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Targeted Genetics Plans for New RNAi Programs — But Only with Partners

Less than a month after Targeted Genetics announced that it had acquired the full rights to the Huntington’s disease therapy it had been working on with Merck subsidiary Sirna Therapeutics, the company’s President and CEO Stewart Parker this week said the firm is working to expand the number of RNAi programs in its pipeline.
However, she cautioned that Targeted Genetics is not a full-fledged RNAi-drugs shop and would likely only begin new projects incorporating the gene-silencing technology with partners.
“We’re not really an RNAi company in the sense that we don’t have internal capabilities for identifying targets,” she said during a conference call held to outline the company’s first-quarter financial results. “We know what we are and we know what we’re not, [and] I think it makes sense to build on [our] strengths and try to leverage [them] through partnering.”
Parker said that Targeted Genetics is “evaluating a number of product opportunities” in RNAi beyond Huntington’s disease, but did not elaborate. However, last month the company’s CSO Barrie Carter said that the company expects to “define one or more other targets” that will be added to the RNAi pipeline before the end of the year.
Still, having already secured a collaborator with RNAi know-how for its Huntington’s disease program in the University of Iowa and seeing the end of Sirna’s involvement in the effort, Targeted Genetics is on track to advance this effort without an industry ally, Parker noted.
“We’re excited about the [Huntington’s disease] program and owning [it] in full because we think we can accelerate that program working directly with the University of Iowa,” she said. “Beyond that, our strategy is to show that [our expressed RNAi approach] works … and then leverage that through partnerships into additional revenue-generating opportunities.”

“We’re excited about the [Huntington’s disease] program and owning [it] in full because we think we can accelerate that program working directly with the University of Iowa. Beyond that, our strategy is to show that [our expressed RNAi approach] works … and then leverage that through partnerships into additional revenue-generating opportunities.”

Targeted Genetics first entered the RNAi therapeutics arena in 2005 when it signed a deal to apply its adeno-associated viral vector technology to Sirna’s ongoing efforts with the University of Iowa to develop an RNAi-based treatment for Huntington’s disease (see RNAi News, 1/14/2005).
Despite promising data coming out of the collaboration, Merck dropped the program after it acquired Sirna (see RNAi News, 1/4/2007) because it did not fall within the big pharma’s areas of interest.
Targeted Genetics, however, remained interested in the Huntington’s disease project and acquired it from Merck in exchange for undisclosed royalties on product sales (see RNAi News, 4/10/2008).
“This research is our primary proof of concept in expressed RNAi, which we believe presents multiple product opportunities,” Parker said of the program during this week’s conference call.
In particular, Targeted Genetics views its AAV vector platform as key to overcoming many of the delivery hurdles facing other RNAi drug candidates due to its “long-term expression capabilities, stability, and safety profile.”
Also boosting Targeted Genetics’ confidence in combining AAV with RNAi is a paper published in the Proceedings of the National Academy of Sciences by the company’s University of Iowa collaborators showing that toxicities observed with the administration of shRNAs to the brain of a mouse model could be overcome with certain modifications.
Specifically, the University of Iowa investigators reported that putting shRNA sequences into an artificial microRNA scaffold “significantly reduced neurotoxicity … with no sacrifice in gene-silencing efficacy.”
These data “supported a new approach to RNAi delivery that addresses delivery limitations of RNAi related to off-target effects and the resulting non-specific toxicity,” Parker said this week. “We believe this new design concept is of great importance to the entire RNAi therapeutics field.”
Thus far in the Huntington’s disease program, Targeted Genetics has “identified and [is] currently evaluating lead candidates in longer-term preclinical studies, which are necessary prior to moving forward into clinical studies,” she noted.
Parker noted that the company plans to report new preclinical data from this program sometime in the second half of the year. She did not provide any specific guidance as to when a Huntington’s disease drug candidate might be ready for human trials, but last month Carter said that phase I testing would likely begin in late 2009.
The Financials
For the first quarter, Targeted Genetics reported a net loss of $3.4 million, or $0.17 per share, compared with a year-ago loss of $3.8 million, or $0.30 per share.
Revenues in the quarter, meanwhile, rose to $2.5 million from $1.7 million in the same period a year earlier. Targeted Genetics said that the first-quarter 2008 revenues were primarily derived from two non-RNAi collaborations.
Research and development spending in the quarter edged up $200,000 to $3.9 million, while general and administrative costs rose $300,000 to $1.9 million.
As of March 31, the company had roughly $12.9 million in cash.

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