R.J. Reynolds Tobacco Spins Off Drug Unit

R.J. Reynolds Tobacco Co., the No. 2 U.S. cigarette maker, said that it has spun off its Targacept Inc. subsidiary, which develops nicotine-related pharmaceuticals, into a privately held company. Targacept was formed by R.J. Reynolds, a wholly owned subsidiary of R.J. Reynolds Tobacco Holdings Inc., in 1997. R.J. Reynolds, which contributed a portfolio of patents and intellectual property to Targacept, said it will own 43% of the newly formed company on a fully diluted basis. Targacept will still design and develop compounds that can interact with certain receptors in the human nervous system to treat major disorder, R.J. Reynolds said. Those disorders include Alzheimer’s disease, Parkinson’s disease, depression, ulcerative colitis, Tourette’s syndrome, attention deficit disorder and schizophrenia. Shares of R.J. Reynolds Tobacco Holdings closed up 19 cents at $36.50 on the NYSE.