July 28, 2010
A Model for Corporate Involvement in Workforce Development – NCBioNetwork Meeting at Forsyth Tech, Winston-Salem
Copyright © 2010 Targacept, Inc. – All rights reserved
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Cautionary Note re: Forward-Looking StatementsCautionary Note re: Forward-Looking Statements
This presentation includes “forward-looking statements” made under the provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are not purely historical in nature regarding, without limitation: the progress or scope of development of TC-5214, AZD3480, AZD1446, TC-5619, TC-6987 or any of our other product candidates or programs, such as the size, design, population, conduct, duration or objective of any clinical trial, the timing for initiation or completion of any clinical trial, for availability of results from any clinical trial, for submission or approval of any regulatory filing or for meeting with regulatory authorities, or the indication(s) for which a product candidate may be developed; the competitive position of TC-5214, AZD3480, AZD1446, TC-5619, TC-6987 or any of our other product candidates; the commercial opportunity in any particular indication; any payments that AstraZeneca or GlaxoSmithKline may make to us; the impact on our alliance of GlaxoSmithKline’s shift in discovery research focus announced in February 2010; or our plans, expectations, objectives, prospects or future operations, financial position, revenues, costs or expenses. The words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “scheduled” and similar expressions are intended to identify forward-looking statements. 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 our critical accounting policies and the risks and uncertainties described 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. In addition, market and industry statistics contained in this presentation are based on information available to us that we believe to be reliable but have not independently verified.All forward-looking statements speak only as of the date this presentation is made and should not be relied upon as representing our views as of any date after this presentation is made. We specifically disclaim any obligation to update any forward-looking statement, except as required by applicable law.
Copyright © 2010 Targacept, Inc. – All rights reserved
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Targacept, Inc.Targacept, Inc.
Clinical-stage biopharmaceutical company
Discovering and developing NNR Therapeutics™
New class of drugs for the treatment of central nervous system diseases and disorders
HQ and Laboratories
Copyright © 2010 Targacept, Inc. – All rights reserved
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NNRs: “Volume Knobs” of the Nervous System that Normalize the Brain’s Chemical BalanceNNRs: “Volume Knobs” of the Nervous System that Normalize the Brain’s Chemical Balance
Targacept’s NNR-SelectiveCompounds Optimize
NNR Activity
NNRs Control the Release of All Major Neurotransmitters
from Nerve Endings
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NNR Target Diversity Enables Treatment of Multiple Diseases With Diverse PharmacologiesNNR Target Diversity Enables Treatment of Multiple Diseases With Diverse Pharmacologies
16 Human Genes Encode..
..for a Number of Protein Targetsin the Human Body
Glutamate
GABA
Dopamine
Acetylcholine
Norepinephrine
Serotonin
BDNF, bFGF, NGF
TH, PNMT, NFkB
Nitric Oxide
TNFIL8
Modulating Key Pathways
Relevant to Debilitating Diseases
Alzheimer’s
MCI / AAMI
ADHD / ADD
Schizophrenia
Parkinson’s
Pain
Anxiety
Depression
Obesity
Smoking cessation
Ulcerative colitis
Copyright © 2010 Targacept, Inc. – All rights reserved
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It takes about 20-25 years to discover and develop a first -in-class medicine Average cost per approved drug ~$1 billion Important to select the right compounds for costly clinical development Targacept’s Proprietary Drug Discovery Platform: Pentad™ = biological
data + sophisticated, computer-based methodologies
High Failure Rate in Discovery……Mitigating the RiskHigh Failure Rate in Discovery……Mitigating the Risk
Copyright © 2010 Targacept, Inc. – All rights reserved
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Unparalleled Patent Position in NNR SpaceUnparalleled Patent Position in NNR Space
Issued Patents, US and EU
Pfizer
Neurosearch
47474747Merck
43434343
Abbott
AstraZeneca
Sanofi-Aventis
J&JNovartis
74747474
107107
47474747
39393939
17171717
66663333 555544443333
BayerCoMentis Servier
5555
Roche/ Memory
5555
Critical
Chart reflects results or patent literature search conducted by Targacept using Delphion Research; includes patents issued in the U.S. or Europe between January 1990 and April 2009.
Copyright © 2010 Targacept, Inc. – All rights reserved
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Deep Pipeline – Areas of Large Unmet Medical NeedDeep Pipeline – Areas of Large Unmet Medical Need
•$80-$100M investment in our pipeline in 2010•$0.5B investment over next 5 years•$65M worldwide outsourcing commitment for Phase 3 clinical development in depression program
Copyright © 2010 Targacept, Inc. – All rights reserved
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Optimistic PragmatismOptimistic Pragmatism
Blue Ocean Strategy
Less Competition/Significant Unmet Medical Need
http://www.blueoceanstrategy.com
Our mission is to provide superior treatment options for complex diseases and disorders to improve patients’ lives by developing innovative new medicines that exploit the unique
role of NNRs.
Compete in Red Oceanswith Big Sharks (alliances
with AstraZeneca andGlaxoSmithKline)
Compete in Blue Oceans with Submarines
(Targacept)
DepressionAnxiety
HypertensionAddiction
AD, ADHD, CDS,Parkinson’s Disease
Copyright © 2010 Targacept, Inc. – All rights reserved
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Financial Highlights – Cash is KingFinancial Highlights – Cash is King
Operating Statement Year Ended12/31/2009
Year Ended12/31/2008
Operating Revenues $25,062 $20,085
R&D Expense 40,179 40,981
G&A Expense 8,167 6,499
License Fees 16,350 0
Net Loss $(39,404) $(25,661)
Cash Position & Capitalization 12/31/2009 12/31/2008
Cash and Investments $111,066 $88,363
Total Debt 3,756 4,798
Shares Outstanding 28,227 24,964
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Timing is everything………..
Targacept: A Public Company is Born April 2006Targacept: A Public Company is Born April 2006
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Impact of Capital Market Conditions, Clinical Trial Outcomes, and Investor Sentiment of Value GeneratorsImpact of Capital Market Conditions, Clinical Trial Outcomes, and Investor Sentiment of Value Generators
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Economic Footprint in Winston-SalemEconomic Footprint in Winston-Salem
2001
$6+ million invested in 2001 up-fit
$1 million in expenses associated with relocation from RJR
Lease of 40,000 square feet (3rd & 4th floors)
2007 1st floor expansion: 14,000 square feet Office and laboratory space Up fit costs: $3+ million 5-year renewal of 3rd and 4th floor space
2010 Further facility expansion by 18,000 square feet
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Economic Footprint in State of North CarolinaEconomic Footprint in State of North Carolina
$ 1,931,622North Carolina State Income Tax paid by
Targacept employees in 2009
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Importance of Optimism in Economic RecoveryImportance of Optimism in Economic Recovery
Targacept Adding ~30 New Jobs in 2010
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Investing in Talent DevelopmentInvesting in Talent Development
Targacept’s Internship Programs
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Working in BiotechWorking in Biotech
“If you like excitement, really hard work, and aswashbuckling wild ride, and if you like to feel thateverything you do every single day impacts thevitality and viability of your company, then you aregoing to fit in at a biotech firm.”
Gregory L. VerdineProfessor of Chemistry and Chemical BiologyHarvard UniversityFounder of Seven (7) Biotech Start-Ups
Chemical & Engineering News. April 12, 2010, Volume 88, Number 15, pp. 47-50
Copyright © 2010 Targacept, Inc. – All rights reserved
Birth of Targacept’s Internship ProgramBirth of Targacept’s Internship Program
Originally designed to attract women and minorities to careers in life sciences
Joint venture between Winston-Salem State University, Salem College, and Targacept
Initially undergrads only; later expanded to include high school and graduate students
2002 – 1st year of summer interns – 3 minority women students funded – assignments in scientific research departments
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Collaboration Between Forsyth Technical Community College and TargaceptCollaboration Between Forsyth Technical Community College and Targacept
2001 – Collaboration between FTCC and Targacept to jointly develop curriculum elements for Biotechnology Associate’s Degree program
2004 – Two FTCC Biotech Program Interns selected for summer assignment; Regina Whitaker subsequently hired as a full-time Targacept employee
Copyright © 2010 Targacept, Inc. – All rights reserved
Internship StatisticsInternship Statistics
Since 2002, provided 58 summer internship (10 weeks, 40 hours/week) plus two January-Term (4 weeks, 40 hours/week) student assignments
This includes 10 summer interns currently at Targacept (4 graduate, 5 undergraduate, and 1 high school student)
We have partnered with total of 8 local colleges/universities and one high school plus one international intern from France
75% scientific, 25% business internships
Competitive stipend co-funded equally between TRGT and academic institutions
Copyright © 2010 Targacept, Inc. – All rights reserved
Targacept’s Internship Program with FTCCTargacept’s Internship Program with FTCC
Associate’s Degree Program
10 weeks, 16 hours per week
Stipend provided by Targacept, as a grant to FTCC
Fulfills requirement for graduation
One or two openings per summer (careful matching of interests)
Assignments typically in our Medicinal Chemistry, Neurochemistry, Molecular Design, and Chemical Process Development laboratories in laboratory technician-type roles
Copyright © 2010 Targacept, Inc. – All rights reserved
Internship Program RequirementsInternship Program Requirements
Excellent background in the topic area Top grades Professor’s/educator’s recommendation Responsible study habits, an indicator for responsible work
habits Excellent communication skills Relevant computer expertise Ability to quickly adapt to Targacept’s work culture – flexibility,
accountability, execution, personal responsibility, resourcefulness, problem-ID/solving, team skills
Commitment to the full 10-week (Summer) or 4-week (Jan Term) assignment
Copyright © 2010 Targacept, Inc. – All rights reserved
Targacept’s Internship ProgramTargacept’s Internship Program
Benefits to Intern– Interview experience– Professional experience in area of
study– Summer income– Relationships with fellow interns– “Real world” work experience—
business hours, accountability– Presentation skills– Numerous opportunities for
professional and social interaction with each other and with employees at all levels in the company
– Seminar by HR: “How to Interview” and “Resume Preparation”
– Resume editing upon request
Copyright © 2010 Targacept, Inc. – All rights reserved
Targacept’s Internship ProgramTargacept’s Internship Program
Benefits to University or Community College– Top quality, relevant work experience provided for student– Grant received for Targacept’s portion of the stipend– Presentation invitation for student advisor and career
services officers– Relationship with Targacept strengthened– Improved understanding of the needs of companies,
allowing curriculum enhancements/adjustments– Ability to use this as a model to encourage other companies
to sponsor internship programs– Ability to raise grant funds from agencies such as NC
Biotech Center, SBTDC and others organizations to support internships
Copyright © 2010 Targacept, Inc. – All rights reserved
Rob Gould – 2009 Summer Intern – Wake Forest University, Physiology/Pharmacology DepartmentRob Gould – 2009 Summer Intern – Wake Forest University, Physiology/Pharmacology Department
“Overall, my summer internship allowed me to grow as a researcher by expanding my scientific skill set and seeing first-hand the differences between academic and industrial research. However, it was through such personal interactions with Targacept researchers and administrative individuals that made my experience so memorable. It is hard to imagine a similar experience evolving from a “Big Pharma” environment.”
www.whatcanbiotechdoforyou.com
Copyright © 2010 Targacept, Inc. – All rights reserved
Local SupportLocal Support
“These internships help our students grow as they deliver positive input to Targacept. We are placing in motion the opportunity for our students to compete for one this coming summer…keep up the good opportunities.” November 11, 2009
Stanley W. Mandel, Ph.D., CPA, PEExecutive Professor & Director, Angell
Center for ENTBabcock Graduate School of
ManagementWake Forest University
“This is a very good program to help keep our trained young graduates here in the region. Also, thanks to Targacept for hosting several of our local interns who have received some of our grant support for their research internships. These collaborative efforts are what continue to build our Biotechnology Cluster for the region.” November 11, 2009
Gwyn F. Riddick, MBARegional Director, Piedmont Triad OfficeNorth Carolina Biotechnology Center
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Targacept People: Key to Company SuccessTargacept People: Key to Company Success
15 different countries of national origin
Nearly half of employees have Ph.D. and/or M.D. degree
Many serve as adjunct faculty or academic advisors
Strengths-based organization: opportunities at all levels
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Differentiate and Distinguish Your Company
For the 4th consecutive year, we were just named one of the Top 30 Best Places to Work in Industry by The Scientist
Magazine
Building Health, Restoring Independence™