Genovo Inc. Sold To Seattle Rival
Aug. 10, 2000
PHILADELPHIA (AP) _ The private company affiliated with gene therapy research at the University of Pennsylvania in which a teen-ager died has been sold to a rival.
Targeted Genetics Corp. of Seattle said it would buy Genovo Inc. in an all-stock deal valued at nearly $90 million.
In a related agreement, Targeted Genetics announced a new partnership with Biogen Inc. of Cambridge, Mass., in a deal that The Seattle Times estimated could be worth $125 million. Biogen has paid Genovo nearly $40 million since 1995 for eventual marketing rights to liver- and lung-related genetic therapies.
Following the announcements, Targeted Genetics stock rose 34 percent to close Wednesday at $13.56 a share. It was trading at $12. 94 on Thursday morning.
Genovo provided about 20 percent of the funding for Penn's Institute for Human Gene Therapy. The institute's ties to a for-profit company sparked nationwide debate following the death of 18-year-old Jesse Gelsinger, the first person known to have died following gene therapy.
The death of the Arizona teen, who suffered from an inherited liver disease, led to stricter regulations at universities engaged in federally funded gene-therapy research.
The Food and Drug Administration has since suspended Penn's human gene therapy program and found violations in its animal laboratories.
Targeted Genetics has ties to other universities, including the University of Washington and Johns Hopkins, but will not be affiliated with Penn, the company said.
Peter Erichsen, Penn's general counsel, said funding for the $25 million annual gene therapy program will not be greatly affected, because most of the budget comes from other sources, including the federal government.
James Wilson, Genovo's founder and director of Penn's gene therapy program, will receive Targeted Genetics stock worth about $13.5 million, The Philadelphia Inquirer reported Thursday.
Wilson said he had no role in the merger decision. He said he will continue as a full professor at Penn.
Targeted Genetics, which has been working on treatments for cystic fibrosis and cancer, reported losses Wednesday of $4.3 million or 12 cents a share in the second quarter, compared with a $5.9 million loss amounting to 19 cents a share in the same period last year. As of June 30 the company had $29.5 million in cash.
On the Net:
Targeted Genetics: http://www.targen.com/home.html
Institute for Human Gene Therapy: http://www.med.upenn.edu/(tilde)ihgt