It's not often that you find companies trading at a negative enterprise value and/or less than cash on hand, so it caught my eye recently that Targacept (Nasdaq: TRGT) had fallen so far. Although investors have definitely had to weather some major disappointments here and the true value of the company's neuronal nicotinic receptor technology is very much in doubt, it's not often that the normally too-optimistic world of biotech says that a company would be better off shutting off the lights and passing out the cash.
The Bad News, In Brief
The failure of Targacept's TC-5214 got plenty of attention in late 2011; earlier studies had been quite encouraging and there was optimism that Targacept and partner AstraZeneca (NYSE: AZN) had a potential blockbuster on their hands with a very new approach to treating major depression. In marked contrast to earlier studies (including a Phase 2b study run in India), the pivotal REN 2 and REN 3 studies failed to show a clinical benefit.
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Is 'Worthless' Really A Fair Assessment Of Targacept?
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