Targacept Announces Plans to Develop TC-5214 in Overactive Bladder

Targacept Announces Plans to Develop TC-5214 in Overactive Bladder

<0> Targacept, Inc.Alan Musso, 336.480.2186SVP, Finance and Administration and CFOorLinnden CommunicationsMichelle Linn, 508.362.3087 </0>

Targacept, Inc. (NASDAQ: TRGT), a clinical-stage biopharmaceutical company developing novel NNR Therapeutics ™, today announced that it plans to pursue development of TC-5214 as a treatment for overactive bladder (OAB). Based on TC-5214’s unique pharmacokinetic profile, an analysis of data from a completed clinical program and findings from additional preclinical studies, the company plans to initiate a Phase 2b study of TC-5214 in the first half of 2013.

“Current treatments for OAB have efficacy and tolerability shortcomings that limit their utility for many patients. The extensive renal excretion of TC-5214 suggests that a low dose of the drug should produce high bladder concentrations that could diminish sensations of urgency and be well tolerated,” said Michael Chancellor, M.D., Professor, Oakland University, William Beaumont School of Medicine and Chairman of the Urology Department at Beaumont Hospital. “Development of an oral drug with targeted effects at nicotinic receptors located in the bladder would represent a welcomed advance towards a potential new treatment paradigm for patients with OAB.”

Completed clinical studies in approximately 2,400 subjects have resulted in a well-established safety and tolerability profile for TC-5214. Targacept’s analysis of data from that program, as well as additional preclinical studies, have revealed physiological findings believed to be consistent with marketed treatments for overactive bladder. In addition, prior studies have shown that over 90% of TC-5214 is eliminated unchanged through the bladder, supporting use of a low dose and creating the potential to minimize unwanted systemic effects.

TC-5214 is a nicotinic channel modulator that has been found to act potently at nicotinic receptors located in the bladder. Agents that block the action of these receptors have been shown in animal models to decrease bladder wall contraction frequency and impact nerve signaling from the bladder. Similar effects in clinical trials in OAB would be expected to contribute to symptomatic improvement.

“OAB is an attractive indication for us, as it has objective clinical endpoints, an established regulatory path, and clear opportunity to improve on available treatments and benefit millions of patients whose quality of life is severely diminished,” said Mark Skaletsky, Chairman of Targacept’s Board of Directors. “This program for TC-5214 builds upon an extensive safety database and preclinical and clinical data that supports the mechanistic rationale.”

Overactive bladder is a disorder that causes a sudden and frequent urge to urinate that may be difficult to suppress and may lead to incontinence and nocturia. OAB poses a significant reduction in quality of life due to a decreased ability to socialize and participate in normal life activities, sleep disturbances and decreased emotional well-being. The market research firm Decision Resources estimated that there were approximately 69.5 million people with OAB in the world’s seven major pharmaceutical markets in 2009.

Targacept is developing a diverse pipeline of innovative NNR Therapeutics™ 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 and proprietary drug discovery platform Pentad™ to fuel its pipeline and attract significant collaborations with global pharmaceutical companies. For more information, please visit .

TARGACEPTBuilding Health, Restoring Independence®

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: whether or when Targacept will initiate a clinical trial of TC-5214 in overactive bladder (OAB); the development stage, dosage or endpoints of any future clinical trial of TC-5214 in OAB; the medical benefits or tolerability of TC-5214 as a treatment for OAB; the competitive position of TC-5214 or the commercial opportunity in OAB; 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 any future clinical trials and non-clinical studies and assessments of TC-5214 as a treatment for OAB; whether favorable findings from completed clinical trials of TC-5214 in another indication or from non-clinical studies with TC-5214 or other agents will be replicated or translate into favorable findings in any future clinical trials of TC-5214 in OAB; Targacept's ability to protect its intellectual property with respect to TC-5214; and the timing and success of submission, acceptance and approval of regulatory filings with respect to TC-5214. 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™, Pentad™ 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.

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