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Lacking Cash, Targeted Genetics Unlikely to Move Huntington's Rx into Clinic in '09

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As Targeted Genetics struggles to find cash from troubled financial markets, the possibility that the company will be able to begin clinical testing of its expressed RNAi-based treatment for Huntington's disease this year is unlikely, a company official told RNAi News this week.

Last November, Targeted Genetics President and CEO Susan Robinson said that Huntington's disease program could move into phase I testing this year, although she cautioned at the time that this timeline would be subject to the company's ability to obtain additional capital (see RNAi News, 11/13/2008).

Having been unable to do so thus far, the company won't likely begin testing its Huntington's disease drug until at least 2010.

"We had hoped there would be financing available much earlier in the year that would have allowed us to move forward at full speed," she said. Since that was not the case, "we're holding off on [the program] until we can get financing in place."

Still, the firm remains committed to RNAi and is continuing target-identification efforts in preparation for when it raises the funds necessary to begin new programs incorporating the gene-silencing technology, Robinson said.

"We believe RNA interference is a very promising area" in which to use the company's adeno-associated viral vector technology, she said. "Should we have the funding, that would be one of the biggest areas we'd be looking at."

Currently, Targeted Genetics expects its cash on hand and short-term investments will support operations through the first half of 2009, a slight improvement over guidance provided around the end of last year, when the company said it would only be able to run into the first quarter of the year.

The cash-horizon extension is the result of renegotiations of an alliance with partner Celladon, which will now increase its payments to Targeted Genetics over 2009. Under the amended deal, Targeted Genetics also agreed to transfer its AAV-vector manufacturing know-how to contract manufacturing organizations in order to give Celladon control of the manufacture of the non-RNAi drug at the heart of their arrangement.

At the same time, doing so will give Targeted Genetics the option to further cut its costs by using CMOs itself in the future, Robinson said in a statement announcing the renegotiated deal.

"Having that flexibility in place … is very important as we determine what kind of financing means we have for moving the company forward and what we want to put that financing towards," she told RNAi News.

Even if the company is able to raise enough funds to keep its manufacturing operations going, she noted, the firm "may want to spend that money on one or two specific products and out-source our manufacturing" going forward.

Despite the extra cash it provides, the amended Celladon arrangement is "not a long-term solution by any means," Robinson said. "It does provide us with a short-term increase to the cash horizon, but we still have the necessity of doing something larger for the … longer-term future."

She said that Targeted Genetics is considering a variety of ways to find money, including partnerships for one or more of its programs or shuttering its manufacturing operations altogether.

Targeted Genetics said last week that if it is unsuccessful "in the near term" with its fundraising efforts, it intends to "phase out its manufacturing operations infrastructure" once its obligations to Celladon are met.

"Such a reduction would include reducing … manufacturing headcount from approximately 35 full-time equivalent staff to five or fewer manufacturing related staff and also include other [undisclosed] infrastructure cost reductions," the company said.

The Road Ahead

Although it has yet to raise a significant amount of capital, when it comes to RNAi Targeted Genetics continues to look beyond its program in Huntington's disease, which remains a priority since it represents "a very good place to provide proof of concept," Robinson said.

About a year ago, Targeted Genetics' then-CSO Barrie Carter said that the company expected to “define one or more other targets” for new expressed RNAi initiatives before the end of 2008 (see RNAi News, 5/8/2008).

Although that goal was missed, Robinson said this week that the process of defining those new targets is proceeding so that the company will be able to hit the ground running on new initiatives once it can raise additional capital.

"As you're seeking the funding, you've got to know what you're going to fund and … have the programs ready to go," she said.

Although she did not elaborate on specific indications for which the company's AAV technology would be a good match, she noted that there is interest in using the vectors for therapeutic microRNA delivery.

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