Britain's second-biggest drug maker will take an impairment charge of $50 million, representing the rest of the value of TC-5214, which had already seen an earlier write-down after two previous Phase III studies also missed their targets.
TC-5214 was initially deemed a potential multibillion-dollar-a-year seller as the first in a new class of medicines that work by calming neuronal nicotine receptors in the brain.
Scientists theorised that overstimulation of these receptors was associated with depression and AstraZeneca agreed to pay as much as $1.24 billion for rights to TC-5214 in 2009, including an upfront payment of $200 million, reflecting the high hopes for the product.
TC-5214 had, in fact, been one of the few bright spots in AstraZeneca's new-drug pipeline, following strongly positive results seen in a mid-stage Phase II study, which involved many patients in India.
The development programme, however, was dealt a serious blow when the first two Phase III trials failed in November and December last year, prompting AstraZeneca to announce an initial partial impairment charge of $96.5 million on December 20.
Now the idea of using TC-5214 as an add-on therapy for patients with depression has been abandoned completely.
Based on the totality of the results, AstraZeneca and Targacept will not pursue a regulatory filing for TC-5214 as an adjunct treatment for patients with MDD (major depressive disorder), the two companies said on Tuesday.
Shares in AstraZeneca were 0.5 percent lower by 0820 GMT in a flat European drugs sector <.SXDP>. Stock in Targacept, a small U.S. drug maker that began as part of R.J. Reynolds Tobacco, is likely to be harder hit by the ending of the project.
The setback leaves AstraZeneca with only one major Phase III asset that is viewed by analysts as a potential blockbuster - fostamatinib for rheumatoid arthritis. Clinical trial results for the oral medicine are expected in the second half of 2012.
The Anglo-Swedish drug maker finds itself in a tight spot because its thin pipeline coincides with looming loss of patent protection on its existing top sellers.
Later this month, U.S. and European patents will expire on Seroquel, its hugely profitable antipsychotic drug, while Nexium, for acid reflux, faces U.S. generics in 2014 and cholesterol fighter Crestor goes off patent in 2016.
Faced with the prospects of a steep fall in both sales and profits in the years ahead, AstraZeneca is actively pursuing bolt-on acquisition opportunities, having bought nothing for more than $400 million since its poorly received purchase of MedImmune for $15.6 billion in 2007.
(Editing by William Hardy)