Its stock soaring in value, Targacept looks to raise $46 million

Posted Oct. 8, 2009 at 1:40 p.m.

Its stock soaring in value, Targacept looks to raise $46 million

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WINSTON-SALEM, N.C. – Shares in biopharmaceutical firm Targacept (Nasdaq: TRGT) have skyrocketed since July and the company is looking to cash in with a $46 million stock offering.

Targacept said Thursday it is looking to sell 2.2 million shares at $21 each. Deutsch Bank Securities, which is handling the offering, has the option to purchase another 320,000 shares.

The news sent Targacept shares down Thursday afternoon more than 6 percent to $21.10.

The company did not specify how the new capital would be used.

Targacept shares traded as low as $1.40 last November but has soared since July to as high as $22.50.

Triggering the surge in price was drug giant AstraZeneca’s decision to advance a proposed drug targeting attention deficit /hyperactivity disorder (ADHD). The compound is called AZD3480. AstraZeneca also paid Targacept a $10 million milestone payment.

The companies also will continue to develop a potential drug for treatment of Alzheimer’s. It is currently in Phase I clinical trials and was discovered through the AstraZeneca-Targacept collaboration.

In recent months, Targacept had lost two potential drug development candidates after clinical trials failed to deliver expected results. GlaxoSmithKline and Targacept stopped development of a neuropathy candidate in March. In December, Targacept and AstraZenica stopped a schizophrenia product.

Tags: Biotech & Life Science, Hot Off the Wire

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