Targacept, Inc. (NASDAQ: TRGT), a clinical-stage biopharmaceutical company developing novel NNR Therapeutics™, today announced a reduction in force as part of a strategic plan to focus the company’s resources on its clinical programs and select preclinical opportunities. This action will reduce the company’s workforce by 65 employees, or approximately 46%.
“It is extremely difficult to make a business decision that will have such an impact on many talented and dedicated colleagues and their families. I want to convey my utmost gratitude to the employees who will be leaving Targacept for their many contributions to the company,” said J. Donald deBethizy, Ph.D., Targacept’s President and Chief Executive Officer. “This painful step is part of an overall plan to align our resources more closely with nearer-term value creation opportunities. We remain well capitalized and focused on operating our business efficiently to ensure we are positioned to exploit our diverse clinical-stage pipeline to bring new medicines to patients.”
Targacept currently has over $220 million in cash and investments in marketable securities. As a result of the reduction in force and associated costs, Targacept estimates annual savings of approximately $12.9 million in cash operating expenses on a going forward basis, with estimated one-time severance and related costs related to this restructuring of approximately $2.4 million for 2012. Targacept plans to announce updated 2012 financial guidance with the release of its financial results for the first quarter of 2012. As previously announced, Targacept will hold a conference call in connection with the release of its first quarter financial results at 5:00 p.m. Eastern Time on Thursday, May 3, 2012.
In addition, Geoffrey C. Dunbar, M.D., Senior Vice President Clinical Development and Regulatory Affairs and Chief Medical Officer, announced that he will retire at the end of May 2012. “I would like to congratulate Geoffrey on his upcoming retirement and, on behalf of Targacept and our Board of Directors, thank him for his commitment and service over the past 11 years,” said Dr. deBethizy.