Targacept Inc. sank the most in three months after the antidepressant the company was testing with AstraZeneca Plc failed in its last two late-stage studies, ending plans to seek regulatory approval.
Targacept dropped 30 percent to $5.19 at the close of New York trading for the biggest decline since Dec. 20. The shares of the Winston-Salem, North Carolina-based company are down 79 percent in the last 12 months.
AstraZeneca and Targacept were testing the drug, known as TC-5214, as an adjunct treatment for major depressive disorder. The London-based drugmaker had licensed the treatment from Targacept in 2009 in a deal valued at as much as $1.24 billion. Targacept fell 36 percent on Dec. 20 after the two companies said TC-5214 hadn’t met its target in a late-stage trial. Today’s failures were the final of four studies on the therapy.
“This latest failure marks an end-of-road for TC-5214 program,” Robyn Karnauskas, a New York-based analyst with Deutsche Bank, wrote in a note to clients today. “We believe markets have already factored in TC-5214 failure and we see limited downside from current levels.”