Targacept, Astra in Blockbuster Deal
The company and AstraZeneca (AZN) have entered into a global collaboration for TC-5214 in depression, the companies announced jointly. The agreement comes about six weeks after Targacept presented jaw dropping, positive results from a phase II study of TC-5214 as an add-on, anti-depressant therapy.
The data presented in mid-October positioned TC-5214 as a potential blockbuster anti-depression drug, which is why AstraZeneca is paying a ton of cash to secure the drug's rights.
Under the agreement, AstraZeneca will make an upfront payment to Targacept of $200 million and up to an additional $540 million if specified development, regulatory and initial sale milestones are met.Targacept will receive stepped double-digit royalties on net worldwide sales of TC-5214 and is eligible for another $500 million in milestone payments if the drug meets certain sales levels. AstraZeneca and Targacept plan to jointly design a phase III clinical program for TC-5214 as an add-on therapy in depression to begin in the middle of 2010. The goal is to seek regulatory approval for the drug in 2012. AstraZeneca is responsible for 80% of the development costs with Targacept picking up the tab for the remaining 20%. The two companies are also planning a phase II study to develop TC-5214 as a standalone anti-depression therapy. Targacept shares closed Wednesday at $23.51. TC-5214 made its first splash in July when Targacept announced top-line results from a phase II study, stating 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). That initial announcement sent Targacept shares soaring more than 600%.
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