Targacept, Inc. (TRGT - Snapshot Report) announced disappointing top-line data from a phase I/II exploratory study on its candidate TC-6499 for the treatment of diabetic gastroparesis.

In a double-blind, placebo-controlled, randomized, four-way crossover phase I/II exploratory study, TC-6499 did not meet the primary endpoint of change in gastric emptying half-time, as measured by a carbon labeled gastric emptying breath test, when compared to placebo.

Top-line data from the exploratory study is in contrast with the evidence from phase I studies which suggested that TC-6499 may increase gastric motility. The company stated that the data does not support further development of TC-6499 for diabetic gastroparesis.

We remind investors that Targacept is set to merge with Catalyst Biosciences, Inc., a privately held biopharmaceutical company. The combined company is expected to take up the name Catalyst Biosciences, Inc.

Earlier this month, Catalyst Biosciences and Targacept were in the news when Pfizer (PFE - Analyst Report) announced its decision to terminate its research and license agreement with Catalyst Biosciences (read more: Targacept Crumbles as Pfizer Pulls Out of Collaboration).

Pfizer and Catalyst Biosciences were in a partnership for the development and commercialization of PF-05280602 for the treatment of hemophilia and surgical bleeding indications. As per Catalyst Biosciences, the candidate targets the approximately $1.5 billion hemophilia market.

Targacept carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care space are Cytokinetics, Inc. (CYTK - Snapshot Report) and Valeant Pharmaceuticals International, Inc. (VRX - Analyst Report). While Valeant holds a Zacks Rank #1 (Strong Buy), Cytokinetics is a Zacks Rank #2 (Buy) stock.