PRESS RELEASE: Targacept Announces Plans to Develop Enantiomer of Mecamylamine as Augmentation Therapy for Depression

Targacept Announces Plans to Develop Enantiomer of Mecamylamine as Augmentation Therapy for Depression

WINSTON-SALEM, N.C., Oct 23, 2007 -- Targacept, a clinical-stage biopharmaceutical company developing a new class of drugs known as NNR Therapeutics (TM), today announced plans to advance TC-5214, one of two enantiomers of mecamylamine hydrochloride, into clinical development as an augmentation therapy for patients who are inadequate responders to first-line antidepressant treatments. Targacept expects to initiate a Phase 1 trial of TC-5214 in the first quarter of 2008 and to initiate Phase 2 development soon thereafter. The company has no current plans to conduct further clinical development of mecamylamine.

Mecamylamine hydrochloride is a racemic compound comprised of two mirror image halves known as the S+ and R- enantiomers. TC-5214 is the S+ enantiomer of mecamylamine. In a Phase 2 trial in patients who did not respond adequately to first-line treatment with citalopram hydrobromide that Targacept completed in 2006, patients whose citalopram regimen was augmented with mecamylamine showed greater improvement on symptoms of depression and irritability than patients who received citalopram and a placebo. Citalopram hydrobromide is a commonly prescribed treatment for depression from the drug class selective serotonin reuptake inhibitors that is marketed as Celexa(R) in the United States.

Targacept recently presented research findings comparing the activity of TC-5214, mecamylamine and the R- enantiomer of mecamylamine at the 20th European College of Neuropsychopharmacology held in Vienna, Austria. The results presented illustrate the superior potency of TC-5214 relative to mecamylamine at specific NNR subtypes believed to have therapeutic application for depression, as well as a favorable preclinical efficacy profile. In light of the Phase 2 results with mecamylamine described above, these findings suggest the compelling potential of TC-5214 as an augmentation treatment for major depression.

"Major depression is a serious medical illness affecting 15 million American adults, and the current treatment options simply are not adequate for many people," said Ranga Krishnan, M.D., Chair of the Department of Psychiatry at the Duke University Medical Center and an internationally recognized expert in depression treatments. "The results from Targacept's Phase II efficacy trial of mecamylamine as an augmentation therapy to citalopram helped establish the NNR mechanism as a potential new treatment paradigm for depression," said Dr. Krishnan. "The profile of TC-5214 as a more potent NNR modulator than racemic mecamylamine bodes well for its potential to help address the unmet need."

Targacept's poster of preclinical research findings of TC-5214 is available on the company's home page at www.targacept.com.

About Targacept

Targacept is a clinical-stage biopharmaceutical company that discovers and develops NNR Therapeutics (TM), a new class of drugs for the treatment of central nervous system diseases and disorders. Its product candidates selectively modulate neuronal nicotinic receptors that serve as key regulators of the nervous system to promote therapeutic effects and limit adverse side effects. Targacept has product candidates in development for Alzheimer's disease and cognitive deficits in schizophrenia, pain, and depression and anxiety disorders, as well as multiple preclinical programs. Targacept also has strategic alliances with AstraZeneca and GlaxoSmithKline. Additional information about Targacept is available at www.targacept.com.

Forward-Looking Statements

Any statements in this press release about strategies, prospects, plans, expectations or objectives for Targacept, Inc., including, without limitation, statements regarding the progress, timing or scope of the research and development of TC-5214, mecamylamine hydrochloride or any of our other product candidates or related regulatory filings or clinical trials, our future operations, financial position, revenues or costs, and all other statements that are not purely historical in nature, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "promise," "continue," "ongoing" and similar expressions are intended to identify forward-looking statements. Actual results may differ materially from those expressed or implied by forward-looking statements as a result of various important factors, including our critical accounting policies and risks and uncertainties relating to: AstraZeneca's right in the future to terminate the preclinical research collaboration that we and AstraZeneca are currently conducting prior to the end of the planned four-year term; the results of clinical trials and non-clinical studies and assessments with respect to our current and future product candidates in development; the conduct of such trials, studies and assessments, including the performance of third parties that we engage to execute them and difficulties or delays in the completion of patient enrollment or data analysis; the timing and success of submission, acceptance and approval of regulatory filings; our ability to obtain substantial additional funding and our ability to establish additional strategic collaborations. These and other risks and uncertainties are described in greater detail under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and in other filings that we make 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. We caution you not to place undue reliance on any forward-looking statement.

In addition, any forward-looking statements in this press release represent our views only as of the date of this release and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, whether as a result of new information, future events or otherwise, we specifically disclaim any obligation to do so, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

NNR Therapeutics(TM) is a trademark of Targacept, Inc. Other service marks, trademarks and trade names appearing in this press release are the property of their respective owners.

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