Biopharmaceutical company Targacept (NASDAQ:TRGT) expects its stock offering will net $70.2 million that will fund development of a compound with targeted applications in schizophrenia and Alzheimer’s disease.
Winston-Salem, North Carolina-based Targacept announced the $75 million stock offering earlier this week. On Friday, the company priced the offering at $20.50 per share. The offering is expected to close on May 25.
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Targacept is directing much of the stock offering proceeds to TC-5619, a compound that drug partner AstraZeneca (NYSE:AZN) evaluated but declined to license. TC-5619 has showed positive results in mid-stage clinical trials studying cognitive dysfunction in patients with schizophrenia, but it failed in a separate trial studying attention-deficit/hyperactivity disorder, or ADHD. Targacept retained the rights to TC-5619 and continues to work with AstraZeneca on developing other compounds under a 2005 partnership agreement to jointly research and develop drug candidates for cognitive disorders.
In addition to the schizophrenia indication, TC-5619 is also being studied as a potential Alzheimer’s disease treatment. But that work is not as far along as the schizophrenia studies. Targacept, a spinout of R.J. Reynolds Tobacco Company, focuses on compounds that target neuronal nicotinic receptors to treat central nervous system disorders.
Targacept’s stock offering follows a shelf registration statement last December in which the company gave itself the option to raise up to $150 million to develop its drug candidates, including TC-5619.
Deutsche Bank Securities is the book-running manager for the stock offering. Lazard Capital Markets, Leerink Swann and Oppenheimer & Co. are co-managers.