This is the commercial opportunity that Targacept is shooting for with TC-5214. And Targacept's drug could be an even bigger hit because its tolerability and side effect profile are likely to be superior to Abilify.

Targcept is currently seeking a large pharmaceutical partner for TC-524, which makes next week's data presentation even more important. Plans for phase III studies are underway.

"I think there is a lot of Big Pharma interest in this drug," said the aforementioned hedge fund analyst.

The danger with a high-flying stock like Targacept is that investor expectations run well ahead of the actual event, so when the data do come out (and even if they look good) investors take quick profits.

"With an effect size of two points or higher on the HAM-D and a clean safety profile, I think Targacept can ultimately be a $30-plus stock," said the analyst, who again, owns the stock.

But will Targacept see $30 soon after the Oct. 15 data presentation? Or, will the appreciation come only after a profit-taking dip in the stock price?

My bullish Targacept analyst didn't know the answer to that question, unfortunately.

Update: Targacept closed this morning on a spot offering of 2.2 million shares at $21 a share. At that price, the offering grosses $46 million.

Why raise money now? Should this be a concern with the TC-5214 data presentation next week? I'm told the company wanted to take advantage of the recent strength in its stock price to bolster the balance sheet. Investor demand for the offering was high.

"This doesn't worry me at all, " said my bullish Targacept analyst. "We are not selling."

Targacept shares are down 11% to $20 in pre-market trading.

Research Firm: Geron's Stem-Cell Drug Has Safety Problems

Independent healthcare research shop SummerStreet Research Partners issued another bearish assessment Wednesday of Geron ( GERN) and its stem cell treatment for spinal cord injury. Recall that FDA placed Geron's spinal cord trial on a clinical hold in August due to the discovery of non-cancerous cysts in the spinal cords of animals treated with the stem cells.

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