Targacept Announces the Pricing of a Public Offering of 3.8 Million Shares of its Common Stock

Business Wire, Jan 17, 2008

WINSTON-SALEM, N.C. -- Targacept, Inc. (Nasdaq: TRGT) today announced the pricing of an underwritten public offering of 3.8 million shares of its common stock at a price to the public of $7.07 per share, which was the closing bid price of Targacept's shares on the Nasdaq Global Market on January 16, 2008. Targacept has granted to the underwriters for the offering a 30-day option to purchase up to 570,000 additional shares of common stock to cover over-allotments, if any. All of the shares are being offered by Targacept. The closing of the offering is expected to take place on January 23, 2008, subject to satisfaction of customary closing conditions. Deutsche Bank Securities Inc. is the sole book-running manager for the offering. Lazard Capital Markets LLC, Oppenheimer & Co. Inc. and Pacific Growth Equities, LLC are co-managers for the offering.

The offering is being made pursuant to an effective shelf registration statement that Targacept previously filed with the Securities and Exchange Commission. This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offer will only be made by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. Copies of the final prospectus, including the prospectus supplement when filed, can be obtained from Deutsche Bank Securities Prospectus Department, 100 Plaza One, Second Floor, Jersey City, NJ 07311, telephone: 800-503-4611.

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. Targacept's 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, multiple preclinical programs, and strategic alliances with AstraZeneca and GlaxoSmithKline. Targacept is located in Winston-Salem, North Carolina.