WINSTON-SALEM, N.C. ( TheStreet) -- Targacept ( TRGT) announces a monster partnership for its depression drug with AstraZeneca ( AZN) this morning, yet the stock plunges when trading opened. Earlier this morning, Targacept shares were off 17%; the stock has now "recovered" somewhat and is only down 8% to $21.46. Huh? Chalk it up to a colossal sell-on-the-news reaction. Investors were expecting Targacept to come through with a partnership either before year-end or soon after. The fact that deal terms, including $200 million upfront and total milestone payments of $1.2 billion, were better than expected doesn't apparently count for much. That AstraZeneca chose to spend major bucks to license TC-5214 but didn't buy Targacept outright at a big premium is also likely a disappointment for some investors. And let's not forget that Targacept shares were up more than 660% since July when the company first announced the stellar data for TC-5214. With those kinds of returns in the bank already, a good number of investors are taking profits now that the AstraZeneca deal is done. That Targacept and TC-5214 now enter a relatively quiet period before the phase III studies begin next year doesn't help matters, especially with short-term oriented investors. Last week, I pegged Targacept and TC-5214 as the drug with the best chance to be partnered on lucrative terms. I was right, but clearly, Thursday stock action wasn't what I was expecting. The sell off today has reached ridiculous levels. It's really just silly. Targacept has something like $10 a share in cash, which means the market is valuing TC-5214 -- a potential blockbuster anti-depression drug entering phase III studies -- at only around $10-11 a share. Never mind that Targacept has a bunch of other drugs in its pipeline.