Winston-Salem, NC Aug 24, 2000
R.J. Reynolds Tobacco Company (RJRT) today announced that it has spun off its Targacept, Inc. subsidiary after completing a $30.4 million equity financing with lead investor EuclidSR Partners and other venture investors.
EuclidSR Partners is a $200 million venture fund established to invest in early stage and high-growth companies in healthcare, information technology and the convergence of these two sectors. EuclidSR has been investing in medical technology companies for more than 15 years and has funded successful companies in the life sciences and biotechnology. Targacept, Inc., which was formed by Reynolds Tobacco in 1997, is now a privately held independent company based in Winston-Salem. Reynolds Tobacco, which contributed a portfolio of patents and intellectual property to Targacept, will own 43 percent of the newly formed company (on a fully diluted basis). In addition to EuclidSR, other investors include:
As an independent company, Targacept will continue to design and develop new compounds that can interact with certain receptors in the human nervous system to treat major disorders such as Alzheimer's disease, Parkinson's disease, depression, pain and ulcerative colitis, as well as Tourette's Syndrome, attention deficit disorder and schizophrenia. In addition, Targacept has an agreement with Aventis Pharmaceuticals, Inc., signed in 1998, to develop new drugs to treat Alzheimer's and Parkinson's diseases.
"This is a sound business decision for Targacept and Reynolds Tobacco," said Andrew J. Schindler, chair and CEO of Reynolds Tobacco.
"During the past decade, our scientists have developed great expertise in discovering new compounds and potential therapeutic uses of those compounds," he said. "Marrying this expertise with investors that have vast experience in the pharmaceutical business will further Targacept’s vision of becoming a leading company in the discovery, development and commercialization of a new class of therapies to treat human disease."
Schindler noted that Reynolds Tobacco's investment and expertise grew Targacept from an idea into a company that has more than 60 issued patents and pending applications, as well as hundreds of compounds that may have the potential to treat disease.
EuclidSR Partner Elaine Jones noted, "Our investment in Targacept is exciting because the company's platform technology in generating neural receptor-selective compounds is very powerful, and the resulting therapeutics have applications in a number of devastating human neurological diseases."
J. Donald deBethizy, RJRT vice president of product evaluation who spearheaded Targacept's development, will leave Reynolds Tobacco to assume the position of president and CEO of Targacept. Twelve other employees in the Reynolds Tobacco research and development (R&D) department have also accepted positions with Targacept.
R.J. Reynolds Tobacco Company is a wholly owned subsidiary of R.J. Reynolds Tobacco Holdings, Inc. (NYSE: RJR). R.J. Reynolds Tobacco Company is the second-largest tobacco company in the United States.