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GSK, Targacept form alliance for CNS-related disorders
September 2007

WINSTON SALEM, N.C.GlaxoSmithKline (GSK) and Targacept Inc., recently announced a strategic alliance to discover, develop and market novel therapeutics that selectively target specified neuronal nicotinic receptors (NNRs). The alliance includes Targacept's lead product candidates for pain: TC-2696, which is currently in a Phase II trial for acute post-operative pain, and TC-6499, a preclinical product candidate that is currently planned for development for neuropathic pain. Targacept has retained an option to co-promote TC-2696 and TC-6499 for pain to specialists and hospital-based physicians in the United States.
The deal leverages Targacept's more than 20 years of focused research in the NNR field, and also provides GSK with access to other discovery programs across five therapeutic focus areas. In addition to pain, the other therapeutic focus areas of the alliance are smoking cessation, obesity, addiction, and Parkinson's disease.
 Under the terms of the agreement, GSK will make an initial upfront payment of $35.0 million to Targacept, which includes an investment of $15.0 million for the purchase of 1,275,502 shares of Targacept common stock. In addition, Targacept is eligible to receive up to $1.5 billion in payments from GSK, contingent on the achievement of specified discovery, development, regulatory and commercial milestones, as well as tiered double-digit royalties dependent on sales achieved.
"The breadth of this alliance validates the importance of NNRs in the potential treatment of a broad range of CNS-related disorders and diseases," said J. Donald deBethizy, Ph.D., president and CEO of Targacept. "This uniquely structured deal enables us to accelerate the progression of our pipeline, capitalize on our discovery and development expertise, and leverage the resources of a premier global pharmaceutical company while retaining considerable value. The alliance also aligns with our business strategy to progress our pipeline through human proof of concept and partner selectively for late-stage development and commercialization in primary care fields."



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