Fee triggered by addition of indications to licensed products, but overall milestones will decrease.

AstraZeneca has expanded and amended its agreement with Targacept related to cognitive diseases, triggering a $10 million fee. AstraZeneca says that it will add attention deficit/hyperactivity disorder (ADHD) to the AZD3480 program, which already includes schizophrenia and Alzheimer’s. Additionally, the firm will develop AZD1446 for Alzheimer’s disease.

AstraZeneca also reports that for Alzheimer’s, AZD1446 will take priority over AZD3480. AZD1446 is already in a Phase 1 trial. Both compounds were discovered in the parties’ ongoing research collaboration and are selective alpha4beta2 NNR agonists.

Under the revised agreement, Targacept is eligible to receive a lower aggregate milestone stream for AZD3480 if ADHD is the only target indication for which AZD3480 is developed further. If development, regulatory, and the first sales milestone is achieved in ADHD, Targacept will receive over $100 million. The company will also earn stepped, double-digit royalties on any future sales of AZD3480 in any indication.

Targacept also continues to be eligible to receive future payments upon the achievement of milestone events for AZD1446 as well as royalties.

In December 2005 AstraZeneca paid $10 million up front for an option to license AZD3480, which was already in Phase II trials for certain cognitive diseases. A year later with a $20 million fee, the company exercised its option to take over development in Alzheimer’s and cognitive deficits in schizophrenia.

Under the terms of the original deal, Targacept was also to offer AstraZeneca compounds that act on different NNR subtypes than AZD3480 for development and commercialization related to various cognitive disorders. The agreement was valued at $300 million.

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