Targeted Genetics is terminating its lease for a facility in Bothell, WA, to save about $11.5 million over the next six years or so. The company notes, however, that unless it secures more capital, it will have to wind down its business by August.
The Bothell site was leased in 2000 to establish a clinical and commercial manufacturing plant, but the company never occupied or commenced construction. The lease covered 76,000 square feet and would have expired in September 2015.
Under the terms of the agreement, Targeted Genetics will be released from up to approximately $12 million in estimated payment obligations and other liabilities. In exchange, the company will pay a termination fee of $500,000 in installments beginning at the execution of the deal until July 2010. The termination agreement includes obligations to accelerate payments, in whole or in part, upon the occurrence of certain events that generate cash for the company.
When the company began restructuring in December 2008, Targeted Genetics said that cash on hand would last until about the first quarter. By the end of the first quarter, the firm said that with $3.9 million in cash and cash equivalents, it would be able to continue operations until the end of the second quarter. Targeted Genetics reaffirmed that August deadline with today’s lease termination.
“It is imperative that we execute on one or more cash-generating transactions in order to either continue our operations or enable continued development of AAV-based gene therapeutic products through another entity,” asserts B.G. Susan Robinson, president and CEO.
Since December Targeted Genetics has been reducing its headcount and focusing on its ocular and neurological candidates. It pipeline comprises clinical-stage AAV-RPE65 for Leber's congenital amaurosis, a preclinical Huntington's disease candidate, and a preclinical drug to treat amyotrophic lateral sclerosis.