Targacept Inc said it was ending a mid-stage trial on its Alzheimer's drug as it did not show superiority over standard medication, sending its shares down as much as 19.8 percent.
The drug, TC-1734, which was being tested against Pfizer Inc's donepezil, had earlier failed another mid-stage trial conducted by partner AstraZeneca Plc.
"Based on (today's) results, we do not intend to invest in further development of TC-1734," Targacept Chief Executive Stephen Hill said.
UK-based AstraZeneca returned rights to the drug in March but the companies continue to co-develop another Alzheimer's drug, AZD1446.
The latest failure marks another setback to Targacept's already thinning pipeline. In September, the company discontinued the development of its schizophrenia drug, TC-5619 after it failed a mid-stage study.
(Reporting By Amrutha Penumudi; Editing by Don Sebastian)