UPDATE 1-Repros, Targacept to offer shares at discount

* Repros to sell 3.5 mln shrs at $1.27 apiece

* Repros to raise about $4.4 mln in gross proceeds

* Targacept to offer 2.2 mln shrs at $21 apiece

* Repros shares fall 24 pct, Targacept down 8 pct

Oct 8 (Reuters) - Shares of Repros Therapeutics Inc (RPRX.O) and Targacept Inc (TRGT.O) fell sharply, after the companies said they plan to raise money by selling shares at a discount.

Biopharmaceutical firm Repros said it would sell 3.5 million common shares at $1.27 apiece to institutional investors for gross proceeds of about $4.4 million.

The offer price represents a discount of 32 percent to the stock's Wednesday close of $1.86.

Shares of Repros fell as much as 24 percent but pared some losses to trade down 36 cents at $1.50 Thursday morning on Nasdaq.

In August, Repros said it does not have enough cash to fund ongoing operations and a failure to raise cash in the immediate short term may result in the filing of bankruptcy and dissolution of the company. [ID:nBNG17708]

Repros shares had risen nearly three-fold on Wednesday after the company said its testosterone drug showed promise in an exploratory study. [ID:nBNG403496]

Separately, clinical stage drug research company Targacept said it would publicly offer 2.2 million common shares at $21 apiece, representing a discount of about 7 percent to the stock's prior close of $22.50.

Targacept shares fell 8 percent, but pared some losses to trade down $1.50 at $21 Thursday morning, making them one of the top percentage losers on Nasdaq.

The stock had surged more than 800 percent in the past three months before Thursday's losses. (Reporting by Esha Dey in Bangalore; Editing by Deepak Kannan)