Targacept: Commentary

(9/16/08 comment on Phase IIb Alzheimer's data)

Targacept/AstraZeneca's TC-1734/AZD-3480 underwhelmed with its Phase IIb Alzheimer's results, topline data released by partner AstraZeneca. It did not definitively fail, even though it missed its primary endpoint, but even when looking at the silver lining, it does appear expectations for this drug in dementia will have to be ramped down. Here are some of the interesting findings and our conjectures:
1) That confounding placebo effect. The placebo group did not show the modest decline one would expect over just three months, indeed they improved. And of course, the safety/tolerability profile of the placebo was outstanding. In retrospect, AZ may/should kick themselves for not running a six month trial, where such an effect is likely to diminish.
2) The benefit of AZD3480 did not outshine Aricept in any consistent way, though it did outperform Aricept on the ADS-CGIC. That is a caregiver/prescriber assessment of patient outcome, which to some degree represents a shot at capturing real-life functional gains that do not translate well into cognitive test scores, but this kind of data is also more subjective and 'squishy'.
3) The report of benefit on the blunt-instrument MMSE is not entirely reassuring, we would have hoped to see some trend on the more detailed CDR, and perhaps something will yet come from more detailed analysis of the several domains assessed.
4) Aricept did not perform any better, and indeed was worse on the ADS-CGIC. It is a reminder that even this lucrative gold standard drug doesn't present all that high a hurdle to match, and matching it is a consolation prize at best.
5) The patient population in this large (567 patients were dosed, at 84 sites!) trial was from Europe and Canada. We will be curious to see what proportion was enrolled in Eastern Europe, where the quality control and experience that can be assumed in clinical trial execution is not as assured, but rapid enrollment is. Just as we have some qualms about Medivation's reliance upon 181 Russian patients, we wonder if there was any divergence associated with those trial sites.
6) There is a modest signal of effect here, but based on what is known thus far, one would have to project a drug which is as effective, but probably not superior to, Aricept in terms of efficacy, but has better tolerability. Whether that will be enough to persuade AstraZeneca to go into Phase III (which would have to be at least six months of treatment) remains to be seen.
7) This raises the stakes on the schizophreniform cognition Phase IIb results, which will be out in December, the same month that AstraZeneca has to decide whether or not they are going to go into Phase III for AD or schizophrenia, and pay the requisite milestone to Targacept. ADHD data will be out in early 2009, but AZ will have to make its decision before then.

8) While comparing studies is a dicey proposition, it is worth noting that Memory Pharma's nicotinic alpha 7 drug (MEM3454), which has a different target than AZD3840, which is an alpha4beta2 modulator, produced a statistically significant effect on the CDR in just eight weeks. Interestingly, both drugs showed an inverted-U response curve, with the mid-dose performing best. This leaves open the question of which NNR target is optimal for AD, and what about the pharmacokinetics of these drug/receptor interactions lead to this dimunition of effect with higher doses.

(from July/August 2008 NI)

Partner AstraZeneca should report the AD and schizophrenia Phase IIb trial data for TC-1734 before the end of this year. As we predicted, Targacept and AstraZeneca folded in TC-5619 for schizophreniform cognition, with a $2 million milestone payment going to Targacept. TC-1734 is now going to be also tested in ADHD, following Abbott/NeuroSearch's successful Phase II trial with their nicotinic alpha4beta2 drug. Targacept is enthused about its mecamylamine enantiomer TC-5214, which offers patent protection and, they believe, potential as both an adjunct antidepressant (being tested therein first) and as a monotherapy. Targacept's view is that the compound will offer very rapid relief of anxiety symptoms, which may provide patients with a sense of improvement as the slower-to-develop depression effects per se then gradually emerge. GSK recently paid a milestone on a second pain compound, and Targacept has identified a lead for smoking cessation.

(from January 2008 NI)

AstraZeneca has launched two PhIIb trials for TC-1734: a 500pt Alzheimer's study, and a 400pt schizophrenia trial, where TC-1734 is an adjunct to antipsychotic therapy. Those two studies are scheduled to be finished at year-end, though we don't expect any results to be announced until 1Q:09. As we predicted, Targacept and AstraZeneca folded in TC-5619 for schizophreniform cognition, with a $2 million milestone payment going to Targacept. Targacept dropped mecamylamine, instead developing its enantiomer TC-5214, which at the very least, offers patent protection. GSK partnered their pain program with a very progressively structured deal. The first compound failed in Phase II, but GSK has recently paid a milestone on a second one.

(revised NI July-August 2007 entry)

AstraZeneca has launched two PhIIb trials for TC-1734: a 500pt Alzheimer's study, and a 400pt schizophrenia trial, where TC-1734 is an adjunct to antipsychotic therapy. Data will not come from those trials until late next year. We expect that Targacept and AstraZeneca will expand the deal, to fold in TC-5619 for schizophreniform cognition. The depression possibilities for Targacept are more diffuse: they have mecamylamine, but they are choosing to instead develop its enantiomer TC-5214, which at the very least, offers patent protection. There is also TC-2216, an inhouse designed compound. A dental pain acute pain trial for TC-2696 is now expected to produce data near year-end. GSK. Pain, Parkinson's, obesity, addiction are all covered. The most important attribute, reflected in the $35 million upfront ($20 million via equity buy) and the $1.5 billion in theoretically available biobucks in milestones and royalties, is the distinct sense of collegiality in the deal. Targacept's ongoing contributions to the discovery/development process led GSK to pay Phase II prices for what is primarily a preclinical platform. As it should.

(added July 2006)

The AAMI trial for TC-1734/ispronicline (partnered with AstraZeneca ) produced better cognitive data than anyone had expected--Targacept included. Now AZ will develop it for Alzheimer's. They continue to seek a buyer for mecamylamine, which has been hanging in suspended animation for several years--other than producing about $1 million per year to Targacept in sales for Tourette's. They have other, unpartnered molecules nearing the clinic for pain and anxiety/depression, as well as TC-5619, which will probably end up optioned to AstraZeneca as well. With their IPO finally completed, albeit for less than they had sought, bringing in $45 million, they have the funds to move ahead.