The deal didn't look too bad. It certainly wouldn't have merited a 6% decline in the stock under normal circumstances. But these aren't exactly normal times with Targacept
The development-stage drugmaker licensed its lead product, depression treatment TC-5214, to AstraZeneca
TC-5214 can be used in combination with current treatments, since it treats depression via a different method than current serotonin reuptake inhibitors (SSRIs) -- drugs like Pfizer's
But getting on the market is still a ways away. With phase 3 trials not expected to begin until the middle of next year, the duo won't be filing for approval with the Food & Drug Administration until 2012. That's a long time to wait, and there's still a lot that can potentially go wrong.
Targacept likely fell on the news because investors had overpriced it, hoping for a buyout -- tsk, tsk. At a market cap greater than $600 million, Targacept looks fairly priced, considering the long, cash-burning road ahead of it.
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