TGEN Tecogen Inc

Targeted Genetics Announces Sale of CellExSys to Chromos SEATTLE, July 28 /PRNewswire-FirstCall/ -- Targeted Genetics Corporation (NASDAQ:TGEN) today announced completion of the sale of its majority owned subsidiary, CellExSys, Inc., to Chromos Molecular Systems, Inc. (TSX: CHR). This acquisition provides Chromos with new cell therapy technology and a strong preclinical pipeline to support product development to treat infectious diseases and cancers. The sale also provides Targeted Genetics and other shareholders of CellExSys with long-term investment in the potential success of CellExSys' product development efforts. Under the terms of the acquisition, announced June 22, 2004, Chromos has issued to CellExSys shareholders 1,500,000 common shares of Chromos and a secured convertible debenture in principal amount of approximately $2,500,000. The debenture will be payable by Chromos at its option in either cash or by the issuance of common shares of Chromos. In combination with the shares of Chromos stock issued at closing, if the debenture is fully paid in common shares of Chromos, the shareholders of CellExSys would receive up to 3.5 million shares. These shares represent approximately 17.2 percent of the issued and outstanding shares of Chromos as of the closing date. Shareholders of CellExSys will receive a pro rata distribution of the acquisition price based on their equity interest in CellExSys. At closing, Targeted Genetics owned approximately 80 percent of CellExSys. "The close of this agreement marks an exciting milestone for CellExSys. With the leadership support of Chromos, we believe that this combined company will provide a solid infrastructure for the purpose of advancing CellExSys' technology through clinical development with the goal of product commercialization," said H. Stewart Parker, president and chief executive officer of Targeted Genetics. "While outside of Targeted Genetics' core focus, we believe in the potential of CellExSys technology and its broad-based applicability to treatment of disease, and we are pleased to maintain a long-term investment in this potential." About Targeted Genetics Targeted Genetics Corporation develops gene-based products for preventing and treating acquired and inherited diseases. The Company has three clinical product development programs, targeting cystic fibrosis, AIDS prophylaxis and rheumatoid arthritis. The Company also has a promising pipeline of product candidates focused on hemophilia and cancer and a broad platform of gene delivery technologies. For more information about Targeted Genetics visit its website at http://www.targetedgenetics.com/. The securities issued to CellExSys' stockholders have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States unless an exemption from registration is available. Note: This press release contains forward-looking statements concerning the merger transaction, the anticipated benefits of the transaction to Targeted Genetics, initiatives proposed by Chromos for CellExSys, expectations as to CellExSys' position in the market for infectious disease and cancer treatments and Chromos' anticipated cash position. Forward-looking statements are not statements of historical fact, and actual events or results may differ materially from those anticipated by Targeted and described in the forward-looking statements, as the result of a variety of risks, uncertainties and other factors; including, without limitation, the risk that one or more of the parties may not perform its obligations under its agreement with CellExSys and its shareholders, including Targeted Genetics; that planned business initiatives could be delayed or cancelled or could prove ineffective; that Chromos and CellExSys may not realize the expected benefits to their combined businesses from the acquisition due to competition, introduction by competitors of new products or technologies or pricing or initiatives, and the possible emergence of post acquisition integration problems with Chromos or that Chromos may have unanticipated costs and expenses or cost overruns that could cause its cash position to be lower than anticipated as well as the other risks identified in Targeted Genetics' periodic reports available at http://www.sec.gov/ and Chromos' periodic reports available at http://www.sedar.com/. Neither Targeted Genetics nor Chromos assumes any obligation to update forward-looking statements to reflect future events. DATASOURCE: Targeted Genetics Corporation CONTACT: Courtney Self of Targeted Genetics Corporation, +1-206-521-7392 Web site: http://www.targetedgenetics.com/

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