TarGen board maintains takeover is best option to maximize value of business and chance of future growth.
Targeted Genetics is hoping to acquire anti-infectives firm Biocontrol in a share-based transaction. Under terms of the proposed deal, which has still to be agreed upon by Biocontrol shareholders, Targeted Genetics would issue shares of its common stock to Biocontrol’s existing shareholders, resulting in the latter’s shareholders owning about 50% of the outstanding equity in Targeted Genetics.
The offer is also still contingent on other conditions including Biocontrol’s ability to raise £200,000 (about $324,000) in working capital from its shareholders and other sources prior to completion. If the deal is ratified Biocontrol CEO Ed Cappabianca will be appointed CEO of the combined entity.
“We believe this is a great opportunity for both companies,” he states. “Biocontrol will gain access to Targeted Genetics’ expertise in cystic fibrosis and future revenues from the Targeted Genetics technology. Targeted Genetics will have an opportunity to increase its critical mass and broaden the range of technology platforms within the enlarged group.”
In May Targeted Genetics reported that despite its drive to “carefully steward” its resources, it was continuing to evaluate options for its future. These included selling off the company or liquidation. Anti-infectives specialist Biocontrol is focused primarily on the development of bacteriophages to treat Gram-negative bacterial infections including Pseudomonas aeruginosa in cystic fibrosis. The firm claims to be the first to have completed a Phase II trial demonstrating the efficacy of bacteriophages in the treatment of serious bacterial infections.
Targeted Genetics is exploiting its technologies for the development of AAV-based therapies and the manufacture of AAV vectors. The firm’s lead product is a clinical-stage AAV-based gene therapy for Leber’s congenital amaurosis (LCA), an ocular disease that leads to blindness due to a mutation of the RPE65 gene.
The product candidate, which utilizes AAV vectors to deliver the RPE65 gene, is currently being evaluated in a Phase II dose-escalation trial, for which the firm predicts having final data by the end of 2010. The LCA candidate is being developed in collaboration with Robin Ali, Ph.D., at the University College London/Moorfields Eye Hospital.
In 2008, Targeted Genetics successfully completed a Phase II trial with another candidate, tgAAC94, for the treatment of inflammatory arthritis. Although the results demonstrated preliminary signs of efficacy, the firm has had to put further clinical trials with tgAAC94 on hold until it can raise external funding from a development and commercialization partner.
Targeted Genetics in addition has an ongoing licensing and manufacturing partnership with Celladon, which is using the AAV vector technology to develop Mydicar®, a genetically targeted enzyme-replacement therapy for advanced heart failure. Mydicar is currently undergoing Phase I/II evaluation. During May Celladon confirmed that the first Phase II study evaluating Mydicar in the treatment of advanced heart failure met its primary safety and efficacy endpoints.