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Bad news yesterday from Targacept (NASDAQ:TRGT), a small company that's been developing an antidepressant with AstraZeneca (NYSE:AZN). TC-5214 (the S enantiomer of the nicotinic ligand mecamylamine) missed its endpoints in a trial of 295 patients in Europe who had not responded to standard drug therapy - the trial started with more like 700 patients, who received open-label therapy with one of the usual agents, and then they picked out the tough cases for the real trial, adding this compound to the standard regimens.

Seeing results in such a population is a very tall order, but that's why AZN and others were excited about the earlier Targacept data. The Phase II numbers were extraordinary. A compound that followed through on that promise would be huge. This piece by Adam Feuerstein gets across the excitement -- people really couldn't believe what they were seeing.

And maybe they shouldn't have. The grumbling today, though, is taking an interesting turn. What you might not realize from reading about those Phase II results is that they were the result of a clinical trial in India. That's added an extra layer of can-we-trust-this-stuff to the usual despairing comments about Phase II / Phase III disconnects. This is an unusually brutal disconnect, because the earlier data were unusually good. So the muttering is not going to go away any time soon.

AstraZeneca says that it is committed to further studies of TC-5214, so we'll see what happens then. Depression is a tricky illness, and getting solid clinical data isn't easy. It's possible that this latest study just had some confounding variable that messed up the numbers -- but then it's possible that the earlier one did too, and that-- sad to say-- is probably the way to bet. This is bad news for AZN, a company that needs all the help it can get, and downright catastrophic news for Targacept, as I'm sure its stock price will reflect. And it might even be bad news for India, and Indian clinical research.

Update: to drive the point home, Adam Feuerstein has posted this under the heading of "My punishment for getting TRGT wrong".

Disclosure: No positions

Source: Targacept's Depressing Plunge As Antidepressant Fails