SEATTLE, WA today announced the publication of preclinical data characterizing the novel use of Adeno-Associated Viral (AAV) vectors to deliver small interfering RNA (siRNA) for the treatment of Huntington's disease. The goal of this research is to assess the use of interfering RNA to silence the mutant huntingtin gene and thus, reduce the level of the defective protein.

siRNAs are a powerful way to silence genes in mammalian cells. siRNAs generally function by causing messenger RNAs (mRNAs) for certain genes to be cleaved and thus prevent protein synthesis. Similarly, a second class of small RNAs, microRNAs (miRNAs), also regulate gene expression. These small RNAs represent a new therapeutic approach to many diseases, such as Huntington's disease, caused by dominant genetic mutations. Delivery of siRNAs to cells as oligonucleotides is inefficient because they are taken up into cells poorly. In addition, these oligonucleotide RNAs bind to certain receptors on the cell and invoke deleterious non-specific immune signals and inflammation. This delivery problem for siRNA can be solved by expressing interfering RNA (short hairpin RNA or shRNA) from vectors, such as AAV, that can be delivered efficiently and specifically to the cell nucleus. However, this approach may still lead to non-specific toxicity with some RNAs.

This publication describes the development of a generally applicable approach to addressing the toxicity problem. The study, titled, "Artificial miRNAs mitigate shRNA-mediated toxicity in the brain: implications for the therapeutic development of RNA interference," by McBride, Boudreau, et.al., is now available online, and will appear in the April 15th issue of Proceedings of the National Academy of Sciences of the United States of America (PNAS).

"We have developed AAV-RNAi vectors that efficiently abrogate disease in mouse models of Huntington's disease. However, many shRNAs are inefficiently processed and can cause non-specific toxicity due to metabolic or off-target effects. The team has developed an approach to overcome these hurdles by embedding the expressed shRNA in an artificial miRNA," stated Barrie J. Carter, Ph.D., executive vice president and chief scientific officer of Targeted Genetics. "These new AAV-RNAi vectors thus retain the efficiency of delivery and biologic efficacy while having a greatly enhanced safety profile. We believe this new design concept is of great importance and general applicability to the entire RNA therapeutic field."

"These findings represent a significant advance in our preclinical evaluation of AAV-RNAi vectors and expands our understanding of use of artificial miRNA expression systems to mitigate shRNA-mediated toxicity in the brain, the implications of which are crucial to the development of RNAi for both basic biological and other therapeutic applications," stated Beverly L. Davidson, Ph.D., Roy J. Carver professor of Internal Medicine and vice chair of basic research in the Department of Internal Medicine at the University of Iowa. "The long-term expression capabilities of AAV vectors allow for infrequent dosing, which is highly desirable when administering a therapeutic directly to the brain. These preclinical data show that the mammalian brain can tolerate at least a 50% reduction of the Huntingtin gene expression for at least 4 months. Even more exciting is the additional ongoing research we are conducting that shows expression over prolonged periods of a year or more."

About Targeted Genetics and University of Iowa and Collaborative Effort

Scientists from Targeted Genetics and the University of Iowa are working together to develop AAV-RNAi vectors that efficiently abrogate disease in mouse models of Huntington's disease. In 2005, Targeted Genetics formed a collaboration to develop HD therapeutics using an AAV delivered RNAi approach to target the HD gene with Sirna Therapeutics, which included the work by University of Iowa researchers. In April, 2008, Targeted Genetics Corporation announced that it has acquired full exclusive rights to its preclinical Huntington's disease (HD) program from Sirna Therapeutics, a wholly owned subsidiary of Merck & Co., Inc. As part of this acquisition, Targeted Genetics obtained a licensing agreement with the University of Iowa that covers certain IP developed by Dr. Beverly Davidson's laboratory related to RNA interference (RNAi) including Adeno-Associated Virus (AAV) expressed RNAi.

Dr. Beverly Davidson at the University of Iowa has published preclinical data demonstrating that the delivery of siRNA to the brain using an AAV vector efficiently inhibited gene expression in an animal model of neurodegenerative disease (Nature Medicine, 2004); and also has conducted studies in which AAV vectors were used to express siRNAs and were directly injected into the brains of mice with HD. Results of these studies demonstrate nearly normal movement in the mice and significant improvements in characteristic neurological damage compared to untreated mice. The study also demonstrated that levels of toxic HD protein in siRNA-treated mice were reduced to 40 percent of normal levels (PNAS, 2005).

About Huntington's Disease

HD is a devastating, inherited, neurodegenerative disorder that results from a mutation in the gene that codes for the huntingtin protein. HD generally shows onset in mid-life and, according to the Huntington's Disease Society of America, one of out of every 10,000 Americans has HD and an additional 200,000 are at risk of onset. The disease-causing gene produces a defective huntingtin protein that is toxic to certain brain cells and the subsequent neuronal damage leads to the movement disorders, psychiatric disturbances and cognitive decline that characterize this disease.

About Targeted Genetics

Targeted Genetics Corporation is a biotechnology company committed to the development of innovative targeted molecular therapies for the prevention and treatment of acquired and inherited diseases with significant unmet medical need. Targeted Genetics' proprietary Adeno-Associated Virus (AAV) technology platform allows it to deliver genes that encode proteins to increase gene function or RNAi to decrease or silence gene function. Targeted Genetics' product development efforts target inflammatory arthritis, AIDS prophylaxis, congestive heart failure and Huntington's disease. To learn more about Targeted Genetics, visit Targeted Genetics' 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 Company's liquidity and financial resources, its ability to fund ongoing and future operations, its business strategy and product development, including statements regarding the data collected in the HD program, the timing, continuance or results of trials related to the HD program, the potential impact of the HD program on our results of operations and other statements about the Company's 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 actual future events or results include, but are not limited to, payments anticipated by the Company under product development collaborations and contracts, the Company's actual expenses, the Company's ability to raise capital when needed, the timing, nature and results of the Company's clinical trials, potential development of alternative technologies or more effective products by competitors, the Company's ability to obtain and maintain regulatory or institutional approvals, the Company's ability to maintain its listing on the NASDAQ Capital Market and the Company's ability to obtain, maintain and protect its intellectual property, as well as other risk factors described in its filings with the Securities and Exchange Commission (SEC), including in "Item 1A. Risk Factors" in the Company's most recent annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC. 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.

Investor and Media Contact: Stacie D. Byars WeissComm Partners 415.946.1072 Email Contact Carolyn Wang WeissComm Partners 415.946.1065 Email Contact

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