Targacept narrowed its losses in the fourth quarter of 2010 and reported a profit for the year as the company started to recognize revenue from a $200 million upfront payment from drug partner AstraZeneca.
Winston-Salem, North Carolina-based Targacept (NASDAQ:TRGT) narrowed its losses in the fourth quarter to $2.2 million. In the same quarter of 2009, Targacept reported a $26.4 million loss. For 2010, Targacept reported net income of $10.9 million compared to a net loss of $39.4 million in 2009. Targacept reported $18.3 million in revenue for the fourth quarter and $72.6 million in revenue for the year.
The payment from AstraZeneca (NYSE:AZN) comes from a 2009 collaboration and license agreement for Targacept’s TC-5214, a compound being developed to treat depression. The drug candidate will move into phase III clinical trials this year.
As Targacept continues to advance its drug pipeline, the company spends more on research and development. R&D expenses totaled $22.5 million in the fourth quarter of 2010, an increase over the $10.4 million the company spent in the year-ago period. The company attributes the higher expenses to an increase of $9.5 million in costs for third-party R&D services related to its clinical-stage drug candidates. For the year, R&D expenses totaled $64.5 million compared to $40.2 million for 2009.