have soared 633%, closing Wednesday at $22.50.The details of the TC-5214 depression augmentation study were left undisclosed for the Oct. 15 presentation. The key data to watch for is the difference in effect size for patients treated with TC-5214 plus Celexa compared to patients treated with a placebo plus Celexa. The magic number here is at least a two-point improvement in the Hamilton Rating Scale for Depression, or HAM-D, in favor of the TC-5214 arm of the study, according to a biotech hedge fund analyst whose been doing a lot of work on TC-5214. His firm owns Targacept shares. A two-point improvement for TC-5214 on this widely recognized depression scale is important because that's the same effect size seen with Bristol-Myers Squibb's (BMY - Get Report) Abilify, which received an expanded FDA approval as an add-on treatment to anti-depressant therapy in late 2007. The bulk of Abilify's $2 billion-plus in sales in 2008 were for schizophrenia, but a Needham analyst estimates that $500 million in Abilify sales this year will come from the add-on anti-depressant market.