UPDATE 1-AstraZeneca Alzheimer's drug result inconclusive

(New throughout)

NEW YORK, Sept 15 (Reuters) - AstraZeneca Plc (AZN.L) said on Monday that a study of the experimental Alzheimer's disease drug it is developing with Targacept Inc (TRGT.O) failed to provide conclusive evidence of its effectiveness.

The companies said neither their AZD3480 nor the medicine to which it was being compared, donepezil, met the clinical trial's primary goal of statistically significant improvement according to a common Alzheimer's disease measurement known as ADAS-Cog.

The results of both drugs were impacted by an improvement seen in the group of patients who received a placebo, the British drugmaker and U.S. biotechnology company said.

AstraZeneca is expected to decide in December whether to continue its development of AZD3480.

Two of the three AZD3480 doses tested showed an improvement in secondary outcome measures of change in patients' behavior and ability to function, the companies said. Donepezil also showed an improvement on the secondary measures.

Neither donepezil nor AZD3480 showed improvement in any domain of the Cognitive Drug Research computerized test battery in the pooled dataset of all subjects.

The drug is also being studied as a treatment for cognitive dysfunction in schizophrenia patients.

Targacept Chief Executive Donald deBethizy said that despite the inconclusive results, he believes they warrant further study of the medicine. (Reporting by Bill Berkrot; Editing by Ted Kerr)