With all its money from financial backers and no products on the market, Targacept is hardly a member of the big pharma club. But as William Caldwell, vice president of drug discovery and development, likes to say, Targacept also isn’t a company run by “two professors in a garage.”

	Caldwell TARGACEPT PHOTO

What Targacept is is an emerging pharmaceutical company with an interesting heritage and enviable financial backing. That’s because, although on its own for only three years, it is rooted in decades of research on nicotine conducted by R. J. Reynolds Tobacco Co.

That work resulted in hundreds of scientific papers and abstracts, many of which focused on neuronal nicotinic receptors, a class of molecular targets in the body that maintain and adjust nervous system activity. Research by Reynolds scientists and others suggested a role for these receptors in the treatment of human diseases. Targacept was formed in 1997 as a Reynolds subsidiary to commercialize these findings.

Today, thanks to more than $120 million in investment from Reynolds and other backers—including a $60 million second round of venture-capital financing completed last month, the second largest in biotechnology in more than a year—Targacept has chemistry resources that many other emerging drug firms can only dream of. Yet it’s a significant customer of the contract manufacturing world as well.

Targacept’s first foray into pharmaceutical chemical outsourcing came in the mid-1990s when, while still part of Reynolds, it needed product to support clinical trials. Outsourcing went on hiatus while the firm sought partners to leverage that early work, and the firm didn’t return to the market until 2000. “Since then, we’ve gone full tilt with multiple programs and multiple contractors,” Caldwell says.

Third parties supplement Targacept’s own well-staffed laboratories, located in Winston-Salem, N.C. According to Caldwell, the company supports a computer-aided molecular design team; an eight-chemist medicinal chemistry group that conducts parallel synthesis and standard medicinal chemistry; a six-member process chemistry group carrying out chemical development, scale-up, and route selection and optimization; and a four-chemist analytical group that supports the medicinal and process chemists while performing bioanalytical work such as pharmacokinetic and in vitro metabolism studies.

Two process group members are dedicated to managing outsourcing of chemistry services and process development. “We believe that management of outsourced work should be a core competency,” Caldwell says. “We’ve been very deliberate about how we’ve built this out.”

Targacept has contracts with a half-dozen or so third-party suppliers that help manufacture small-molecule compounds, notably for three drugs in clinical trials and five in preclinical trials. Of these relationships, Caldwell points to one with Siegfried, a midsized pharmaceutical chemicals company based in Zofingen, Switzerland, as being particularly strong.

He says the two firms linked up through a fairly typical route—Siegfried’s response to a competitive bid on a Targacept compound.

The ties increased in August 2002 when Targacept acquired its first commercial drug,
Inversine (mecamylamine HCl), a Merck-developed hypertension treatment that is known to modulate nicotinic acetylcholine receptors. Siegfried, it turned out, formulated the finished dosage form of Inversine at its Zofingen facility.

But for Caldwell, Siegfried’s real draw has been that it is “very interested in developing relationships. They see an opportunity for long-term potential, not just one-off projects.” As evidence, he points to the Swiss company’s recent response to a request to make a compound using a route developed in Targacept’s labs.

“They did it, but they also put a chemist on the compound and came up with another route that was cheaper and faster. That impressed me,” Caldwell says. “I wish other companies would display that kind of initiative.”

His advice to other potential outsourcing partners is that relationships are very important—for Targacept as well as other emerging drug companies. “We want to work with a service provider that shares a sense of passion to get our drug to market,” he says.

Caldwell definitely doesn’t appreciate the occasions in which a Targacept project has been pushed to a contractor’s back burner to make room for work from a major drug company. What he does appreciate are companies willing to take risks on compounds that aren’t on the market yet but that—he is confident—will get there. “Don’t see us as what we are today; see us as what we will be tomorrow,” he says. “We will be big.”

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Copyright © 2003 American Chemical Society