Targeted Genetics Corp. reported what it called "encouraging" preliminary results of a Phase II trial in patients with cystic fibrosis using its gene therapy product candidate, tgAAVCF.

The trial, which involved 37 patients with a median age of 24 years, met its primary endpoint of demonstrating safety and tolerability. Seattle-based Targeted Genetics said it was the first repeat-dosing study of its kind and showed "positive trends" in pulmonary function, interleukin-8 levels and gene transfer.

"We're really pleased with the results, but our work is not yet done," said Targeted Genetics President and CEO H. Stewart Parker, who especially noted the positive safety profiles and efficacy data.

That data comes on the heels of news Thursday reported by the American Society of Gene Therapy that a serious adverse event was observed in the clinical trial of a gene therapy for the X-linked form of severe combined immune deficiency disease in children in a trial in Paris. One of the subjects in the trial being conducted by Alain Fischer and colleagues at the H pital Necker Enfants Malade developed what the association said appears to be T-cell leukemia-like illness about three years after the gene therapy procedure.

In light of the development, the association said the FDA put a clinical hold on similar trials in the same disease in the U.S., pending further investigation.

Responding to the adverse event, Parker said, "The news in France was specific to that trial and to that technology.

"We're at a delicate time right now," she said, noting that the news from France could "substantively affect" the development of the technology. Parker said the roller coaster ride in gene therapy is a "natural consequence of drug development" as the technology matures.

"We're just pleased to have one more piece of good news," she said, referring to the company's preliminary Phase II data.

Targeted Genetics' study was a randomized, double-blind, placebo-controlled trial in patients with mild cystic fibrosis. TgAAVCF uses an adeno-associated virus to deliver a copy of the CFTR gene to the airways of patients, the company said. Cystic fibrosis is caused by the loss of proper function of the CFTR gene and is characterized by thick mucous in the lungs and sinuses, leading to a build-up and colonization of bacteria. Eventually, the lungs suffer permanent damage from scarring, leading to death.

The aerosolized product was delivered via nebulizer, with lung function measured at 30-, 60- and 90-day intervals. The results showed a statistically significant improvement in lung function at day 30 of treatment (p=0.04).

The study also showed lowered levels of IL-8, a cytokine associated with inflammation, after 14 days in treated patients vs. those treated with placebo.

Targeted Genetics will continue to monitor the patients through 150 days, at which point a full analysis of data will be completed along with analysis of individual patient data, the company said.

Noting that the trial showed preliminary efficacy, the next steps for tgAAVCF have yet to be determined, Parker said. The company is reviewing data with the Cystic Fibrosis Foundation and its partner for tgAAVCF, Celltech Group plc, of Slough, UK.

In August, Targeted Genetics took efforts to reduce expenses by eliminating 45 research and administrative positions and by suspending Phase I trials of tgDCC-E1A in ovarian and head and neck cancer, because the cancer program was not partnered, the company said. Those moves were expected to save the company about $2.5 million per quarter. As of June 30, the company had $17.3 million in cash, but said it was expecting about $12.4 million in research and development reimbursement payments from various partners during the next 15 months. (See BioWorld Today, Aug. 8, 2002.)

However, the company's preclinical hemophilia program - partnered with Wyeth - using gene therapy continues.

The company also is working on an HIV vaccine and is expected to submit an investigational new drug application in 2003 to begin clinical trials. That program is partnered with the International AIDS Vaccine Initiative in New York.

A third preclinical program is focused on using gene therapy in arthritis.

Targeted Genetics' stock (NASDAQ:TGEN) rose 2 cents Friday to close at 47 cents.