News Release

Targeted Genetics presents data on arthritis gene therapy

Peer-Reviewed Publication

Noonan/Russo Communications

AAV delivery of gene encoding ENBREL shows promise in reducing inflammation in preclinical studies

Seattle, WA-June 5, 2000-Targeted Genetics Corporation (Nasdaq:TGEN) presented data from its gene therapy program for rheumatoid arthritis (RA) this weekend at the American Society of Gene Therapy Third Annual Meeting in Denver, Colorado. The Company is utilizing its adeno-associated virus (AAV) vector technology to deliver the DNA sequence encoding tumor necrosis factor receptor-immunoglobulin Fc fusion protein (TNFR:Fc) as a treatment for RA and other inflammatory diseases. Recombinant TNFR:Fc, ENBREL (etanercept), currently marketed for the treatment of several forms of RA, was developed by Immunex Corporation. Targeted Genetics obtained rights to the gene therapy applications of numerous genes and gene delivery technologies when it was spun out of Immunex in 1992.

Dr. Haim Burstein, Senior Scientist in the Department of Research at Targeted Genetics, presented the data in an abstract titled "Treatment of Experimental Arthritis Using Recombinant AAV-TNFR:Fc Vector Gene Therapy." The studies were conducted in collaboration with Dr. Sharon M. Wahl at the National Institute of Dental and Craniofacial Research, an institute of the National Institutes of Health. In these studies, recombinant AAV vectors containing the TNFR:Fc fusion genes were evaluated in an experimental rat model of arthritis. A single intra-articular (joint) administration of AAV-rTNFR:Fc into both rear ankle joints of arthritic rats resulted in a significant reduction of ankle and hind paw swelling as measured by arthritis index scores. A single intramuscular administration produced a similar effect. Bioactive rat TNFR:Fc protein was readily detectable in the serum of treated rats 33 days after intramuscular administration of AAV-rTNFR:Fc compared to control animals.

Injection of AAV-rTNFR:Fc into a single joint led to a reduction in hind paw swelling in the contralateral joint. Interestingly, this effect was observed even though intra-articular administration did not result in significant increases in serum TNFR:Fc protein levels compared to controls. This suggests that local joint administration of AAV-TNFR:Fc is less likely to lead to significant systemic distribution of this TNF-a antagonist. AAV-TNFR:Fc also was shown to inhibit TNF-a in several bioassays.

"Recombinant TNF receptor-immunoglobulin Fc fusion protein has been shown to have a positive impact on the symptoms of RA by antagonizing the function of TNF-a, a key component of the inflammatory response," said Dr. Barrie Carter, Executive Vice President and Director, Research and Development of Targeted Genetics. "We believe that the safety profile and long-term expression properties of our AAV vectors make them a logical approach to developing a gene-based delivery system for this important therapeutic protein. Local delivery of AAV-TNFR:Fc to arthritic joints may allow patients to be dosed every few months while maintaining therapeutic levels of the protein between treatments. We are moving forward with the preclinical development of the human version of this construct."

"These data demonstrate that gene delivery may have a number of applications beyond the treatment of cancer or single-gene defects," said H. Stewart Parker, President and Chief Executive Officer of Targeted Genetics. "Our ability to deliver therapeutic proteins by delivering the genes that encode them should enable the development of numerous products based on existing protein therapies or on newly identified genes. Protein therapy via gene delivery may allow for less frequent dosing, maintenance of consistent levels of protein over time, localized administration and the prevention of acute episodes in chronic diseases. These characteristics may result in more patient-friendly and cost-effective treatment regimens for a variety of diseases, and may reduce side effects resulting from systemic delivery of some protein therapies."

About Rheumatoid Arthritis
Rheumatoid arthritis (RA) is a chronic disease that causes pain, stiffness, swelling and loss of function in the joints and inflammation in other organs. While the exact cause of the disease remains unknown, autoimmune and inflammatory processes lead to chronic and progressive joint damage. According to the American College of Rheumatology, RA affects more than two million Americans, with disease onset occurring most frequently in people between the ages of 20 and 45. Symptoms are treated with a variety of steroidal and non-steroidal anti-inflammatory drugs and disease modifying drugs such as methotrexate, cyclosporine and etanercept. Direct and indirect costs associated with RA reached $65 billion in 1992. Sales of ENBREL for the treatment of moderate to severe RA were $366.9 million in 1999. There is no cure for RA.

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Targeted Genetics Corporation develops gene therapy products for the treatment of acquired and inherited diseases. The company has lead clinical product development programs targeting cystic fibrosis and cancer, and a promising preclinical pipeline of product candidates focused on hemophilia A, cancer and AIDS prophylaxis. The company has a broad platform of gene delivery technologies, as well as a promising body of technology for cellular therapy. For more information about Targeted Genetics Corporation please visit the Company's web site at http://www.targetedgenetics.com.

NOTE: This release contains forward-looking statements relating to the Company's products under development, technologies and future operating results that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believes", "expects", "intends", "anticipates", variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the need for additional capital, the early stage of product development, uncertainties related to clinical trials, and uncertainties related to patent position. Reference is made to the Company's latest Quarterly Report on Form 10-Q filed with the SEC for a more detailed description of such factors. Readers are cautioned not to place an undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Contact:

Targeted Genetics Corporation
Stephanie Seiler, Ph.D.
Director, Communications
(206) 521-7823

Noonan/Russo Communications
Page Sargisson (media)
(415) 677-4455, ext. 229
Mary Claire Bice (investors)
(212) 696-4455, ext. 238


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