Targacept, a tobacco research firm spun off of R.J. Reynolds Tobacco, has signed a drug-development deal with GlaxoSmithKline that could bring in up to $1.5 billion, Reuters reported July 27.

Targacept's research focuses on developing pain and other medications based on nicotine. The company also is involved in smoking-cessation, obesity, addiction, and Parkinson's disease research.

The Winston-Salem, N.C., firm will receive $35 million up front from Glaxo in the incentive-laden deal. Shares of Targacept rose 14 percent on news of the agreement.