AstraZeneca will continue Phase II trials on AZD3480 to treat Alzheimer’s disease and cognitive deficits in schizophrenia.

AstraZeneca has decided to continue development of Targacept’s Phase II candidate for certain cognitive diseases triggering a $20-million milestone payment to Targacept. AstraZeneca plans further clinical studies on TC-1734, which the company calls AZD3480, in Alzheimer’s disease and cognitive deficits in schizophrenia.

The firms signed an exclusive global license and research collaboration agreement in December 2005 worth approximately $300 million to Targacept. AstraZeneca conducted additional safety and product characterization studies of AZD3480, a neuronal nicotinic receptor (NNR) agonist. “Our decision to continue clinical development of AZD3480 demonstrates our belief in the cognitive-enhancing potential of NNR-targeted therapeutics,” says Bob Holland, vp and head of the neuroscience therapy area, AstraZeneca.

“We believe that the effects on cognition that we observed in our previous nine clinical trials of this product candidate in approximately 400 subjects show its potential as a treatment for cognitive disorders,” points out J. Donald deBethizy, Ph.D., president and CEO of Targacept.

Under the 2005 deal, Targacept received an initial payment of $10 million from AstraZeneca. The company expects to receive approximately $26.4 million in funding from AstraZeneca over the planned four-year research term.

AstraZeneca is primarily responsible for and will fund the development and commercialization of AZD3480 and any compounds that arise out of the research collaboration. Targacept is also eligible to receive payments based on development, regulatory, and first commercial-sale milestones on additional candidates selected in the research collaboration. In addition, Targacept retained a U.S. copromotion option for AZD3480 and any other compounds and will receive sale-dependant stepped double-digit royalties.

Targacept can also offer AstraZeneca compounds that act on different NNR subtypes than AZD3480 for development and commercialization related to  Alzheimer’s disease, cognitive deficits in schizophrenia, or other cognitive disorders.

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