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Targacept Inc.'s (TRGT) treatment for manic-depressive disorder was shown effective and safe in mid-stage clinical trials, the company announced Tuesday, paving the way for late-stage trials and discussions with the Food & Drug Administration approval.

The results are in contrast to some of the biopharmaceutical company's other medicines in development, which have had setbacks, such as a drug to treat cognitive dysfunction in schizophrenia and an Alzheimer's drug, which it is working on with AstraZeneca PLC (AZN).

Targacept plans to present detailed results from the trials of its TC-5214 drug for manic-depressive order at a Society for Neuroscience meetings scheduled in October in Chicago. It expects late-stage trials to begin in the second quarter of next year.

The company is also in discussions with a number of pharmaceutical companies to find a strategic partner for the development and commercialization of TC-5214, designed as a supplemental treatment in combination with other medications. It is also being studied as an add-on treatment for hypertension.

The mid-stage study began a year ago at 20 sites in India and three in the U.S. In the first eight weeks, nearly 580 subjects received citalopram, a selective serotonin reuptake inhibitor marketed as Celexa in the U.S. In the second phase, they continued with Celexa along with TC-5214 or a placebo for another eight weeks.

In the study, signs of improvement were seen after two weeks in patients who had TC-5214 added to their dosing and increased over the course of the study, with twice as many going into remission than in the control group, Targacept said.

There was one severe adverse reaction, with one patient having a seizure.

Targacept's shares closed at $3.06 on Tuesday and was at $4.56 in premarket trading. The stock is down roughly 30% in the past 10 months, but up from an all-time low of $1.40 in November. Shares were cinged in March after an early-stage study for a pain treatment led to Targacept saying further development wasn't warranted.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com