News Targacept's Key Drug Failed Phase 2b Trial Shaves 16% From Shares
Shares of Targacept (NASDAQ: TRGT) fell as much as 16 percent Monday following news of some concerning results in a trial of the company's TC-1734.
The news was first broke on the Twitter account of TheStreet.com's Adam Feuerstein:
— Adam Feuerstein (@adamfeuerstein) July 14, 2014
Shares of Targacept immediately began plunging as traders responded to the "does not show superiority of TC-1734 over donepezil" language in the title of the then-rumored release. Action in the stock was quickly halted by an exchange circuit breaker as the price tumbled to a low at $3.56. Just a moment or two before the stock was set to resume following the circuit breaker, shares were halted with code "news pending."
The post to the Targacept page (seen in the screenshot by Feuerstein) was apparently immediately removed from the site as browsing to the page failed to return any hint of an official release from the company. A source within Targacept later suggested the release was posted in error amid a system glitch.
About 45 minutes after the "news pending" halt, the company officially issued the press release confirming the news of the failed Phase 2b trial of TC-1734.
"Based on these results, we do not intend to invest in further development' of the drug, called TC-1734," Chief Executive Stephen Hill said in the statement.
"After 52 weeks of treatment the drug did not meet the objective of showing superiority to donepezil, the marketed medication most often prescribed for Alzheimer's disease," the release showed.
Although the knee-jerk reaction in Targacept shares pushed the stock to a session low at $3.56, shares rebounded sharply following resumption of trade. The stock closed down just 0.7 percent at $4.41.
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