A Targacept (Nasdaq: TRGT) compound that has been studied in a range of cognitive disorders with drug partner AstraZeneca (NYSE: AZN) has started in mid-stage clinical studies as a potential new Alzheimer's disease treatment.

Winston-Salem, North Carolina-based Targacept is studying AZD3480 in patients with mild to moderate Alzheimer's disease. The study is part of a special protocol assessment, an agreement between the Food and Drug Administration and a drug company before the start of a phase 3 trial on the trial design and endpoints sufficient for regulatory approval.

"We are pleased to get this study underway and further evaluate the promise of AZD3480 to meet the enormous unmet medical need in Alzheimer's disease," Targacept President and CEO J. Donald deBethizy, said in a prepared statement.

The compound AZD3480 has already been studied by either Targacept or AstraZeneca in 1,350 patients in six phase 2 studies of cognitive disorders including attention deficit hyperactivity disorder (ADHD), mild cognitive impairment, age associated memory impairment, cognitive dysfunction in schizophrenia as well as Alzheimer's disease.

This new phase 2b clinical trial will study the efficacy of AZD3480 compared with Eisai's donepezil, the world's most prescribed Alzheimer's treatment. Donepezil is marketed as Aricept and the drug generates about $2.3 billion in annual U.S. sales, according to IMS Health data. But Aricept sales are expected to decline with several generic drug makers moving into the market with generic versions of Aricept.

A previous phase 2b study of AZD3480 in Alzheimer's disease over three months was inconclusive. Neither AZD3480 or donepezil met the primary target of the trial. But Targacept said that after consulting with experts, the company believes it can get different results in a longer clinical study. This second phase 2b study will last one year.

AZD3480 is one of several compounds licensed to AstraZeneca in a 2005 collaboration agreement with the pharmaceutical company focused on cognitive disorders. Under a prior amendment to the agreement, Targacept will conduct the study and and bear all of its costs. But AstraZeneca will pay Targacept for certain events of the study. For example, AstraZeneca will pay Targacept $3.7 million upon dosing of the first patients in the clinical study. Targacept is eligible for future milestone and royalty payments under the agreement. If AstraZeneca chooses to move forward developing AZD3480 beyond the phase 2b study, it will be responsible for all future development costs.

Medcitylogo