Targacept has provided details of a previously-announced workforce reduction that was prompted by the failure of its investigational attention-deficit hyperactivity disorder drug.
The cuts will affect 38% of current employees, leaving the firm with a staff of 43 employees. Targacept also announced that it will close its laboratory operations by the end of 2012 and these changes will result in annual savings of $9.6 million beginning in 2013.
Last month, Targacept announced top-line results from a Phase II trial of TC-5619 as a treatment for inattentive-predominant ADHD, which showed that across the study measures, patients in the placebo group consistently improved more than those on the drug. The company decided not to pursue further development of TC-5619 in ADHD.
The latest job losses come on top of the 46% reduction (or 65 posts) announced in April. In June, chief executive Donald deBethizy stepped down following a series of clinical setbacks. Mark Skaletsky, Targacept’s chairman, said that "this is a difficult step for us to take, as many talented professionals who have contributed significantly…over the years will be leaving the company". The firm estimates one-time severance and other charges of $1.5 million to be incurred in the fourth quarter of 2012.
Targacept currently has cash and investments of $195.0 million which will be sufficient to fund operations through at least 2015.