A promising antidepressant drug developed at the University of South Florida and sought by major pharmaceutical firms conjured dreams of vast royalties akin to Gatorade enriching the University of Florida.
"We all know Gatorade, and we all know some of the big names" of cash-cow products spun out of university labs, Karen Holbrook, then USF's vice president for research and innovation, said back in 2009 when the university's drug caught industry attention. "One of those is hitting the University of South Florida."
But things have not gone as hoped. Clinical trials of the USF drug known as "TC-5214" are a bust, dashing the university's vision of a commercial blockbuster, a royalty home run and R&D bragging rights among the nation's big research universities.
Gatorade has delivered close to $12 million a year and more than $150 million overall to UF in royalties. Another drug that did succeed in reaching the market, the cancer drug Taxol developed at Florida State University, generated $65 million in FSU royalties in just 2000, though sums have since dropped with the rise of generic drugs.
Breakthroughs in university research that hit commercial paydirt are rare. USF's experimental TC-5214, which specifically was being tested as a secondary drug to augment the effects of a primary antidepressant drug, smacked of such potential.
"This was the biggest thing of financial potential to come out of USF," said Valerie McDevitt, the university's assistant vice president of patents and licensing. "It would have been great if it had succeeded.
"But when it comes to drug development and clinical trials, there are very few Taxols at the end of the day. We hope one of them will be ours."
Two drug companies seeking to develop TC-5214 — Targacept and its much bigger partner, AstraZeneca PLC — recently scrapped plans to develop the drug and win federal FDA approval. It was one of Targacept's lead product candidates.
TC-5214 affects the same neuron receptors as nicotine. But it failed in the drug company tests to show a substantial increase in the standard measurement for depression — the Montgomery-Asberg Depression Rating Scale — compared to a placebo.
For North Carolina's Targacept, which has patent agreements on the drug with USF, the poor performance of TC-5214 contributed to devastating financial results. Since Nov. 8, Targacept shares have dropped nearly 80 percent. Shares closed Friday at $4.40, down from nearly $20 a share in early November.
The 150-employee company added about 35 employees in the past 18 months, some on the assumption of commercializing TC-5214. Further, the company recently learned its top shareholder, The baupost Group LLC of Boston, had sold its entire stake in Targacept holdings of 6 million shares.
AstraZeneca has also taken its lumps. In December 2009, it announced it would make a $200 million payment to Targacept to begin a joint effort to develop the drug. Last month, AstraZeneca said it will write off $50 million tied to the failed trials with TC-5214.
USF's McDevitt emphasized that TC-5214 may still have potential as a future drug, and it will be up to the drug companies to decide what alternative testing may be considered.
"I do not think this is over," she said.
Paul Sanberg, USF vice president of research and innovation and one of the patent holders on TC-5214, acknowledged the drug did not work for the application pursued by the drug companies. But he stated the drug and its licensing agreement was a bigger story than that in terms of developing a mechanism to help the brain.
Sanberg was traveling in China last week and relayed his remarks through a USF spokesman. He did not respond directly to an email seeking more detail.
"I think we are just starting to see the university become more mature," McDevitt said Friday. "Some of these drug developments can take 10 years just to get where we are. This is a natural progression."
Despite the disappointment, the bigger message seems clear: Don't count USF out of the hunt for the next big thing.
Robert Trigaux can be reached at [email protected]