Targacept to Receive $20 Million Milestone Payment as AstraZeneca Plans to Continue Development of AZD3480 (TC-1734)
Wednesday December 27, 8:55 am ET
<I expected this in 1q,07 and opened a position yesterday :-)>
WINSTON-SALEM, N.C., Dec. 27 /PRNewswire-FirstCall/ -- Targacept, Inc. (Nasdaq: TRGT - News) today announced that AstraZeneca (NYSE: AZN - News) plans to continue development of AZD3480 (TC-1734) in Alzheimer's disease and cognitive deficits in schizophrenia. AstraZeneca's determination to continue development triggers a $20 million milestone payment to Targacept under the parties' collaboration agreement. Today's announcement follows the completion by AstraZeneca of previously disclosed studies of AZD3480 (TC-1734).
"AstraZeneca is committed to developing innovative therapies in the areas of unmet need of Alzheimer's disease, schizophrenia and other cognitive disorders. Our decision to continue clinical development of AZD3480 demonstrates our belief in the cognitive-enhancing potential of NNR-targeted therapeutics," said Bob Holland, Vice President and Head of the Neuroscience Therapy Area, AstraZeneca. "In addition to the promise of AZD3480, we are very pleased with our research collaboration with Targacept. We entered into the collaboration excited about the prospects of combining Targacept's longstanding leadership position in NNR research with our existing strengths, and the progress made in a relatively short time has been impressive."
"We are delighted with AstraZeneca's plans to move forward with development of AZD3480 in these two areas where a significant medical need is clear. We believe that the effects on cognition that we observed in our previous nine clinical trials of this product candidate in approximately 400 subjects show its potential as a treatment for cognitive disorders," said J. Donald deBethizy, Ph.D., President and Chief Executive Officer of Targacept. "We are very pleased that AstraZeneca made the determination to conduct further development of AZD3480 ahead of schedule, demonstrating a strong commitment to the NNR mechanism and an extraordinary ability to execute against aggressive timelines. We look forward to a long and productive collaboration."
Alzheimer's disease represents an area of great medical need in the developed and developing world, causing great distress to patients and their caregivers and imposing a major financial burden. Current treatments have limited efficacy and significant side effects in many patients.
Schizophrenia is a chronic, severe and disabling form of psychosis that, in addition to symptoms such as delusions and hallucinations, is often marked by impairments in cognitive functions such as attention, vigilance, memory and reasoning. These cognitive impairments play a primary role in the inability of schizophrenic patients to function normally. There is currently no product approved for the treatment of cognitive deficits in schizophrenia.
Collaboration Summary
In December 2005, Targacept and AstraZeneca entered into an exclusive global license and research collaboration agreement for the development and commercialization of Targacept's proprietary compound TC-1734, which AstraZeneca refers to as AZD3480, to treat Alzheimer's disease, cognitive deficits in schizophrenia and other cognitive disorders. Targacept received an initial payment of $10 million from AstraZeneca and, as a result of AstraZeneca's determination to continue development of AZD3480, a milestone payment of $20 million from AstraZeneca will become due. In addition, Targacept is eligible to receive other payments of up to $249 million, contingent upon the achievement of development, regulatory and first commercial sale milestones for AZD3480, as well as stepped double digit royalties dependent on sales achieved following regulatory approval.
Under the agreement, Targacept and AstraZeneca initiated a preclinical research collaboration in January 2006 under which Targacept is utilizing its proprietary drug discovery technology known as Pentad(TM) to discover additional compounds. Based on the current budget for the research collaboration, Targacept expects to receive approximately $26.4 million in funding from AstraZeneca over the planned four-year research term.
AstraZeneca is primarily responsible for and has agreed to fund the development and commercialization of AZD3480 and any compounds that arise out of the research collaboration. If compounds that arise out of the research collaboration are selected for advancement, Targacept would be eligible to receive additional payments, contingent upon the achievement of development, regulatory and first commercial sale milestones, as well as royalties dependent on sales achieved following regulatory approval. Targacept has retained an option to co-promote in the United States AZD3480 and any compounds that arise out of the research collaboration and are selected for advancement.
Independent of the research collaboration, the agreement provides for a mechanism by which Targacept can offer to AstraZeneca compounds that act on different NNR subtypes than AZD3480 for development and commercialization for the treatment of Alzheimer's disease, cognitive deficits in schizophrenia, other cognitive disorders or schizophrenia. |
