Targeted Genetics needed a lifeline and it got one at the last possible minute. The Seattle-based mainstay of gene therapy, which has been running on fumes for months, has struck an 11th-hour deal to stay alive another year by selling off its most valuable intellectual property for $7 million to Genzyme (NASDAQ: GENZ).
Many of the remaining 15 employees at Targeted Genetics (NASDAQ: TGEN) were happy to hop on a flight to San Diego last night to start handing over intellectual property to Genzyme’s Southern California operation that handles gene therapy manufacturing. Targeted Genetics, which only had enough money to operate through August, will now get $3.5 million right away, and another $3.5 million when all the intellectual property and proprietary know-how is handed over by the end of this year. That should be enough cash for Targeted Genetics to operate through 2010, says CEO Susan Robinson.
“We’re back from the brink,” Robinson says.
The Targeted Genetics story is a notable one because the company is one of the diehards of gene therapy—one of the most promising, and most snakebitten, fields within biotechnology. Gene therapy is about modifying viruses to carry copies of genes into cells where they can replace missing or faulty genes at the root cause of certain diseases. Back in the early 1990s, it was hyped as the ultimate cure-all for any number of diseases, and surely the place where the next Amgen or Genentech would be found. Targeted Genetics, a spinoff from Seattle-based Immunex in 1992, was part of that early generation of more than 100 companies that rose on that enthusiasm, and then crashed when the research failed to live up to the hype.
Seventeen years later, the Targeted Genetics track record is not pretty. The company never cured anything, and didn’t prove the concept of gene therapy as a superior method of medicine. It has never made a profit, and has burned through more than $315 million in investor capital. It has, however, populated Seattle biotech with many talented alumni, as I described late last month.
Yet Genzyme, one of the biggest and most successful biotechs in the industry’s history, saw something it wanted in the ashes of Targeted Genetics. Genzyme, the world’s largest maker of enzyme replacement therapies for genetic disorders, has been pursuing gene therapy since those heady early days in 1991. Like Targeted Genetics, it still has no approved drugs to show for it, or even a promising final-stage clinical trial result.
What Targeted Genetics had accumulated of value … Next Page »
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