Targeted Genetics, one of the diehards in the field of gene therapy, appears to be near the end of the road. The Seattle-based biotech company said if it is unable to improve its finances by the end of next month, “We plan to begin the process of ceasing operations, seeking bankruptcy protection or otherwise winding up our business,” according to its quarterly filing with the SEC.
Based on “considerable efforts” to raise money in recent months, and the short deadline to bring in more cash, “we believe it is increasingly unlikely we will be able to secure additional financial resources in time,” the company said. Targeted, which has no marketed products, has run up a deficit of $322.7 million since its founding in 1992.
Targeted Genetics (NASDAQ: [[ticker:TGEN]]) has been trying to cut costs and craft a new strategy to build value for the last few months, since it founder, CEO, and spiritual leader H. Stewart Parker resigned in November. The company has worked to advance its programs for heart failure, an HIV vaccine, and a treatment for Lou Gehrig’s disease.
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. This technique was hyped in the early 1990s as a panacea for many ills beyond the reach of conventional medicine. Time magazine published a cover story in 1994 titled “Genetics: The Future is Now.” More than 100 biotech companies were formed with dreams of becoming the next Amgen or Genentech. Targeted Genetics was one of those companies, spun out of Seattle-based Immunex in 1992, during the early booms days. It rode the wave of enthusiasm to an IPO just two years later.
Yet right as the field reached its hopeful peak in 1999—around the time of the dotcom and genomics stock bubble—the field collapsed when Arizona teenager Jesse Gelsinger died of a massive inflammatory response in a gene therapy clinical trial at the University of Pennsylvania. This sparked a global ethical debate about informed consent in clinical trials, prompted the FDA to put all gene therapy clinical trials on hold temporarily, and has scared away many investors to this day.
Through it all, Targeted Genetics has forged on. Gene therapy has always used modified viruses as the most efficient delivery vehicle to shuttle genes into cells. Earlier generations of gene therapy used retroviruses or adenoviruses, which didn’t work, and raised some safety concerns. Targeted Genetics made its bet
