AstraZeneca and Targacept enter into agreement to develop and commercialize TC-5214

AstraZeneca and Targacept, Inc. today announced a collaboration and license agreement for the global development and commercialization of TC-5214, Targacept’s late-stage investigational product for major depressive disorder (MDD). TC-5214, which recently completed a phase IIb clinical trial, is a nicotinic channel blocker that is thought to treat depression by modulating the activity of various neuronal nicotinic receptor (NNR) subtypes.

Major Depressive Disorder is a common illness, affecting approximately 42 million people worldwide, and the global antidepressant market is valued at over $20 billion. Serotonin reuptake inhibitors (SSRIs) are the most commonly prescribed class of drugs for depression, but many patients fail to respond adequately. The NIMH STAR*D study suggests that approximately 63 percent of patients do not achieve remission with first-line SSRI treatment.

Under the agreement, AstraZeneca will make an upfront payment to Targacept of $200 million upon effectiveness and up to an additional $540 million if specified development, regulatory and first commercial sale milestones are achieved. Targacept will also be eligible to receive up to $500 million if specified sales related milestones are achieved as well as significant stepped double-digit royalties on net sales worldwide. Targacept has retained an option for a co-promotion of TC-5214 to a limited target physician audience in the US. Effectiveness of the agreement is contingent on expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

AstraZeneca and Targacept will jointly design a global phase III clinical program anticipated to begin in mid 2010 with the goal of filing a new drug application (NDA) with the US Food and Drug Administration (FDA) in 2012. TC-5214 is being developed as an adjunct to antidepressant therapy in adults with MDD who do not respond adequately to first-line antidepressant treatment. The companies will also initiate a phase II study exploring TC-5214 as a monotherapy for MDD. AstraZeneca will be responsible for 80% of the cost of the initial global development program, with Targacept responsible for the remaining 20%. AstraZeneca will be responsible for and will fund the costs of global commercialization of TC-5214, and will assume Targacept's manufacturing and supply agreements with third parties in relation to TC-5214. The agreement also provides for a specified period for the parties to negotiate a potential multi-year research program that would be conducted by Targacept to identify and develop additional NNR Therapeutics for MDD and possibly other indications.

David Brennan, Chief Executive Officer of AstraZeneca said: “The opportunity to improve treatment in depression is a large one, both commercially and in terms of benefits for patients. It’s an area both AstraZeneca and Targacept know well and I’m pleased to be adding another late stage project to our pipeline.”

J. Donald deBethizy, Ph.D., President and Chief Executive Officer of Targacept, said: “We are delighted to have selected AstraZeneca to work with us to meet our goal of advancing TC-5214 into late-stage development and bringing a new mechanistic approach for the treatment of depression to the millions of patients who do not respond well to first-line antidepressant therapy and need relief. Targacept and AstraZeneca have an established track record of successful collaboration and today’s agreement demonstrates our shared dedication to excellence in the field of neuroscience.”

Targacept and AstraZeneca previously entered into a global collaboration focused on cognitive disorders in 2005. Three product candidates in the collaboration are currently in clinical development; including AZD3480 for attention deficit/hyperactivity disorder (ADHD), AZD1446 planned for Alzheimer’s disease, and TC-5619, for cognitive dysfunction in schizophrenia.