In the weird world of drug partnerships, GlaxoSmithKline
Targacept, spun off from tobacco giant Reynolds American
Neuronal nicotinic receptors are a subclass of nerve cell receptors found throughout the nervous system. While nicotine does bind to them -- that's how they got their name -- the receptors function in a wide variety of biologic processes by releasing neurotransmitters. The only approved drug targeting NNRs is Pfizer's
Targacept has developed a drug discovery system that allows it to find small molecules that bind to specific NNRs. It will continue to use this technology to discover new therapeutics and advance them into the clinic. Glaxo has hedged its bets in the deal; it doesn't have to decide whether to pick up the new compounds until after Targacept has performed a proof-of-concept phase 2 clinical trial. The deal also covers one of Targacept's lead candidates, TC-2696, currently in a phase 2 trial for acute postoperative pain.
Targacept already has a licensing agreement with AstraZeneca
Targacept is still years away from a marketable drug, and the class of drugs it's designing is risky, to say the least. But if it can move another drug or two through phase 2 trials, it should have a proof of concept that's more in line with the greater-than-$200 million market cap it's been sporting since the partnership announcement.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. GlaxoSmithKline is an Income Investor recommendation. Pfizer is a pick of the Inside Value team. The Fool's disclosure policy is loved by everyone.