Item 1.02 Termination of a Material Definitive Agreement.

On April 24, 2012, Targacept, Inc. received notice of termination of its collaboration and license agreement, dated December 3, 2009, with AstraZeneca AB for the development and commercialization of Targacept's product candidate TC-5214. By the terms of the agreement, the termination becomes effective on May 24, 2012. As a result of the termination of the agreement, all rights and licenses granted under the agreement by Targacept to AstraZeneca will terminate and revert to Targacept.

Under the agreement, Targacept and AstraZeneca conducted a global development program for TC-5214 as an adjunct to antidepressant therapy for patients with major depressive disorder who do not respond adequately to initial antidepressant treatment (the "Target Indication"). In March 2012, Targacept and AstraZeneca announced that, based on the totality of the results from the program, they will not pursue a regulatory filing for TC-5214 for the Target Indication.

Targacept will incur no early termination penalties as a result of the termination of the agreement.

Targacept and AstraZeneca are also parties to a collaborative research and license agreement, dated as of December 27, 2005, as amended, that is focused in cognitive disorders and remains in full force and effect.

---