Targeted Genetics cuts payroll through layoffs, pay cuts

Targeted Genetics said Tuesday it has cut its payroll by 25 percent through layoffs and senior executive pay cuts, and has shifted its research efforts in a bid to survive a cash crunch.

The Seattle biotechnology company said it will focus on a promising experimental therapy to treat a genetic eye disease, and on two other early-stage products that haven't been tested in humans yet.

The company is shifting resources away from its current lead product, a gene therapy to treat inflammatory arthritis, and may seek a partner to take on the expensive clinical trials required to get the drug to market.

Targeted Genetics has laid off seven employees, about 10 percent of its work force, and its seven most senior executives are taking salary deferrals or have been reduced to half-time status. Those changes will result in a 25 percent cut in payroll expenses.

After the layoffs and reductions, the company now employs 56 full-time-equivalent employees, it said in a statement.

Targeted Genetics, whose founding chief executive, H. Stewart Parker, departed last month, has cash to last it through the first quarter of 2009.

The company has struggled since a patient died during a clinical trial for its inflammatory-arthritis therapy in July 2007. Its stock price plummeted, and never recovered, even after federal researchers determined that the product was not responsible for the patient's death.

Now the company faces an uphill battle to survive in a climate where investors are leery of investing in small biotechs.

"We believe this prioritization of our product pipeline, and the resulting changes to our cost structure, positions us to advance our promising candidates while we explore ways to monetize other valuable assets that the company has built over the years," said B.G. Susan Robinson, president and chief executive, in a statement.

Targeted Genetics' stock closed Tuesday up 6 cents, or 27.3 percent, at 28 cents.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com