Friday, January 7, 2011

Targacept (NASDAQ:TRGT) Valuation Low Based on TC-5214 Program Says Needham

The valuation of Targacept (NASDAQ:TRGT) appears to be low, according to Needham, citing the strength of their TC-5214 program and the NNR pipeline.

Needham says, "All five planned Phase 3 TC-5214 trials in depression have been initiated by collaborator AstraZeneca (N/R), with initial topline results on track for YE11. We are favorably inclined based on impressive Phase 2 data announced in 2009. Valuation is low in our opinion (EV $500MM), given the strength of the TC-5214 program and the depth of the NNR pipeline in cognition and inflammatory disease. We reiterate our rating and price target. The stock was a favorite in 2010 and remains so into 2011."

Needham & Company reiterates a "Buy" rating on Targacept, which closed Thursday at $26.76, down $0.22, or 0.82 percent.

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