Targacept IPO

Targacept, a US-based venture-backed company focused on producing new drugs to treat nervous system diseases, has floated on NASDAQ, raising US$45m. It was originally hoped the IPO would raise US$75m, but a weak response from investors saw the company sell its five million shares at US$9 per share, well below its indicative price range of US$11 and US$13. As the time of writing the share price is US$7.51.

The lack of appetite from the public markets for biotech companies has been an issue all year in the US, with a number of similar companies forced to cut their prices. What also didn’t help was Targacept reporting a net loss of US$24m and revenue of US$3.7m in 2004.

Starting life in 1982 as part of RJ Reynolds Tobacco Holdings, it was set-up to study the effects of nicotine on the human body, it was incorporated in 1997 as a wholly owned subsidiary, achieving independence in August 2000.

It held its first funding round in 2000, and has a wide-range of investors: Academy Funds (formerly the Longleaf Venture Fund), Advent International, Advent Venture Partners, Auriga Partners, Burrill Biotechnology Capital Fund, CDC Entreprises Innovation, CDIB BioScience Venture Management, Easton Hunt Capital Partners, EuclidSR Partners, Genavent, JAFCO Co, New Enterprise Associates, Nomura International, Oxford Bioscience Partners, SI Ventures, Societe Generale.