Targacept's stock tanks after its latest pill pops.

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Officials at Targacept Inc. say they have a shots-on-goal strategy for developing drugs. But lately not enough have been getting into the net, causing its once high-flying stock to slide. The latest miss came in November, when the Winston-Salem-based drug developer announced that its most promising compound, aimed at helping patients who don't respond to traditional antidepressants, failed a clinical trial. Those who took the drug, TC-5214, showed little difference from those who took a placebo.

The market hammered Targacept, and its share price plummeted more than 60% in one day, from $19.12 to $7.61. That's off its high of nearly $30 in March, just before the stock began falling due to an earlier trial that came in with lackluster results. (Through three quarters of 2011, Targacept had net income of about $1.3...