AstraZeneca plans to further develop AZD3480 (TC-1734) for attention deficit/hyperactivity disorder (ADHD) and will make a $10 million milestone payment to Targacept. AZ will also continue development of AZD1446 (TC-6683) in Alzheimer’s disease. The drug is currently in Phase I and was discovered through the parties’ ongoing research collaboration.

Targacept is also eligible to receive a milestone payment for AZD3480 if ADHD is the only target indication for which AZD3480 is developed further. Targacept remains eligible to receive more than $100 million if development, regulatory and commercial sale milestones are achieved for AZD3480 in ADHD, as well as royalties on any future sales of AZD3480 in any indication. Targacept may also receive future success based milestones for AZD1446 and royalties on any future sales.

“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.”

“We appreciate the efforts and dedication of our colleagues at AstraZeneca as we work together to develop and deliver the promise of NNR Therapeutics to patients affected by cognitive disorders like ADHD and Alzheimer’s disease,” said J. Donald deBethizy, Ph.D., president and chief executive officer of Targacept. “In addition to AZD3480 and AZD1446, we remain enthusiastic about the breadth and pharmacological diversity of our portfolio. With our pipeline, strong alliances and a cash runway that we expect to fund our operations for at least the next two years, we are well positioned to execute our business plan.”