AstraZeneca in deal with Targacept worth up to $300M

In what was a busy period for UK drug major AstraZeneca, in late December 2005 the firm signed an exclusive global licensing and research collaboration with Targacept for the development and commercialization of the latter's Phase II compound TC-1734 to treat Alzheimer's disease, cognition defects in schizophrenia and other cognitive disorders. This could be worth as much as $300.0 million to the US firm over a four-year period and follows swiftly on AstraZeneca's $1.0 billion licensing accord with AtheroGenics for AGI-1067 and its $210.0 million bid to acquire KuDOS Pharma (Marketletter January 2 & 9).

Under the agreement, which is subject to the expiration or termination of the Hart Scott Rodino clearance period in the USA, AstraZeneca will obtain the global rights for the development and commercialization of TC-1734 and any compounds that arise out of the research collaboration with the aim of developing differentiated therapies for treating cognitive decline, an area of high unmet medical need.

Upon effectiveness of the deal, Targacept will receive an initial payment of $10.0 million from AstraZeneca. The parties will then begin the research collaboration and AstraZeneca will initiate additional safety and product characterization studies of TC-1734. Successful completion of these studies and a determination by the UK company to initiate further Phase II clinical trials of TC-1734 would trigger an additional milestone of $20.0 million to Targacept, as well as around $26.0 million in research support payments over the four-year period.