Oct. 9--It took Targacept Inc. nearly two years of preparation and two weeks of selling to raise $45 million in its initial public offering in April 2006.

In another sign of its stunning emergence as a biotechnology favorite, it took the Winston-Salem company less than 24 hours this week to raise as much as $52.9 million. The sale, mostly to institutional investors, began late Wednesday and concluded yesterday.

Targacept sold 2.2 million shares in a public offering at $21 a share, representing $46.2 million in capital. Deutsche Bank Securities, the sole manager for the offering, is likely to act on an option of buying an additional 320,000 shares, which would raise another $6.7 million.

"The reason we could finance the company overnight, and raise that kind of money, is that people are investing in the company at these prices," said Don deBethizy, the chief executive and president of Targacept.

"The results we have released to date have gotten people excited about our research and future," deBethizy said.

Targacept, based in Piedmont Triad Research Park, is developing drugs based on the use of nicotinic receptors to treat diseases of the central nervous system. It has 115 employees, making it one of the largest life-sciences employers in the Triad.

The public offering is the latest in a string of positive developments over the past three months related to its research involving adult attention deficit/hyperactivity disorder and major depressive disorder.

On Thursday, Targacept plans to present data on a clinical trial for major, or chronic, depressive disorder at the Nicotinic Acetylcholine Receptors as Therapeutic Targets symposium.

Targacept's share price soared from $2.44 on July 8 to a record high of $22.50 Wednesday.

The share price dropped $1.94, or 8.6 percent, to finish at $20.56 yesterday.

Analysts said that decline is likely related to profit-taking by investors.

Adam Feuerstein, an analyst with TheStreet.com, a financial-news Web site, said that it was a bold move for Targacept to time the public offering so close to a pivotal research report.

"Investors are looking at the share price and saying it is a reasonable buy given the commercial potential for the anti­depression drug, particularly if Targacept finds a partner or sells the drug to a big pharma company," Feuerstein said.

DeBethizy said that the company has several options for spending the capital, including moving up clinical trials for several drug compounds and broadening the potential reach into new medical disorders.

"Our value has gone up so much, and there are a number of things in our pipeline that we wanted to make sure are funded," DeBethizy said.

"We essentially took out an insurance policy by doing this financing very opportunistically."

rcraver@wsjournal.com

727-7376

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