July's death of a patient in Targeted Genetics Inc.'s halted Phase I/II trial of the arthritis drug tgAAC94 shone the spotlight - unfavorably, again - on gene therapy, dragging all involved companies out for inspection. And it gave many investors an excuse to talk about China, as if many in biotech weren't already.

Targeted Genetic's shares, which had lost about 20 percent of their value on word of the clinical hold, fell more than 13 percent when the death was disclosed. The company said it was investigating, and privacy issues prevented release of more data regarding the patient - though some speculated the person was elderly, with an immune system already compromised by using arthritis drugs such as the anti-TNF-alpha compounds Enbrel (etanercept, Amgen Inc.), Remicade (infliximab, Centocor Inc.) and Humira (adalimumab, Abbott).

Last week, though, the Washington Post reported that the patient as 36-year-old Jolee Mohr, who died of massive bleeding and organ failure at a Chicago hospital. The story - headlined, "Death Points to Risks in Research" - bothered Targeted Genetics enough to respond in a press release, saying the report "seems designed to agitate as opposed to inform."

The death itself, which the firm called "the incident central to the article," is being investigated by Targeted Genetics and the FDA, and "it would be premature as well as irresponsible to draw any conclusions" before the probe is done, the company said.

But people started doing so, almost right away. Some made comparisons to the 1999 death of 18-year-old Jesse Gelsinger, whose liver (unlike Mohr's, apparently) was failing when the University of Pennsylvania injected a high-dose adenovirus construct to deliver the genes directly into the hepatic artery. By contrast, Targeted Genetics uses the smaller, adeno-associated viral approach to inject TNFR:Fc fusion gene into arthritic joints.

Stephen Dunn, analyst with Dawson James, saw no likely similarity between Mohr's death and Gelsinger's - and noted that the Targeted Genetics patient, indeed, had been taking anti-TNF-alpha drugs that almost certainly suppressed her immune system, a condition that, in itself, can cause bleeding and organ failure.

"Since gene therapy actually has a very good safety record, believe it or not, I suspect the Targeted Genetics case is going to go like the Jesse Gelsinger case, i.e., the clinical trial protocol was designed poorly, it wasn't followed correctly and/or it wasn't administered correctly," he told BioWorld Financial Watch.

The company likely to win approval of the first gene-therapy drug is Introgen Therapeutics Inc., which this year reported encouraging Phase II data in head and neck cancer with Advexin, a combination of the p53 tumor suppressor gene with a non-replicating, non-integrating adenoviral gene-delivery system. Introgen is expected to file for approval of Advexin later this year, and a drug similar to Advexin already is cleared for marketing by a separate company in China - where gene therapy is much more highly regarded.

"As soon as Introgen gets approval [of Advexin], they're going to sue," Dunn said. The target of the lawsuit would be Shenzhen SiBiono GeneTech, a company that is majority owned by Benda Pharma, and makes the gene therapy Gendicine. Introgen is likely to allege that it developed Gendicine (essentially the same drug as Advexin) a decade and a half ago, and Chinese regulators pushed the stolen compound to market faster than the FDA would.

Meanwhile, "a lot of public [U.S.] companies have dropped their programs, while the Chinese have accelerated," Dunn said. "They got gene therapy approved last year. Americans pay roughly $20,000 to travel there and get treated" with Gendicine.

Others in the gene-therapy space in the U.S. that are similar to Introgen include GenVec Inc., with TNFerade, an adenovector that contains the gene for TNF-alpha, in a Phase II/III study for locally advanced pancreatic cancer.

Late last year, results for the first 51 patients enrolled in GenVec's pivotal Pancreas Cancer Clinical Trial with TNFerade study, known as PACT, showed a 42.5 percent absolute increase in overall survival when TNFerade was added to chemo-radiation, the standard of care, in pancreatic cancer. At one year, survival was 70.5 percent in the TNFerade plus standard-of-care arm vs. 28 percent for patients in the standard-of-care arm. (See BioWorld Today, Dec. 20, 2006.)

Phase IIa data looked strong but Phase IIb results "didn't look so good," and GenVec is "kind of struggling there," Dunn said, noting that TNFerade is injected into the pancreas, but patients are not immunosuppressed, as they were in the Targeted Genetics study.

What does the latest death mean for gene therapy's already-damaged U.S. reputation?

"The media like to hype it up a bit," said Dunn, who has become something of a gene-therapy guru, since many others have abandoned the space. "Everybody pulls up their gene therapy files and they come up with three patient deaths - two children [in France in late 2002 and early 2003] and Jesse Gelsinger. It happens every day, but gene therapy has that 'Frankenstein' allure to the media."

Dunn, though, said last Tuesday that he still does not expect widespread impact in the gene-therapy sector from the Targeted Genetics death.

"Since Introgen is the second highest biotech percentage gainer in on Wall Street today, I don't think all of gene therapy is going to be in trouble, unless the mass media misreports it," he said.

The company disclosed second-quarter results Monday, reporting a net loss of $7.7 million or 18 cents per share, compared to a loss of $7.7 million or $0.21 per share in the same quarter one year ago. Revenue declined to $82,000 from $98,000 in last year's period. Introgen listed a net loss of $13.4 million or 31 cents per share for the six-month period, compared to a loss of $15.9 million or 43 cents per share a year ago.

Introgen also has benefited from still more activity in the RNA interference space recently. In early July, AstraZeneca plc struck a deal with Silence Therapeutics Inc., worth up to $400 million. Introgen owns about 8 percent of Silence, which has a market cap of about $300 million and also sub-licensed, in the fall of 2006, the RNAi drug RTP-801i for age-related macular degeneration to Pfizer Inc., through Silence's collaboration partner Quark Biotech Inc.

In other gene-therapy news last week, the German firm Mologen Holding AG won the go-head in India to try a cell-based gene therapy for cancers of the kidney, colon, breast, and lung. The drug has only been tested in a Phase I/II trial. Mologen's partner in India is Onco Life Sciences.

Dunn, though, said Mologen's approach is not traditional gene therapy, and likened it to Cell Genesys Inc.'s Phase III prostate cancer therapy GVAX, which is an immune-system booster, or Dendreon Corp.'s cancer vaccine Provenge (sipuleucel-T).