Mixed top-line Phase IIb results with AZD3480 in Alzheimer's disease add tension for Targacept about December, when partner AstraZeneca will choose whether to push ahead with the nicotinic receptor modulator.

But recent late-stage blowups in the AD space have knocked away competitors and London-based AstraZeneca might choose to shoot for a win.

Word that AZD3480 missed the trial's primary endpoint - statistical improvement in ADAS-cog scores - hurt shares of Targacept Sept. 16, when the stock dropped more than 30 percent to end trading at $2.58.

The 12-week Sirocco trial's active comparator, AD's gold-standard Aricept (donepezil) from Pfizer, didn't hit the primary endpoint either and showed less improvement than in previous, published trials of the same length, noted Targacept CEO Donald deBethizy in a late-afternoon conference call Sept. 15.

Another surprise: Placebo patients got better rather than worse.

The trial in mild to moderate AD, conducted by AstraZeneca, included 567 patients dosed with AZD3480, which hit secondary endpoints of improvements in other measures. Full results will be published later.

First data are due by year-end from a Phase IIb study with the compound in schizophrenic cognitive dysfunction. Another Phase II study is trying the compound in adult attention deficit/hyperactivity disorder.

AstraZeneca "has always reserved their interest in looking at the [AD] results as well as the schizophrenia results" before deciding what to do with AZD3480, deBethizy said. The deal was signed in 2005 (¹ Also see "AstraZeneca Licenses Nicotinic Alzheimer’s Treatment From Targacept" - Pink Sheet, 28 December, 2005.).

Phase III failures such as Myriad's Flurizan and the Phase II stumble by Elan with bapineuzumab have hamstrung the competition in AD, so AstraZeneca could elect to go ahead with development of AZD3480, especially if outcomes are positive in the schizophrenia trial.

Myriad, of Salt Lake City, reported the fizzle of Flurizan (tarenflurbil) in August (² Also see "Myriad Weighs Strategic Alternatives" - Pink Sheet, 20 August, 2008.). Dublin, Ireland-based Elan's less than stellar news came late the month before (³ Also see "Wyeth’s Pipeline Star Bapineuzumab Looks More Long Shot Than Sure Bet" - Pink Sheet, 30 July, 2008.).

Marching ahead, though, is Medivation with Dimebon , the subject of a recent Pfizer deal that brought $225 million upfront (⁴ Also see "Pfizer Finds Backup For Aricept In Medivation’s Dimebon" - Pink Sheet, 3 September, 2008.).

Oppenheimer analyst Bret Holley wrote in a Sept. 16 research note that the results in AD "may shake" AstraZeneca's faith in AZD3480 and delay the program, but the firm "could well decide" to go ahead. Gastrointestinal side effects, Holley pointed out, were less with AZD3480 than with Aricept.

Dimebon (dimebolin) boasts a better side effect profile than Aricept, too.

- Randall Osborne (r.osborne@elsevier.com)

Targacept’s AstraZeneca Deal Down, Not Out

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