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Targacept, AstraZeneca Amend Pact, Targacept Wins Right to Pursue Any Alpha7 NNR Modulator

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Targacept, Inc. (NASDAQ: TRGT), a clinical-stage biopharmaceutical company developing novel NNR Therapeutics (TM), today announced that its collaboration with AstraZeneca (NYSE: AZN) 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.

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