Targeted Genetics to consider collaborations, strategic transactions for raising capital

By Jennifer Lanning Drey

Eugene, Ore., Aug. 10 - Targeted Genetics Corp. plans to raise capital through a combination of new product development collaborations and strategic transactions in order to maintain compliance with Nasdaq listing standards, said David Poston, chief financial officer of Targeted, in a company conference call held Thursday.

Specific actions the company may take include selling stock, placement of debt, expanding or extending its current collaborations and taking initiatives to leverage manufacturing capabilities and product development infrastructure, Poston said.

"We continue to scrutinize our cash and take every opportunity to extend our runway through all of the means at hand," said H. Stewart Parker, Targeted's president and chief executive officer, during Thursday's call.

The company had cash and cash equivalents of $12.2 million at June 30, compared to $14.1 million on Dec. 31, 2005, according to a company news release.

Targeted reported a second quarter net loss of $27.9 million, or $2.83 per share, compared to a net loss of $5.3 million, or $0.62 per share, in the second quarter of 2005.

Poston said the loss was due to a $23.7 million non-cash goodwill impairment charge recorded during the second quarter. The charge did not affect the company's cash position, he said.

tgAAC94 advancing

Targeted's clinical focus for the remainder of 2006 will be on advancing its inflammatory arthritis drug and developing its HIV/AIDS vaccine program in collaboration with the International AIDS Vaccine Initiative, Parker said Thursday.

During the second quarter, the company reported interim data from ongoing phase 1/2 clinical trials of its lead product tgAAC94 for inflammatory arthritis. The data supported the safety and tolerability of intra-articular administration of the drug and demonstrated tgAAC94 may lead to improvements in signs and symptoms of arthritis in injected joints.

"Our growing body of data continue to support that local administration of tgAAC94 to affected joints may provide additional clinical benefit to the many patients with inflammatory arthritis who have unresolved symptoms despite existing arthritis treatment," Parker said.

The company plans to present data from the trials at the American College of Rheumatology's meeting in November, and expects to have additional data from the study by mid- 2007, she said.

Parker also said the company is pursuing strategic transactions and in-licensing opportunities in therapeutic areas that could be complimentary to tgAAC94.

Targeted Genetics develops targeted molecular therapies for the prevention and treatment of inflammatory arthritis, HIV/AIDS and other acquired and inherited diseases.

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