Full Press Release Details
Investor and Media Contact:
Director, Communications
Targeted Genetics Corporation
TARGETED GENETICS REPORTS FOURTH QUARTER AND
YEAR-END 2004 FINANCIAL RESULTS
Seattle, WA March 3, 2005 Targeted Genetics Corporation (NASDAQ: TGEN) today announced its
financial results for the fourth quarter and year ended December 31, 2004. As previously
announced, the Company will hold a conference call with analysts at 10:30am EST today. The call
will be broadcast live over the Internet and can be accessed, along with replay information, at
For the quarter ended December 31, 2004, Targeted Genetics reported a net loss of $2.2 million, or
$0.03 per common share, compared to $6.3 million, or $0.10 per common share, for the fourth quarter
of 2003. For the year ended December 31, 2004, the Company reported a net loss of $14.3 million,
or $0.18 per common share, compared to $14.8 million, or $0.26 per common share, for the same
Revenue for the fourth quarter ended December 31, 2004 was $3.2 million, compared to $1.4 million
for the fourth quarter of 2003. Revenue for the year ended December 31, 2004 was $9.7 million,
compared to $14.1 million for the year ended December 31, 2003. Revenue in 2004 primarily reflects
amounts earned under the Company s HIV collaboration with the International AIDS Vaccine
Initiative, which increased during 2004. Revenue in 2003 included amounts earned under the HIV
collaboration as well as amounts earned under the Company s former collaborations with Biogen and
Wyeth, which concluded in 2003.
In 2004 we made important progress in each of our clinical development programs, allowing us to
present preliminary safety data from our Phase I AIDS vaccine trial recently and positioning us to
announce data from our Phase II trial in cystic fibrosis in mid to late March. We also remain on
track to present data from our inflammatory arthritis trial in the first half of this year, said
H. Stewart Parker, President and Chief Executive Officer. We also strengthened our financial
position during the year, raising $29.8 million through sales of common stock, extending our
collaboration with the International AIDS Vaccine Initiative (IAVI) and selling our CellExSys cell
therapy subsidiary to Chromos Molecular Systems, Inc. By successfully achieving our 2004
objectives and managing our financial and technology resources, we are well positioned to continue
advancing our clinical development programs and evaluating additional product development
opportunities in 2005.
Operating expense for the fourth quarter of 2004 decreased to $5.4 million, compared to $7.6
million for the fourth quarter of 2003. Operating expenses for the year ended December 31, 2004
decreased to $24.8 million, from $27.9 in 2003. Research and development expense for the fourth
quarter ended December 31, 2003 decreased to $4.0 million, from $4.4 million in the fourth quarter
of 2003 and was $17.3 million for the year ended December 31, 2004, compared to $17.2 million in
2003. General and administrative expense decreased to $1.4 million in the fourth quarter of 2004,
compared to $1.6 million in the fourth quarter of 2003, and increased to $6.7 million for the year
ended December 31, 2004, from $5.5 million for the year ended December 31, 2003. The decrease in
expenses during the fourth quarter of 2004, reflect the sale of CellExSys in July 2004, which also
resulted in a gain on sale of $1.0 million. The increase in general and administrative expense for
2004 is attributed to higher patent, regulatory compliance and personnel costs. During 2004, the
Company recorded restructuring charges of $0.1 million in the fourth quarter and $0.9 million for
the year, compared to $1.6 million for restructuring charges in the fourth quarter and
restructuring charges of $5.2 million for unused leased facilities for 2003.
2004 AND RECENT CORPORATE HIGHLIGHTS
| Secured a three-year extension of our collaboration with IAVI and Columbus Children s Research Institute (CCRI) to develop an adeno-associated virus (AAV)-based vaccine against HIV/AIDS. | ||
| Raised $25.5 million through a public offering of common stock. | ||
| Reduced 2004 interest charges through conversion of Elan convertible debt in 2003. | ||
| Signed an exclusive license agreement with the National Institutes of Health for patents that cover the use of the AAV inverted terminal repeat (ITR) as a promoter when utilizing AAV vectors for any product indication. | ||
| Broadened AAV patent portfolio with the issuance of a patent covering AAV vectors that contain sequences from AAV serotype 1. | ||
| Sold majority-owned cell therapy subsidiary, CellExSys, Inc. to Chromos Molecular Systems, Inc. | ||
| Named one of Washington State s fastest growing technology companies in the Deloitte Technology Fast 50 Program. | ||
| Established a collaboration with Celladon to develop AAV-based therapies for congestive heart failure in January 2005. Simultaneous with the initiation of this collaboration, Enterprise Partners and Venrock Associates, venture capital funds that |
| have invested in Celladon, made a $6 million common stock investment in Targeted Genetics. | ||
| Established a collaboration with Sirna Therapeutics to develop therapies for Huntington s disease that utilizes Targeted Genetics AAV vectors and Sirna s RNA inhibition (RNAi) technology in January 2005. |
tgAAVCF 2004 Highlights and Current Status
In 2004, the Company continued enrolling and dosing patients in its ongoing Phase IIb study of
tgAAVCF in patients with mild to moderate cystic fibrosis. An independent data monitoring
committee (DMC) recommended continuing this trial based on its analysis that, upon complete
enrollment, the study could show a statistically significant positive impact on lung function
measurements in patients receiving tgAAVCF compared with placebo. Results of this study are
anticipated in mid to late March 2005. Additionally, the Company published the complete results of
a previous Phase II trial of tgAAVCF in patients with cystic fibrosis, demonstrating a
statistically significant improvement in lung function and a clean safety profile.
TGAAC09 2004 HIGHLIGHTS AND CURRENT STATUS
In 2004, in collaboration with IAVI and CCRI, enrollment of Phase I trial of tgAAC09 in healthy
volunteers in Germany and Belgium was completed. Preliminary results from this study, which were
presented in February 2005, indicate that the vaccine met its primary safety endpoint. No
immunological responses against HIV antigens were observed at the doses tested. Future studies
will evaluate higher doses, prime/boost administration, multi-antigen vaccine constructs and
vectors containing sequences from AAV serotype 1, which may confer higher expression levels in
muscle. In February 2005, the collaboration initiated a Phase I trial of tgAAC09 in healthy
volunteers in India in order to generate additional safety data.
tgAAC94 2004 Highlights and Current Status
In March 2004, the Company initiated a Phase I trial of tgAAC94 in patients with inflammatory
arthritis and is on track to report data from the trial in the first half of 2005. In 2004 the
Company also presented data from preclinical studies that evaluated multiple routes of
administering tgAAC94 and demonstrated complete suppression of inflammatory arthritis over three
months of study in an animal model of the disease at the 7th Annual Meeting of the
American Society of Gene Therapy.
Conference call and webcast information:
The company will host a conference call reviewing year-end financial results, product portfolio,
including an update on the development progress of the Company s CF, RA and HIV programs, and other
business developments, on Thursday, March 3rd at 10:30 a.m. Eastern Time. To access the live call
or the archive via the Internet, log on to www.targetedgenetics.com. Please connect to the
Company s website at least 15 minutes prior to the conference call to ensure adequate time for any
software download that may be needed to hear the webcast. We advise turning off any pop-up blockers
in order to access the call via the Internet. Telephone replay is available approximately two hours
after the call for 30 days. To access the replay, please call 800.207.7077 (U.S.) or 913.383.5767
(international) and enter replay code 4088.
About Targeted Genetics
Targeted Genetics Corporation develops gene-based products for preventing and treating acquired and
inherited diseases. The Company has three clinical product development programs, targeting cystic
fibrosis, AIDS prophylaxis and inflammatory arthritis. The Company also has a promising pipeline of
product candidates focused on hyperlipidemia, congestive heart failure and Huntington s disease
that are being developed under collaboration agreements with others, and a broad platform of gene
delivery technologies for application in nucleic acid-based drug development. For more information
about Targeted Genetics, visit its website at www.targetedgenetics.com.
NOTE: This release contains forward-looking statements regarding our projected financial resources,
intellectual property, clinical trials and regulatory filings and anticipated data from our
clinical and preclinical programs. These statements, involve current expectations, forecasts of
future events and other statements that are not historical facts. Inaccurate assumptions and known
and unknown risks and uncertainties can affect the accuracy of forward-looking statements. Actual
results could differ materially from expectations for a number of reasons, including failure of our
partners to provide funding, our failure to make progress with our clinical trials, our failure to
obtain positive results from our preclinical programs, our failure to obtain or maintain regulatory