Monday, April 6, 2015

Targacept (TRGT) merger looks to be in question

Targacept filed an 8K today under the radar (aka no formal press release) which put their merger with Catalyst Bio into question.  Catalyst informed Targacept that Pfizer was terminated its partnership with the company for its lead compound.

Targacept stated that it is currently reviewing the implications of this event on the proposed merger.  I have little doubt that Targacept will back out of the deal.  Pfizer giving notice to terminate the partnership isn't a great vote of confidence on Catalyst's platform so I don't see any reason for them to carry through with the merger.  Targacept stated during the conference call which announced the merger that there were many companies that were considered and there's probably a better deal out there now that Catalyst doesn't have a partner.

I currently hold 10,000 shares of Targacept and have no plans to sell until I see this story play out.  As a reminder, Targacept will also report phase 2 results this quarter of it's lead compound in gastroparesis.

Do you own research and hope everyone has a good trading week!

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