SEATTLE, WA--(Marketwire - July 29, 2009) - Targeted Genetics Corporation (NASDAQ: TGEN) today announced that, on July 23, 2009, it received a letter from the Nasdaq Stock Market indicating that the Company has failed to regain compliance with Nasdaq Listing Rule 5550(b), which requires companies listed on the Nasdaq Capital Market to maintain a minimum of $2.5 million in shareholders' equity, $35 million in market value of listed securities or $500,000 in net income from continuing operations. The Nasdaq staff has therefore determined to delist the Company's common stock from the Nasdaq Capital Market effective at the opening of business on August 3, 2009. The Nasdaq staff determination follows an April 8, 2009 notification letter from the Nasdaq Stock Market, which was previously announced by the Company on April 14, 2009.
The Company intends to appeal the Nasdaq staff's determination by requesting a hearing before a Nasdaq listing qualifications panel. A timely request will stay the delisting of the Company's securities until the hearing is completed and the hearing panel has issued a written decision. The hearing date will be determined by Nasdaq and should occur within 45 calendar days from the date of the request. There can be no assurance that, following the hearing, the panel will grant the Company's request for continued listing on the Nasdaq Capital Market.
The Company reported a shareholders' equity deficit of $3.8 million in its annual report on Form 10-K for the year ended December 31, 2008 and a shareholders' equity deficit of $5.4 million in its quarterly report on Form 10-Q for the quarter ended March 31, 2009. This negative net worth resulted from the Company's restructuring charges totaling $7.6 million at December 31, 2008 and March 31, 2009, which related to obligations under the Company's lease for its Bothell facility, in combination with the goodwill impairment charge of $7.9 million recorded for the fourth quarter of 2008. As previously announced, the Company has since terminated the lease for the Bothell facility and reversed approximately $7 million of the restructuring charge liability from its balance sheet, but its shareholders' equity remains below the $2.5 million required by Rule 5550(b).
As previously announced, the Company is also in non-compliance with the $1.00 minimum bid price required for continued listing on the Nasdaq Capital Market under Listing Rule 5550(a)(2). The Nasdaq Stock Market has suspended enforcement of this requirement until July 31, 2009, at which time the Company will have five business days, or until August 7, 2009, to evidence compliance with the minimum $1.00 per share bid price rule. If, on August 7, 2009, the Company meets all of the Nasdaq Capital Market's initial listing criteria (other than the bid price criterion) but has not regained bid price compliance, the Company will be afforded an additional 180 calendar days to demonstrate compliance. If the Company does not meet the initial listing criteria on that date and has not regained bid price compliance, the Company will receive written notification from Nasdaq that the bid price deficiency serves as an additional basis for delisting the Company's securities. The Company plans to address any continuing issue of non-compliance with the bid price requirement in connection with the hearing before the Nasdaq panel discussed above.
If the Company is delisted from the Nasdaq Capital Market, its common stock may be traded over-the-counter on the OTC Bulletin Board or in the "pink sheets" if one or more market makers seeks and obtains approval by the Financial Industry Regulatory Authority (FINRA) to continue quoting in the Company's common stock. The over-the-counter market, however, is generally considered to be less efficient than the Nasdaq Capital Market. Many over-the-counter stocks trade less frequently and in smaller volumes than securities traded on the Nasdaq markets, which would likely have a material adverse effect on the liquidity and value of the Company's common stock.
About Targeted Genetics Corporation
Targeted Genetics Corporation is a biotechnology company committed to the development of innovative therapies for the prevention and treatment of diseases with significant unmet medical need. A key area of focus for Targeted Genetics is applying its proprietary Adeno-Associated Virus (AAV) technology platform to deliver genetic constructs to increase gene function or silence gene function. Targeted Genetics' lead product development efforts target ocular and neurological indications, two therapeutic areas where AAV delivery may have competitive advantages over other therapeutic modalities. To learn more about Targeted Genetics, visit its website at www.targetedgenetics.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements, including statements
regarding the Company's potential delisting from the Nasdaq Capital Market,
the process for appealing the Nasdaq staff determination to delist the
Company's securities and potential trading of the Company's securities on
the over-the-counter market. 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 and
cause actual results to differ materially from those expected or implied by
the forward-looking statements. Factors that could affect actual future
events or results include, but are not limited to, the risk that the
Company will not be able to enter into one or more strategic transactions
and/or to sell or otherwise monetize its assets, the risk that the Company
will not be able to raise capital or secure other financial resources in
the very near term and will be required to cease its operations or
otherwise wind up its business, the risk that the Company will be unable to
regain compliance with the Nasdaq Capital Market listing requirement for
shareholders' equity, market value of listed securities or net income
and/or the listing requirement for minimum bid price and that its appeal to
the Nasdaq listing qualifications panel will not be timely filed or will be
unsuccessful, resulting in the inability of the Company to maintain its
listing on the Nasdaq Capital Market, the risk that an over-the-counter
market will not trade the Company's shares if the Nasdaq Capital Market
delists the Company, the risk that the Company will run out of cash earlier
than expected, the risk that the Company will be unable to meet its
obligations under its Bothell lease termination agreement, which would
result in the Company not being released from its obligations under the
Bothell lease (which would result in, among other things, restructuring
charges on the Company's balance sheet that would significantly impact the
Company's shareholders' equity), the risk that the Company will be unable
to meet its obligations under the amendment to its headquarters facility
lease (which would result in the Company's inability to terminate the lease
without further obligations or continue the lease if desired) and the risk
factors described in the section entitled "Risk Factors" in Part I, Item 1A
of the Company's quarterly report on Form 10-Q for the quarter ended March
31, 2009, filed with the Securities and Exchange Commission. You should
not rely unduly on these forward-looking statements, which apply only as of
the date of this release. The Company undertakes no duty to publicly
announce or report revisions to these statements as new information becomes
available that may change the Company's expectations.
