R.J. Reynolds To Create Spinoff
WINSTON-SALEM, N.C. (AP) - R.J. Reynolds Tobacco Co. announced Thursday that it has spun off a drug development subsidiary, Targacept Inc., after securing $30.4 million in financing from venture capital firms.
Partners in the new privately held firm include EuclidSR Partners, Burrill & Co., Auriga Ventures, CDC Innovation, Genavent, Advent Venture Partners and Longleaf Venture Fund.
R.J. Reynolds, the nation's second bigest tobacco company with brands like Winston, Salem, Camel and Doral, will keep a 43 percent stake in the new company.
Targacept, formed in 1997, will continue to develop new compounds designed to treat Alzheimer's disease, Parkinson's disease, ulcerative colitis and other disorders, company officials said.
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, chairman 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.''
Schindler said the spinoff will match company scientists with investors ``who 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.''