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Targacept cuts workforce

Published on 01/05/12 at 04:42pm

The fall-out from pipeline difficulties has led US biopharma company Targacept to make almost half its workforce redundant.

In March the North Carolina-based company announced it would not file depression drug TC-5214, developed with AstraZeneca since 2009, for regulatory review. 

Disappointing Phase III results, where TC-5214 was being tested as an add-on therapy to an antidepressant in patients with major depressive disorder (MDD), sealed the investigational drug’s fate. 

Targacept will now lose 65 staff - 46% of its workforce - in a move that has been badged as “part of a strategic plan to focus the company’s resources on its clinical programmes and select pre-clinical opportunities”.  

Chief executive J. Donald deBethizy described making the cuts as ‘extremely difficult’ but says they will create annual savings of $12.9 million, with one-off severance costs of $2.4 million.  

“This painful step is part of an overall plan to align our resources more closely with nearer-term value creation opportunities,” he added. 

AstraZeneca has already taken charges of more than $140 million following TC-5214’s failure. The firm had been expecting to file in the US later this year and in Europe in 2015. 

Targacept, which was founded in 1997, still has various products in Phase II, including two with AstraZeneca for Alzheimer’s Disease (AZD3480 and TC-6683), one for inflammatory disorders (TC-6987) and another (TC-5619) for schizophrenia, Alzheimer’s and ADHD. 

All its candidates are designed to modulate a class of molecular targets, called neuronal nicotinic receptors (NNRs), which are involved in regulating nervous system activity. 

It also owns Pentad, a proprietary drug discovery platform.

The company plans to announce updated 2012 financial guidance this week with the release of its financial results for the first quarter.  

Meanwhile Geoffrey Dunbar, the company’s chief medical officer, is to retire at the end of this month. 

Adam Hill

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