TGEN Tecogen Inc

Targeted Genetics Corporation (Nasdaq:TGEN) announced today that the principal investigator for its current clinical studies, Philip Mease, M.D., Chief, Rheumatology Clinical Research Division of Swedish Hospital Medical Center and Head of Seattle Rheumatology Associates, presented data from a completed Phase I and ongoing Phase I/II trial of tgAAC94 in patients with inflammatory arthritis. tgAAC94 is an investigational therapeutic designed to inhibit the activity of tumor necrosis factor-alpha (TNF-alpha), a key mediator of inflammation. The data support the safety and tolerability of intra-articular administration of tgAAC94 to affected joints and suggest that tgAAC94 may lead to improvements in signs and symptoms of arthritis in injected joints. Importantly, these improvements have been observed in patients with and without concurrent systemic TNF-alpha antagonist therapies. Dr. Mease presented this data at the Annual European Congress of Rheumatology, taking place in Amsterdam June 21st-24th. tgAAC94 utilizes an adeno-associated virus (AAV) vector to deliver the gene encoding a soluble form of the receptor for TNF-alpha (TNFR:Fc) directly to affected joints. TNFR:Fc protein is a potent inhibitor of TNF-alpha. "Although the number of patients evaluated thus far is relatively small, these data are very encouraging and suggest positive response trends," said Dr. Mease. "Many patients with inflammatory arthritis fail to achieve sufficient disease control in one or more joints and continue to experience pain and discomfort. tgAAC94 is a promising investigational therapeutic that may provide clinical benefit to these patients and allow them to manage their disease more effectively. The safety and responses observed in clinical trials to date suggest that tgAAC94 has the potential to advance the care of patients with inflammatory arthritis." In the completed Phase I study, 12 females and 2 males with rheumatoid arthritis and 1 male with ankylosing spondylitis received an injection into the knee (n=14) or ankle (n=1) and were followed for 24 weeks. Improvement in a composite tenderness and swelling score was noted in all treatment groups, particularly among subjects who received the higher dose of tgAAC94. Intra-articular administration of tgAAC94 was safe and well tolerated. None of the reported adverse events were definitely related to the study drug. In the ongoing Phase I/II study, approximately 120 adults are being randomized into three dose groups to receive a single intra-articular injection of either tgAAC94 or placebo, followed by an open-label injection of tgAAC94 after 12 to 30 weeks, depending on when swelling in the target joint meets criteria for re-injection. As of May 2006, 21 subjects in the first cohort, 10 of whom were receiving concurrent TNF-alpha antagonists, received an injection of blinded study drug into the knee (n=12), ankle (n=4), wrist (n=2) or metacarpophalangeal joint (n=3). No significant safety concerns have been identified after 12 to 24 weeks of follow-up. Fewer patients receiving tgAAC94 had symptoms requiring re-injection at the 12-week time point, compared with patients in the placebo arm. The data also suggest a trend toward improvement in tenderness and swelling of the injected joint in patients receiving tgAAC94. These improvements were noted in subjects taking concurrent systemic TNF-alpha antagonist therapy as well as those subjects not on these therapies. "I have been very impressed with the responses observed in patients from my practice who have participated in clinical trials of tgAAC94," said Edward J. Fudman, M.D., President, Austin Rheumatology Research. "Although these patients had residual disease despite treatment with other agents, including systemic TNF-alpha antagonists, they have experienced improvements in the signs and symptoms of disease in joints treated with tgAAC94. I am optimistic that tgAAC94 will continue to show benefit in this patient population and believe that this investigational therapeutic may have an important role to play in the treatment of inflammatory arthritis." H. Stewart Parker, President and Chief Executive Officer of Targeted Genetics, added, "The selection of this abstract for presentation at the leading European arthritis conference reflects the growing interest in tgAAC94 among physicians who treat inflammatory arthritis in their daily practices. We are pleased to have the opportunity to share the promising results of our tgAAC94 clinical studies with these members of the medical community and will continue to use opportunities like these to further educate our constituents about the potential of targeted localized protein therapy for inflammatory arthritis." About tgAAC94 tgAAC94 is being developed as a potential supplement to systemic anti-TNF-alpha protein therapy for use in patients with inflammatory arthritis who have one or more joints that do not respond to systemic protein therapy. The product candidate uses Targeted Genetics' recombinant AAV (rAAV) vector technology to deliver a DNA sequence that encodes a soluble form of the TNF-alpha receptor (TNFR:Fc). Soluble TNFR inhibits the immune stimulating activity of TNF-alpha. Direct injection of tgAAC94 into affected joints leads to the localized production of secreted TNFR within joint cells, reducing the activity of TNF-alpha within the joint and, potentially, leading to a decrease in the signs and symptoms of inflammatory disease and inhibition of joint destruction. The Company's rAAV technology platform is used to deliver genes and is based on AAV, a naturally occurring virus that has not been associated with any disease in humans. About Targeted Genetics Targeted Genetics Corporation is a biotechnology company committed to the development and commercialization of innovative, targeted molecular therapies for the prevention and treatment of inflammatory arthritis, HIV/AIDS and other acquired and inherited diseases with significant unmet medical need. Targeted Genetics uses its considerable knowledge and capabilities in the development and manufacturing of gene delivery technologies to advance a diverse product development pipeline. Its product development efforts target inflammatory arthritis, HIV/AIDS, congestive heart failure, Huntington's disease, and hyperlipidemia. 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 regarding the data to be collected in this trial, the establishment or determination of efficacy endpoints from the data collected in the trial, the timely and complete accrual of patients in the trial and our ability to commercialize tgAAC94 and other statements about our 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 our actual results include, but are not limited to, our ability to obtain, maintain and protect our intellectual property, our ability to raise capital when needed, our ability to recruit and enroll suitable trial participants, the timing, nature and results of research and clinical trials, potential development of alternative technologies or more effective processes by competitors, and, our ability to obtain and maintain regulatory or institutional approvals, as well as other risk factors described in Item 1A. Risk Factors in our report on Form 10-K for the year ended December 31, 2005 and updated in Item 1A. Risk Factors in our Form 10-Q for the quarter ended March 31, 2006. You should not rely unduly on these forward-looking statements, which apply only as of the date of this release. We undertake no duty to publicly announce or report revisions to these statements as new information becomes available that may change our expectations.