April 16, 2015
By Riley McDermid and Mark Terry, BioSpace.com Breaking News Staff
Winston-Salem, N.C.-based Targacept, Inc. ran out of Hail Marys on Thursday, when it announced its last remaining drug program, a clinical treatment for diabetic gastroparesis, had failed to meet its primary endpoint in an exploratory study.
Targacept had hoped that experimental drug TC-6499could treat the chronic disorder diabetic gastroparesis, which inhibits the movement of food through the digestive system. However, the drug failed to aid in stomach emptying, a primary goal. Shares of the company dropped 6.3 percent in premarket trading, continuing a freefall of 41 percent over the last year.
“The results we saw do not support the prior signal we had seen suggesting that TC-6499 might increase gastric motility in this patient population,” said Stephen A. Hill, Targacept’s president and chief executive officer, in a statement. “While TC-6499 did demonstrate a positive safety and tolerability profile in this study, these results do not warrant further development of TC-6499 in this therapeutic area.”
The news follows a string of failures for the star-crossed company, which in July said it would stop a Phase IIb clinical trial of the company’s drug, TC-1734, which it had touted as possible treatment for mild to moderate Alzheimer’s disease. That was quickly extinguished when TC-1734 failed to show superiority to donepezil, the most common prescription for Alzheimer’s.
That came after Targacept had to yank a separate, Phase IIb trial for experimental drug TC-5619, saying it didn’t significantly improve symptoms of schizophrenia and Alzheimer’s disease after 24 weeks.
Targacept came out of research conducted at R.J. Reynolds Tobacco in 2000. Its focus was on the treatment of Alzheimer’s and Parkinson’s disease. Initially Targacept was hired by R.J. Reynolds to come up with safer cigarettes.
Still, South San Francisco, Calif.-based Catalyst Biosciences, Inc., said March 5 that it is merging with the unlucky Targacept. The newly formed joint company will be named Catalyst Biosciences, Inc. with a NASDAQ symbol expected to be CBIO.
As part of the deal, Catalyst shareholders will own about 65 percent of the new company. Operations will be combined. Targacept stockholders will retain about 35 percent of the new company and will receive a dividend of an aggregate of $37 million in non-interest bearing redeemable convertible notes, as well as about $20 million in cash.
“This transaction with Catalyst reflects the continued commitment of Targacept’s Board of Directors and management team to delivery value to Targacept stockholders, and make a difference in patients’ lives,” said Hill at the time. “The proposed transaction employs an innovative structure that is designed to optimize stockholder value for both Catalyst and Targacept. Substantial capital is committed to the combined entity, potential additional capital is earmarked for future investment into the combined company if the notes are converted, and a special dividend is provided for existing Targacept stockholders at the closing.”
In mid-2009 Catalyst signed a licensing deal for $521 million with Wyeth on a Factor VIIa to treat uncontrolled bleeding. Since then Wyeth became Pfizer Inc. and the compound, PF-05280602, recently finished a four-year Phase I study.
Now the combined companies will have a pipeline of protease therapeutics, including PF-05280602, an engineered Factor VIIa for hemophilia, which was developed by Pfizer under license from Catalyst. Four more possible drug candidates for hemophilia B are in the pipeline, as well possible other drug development program related to the Pfizer-sponsored Factor VIIa program.
“This merger establishes a well-capitalized public company with resources to advance our unique protease-based product candidates through multiple future value inflection points,” said Nassim Usman, chief executive officer of Catalyst in a statement. “In addition to our Factor VIIa program we will also have sufficient resources to initiate and complete a planned proof-of-concept study of CB 2679d, a next-generation Factor IX for hemophilia B patients, as well as further development of our novel Factor Xa variant and our anti-complement programs.”
BioSpace Temperature Poll
After last week’s news that Gilead had issued a health advisory to doctors, concern is growing after nine patients taking Harvoni or Sovaldi along with another drug, amiodarone, were treated for abnormally slow heartbeats. One of the patients died of cardiac arrest. Three of the nine patients required a pacemaker. That has BioSpace asking, what next?
