Targacept to Perform Workforce Reductions That Will Affect 38% of Employees; To Close Laboratory Operations At End of 2012

Targacept

today provided details of a previously announced workforce reduction that will affect approximately 38% of current employees. The company further announced that it will close its laboratory operations by the end of 2012. Targacept is implementing these measures to align its resources more closely with corporate objectives that include realizing the value potential of its clinical programs and conserving capital to best position the company for future opportunities. The reduction in force and changes to operations are expected to generate annual savings of approximately $9.6 million beginning in 2013. “This is a difficult step for us to take, as many talented professionals who have contributed significantly to Targacept over the years will be leaving the company. We are deeply appreciative of these employees for their years of committed service,” said Mark Skaletsky, Chairman of Targacept's Board of Directors. Targacept estimates one-time severance and other charges related to the reduction in force of approximately $1.5 million will be incurred in the fourth quarter of 2012. Targacept expects the actions announced today, together with steps implemented earlier this year, will generate annual savings of approximately $22.5 million on a going forward basis. Targacept currently has cash and investments of approximately $195.0 million and continues to expect that its cash resources will be sufficient to fund its operating requirements through at least 2015.