Targacept Inc. whose founder & CEO has ties to Wake Forest University celebrates successes

7.22.2009 Faculty News, General, News Release

Targacept Inc., whose founder and CEO has ties to Wake Forest University and the Schools of Business, is celebrating positive results from a Phase 2b clinical trial involving a drug to treat depression. On Wednesday, July 15, the Winston-Salem-based, clinical-stage biopharmaceutical company saw its stock price rise 136.9 percent, to $7.25 per share.

The clinical trial involved TC-5214 as an augmentation treatment for major depressive disorder in people who did not respond adequately to first-line treatment with the anti-depressant citalopram alone, according to a Targacept news release.

J. Donald deBethizy has served as Targacept’s CEO and as a member of its board since August 2000. The company’s president since March 1997, deBethizy has been an adjunct professor in the Department of Physiology and Pharmacology at the Wake Forest University School of Medicine since October 1991.

“The magnitude and consistency of the clinical results with TC-5214 could lead to a superior treatment for major depression. We are excited about the potential to restore independence to the millions of patients with major depression who do not respond well to current therapies,” deBethizy said.

deBethizy also has ties to the Wake Forest Schools of Business. Michael Lord, Sisel Fellow in Strategy, and director of the Flow Institute for International Studies at the University, teamed with deBethizy on a book, “Innovation that Fits.” Lord and Stan Mandel, executive professor and director, Wake Forest Angell Center for Entrepreneurship, featured Targacept in a Best Practice article — “Spinning Out a Star” — for the Harvard Business Review. deBethizy is a frequent guest lecturer in Lord and Mandel’s innovation and entrepreneurship courses.

“Don talks about innovation and entrepreneurship, especially regarding how to develop basic science into more advanced-stage R & D and then especially how to commercialize that R&D into real products,” Lord says. “He also is a practical expert on spinouts, having led the spinout of Targacept from R.J Reynolds. He is a sharp scientist, an effective manager and leader, and a great entrepreneur — a very rare and valuable combination, indeed.”

Mandel said: “Don deBethizy is a star. Not only does he help cultivate great science, identify new technology, but he leads to create a great company. Finding such a combination among a scientist is rare, but when you do, it most often leads to an incredibly successful venture. We in Winston-Salem are fortunate to have retained Targacept and Don to help fuel new technology startups.”

Lord added: “This is great news. Don and Targacept have contributed so much to Winston-Salem, to Wake Forest, and to the larger scientific and business communities. It’s fantastic to see this success in progress toward their ultimate goals. Targacept’s unique R&D portfolio has huge promise to help so many people with so many different needs. These latest results are just one example, offering hope to those with serious depression who are not helped by current therapies.”

Targacept, which is developing a new class of drugs known as NNR Therapeutics, on Wednesday, July 8, announced that AstraZeneca plans to conduct further development of AZD3480 (TC-1734) for attention deficit/hyperactivity disorder. AstraZeneca also has agreed to make a $10 million milestone payment to Targacept.

The jump in stock price coincided with the announcement regarding TC-5214. The results on all of the trial’s secondary efficacy measures, including assessments of depression, irritability, disability, cognition, severity of illness and global improvement, were also highly statistically significant in favor of TC-5214 on an intent-to-treat basis, a Targacept news release said.

“The magnitude and consistency of the effect of TC-5214 seen in this trial could represent a major breakthrough for patients with depression,” said Dr. Madhukar H. Trivedi. He is professor and the director of the Mood Disorders Research Program and Clinic at the University of Texas Southwestern Medical Center at Dallas, one of the principal investigators for the trial and Co-Principal Investigator in the National Institute of Mental Health’s large-scale STAR*D study.

Targacept plans to present detailed results from the Phase 2b trial of TC-5214 at the Society for Neuroscience meeting scheduled for October in Chicago, a news release said.

Targacept is in discussions with multiple pharmaceutical companies with the goal of identifying a strategic partner to assist in the global development and planned commercialization of TC-5214. Targacept expects Phase 3 clinical development to be initiated in the second quarter of 2010, following planned discussions with FDA and production of clinical trial material.