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Targacept Inc. Reports Operating Results (10-Q)

August 09, 2012 | About:
10qk

10qk

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Targacept Inc. (TRGT) filed Quarterly Report for the period ended 2012-06-30.

Targacept , Inc. has a market cap of $144.2 million; its shares were traded at around $4.77 with and P/S ratio of 1.5.

Highlight of Business Operations:

Net operating revenues for the three months ended June 30, 2012 increased by $12.9 million as compared to the three months ended June 30, 2011. The higher net operating revenues for the 2012 period were attributable to increases of $12.8 million in license fees and milestones from collaborations and $114,000 in grant revenue for the 2012 period. The higher license fees and milestones from collaborations for the 2012 period primarily resulted from increases of $14.6 million in recognition into revenue of the upfront payment previously received under our TC-5214 agreement with AstraZeneca and $603,000 in recognition into revenue of payments previously

We expect our net operating revenues for future 2012 periods to decrease substantially both as compared to the comparable 2011 periods and as compared to the first six months of 2012, primarily due to the upfront payment received under our TC-5214 agreement with AstraZeneca becoming fully recognized in the second quarter of 2012.

Net operating revenues for the six months ended June 30, 2012 decreased by $3.2 million as compared to the six months ended June 30, 2011. The lower net operating revenues for the 2012 period were primarily attributable to a decrease of $3.5 million in license fees and milestones from collaborations, partially offset by an increase of $292,000 in grant revenue. The lower license fees and milestones from collaborations for the 2012 period primarily resulted from the recognition into revenue during the 2011 period of the remaining $18.4 million in payments previously received from GlaxoSmithKline that were unrecognized as of the time we received notice of termination of our product development and commercialization agreement with GlaxoSmithKline and a decrease of $4.8 million in recognition of payments related to the development of TC-5619 previously received from AstraZeneca under our cognitive disorders agreement with AstraZeneca, as the TC-5619-related payments became fully recognized in the second quarter of 2011. These decreases were partially offset by increases of $18.5 million in recognition into revenue of the upfront payment previously received under our TC-5214 agreement with AstraZeneca and $1.2 million in recognition into revenue of payments previously received under our cognitive disorders agreement with AstraZeneca.

Net cash provided by investing activities for the six months ended June 30, 2012 was $7.3 million as compared to net cash used in investing activities of $36.5 million for the six months ended June 30, 2011, a difference of $43.7 million. Cash used in investing activities reflects the portion of our cash that we allocate to, and the timing of purchases and maturities of, our investments in marketable securities and equipment purchases. Our net sales of investments in marketable securities for the six months ended June 30, 2012 were $7.4 million and occurred primarily to fund our short-term liquidity requirements. Our net purchases of investments in marketable securities for the six months ended June 30, 2011 were $35.5 million and occurred following our receipt of $80.8 million in net proceeds from a public stock offering. Our net equipment purchases decreased by $875,000 to $137,000 for the 2012 period, from $1.0 million for the 2011 period.

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