(Updates shares in the first and second paragraph.)
Dec. 20 (Bloomberg) -- Targacept Inc., developer of an experimental depression treatment with AstraZeneca Plc., fell as much as 28 percent after the drug failed to meet the main goal of a second trial.
Targacept plunged 25 percent to $5.85 at 9:44 a.m. New York time, after touching $5.64 in the biggest intraday decline since Nov. 8. The shares of the Winston-Salem, North Carolina-based company dropped 71 percent this year before today.
The drug, TC-5214, failed in the second of four late-stage efficacy trials in patients with major depressive disorder for whom antidepressants alone didn’t work, London-based AstraZeneca said in a statement today. AstraZeneca had licensed the depression treatment from Targacept Inc. in 2009 in a deal valued at as much as $1.24 billion.
“We believe the probability of success is too low to still see a compelling risk/reward,” said Joshua Schimmer, a New York-based analyst for Leerink Swann, in a note to investors today.
AstraZeneca and Targacept said last month the compound failed to meet the main goal of its first trial, prompting Targacept shares to fall 60 percent on Nov. 8. The drug was meant to normalize certain brain receptors thought to be overstimulated in depression.
--with reporting by Simeon Bennett in Geneva. Editors: Bruce Rule, Reg Gale
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