8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 9, 2006
 

Targeted Genetics Corporation

(Exact name of registrant as specified in its charter)

Washington	0-23930	91-1549568
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1100 Olive Way, Suite 100, Seattle, Washington	98101
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (206) 623-7612
 

Not Applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry into a Material Definitive Agreement.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 5.1
EXHIBIT 10.1
EXHIBIT 99.1

Item 1.01. Entry into a Material Definitive Agreement.

     On March 9, 2006, Targeted Genetics Corporation sold 12,791,611 shares of its common stock at a price of $0.39 per share, for aggregate proceeds of approximately $4,988,728, to institutional investors in a registered direct offering pursuant to purchase agreements with the investors. The form of purchase agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

     In connection with this offering, Orrick, Herrington & Sutcliffe LLP, counsel to Targeted Genetics, has delivered an opinion with respect to the validity of the shares of common stock sold in the offering. A copy of this opinion is attached as Exhibit 5.1 to this current report and is incorporated herein by reference.

     A press release announcing this offering is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibits:		Description of Document
	5.1	Opinion of Orrick, Herrington & Sutcliffe LLP regarding the validity of the shares of common stock issued
	10.1	Form of Purchase Agreement dated March 9, 2006
	23.1	Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 5.1)
	99.1	Press Release of Targeted Genetics Corporation dated March 10, 2006

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Targeted Genetics Corporation
By:	/s/ H. Stewart Parker
	H. Stewart Parker
	President and Chief Executive Officer

Dated: March 9, 2006

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EXHIBIT INDEX

Exhibits:		Description of Document
	5.1	Opinion of Orrick, Herrington & Sutcliffe LLP regarding the validity of the shares of common stock issued
	10.1	Form of Purchase Agreement dated March 9, 2006
	23.1	Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 5.1)
	99.1	Press Release of Targeted Genetics Corporation dated March 10, 2006

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EX-5.1

Exhibit 5.1

ORRICK, HERRINGTON & SUTCLIFFE
LLP
719 Second Avenue
Suite 900
Seattle, Washington 98104
TEL 206-839-4300
FAX 206-839-4301
www.orrick.com

March 9, 2006

Targeted Genetics Corporation
1100 Olive Way, Suite 100
Seattle, Washington 98101

          Re: Targeted Genetics Corporation
Registration Statement on Form S-3

Ladies and Gentlemen:

At your request, we have examined the Registration Statement on Form S-3, File No. 333-16600 (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) relating to the offering from time to time, pursuant to Rule 415 of the General Rules and Regulations of the Commission promulgated under the Securities Act of 1933, as amended (the “Securities Act”), by Targeted Genetics Corporation, a Washington corporation (the “Company”), of up to 16,300,000 shares of common stock the Company, which Registration Statement was declared effective by the Commission on July 7, 2004. In connection with the sale by the Company of 12,791,611 shares of the Company’s common stock (the “Shares”), par value $0.01 per share, under the Registration Statement, the Company filed a prospectus supplement with the Commission in accordance with Rule 424(b)(5) under the Securities Act on March 9, 2006 (the “Prospectus Supplement”).

We have examined the Registration Statement, the Prospectus Supplement and such instruments, documents, and records that we deemed relevant and necessary for the basis of this opinion, and we have also examined and relied on representations, statements or certificates of public officials and officers and representatives of the Company. In this examination, we have assumed (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy, and completeness of the information, representations and warranties contained in the records, documents, instruments, and certificates we have reviewed.

Based on such examination, we are of the opinion that the Shares to be issued and sold by the Company are duly authorized, and, when issued against payment of the purchase price therefor in the manner described in the Prospectus Supplement, will be legally issued, fully paid and nonassessable.

March 9, 2006
Page 2

We hereby consent to the filing of this opinion as an exhibit to the Company’s current report on Form 8-K and any amendment thereto, and to the reference to our firm in the Prospectus Supplement under the heading “Legal Matters.” In giving this consent, we do not admit that we are “experts” within the meaning of that term as used in the Securities Act, or the rules and regulations of the Commission issued thereunder, with respect to any part of the Registration Statement or the Prospectus Supplement, including this opinion as an exhibit or otherwise.

Very truly yours,

/s/ Orrick, Herrington & Sutcliffe LLP

ORRICK, HERRINGTON & SUTCLIFFE LLP

EX-10.1

Exhibit 10.1

PURCHASE AGREEMENT

Targeted Genetics Corporation
1100 Olive Way; Suite 100
Seattle, WA 98101

Ladies and Gentlemen:

     The undersigned, (the “Investor”), hereby confirms and agrees with you as follows:

     1. This Purchase Agreement (the “Agreement”) is made as of March 9, 2006 between Targeted Genetics Corporation, a Washington corporation (the “Company”), and the Investor.

     2. As of the Closing (as defined below) and subject to the terms and conditions hereof, the Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor ___ shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (“Common Stock”), for a purchase price of $0.39 per share, or an aggregate purchase price of $___. The Investor acknowledges that the offering of the Shares is not a firm commitment underwriting and that there is no minimum offering amount. Investor acknowledges and agrees that the Company shall have no obligation to issue or sell any Shares to the Investor until the Company accepts this Agreement by executing and delivering to the Investor a counterpart to this Agreement.

     3. The completion of the purchase and sale of the Shares shall occur at a closing (the “Closing”) which is expected to occur on or about March 10, 2006. After the execution of this Agreement by the Investor, the Investor shall remit to the Company by wire transfer to the account designated by the Company in this Agreement the amount of funds equal to the aggregate purchase price of the Shares. Unless otherwise requested by the Investor and agreed to by the Company, the Shares purchased by the Investor will be delivered by electronic book-entry at The Depository Trust Company (“DTC”), registered in the Investor’s name and address as set forth below, and will be released by Mellon Shareholder Services, the Company’s transfer agent (the “Transfer Agent”), to the Investor at the Closing. After the execution of this Agreement by the Investor, the Investor shall direct the broker-dealer at which the account or accounts to be credited with the Shares are maintained to set up a deposit/withdrawal at custodian (“DWAC”) instructing the Transfer Agent to credit such account or accounts with the Shares.

     4. The offering and sale of the Shares (the “Offering”) are being made pursuant to an effective shelf registration statement on Form S-3 (No. 333-116600) (including the Prospectus contained therein (the “Base Prospectus”) and the exhibits thereto and the documents incorporated therein by reference, the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) on June 17, 2004 which became effective on July 7, 2004, and, if applicable, certain preliminary prospectuses or “free writing prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended, (the “Act”)), that have or will be filed with the Commission and delivered to the Investor on or prior to the date hereof (the “Time of Sale Prospectus”), and a Prospectus Supplement (the “Prospectus Supplement”, and collectively with the Base Prospectus and any Time of Sale Prospectus, the “Prospectus”) containing certain supplemental information regarding the Shares and terms of the Offering that will be filed with the Commission pursuant to Rule 424(b). The Investor acknowledges that the Company intends to enter into purchase agreements in substantially the same form as this Agreement with certain other investors and intends to offer and sell up to 12,791,611 shares of Common Stock pursuant to the Registration Statement and Prospectus.

     5. Once this Agreement has been accepted and agreed to by the Company, the Company’s obligations to issue and sell the Shares to the Investor shall be subject to the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing. The obligations of each of the Company and the Investor hereunder shall be subject to the condition that there is no stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment to the Registration Statement, in effect, and that no proceedings for such purpose have been instituted or threatened by the Commission.

     6. The Company hereby makes the following representations, warranties and covenants to the Investor:

          (a) The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereunder have been duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against the Company in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The Shares have been duly and validly authorized by the Company and, when the Shares, are issued and delivered against payment therefor as provided herein, the Shares will be duly and validly issued, fully paid and non-assessable.

          (b) The Company (i) may, after the closing of trading on the Nasdaq Stock Market on the date hereof or before the opening of trading on the Nasdaq Stock Market on the next trading day after the date hereof, issue a press release, disclosing all material aspects of the transactions contemplated hereby and (ii) shall make such other filings and notices in the manner and time required by the Commission with the respect to the transaction contemplated hereby. The Company shall not identify the Investor by name in any press release or public filing, or otherwise publicly disclose the Investor’s name, without the Investor’s prior, written consent, unless required by law or the rules and regulations of any self-regulatory organization which the Company or its securities are subject.

          (c) Reference is made to the disclosure contained in the Prospectus (including the risk factors included and incorporated by reference therein), however, if the Company receives gross proceeds in the Offering of at least $4.8 million, the Company does not expect to receive a “going concern” qualification in the auditor’s opinion relating to its fiscal 2005 audit, however, this decision is the decision of the auditors, and is outside the Company’s control.

     7. The Investor hereby makes the following representations, warranties and covenants to the Company:

          (a) The Investor confirms receipt of the final Base Prospectus dated July 7, 2004 has been delivered or otherwise made available to the Investor for its review prior to or in connection with the receipt of this Agreement. The Investor acknowledges that the Prospectus Supplement and, if applicable, the Time of Sale Prospectus will be delivered, or otherwise made available to the Investor before this Agreement will be executed and delivered by the Investor and before this Agreement is deemed to be effective. The Investor confirms that it has had full access to the Prospectus and the information incorporated by reference therein. The Investor is an “accredited investor” within the meaning of Rule 501(a)(1), (2) or (3) under the Act. The Investor is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the purchase of the Shares. The Investor is purchasing the Shares for the Investor’s own account for investment purposes only and not with a view to or for sale in connection with any distribution thereof. The Investor acknowledges that in connection with its decision to purchase the Shares, it has relied only upon the Prospectus and the documents incorporated by reference therein, and the representations and warranties of the Company contained herein.

          (b) The Investor acknowledges, represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company that would permit an offering of the Shares, or possession or distribution of offering materials in connection with the issue of the Shares in any jurisdiction outside the United States where action for that purpose is required. If the Investor resides outside the United States, Investor will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers the Shares or has in its possession or distributes any offering material, in all cases at its own expense.

          (c) From and after obtaining knowledge of the sale of the Shares contemplated hereby, such Investor has not taken, and prior to the public announcement of the transaction such Investor shall not take, any action that has caused or will cause such Investor to have, directly or indirectly, sold or agreed to sell any Common Stock, effected any short sale, whether or not against the box, established any “put equivalent position” (as defined

in Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derives any significant part of its value from the Common Stock, whether or not, directly or indirectly, in order to hedge its position in the Shares.

          (d) The Investor shall not issue any press release or make any other public announcement relating to this Agreement unless (i) the content thereof is mutually agreed to by the Company and the Investor or (ii) the Investor is advised by its counsel that such press release or public announcement is required by law.

          (e) The Investor has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Investor and the consummation by it of the transactions contemplated hereunder have been duly authorized by all necessary action on the part of the Investor. This Agreement has been duly executed by the Investor and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

          (f) The Investor understands that nothing in this Agreement or any other materials presented to the Investor in connection with the purchase or sale of the Shares constitutes legal, tax or investment advice. The Investor has consulted such legal, tax or investment advisors as it, in its sole discretion, deems necessary or appropriate in connection with its purchase of the Shares.

          (g) The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company, (b) neither it, nor any group of which it is a member or to which it is related, beneficially owns (including the right to acquire or vote) any securities of the Company, and (c) it is not a, and it has no direct or indirect affiliation or association with any, NASD member as of the date hereof. Exceptions:

 

(If no exception noted, then deemed to be “None”)                    

     8. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investor herein shall survive the execution of this Agreement, the delivery to such Investor of the Shares being purchased and the payment therefor.

     9. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Washington, without giving effect to the principles of conflicts of law.

     10. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

The Company has filed a registration statement (Registration No. 333-116600, including the Base Prospectus) with the Commission for the Offering to which this communication relates. Before you invest, you should read the Base Prospectus in that registration statement and other documents the Company has filed with the Commission for more complete information about the Company and this Offering. You may get these documents for free by visiting EDGAR on the Commission’s web site at www.sec.gov. Alternatively, the Company will arrange to send you the Base Prospectus if you request it by calling (206) 521-7362.

[Remainder of page intentionally left blank.]

     Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

Name of Investor:

By:

Print Name:

Title:

Address:

Tax ID No.:

Contact Name:

Telephone:

Name in which book-entry should be made (if different):

Broker:

Broker Contact Name:

Broker Phone Number:

Broker Fax:

Broker Email:

DTC Account Number:

AGREED AND ACCEPTED:

TARGETED GENETICS CORPORATION
a Washington corporation

By:

Name:

Title:

Targeted Genetics Corporation hereby directs that the purchase price for the Shares of common stock being sold to the Investor pursuant to this Agreement be wired to the following account:

Bank:
ABA#
Credit to:
Account No.:
Re:

EX-99.1

EXHIBIT 99.1

Company Contact:
Stacie D. Byars
Director, Communications
Targeted Genetics Corporation
(206) 521-7392

TARGETED GENETICS ANNOUNCES $5.0 MILLION PUBLIC
OFFERING OF COMMON STOCK

Seattle, WA—March 10, 2006 – Targeted Genetics Corporation (Nasdaq: TGEN), today announced that it has obtained agreements from select institutional investors to purchase 12,791,611 shares of its common stock at a price of $0.39 per share in a registered direct offering. The closing of the offering is expected to take place on March 10, 2006, subject to satisfaction of customary closing conditions.

The shares were offered through a prospectus supplement under the Company’s shelf registration statement previously filed with the Securities and Exchange Commission, which was declared effective on July 7, 2004.

If the closing occurs as expected, the gross proceeds would be $4,988,728. The Company estimates net proceeds from the financing to be approximately $4.8 million after deducting the estimated costs associated with the offering. The Company plans to use the net proceeds of this financing for working capital and other general corporate purposes.

This press release shall not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sales of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements regarding the amount of proceeds expected to be received from the offering, the expected timing of the closing of the offering, Targeted Genetics’ expected use of these proceeds and other statements about Targeted Genetics’ plans, objectives, intentions and expectations. 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. Factors that could affect Targeted Genetics actual results include, but are not limited to, the risk that the offering is not consummated, the possibility that Targeted Genetics decides to use the proceeds from the offering for purposes other than those described above, as well as other risk factors described in the section entitled “Factors Affecting Our Operating Results, Our Business and Our Stock Price” in Targeted Genetics’ quarterly report on Form 10-Q for the quarter ended September 30, 2005. You should not rely unduly on these forward-looking statements, which apply only as of the date of this release. Targeted Genetics undertakes no duty to publicly announce or report revisions to these statements as new information becomes available that may change its expectations.

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