Targeted Genetics amends Biogen Idec funding agreement, will repay $500,000 in stock

By Angela McDaniels

Seattle, Nov. 7 - Targeted Genetics Corp. said it amended its funding agreement with Biogen Idec Inc. to restructure the repayment of $8.15 million of debt owed to Biogen Idec.

Under the terms of this amendment, Biogen Idec will convert $5.65 million of debt into 1 million shares of Targeted Genetics common stock. As a result, Biogen Idec's equity holdings in Targeted Genetics will increase to 19.9% of the total outstanding common stock.

Targeted Genetics will pay $500,000 of the remaining debt immediately, $1 million in August 2007 and $1 million in August 2008. Such payments are subject to acceleration in the event of receipt of certain milestone payments from third parties or certain key events, according to a company news release.

The funding agreement between Targeted Genetics and Biogen Idec began in August 2000 and was first restructured in September 2005. Under the September 2005 amendment, Targeted Genetics was to repay $3.1 million in August 2007, $2.5 million in August 2008 and another $2.5 million in August 2009.

Targeted Genetics is a Seattle-based biotechnology company.

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