Schizophrenia affects approximately 1% of the population worldwide, and in about 80% of cases, it is a lifelong, disabling illness. It is a multi-dimensional disease that is associated with symptoms that have been characterized as positive, negative, and cognitive. CDS is a core feature of schizophrenia, and most individuals with schizophrenia exhibit cognitive impairment. Attention disorders, slow information processing, working memory disorders, and lack of flexibility for adaptive strategies are symptoms of cognitive impairment that have a devastating impact on the function, employment, and social status of patients with schizophrenia.

Older typical neuroleptic medications (e.g., haloperidol, fluphenazine) do not improve cognition. In fact, haloperidol has been shown to induce cognitive impairment in schizophrenic patients.

Novel atypical antipsychotics, such as risperidone, clozapine, and olanzapine, seem to produce gains in cognition. This improvement may reflect a diminution of extrapyramidal side effects of the typical high potency neuroleptics. Alternatively, it might reflect more effective symptom reduction by the novel antipsychotics, or direct cognitive enhancement through the effects of the newer agents on a variety of neurotransmitters, their receptors, and gene expression. Even when the newer antipsychotic medications improve cognition, they do not normalize it.

Presently, there are no approved therapies for CDS. However, in schizophrenic patients, nicotine improves multiple cognitive domains, including working memory and attention. Furthermore, based on a strong body of evidence ranging from genetic mapping to clinical trials, the alpha7 NNR subtype has emerged as a primary therapeutic target relevant to CDS and other core symptoms of schizophrenia

Inclusion Criteria:

• Diagnosis of schizophrenia, per DSM-IV TR criteria, as aided by the MINI International Neuropsychiatric Interview (MINI)
• Controlled schizophrenia, on same dose of quetiapine or risperidone for no less than 2 months prior to screening
• Age 18 - 60, male or female
• Stable schizophrenia as documented by lack of psychiatric hospitalization for 2 months prior to Screening
• Clinical history of stable psychotic symptoms for 1 month prior to Screening
• Stable positive symptoms of schizophrenia for 4 weeks prior to Day 1, as shown by score ≤ 4 on PANSS for items related to delusion, hallucination, conceptual disorganization, and unusual thought content, at Screening and at Day 1
• Calgary Depression Scale for Schizophrenia score < 6
• Outpatient with stable housing, and presence of an informant who sees the subject at least 4 times weekly
• Able to understand and sign informed consent

Exclusion Criteria:

• Diagnosis of schizoaffective or schizophreniform disorders 1 year prior to Screening
• Patients at significant risk of suicide or of danger to themselves or others
• Antipsychotics other than quetiapine or risperidone, or a change in dosing of these within 2 months of Screening
• Treatment with mood stabilizers, antidepressants, or anxiolytics (short-acting hypnotics permitted)
• Treatment within 1 month using cognition-affecting agents other than the above, as listed in Appendix 3 (e.g. CNS stimulants)
• Use of other prohibited concomitant medications
• Other concomitant medications that have been changed within 1 month prior to Screening
• History within past 6 months of alcohol or illicit drug abuse
• Use of smoking cessation therapy within 1 month prior to Screening
• Tobacco users with no detectable urine cotinine level; and tobacco non-users with a detectable urine cotinine level
• Unable to comply with study procedures in opinion of investigator, including CogState battery
• History of significant other major or unstable neurological, metabolic, hepatic, renal, hematological, pulmonary, cardiovascular, gastrointestinal, or urological disorder
• Myocardial infarction
• Seizure disorder
• Type 1 diabetes mellitus (DM); type 2 DM that requires medication (diet-controlled allowed, with HbA1C < 7.3)
• Electroconvulsive therapy within 2 months prior to Screening
• Uncontrolled hypothyroidism, vitamin B12 or folic acid deficiency
• Current TB or known systemic infection (HBV, HCV, HIV)
• Clinically significant finding on physical exam that could be a safety issue in the study
• ALT or AST levels > 2.5 times the upper limits of the laboratory reference range
• Clinically significant lab or ECG abnormality that could be a safety issue in the study, including QTcF > 450msec (males) or QtcF > 480msec (females)
• Women of child-bearing potential and men unwilling or unable to use accepted methods of birth control
• Women with a positive pregnancy test, or who are lactating
• Participation in another clinical trial in last 3 months prior to Screening
• Involvement in planning or conduct of the study by site staff