An investigational attention-deficit hyperactivity disorder drug from Targacept has failed in a mid-stage trial, forcing the troubled US firm to announce more job losses.

The company has 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 Targacept drug. Chairman and stand-in chief executive Mark Skaletsky noted that the firm will not pursue further development of TC-5619 in ADHD.

He added that "under these circumstances, we are taking additional steps to more closely align our resources with our current operational plan and emphasise the efficient use of Targacept’s capital". As such, Mr Skaletsky said "we will limit our investment in our nicotinic pipeline to our ongoing or previously announced clinical programs until the search for a new CEO is successfully completed, and we will implement a further reduction in force".

No specific figures for job losses were revealed but they will 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 suffered by Targacept, not least with TC-5619.

The compound had failed in an earlier ADHD trial and despite showing promise in schizophrenia, AstraZeneca told the Winston-Salem, North Carolina firm it would not take up an option on the drug. Then, in March this year, Targacept and the Anglo-Swedish drugmaker ended development of TC-5214, an antidepressant after two Phase III studies failed to meet their primary endpoints.

Mr Skaletsky said the board will now work on "maximising the future potential of the company’s assets" and investors fear the worst. Targacept shares closed at $4.31, down 11.1%; the stock had a 52-week high of $19.54.