Targacept and AstraZeneca Amend Collaboration

  Targacept and AstraZeneca Amend Collaboration

Business Wire

WINSTON-SALEM, N.C. -- March 5, 2013

Targacept, Inc. (NASDAQ: TRGT), a clinical-stage biopharmaceutical company
developing novel NNR Therapeutics (TM), today announced that its collaboration
with AstraZeneca has been restructured. Under the new terms:

  *Targacept now has the right to pursue development and commercialization of
    any alpha7 NNR modulator in any therapeutic area, including cognitive
    disorders and schizophrenia, without obligation to AstraZeneca.
    Previously, AstraZeneca held an option to license any such compound that
    was developed by Targacept for a cognitive disorder or schizophrenia.
    Targacept has several alpha7 NNR modulators in its portfolio.
  *AstraZeneca now has the right to develop and commercialize the alpha4beta2
    NNR modulators that it has licensed from Targacept under the
    collaboration, including AZD1446, in any therapeutic area. Previously,
    AstraZeneca’s rights with regard to these compounds were limited to
    cognitive disorders and schizophrenia.
  *AstraZeneca will return to Targacept all rights to the alpha4beta2
    modulator TC-1734 (also known as AZD3480), which is currently in a Phase
    2b clinical trial in mild to moderate Alzheimer’s disease.

“We are pleased to regain unencumbered rights to exploit the alpha7 target, as
recent advances have provided clinical evidence of its relevance in both
schizophrenia and Alzheimer’s disease. As appreciation of the potential
therapeutic benefits of this mechanism grows, we believe our leadership
position and library of novel compounds will serve us well,” said Dr. Stephen
A. Hill, Targacept’s President and Chief Executive Officer. “With respect to
TC-1734, we plan to continue our ongoing clinical study, which is designed to
reveal conclusively how our compound performs as compared to the market leader
in the treatment of mild to moderate Alzheimer’s disease after a year of
treatment. Sadly, new treatment options for Alzheimer’s disease have been
elusive, while the need for patients and their caregivers remains immense.”

“The modifications to our agreement remove contractual barriers and enable us
to pursue AZD1446 and the other compounds that we have licensed from Targacept
wherever the science leads us, which we believe increases our chances for
clinical success,” said Dr. Mike Poole, Head, Neuroscience Innovative
Medicines at AstraZeneca.

About Targacept’s alpha7 NNR Therapeutics

Scientific evidence supports the alpha7 NNR as a potential target of interest
in the treatment of various diseases and disorders. TC-5619, Targacept’s most
advanced alpha7 NNR modulator, is currently in a Phase 2b clinical trial as a
treatment for negative symptoms and cognitive dysfunction in schizophrenia.
Top-line results from this study are expected by the end of 2013. Targacept is
also evaluating potential Phase 2 development of TC-5619 as a treatment for
Alzheimer’s disease. Beyond TC-5619, Targacept has several alpha7 NNR
modulators in its chemical library. The most advanced of these compounds is
the Phase 2-stage TC-6987, and Targacept is evaluating potential future
development options for this product candidate.

About Targacept

Targacept is developing a diverse pipeline of innovative NNR Therapeutics(TM)
for difficult-to-treat diseases and disorders of the nervous system. NNR
Therapeutics selectively modulate the activity of specific neuronal nicotinic
receptors, unique proteins that regulate vital biological functions that are
impaired in various disease states. Targacept’s clinical pipeline includes
multiple Phase 2 product candidates, all representing first-in-class
opportunities. Targacept leverages its scientific leadership diverse pipeline
to attract significant collaborations with global pharmaceutical companies.
For more information, please visit www.targacept.com.

Building Health, Restoring Independence®

Forward-Looking Statements

This press release includes “forward-looking statements” made under the
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements, other than statements of
historical fact, regarding without limitation: the timing for availability of
top-line results from Targacept’s ongoing Phase 2b clinical trial of TC-5619;
Targacept’s ongoing clinical trial of TC-1734 in mild to moderate Alzheimer’s
disease or the continuation of the trial by Targacept; the potential medical
benefits of compounds with alpha7 NNR mechanisms; or Targacept’s plans,
expectations or future operations, financial position, revenues, costs or
expenses. Actual results, performance or experience may differ materially from
those expressed or implied by any forward-looking statement as a result of
various important factors, including without limitation risks and
uncertainties relating to: the conduct and results of clinical trials and
non-clinical studies and assessments of TC-1734, TC-5619 and TC-5214,
including the performance of third parties engaged to execute such trials,
studies and assessments, delays resulting from any changes to the applicable
protocols and difficulties or delays in the completion of subject enrollment
or data analysis; whether the executive turnover and two workforce reductions
experienced by Targacept in 2012 will have an adverse impact on the
development of any Targacept product candidate or Targacept’s business
generally; Targacept’s ability to establish additional strategic alliances,
collaborations or licensing or other comparable arrangements on favorable
terms; Targacept’s ability to protect its intellectual property; and the
timing and success of submission, acceptance and approval of regulatory
filings. Risks and uncertainties that Targacept faces are described in greater
detail under the heading “Risk Factors” in Targacept’s most recent Annual
Report on Form 10-K and in other filings that it makes with the Securities and
Exchange Commission. As a result of the risks and uncertainties, the results
or events indicated by the forward-looking statements may not occur. Targacept
cautions you not to place undue reliance on any forward-looking statement.

In addition, any forward-looking statement in this press release represents
Targacept’s views only as of the date of this press release and should not be
relied upon as representing its views as of any subsequent date. Targacept
disclaims any obligation to update any forward-looking statement, except as
required by applicable law.

NNR Therapeutics™ and Building Health, Restoring Independence® are trademarks
or service marks of Targacept, Inc. Any other service marks, trademarks and
trade names appearing in this press release are the properties of their
respective owners.


Targacept, Inc.
Alan Musso, SVP, Finance and Administration and CFO
Linnden Communications
Michelle Linn, 508-362-3087
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