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Targeted Genetics to Shut Down if Fundraising in Q2 is Unsuccessful

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Targeted Genetics warned last week that it will begin shutting down its operations if it is unable to secure additional funding during the second quarter.

"If we are not successful in extending our cash horizon by the end of June 2009, we plan to begin the process of ceasing operations, seeking bankruptcy protection, or otherwise winding up our business," President and CEO Susan Robinson said during the firm's first-quarter conference call.

As of March 31, Targeted Genetics had cash and cash equivalents totaling $3.9 million.

The disclosure came as part of the company's release of its first-quarter financial results, which included a drop in losses amid a cost-cutting effort that has included layoffs.

Targeted Genetics has been facing a severe cash crunch lately. In March, Robinson told RNAi News that the company would not likely begin clinical testing of an expressed RNAi treatment for Huntington's disease this year as previously expected due to financial constraints (see RNAi News, 3/12/2009).

Around that time, the company had said that its cash and short-term investments would only be sufficient to fund operations through the first half of the year, but that it was pursuing multiple financing options.

However, it has been unable to find additional funding, Robinson said in a statement last week.

During the first quarter, Targeted Genetics' net loss fell to $1.8 million, or $0.09 per share, from a year-ago loss of $3.4 million, or $0.17 per share.

Revenues in the quarter, derived primarily from research and development funding related to non-RNAi programs, dropped to $2 million from $1.5 million.

R&D costs, meanwhile, dropped to $2.1 million from $3.9 million, while general and administrative expenses declined to $1.4 million from $1.9 million.

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