Firm to drop seven employees, reduce or defer salaries, and focus on ocular and neurological compounds.
Targeted Genetics is reducing its payroll costs by 25% and other expenses by 15% compared to 2008. The firm also decided to focus only on its ocular and neurological candidates. Targeted Genetics is also seeking a development partner for its Phase I inflammatory arthritis compound, tgAAC94.
For now the company will continue to support the NIH and Children’s Hospital of Philadelphia in the initiation of clinical trials for an HIV vaccine. Targeted Genetics will also maintain its manufacturing collaboration with Celladon covering a clinical study in congestive heart failure.
The company’s cost-cutting measures included a reduction of seven employees and salary deferrals or reductions to half-time status for the seven most senior executives. Along with the previously announced resignations of the company’s former CEO and CSO, these changes collectively reduce the firm’s current cash outflow for employee compensation by approximately 25%. As a result of these staffing changes, Targeted Genetics currently employs 56 full-time equivalent employees.
Targeted Genetics previously reported that its cash and short-term investments will only support ongoing activities into the first quarter of 2009. Hence, the firm reports that it is pursuing access to additional capital from a wide variety of potential sources including strategic transactions, licensing or selling technology, additional product development collaborations, sales of stock or placement of debt, additional revenue from expanding or augmenting current collaborations, and initiatives to capitalize on the company’s intellectual property, manufacturing capabilities, and product-development expertise.
The firm believes that the ocular and neurological programs have the greatest opportunity for creating value in the near term with the capabilities and resources currently available to the company and its collaborators as well as with the financial resources it believes are available in today’s challenging capital markets. These programs include clinical-stage AAV-RPE65 for treatment of severe retinal dystrophies most commonly diagnosed as Leber’s congenital amaurosis, its preclinical Huntington’s disease candidate, and a preclinical drug to treat amyotrophic lateral sclerosis.
