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Raleigh-Durham Roundup: Targacept, Chimerix, Red Hat, & More

Xconomy Raleigh-Durham — 

Here are this week’s headlines in North Carolina tech and biotech news:

—Targacept’s (NASDAQ: TRGT) decade-long strategic partnership with AstraZeneca (NYSE: AZN) is ending with no new drugs to show for it. Winston-Salem, NC-based Targacept quietly disclosed the end of the research and collaboration partnership in a regulatory filing, saying that the British drug giant terminated the agreement on Oct. 8.

Targacept was spun out of tobacco company R.J.Reynolds, whose initial research into body’s receptors for nicotine was used to develop drug candidates for cognitive disorders. The collaboration agreement gave AstraZeneca the option to license drug candidates addressing depression, schizophrenia and Alzheimer’s disease. Targacept lead compound, a depression drug, failed in Phase 3 clinical trials in 2012. Other drug candidates also failed to progress in clinical trials and in recent years, AstraZeneca has pulled back from the partnership by returning compounds or their rights to its smaller partner.

The termination becomes effective 90 days after the Oct. 8 termination notice. All rights and licenses to remaining compounds developed by Targacept will be returned to the company, including a compound that both companies had hoped could become a new Alzheimer’s disease drug. Following Targacept’s most recent clinical trial failure, a study of an incontinence drug, executives said the company would explore “non-nicotine opportunities.” Targacept had $43.4 million in cash and cash equivalents through the end of the second quarter, according to financial filings.

—It was an up and down week for Chimerix (NASDAQ: CMRX) experimental antiviral brincidofovir. The Durham, NC company’s preliminary results for an open-label Phase 3 clinical trial of the drug in adenovirus showed it improved survival in patients with the potentially fatal respiratory infection, which progresses quickly in those with weakened immune systems. While the early results rocketed Chimerix’s stock price upward, the stock plummeted just as quickly on news that Thomas Eric Duncan, a Liberian man in Dallas, TX whose Ebola infection was treated with brincidofovir, died on Oct. 8.

Chimerix, which says it provided brincidofovir for emergency treatment in response to doctor requests, is moving ahead with plans to formally test the drug against Ebola in a clinical trial. The company says it is talking with the FDA about a pathway to test brincidofovir in humans; animal tests are already underway.

—Open source software company Red Hat (NYSE: RHT) raised $700 million in funding in a private placement of stock. The Raleigh, NC company’s convertible note offering was announced earlier this month. Those who purchased Red Hat stock in this offering have the option of acquiring up to another $105 million in notes under the same terms within 30 days.

Approximately $68.3 million of the net proceeds from the stock offering will be used to pay the cost of privately-negotiated convertible hedge transactions. Red Hat will use another $375.0 million from the offering to repurchase Red Hat stock. Red Hat says the remaining proceeds will be used for potential acquisitions or strategic transactions.

—An ulcerative colitis treatment from Salix Pharmaceuticals (NASDAQ: SLXP) now has Food and Drug Administration approval. Budesonide (Uceris) was developed to treat the chronic condition, in which the intestinal lining becomes inflamed and develops tiny open sores, or ulcers. Budesonide is a rectal foam that distributes the drug throughout the colon. The Raleigh, NC company says its treatment overcomes limitations of other therapies that may not be able to sufficiently distribute a drug.

The Food and Drug Administration in September gave Salix tentative approval for budesonide. Final approval was granted on Oct. 7. The Crohn’s and Colitis Foundation of America estimates that ulcerative colitis may affect as many as 700,000 Americans.