Targacept , Inc.(NASDAQ:TRGT) said its licensing partner AstraZeneca has agreed to pay $10 million milestone payment to further develop Targacept's experimental treatment for attention deficit/hyperactivity disorder (ADHD).
U.S.-based Targacept will be eligible to get over $100 million if development, regulatory and sales milestones are achieved for the drug, the company said in a statement.
“We continue to be enthusiastic about neuronal nicotinic receptors as a promising new mechanism in the treatment of multiple cognitive disorders,” said Bob Holland, Vice President and Head of the Neuroscience Therapy Area, AstraZeneca. “We believe the therapeutic profile of AZD3480, a non-stimulant, may be an important advance for treating patients with ADHD and we also remain positive about the potential of NNR agonists to treat Alzheimer’s disease.”
The company may get stepped double-digit royalties on any future sales of the drug in any indication.
In May, the drug AZD3480 met the main goal of a mid-stage trial in adults with ADHD.
AstraZeneca also confirmed plans to continue development of another drug, AZD1446, for Alzheimer's disease. Targacept will be eligible for milestone and royalty payments for AZD1446 as well, Targacept said.
AZD1446 is currently being tested in early-stage clinical trials.
Targacept also said that it was well positioned to fund its operations for at least the next two years.
Shares of Targacept were up 21 percent at $2.95 in morning trade on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Pradeep Kurup)
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