Targeted Genetics Corp. raised $17.5 million through a public offering of about 7.7 million shares at $2.25 each pursuant to a shelf registration.
Gross proceeds are expected to total about $16.2 million after placement agent fees and other costs are paid, and the company will use the money as working capital and for general corporate purposes.
H. Stewart Parker, president and CEO of the Seattle-based company, told BioWorld Today that legal advisers had instructed her not to comment beyond the press release. She noted a prospectus on the offering will be filed Tuesday.
With about $12 million in cash before the offering and a burn rate of about $1 million per month, the company needed more resources, although in March it got an up to $5.6 million boost from the International AIDS Vaccine Initiative to push its viral-vector AIDS vaccine into the clinic.
The company regained rights to its lead drug, targeting cystic fibrosis, when its partner, Slough, UK-based Celltech Group plc, terminated a four-year-old agreement late last year. (See BioWorld Today, Dec. 8, 2002.)
In October at the North American Cystic Fibrosis meeting in New Orleans, positive preliminary results from a Phase II trial had been disclosed, showing a significant change in lung function with the tgAAVCF drug candidate. (See BioWorld Today, Oct. 7, 2002.)
And this month, the final data from that trial came out, showing 17 percent of the 20 treated patients had a sustained improvement in lung function of at least 10 percent - a clinically significant response that reached statistical significance after 30 days.
Targeted Genetics also has programs in rheumatoid arthritis, hemophilia and cancer.
Near the end of last year, the company let go 67 of its 120-employee work force in an effort to extend operating capital - four months after the first staff reduction of a team that had numbered 175. (See BioWorld Today, Dec. 18, 2002, and Aug. 8, 2002.)
Targeted Genetics' stock (NASDAQ:TGEN) closed Friday at $2.27, down 82 cents, or 26.5 percent. The share price had jumped to $3.96 from $2.41 on news last week from a preclinical study of the AIDS vaccine, presented at the meeting of the American Society of Gene Therapy.