Pharmaceutical company AstraZeneca plc (NYSE: AZN) is looking for another big winner to replace its Nexium heartburn drug and its Seroquel schizophrenia treatment. Unfortunately two drugs the company had in trials both failed late-stage trials. That’s bad news for AstraZeneca, but even worse news for Targacept Inc. (NASDAQ: TRGT), the co-developer of one of the drugs.
AstraZeneca will take a $381.5 million pre-tax charge in the current quarter and stop development of one of the drugs, olaparib, which was being tested as a treatment for ovarian cancer. The second drug, an anti-depressant called TC-5214, was the one being jointly developed with Targacept.
The drug failed its first round trials last month, pushing Targacept shares down by -60%. Following today’s announcement that TC-5214 had failed in the second phase of the trials is crushing the company’s stock yet again. AstraZeneca paid Targacept $1.24 billion in 2009 to license the drug.
AstraZeneca plans to complete the remaining two trials and then make a decision on whether or not to file a new-drug application in the US in the second half of next year. Current plans call for the company to file for European marketing approval in 2015.
Targacept may not be able to hold out that long. The company’s shares are down nearly -33% again today, at $5.23, a new 52-week low. Shares are down about -70% for the trailing twelve months and more than -80% from the 52-week high of $30.47.
AstraZeneca shares are actually up a fraction, 0.02%, at $45.44, in a 52-week range of $40.89-$52.54.
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