AstraZeneca signs deal with Targacept for Alzheimer's

12/28/05 - newratings.com

LONDON, December 28 (newratings.com) – AstraZeneca (AZN-GBX) Wednesday announced that it had signed a $300 million deal with Targacept to develop and commercialize drugs for treating Alzheimer's disease, cognitive deficits in schizophrenia and other cognitive disorders.

The company said that Targacept's long-standing leadership position in NNR (Neuronal Nicotinic Receptors) research would create new opportunities for AstraZeneca. Under the terms of the deal, both the companies would develop and commercialize Targacept's Phase II compound, TC-1734. AstraZeneca would make a $10 million initial payment to Targacept and another payment of $20 million on the successful completion of mid-stage clinical trials. Targacept would receive about $300 million, based on the sales of the drug following regulatory approvals, AstraZeneca added.

AstraZeneca is depending upon the sales of its older products, such as Nexium and Seroquel, and cost reductions to boost its margins going ahead. The company is forging partnerships and pursuing acquisitions to strengthen its product line. Including Targacept, AstraZeneca has agreed to four deals worth $1.85 billion this month. The company announced last Friday that it had agreed to acquire KuDOS Pharmaceuticals for $210 million. AstraZeneca's share price rose 31p, or 1.1%, to 2826p in Wednesday
morning trading in London.