Targeted Genetics Corporation, of Seattle, Washington, announced the restructuring of its operations, including a 27% reduction in staffing, in order to deploy the majority of its remaining resources to identify the clinical utility of the anti-tumor necrosis factor (TNF) product tgAAC94 for the treatment of inflammatory arthritis.

According to Targeted Genetics, delivery of tgAAC94, an intra-articular-injected recombinant adeno-associated virus (AAV) vector that encodes a soluble form of the TNF-alpha receptor (TNFR:Fc) in an animal model, resulted in localized expression, significant reduction in swelling in arthritis models, reduced bone and cartilage loss, decreased levels of inflammatory cytokines, a contralateral effect, and a clean safety profile.

Targeted Genetics has gathered initial positive data pertaining to the safety of intra-articular delivery of tgAAC94, and clinical trials are ongoing, targeting those patients who are on concurrent systemic anti-TNF therapies but still have residual disease in one or more affected joints. According to the company, 15% to 40% of patients do not respond to existing anti-TNF-alpha therapies in one or more joints, a $2+ billion opportunity.

In October 2005, Targeted Genetics initiated a 40-patient, double-blind, placebo-controlled (with an open-label component), multicenter phase I clinical trial of tgAAC94 to evaluate two dose levels in patients with rheumatoid arthritis, psoriatic arthritis, or ankylosing spondylitis and those who may be receiving concomitant TNF-alpha blockade therapy. Targeted Genetics' key goal for this program for mid-2006 is to report preliminary tgAAC94 phase I data in patients with inflammatory arthritis.

The restructuring, with a projected 20% to 25% reduction in cash burn for 2006 versus 2005, will include the elimination of 26 employees, primarily in early-stage research and development groups as well as in operations and general and administrative areas.

—A. Techman