Targacept (TRGT) Completes Recruitment in Phase 2b Schizophrenia Trial of TC-5619

Targacept, Inc. (NASDAQ: TRGT), a clinical-stage biopharmaceutical company developing novel NNR Therapeutics™, today announced that it has completed recruitment of patients in the Phase 2b study of TC-5619 as a treatment for negative symptoms and cognitive dysfunction in schizophrenia. The company expects to report top-line results from the study by the end of 2013. TC-5619 is a highly selective modulator of the alpha7 neuronal nicotinic receptor.

“I would like to thank the patients, study sites and investigators who have helped us reach this important milestone in the development of TC-5619 as a potential new treatment for schizophrenia,” said Dr. Stephen A. Hill, Targacept’s President and Chief Executive Officer. “Current schizophrenia therapies primarily impact positive symptoms of schizophrenia, leaving the negative symptoms and cognitive dysfunction largely untreated. A new and effective treatment that addresses this medical need would be critically important for the millions of schizophrenia patients unable to function in society.”

The ongoing Phase 2b study is a double blind, placebo controlled, randomized, parallel group trial being conducted at sites in Eastern Europe and the United States. The primary outcome measure is the Scale for the Assessment of Negative Symptoms (SANS). Key secondary outcome measures include the CogState Schizophrenia Battery (composite score), a computerized test battery, and the University of California, San Diego Performance-Based Skills Assessment, Brief Version. The study is designed to randomize 456 patients with stable schizophrenia who are taking a fixed dose of an atypical antipsychotic. The study includes a 4-week screening period, followed by a 24-week treatment period during which patients receive one of two doses of TC-5619 (5mg or 50mg) or placebo once daily.

About Negative Symptoms and Cognitive Dysfunction in Schizophrenia

Schizophrenia is a chronic, severe and disabling form of psychosis. The disease generally includes three domains, positive symptoms, negative symptoms and cognitive dysfunction. The negative symptoms and cognitive dysfunction play a primary role in the inability of many schizophrenic patients to function normally. The market research firm Decision Resources estimated that there were approximately 4.7 million people with schizophrenia in the world’s seven major pharmaceutical markets in 2011. Estimates as to the prevalence of schizophrenia patients who suffer from negative symptoms vary, and it has been estimated that up to 75% of patients with schizophrenia are cognitively impaired. There is currently no drug approved in the United States or Europe specifically for the treatment of negative symptoms of schizophrenia or cognitive dysfunction in schizophrenia.

About Targacept

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 diverse pipeline to attract significant collaborations with global pharmaceutical companies. For more information, please visit www.targacept.com.

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Forward-Looking Statements

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: the timing for reporting of top-line results from Targacept’s Phase 2b clinical trial of TC-5619 in negative symptoms and cognitive dysfunction in schizophrenia; 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 Targacept’s critical accounting policies and risks and uncertainties relating to: the conduct and results of the ongoing Phase 2b clinical trial of TC-5619, including the performance of third parties engaged to execute such trial, delays resulting from any changes to the applicable protocols and difficulties or delays in the completion of subject enrollment or data analysis; whether positive findings from Targacept’s completed clinical trial of TC-5619 in patients with schizophrenia will be replicated in the ongoing clinical trial of TC-5619; Targacept’s ability to establish additional strategic alliances, collaborations or licensing or other comparable arrangements on favorable terms; Targacept’s ability to protect its intellectual property; and the timing and success of submission, acceptance and approval of regulatory filings. 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™ 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.