Targeted Genetics Presents Additional Data from Its Inflammatory Arthritis Program at the 13th Annual Congress of the European Society of Gene Therapy

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Targeted Genetics Presents Additional Data from Its Inflammatory

Arthritis Program at the 13th Annual Congress of the European Society

of Gene Therapy

10/31/2005 8:30:00 AM EST

Targeted Genetics Corporation (Nasdaq:TGEN)

-- Results demonstrate safety and reduction of mean tenderness and

swelling scores of the treated joint; results support continued study

of tgAAC94 in conjunction with TNF-alpha antagonists in inflammatory

arthritis

Targeted Genetics Corporation (Nasdaq:TGEN) presents additional

results from its initial Phase I clinical trial of tgAAC94 in

patients with inflammatory arthritis, in a poster session during the

13th Annual Congress of the European Society of Gene Therapy in

Prague, Czech Republic, October 29-November 1. Barrie J. ,

Ph.D., Executive Vice President and Chief Scientific Officer at

Targeted Genetics, is presenting the data in a poster session at the

conference. This presentation highlights data from the Phase I

clinical study evaluating the safety of intra-articular injection of

two escalating dose levels of tgAAC94 in patients not on concomitant

systemic TNF-alpha antagonist therapy.

The Phase I clinical trial was designed to evaluate safety of a

single dose of tgAAC94 injected locally into the arthritic joint of

subjects suffering from inflammatory arthritis. Enrollment was

limited to those not currently on concomitant TNF-alpha antagonist

therapies. Fifteen subjects who enrolled in the trial were randomized

to receive either one of two escalating dose levels of tgAAC94 (n=11)

or a placebo (n=4). The trial contained a placebo arm at each dose

level, which was included to assess safety and determine whether any

adverse events were attributable to an intra-articular injection

itself, as opposed to an intra-articular injection of tgAAC94.

Preliminary safety data were previously reported by the Company after

all subjects had been evaluated for 4 weeks after injection.

Secondary endpoints were also reported on a subset of subjects that

had completed up to eight weeks of follow-up. In those treated with

tgAAC94 and followed for up to eight weeks, there was an indication

of sustained improvement in signs and symptoms of disease in injected

joints. The trial is closed for enrollment and patients will continue

to be followed for 24 weeks after injection.

All subjects have now been followed for at least 12 weeks after

injection of tgAAC94 or placebo. Data presented at this time point

demonstrate that:

-- Intra-articular injections of tgAAC94 were safe and well-tolerated

at doses up to 1x10(11) DRP per mL of joint volume among patients

currently taking conventional disease modifying anti-rheumatic drugs

(DMARDS).

-- No drug-related serious adverse events have been reported to date

(n=11).

-- Although the study is not powered to show efficacy, in those

treated with a single dose of tgAAC94, continued measurable

improvements in swelling and tenderness were observed (n=11). The

reduction in mean scores appears to be greater at the higher dose,

suggesting a dose to response correlation (n=6). There was some

improvement noted in mean tenderness and swelling scores in subjects

receiving placebo (n=4). These subjects were primarily included for

safety analysis.

-- In the non-injected joints of the tgAAC94 treated groups there

also appears to be a trend in the decrease in mean tenderness and

swelling scores over time, which was not observed in the subjects

receiving placebo.

" I am very encouraged that the results from later time points in the

study continue to demonstrate the safety of injecting tgAAC94

directly into affected joints, and the observed trends in

improvements in tenderness and swelling scores of treated joints

persist, " said . " We believe that the data presented today

support the potential of our experimental therapeutic product,

tgAAC94, to treat patients who suffer with inflammatory arthritis. We

are excited to have recently initiated our next Phase I clinical

study in patients with inflammatory arthritis who have not

experienced an adequate response to anti-TNF-alpha therapy and who

might have ongoing destructive inflammation in select joints. "

About the Follow-on Phase I Clinical Trial of tgAAC94

In October, 2005, Targeted Genetics initiated a follow-on Phase I

clinical trial of tgAAC94 administered directly to affected joints of

patients with inflammatory arthritis who may be receiving concomitant

systemic TNF-alpha antagonist therapy. The study is designed to

enroll up to 40 subjects and will evaluate tgAAC94 at two dose levels

in patients with rheumatoid arthritis, psoriatic arthritis or

ankylosing spondylitis and who may be receiving concomitant

treatments of anti-TNF-alpha therapy. tgAAC94 is being developed

initially as a complementary therapy for patients who may not achieve

adequate relief with existing arthritis treatments or others who have

disease limited to a few joints and therefore, may not need systemic

protein therapies. This targeted, localized approach to treatment is

intended to provide therapeutic benefit that will enable patients to

achieve better control and relief of the signs and symptoms of their

disease.

In the first segment of the double-blind, placebo-controlled study,

subjects will receive a single intra-articular injection of tgAAC94

or placebo in the affected joint and be monitored until swelling in

the target joint reaches pre-determined criteria for re-injection. At

that time, both tgAAC94-injected subjects and those initially

injected with placebo will receive a second injection of tgAAC94 in

the affected joint as part of the open-label segment of the study.

The primary endpoint of the study is to establish the safety of a

higher dose and of repeat administration of tgAAC94 into the joints

of subjects with or without concomitant TNF-alpha inhibitor therapy.

Secondary endpoints include evaluation of pain, swelling, duration of

response, and overall disease activity following intra-articular

administration of tgAAC94 to affected joints, as well as molecular

markers of disease. Additionally, changes in joint inflammation and

joint damage will be assessed in a subset of patients using magnetic

resonance imaging.

About tgAAC94

tgAAC94 uses Targeted Genetics' recombinant AAV (rAAV) vector

technology and contains a gene 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 soluble TNFR by

the patient's joint cells. Localized production of TNFR reduces the

activity of TNF-alpha within the joint, potentially leading to a

decrease in the signs and symptoms of inflammatory disease and

inhibition of joint destruction. Preclinical studies have

demonstrated the efficacy of tgAAC94 in reducing inflammation and

joint damage. Data from preclinical studies conducted in an animal

model of inflammatory arthritis demonstrated that a single injection

of rAAV encoding a soluble form of the rat TNFR:Fc vector into the

ankles of arthritic rats resulted in a significant reduction in ankle

and hind paw swelling as measured by arthritis index scores.

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. Local administration of a DNA sequence encoding a

soluble TNFR potentially may supplement currently used drugs in a

number of inflammatory conditions. In addition, a locally

administered anti-TNF-alpha therapy could also be useful in patients

who have a limited number of joints affected by inflammatory

arthritis that are at a risk for progressive joint damage but who may

not require systemic therapy. The characteristics of AAV vectors make

them well suited for delivery of genetic material to joints and other

organs. 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 and other acquired and inherited diseases with significant

unmet medical need. We use our considerable knowledge and

capabilities in the development and manufacturing of gene delivery

technologies to advance a diverse product development pipeline. Our

product development efforts target inflammatory arthritis, AIDS

prophylaxis, congestive heart failure, Huntington's disease and

hyperlipidemia. To learn more about Targeted Genetics, visit our

website at: www.targetedgenetics.com.

Safe Harbor Statement under the Private Securities Litigation Reform

Act of 1995:

This release contains forward-looking statements regarding our

intellectual property, research programs and clinical trials, our

product development and our potential development platforms including

tgAAC94 and other statements about our plans, objectives, intentions

and expectations. In particular, the statements regarding the

Company's pipeline, ability to maintain patients in the trial for

follow-up and future clinical trial plans are forward-looking

statements. 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,

initial trial results not indicative of results from the completion

of the trial, the timing, nature and results of our clinical trials,

potential development of alternative technologies or more effective

products by competitors, our ability to obtain and maintain

regulatory or institutional approvals, our ability to obtain,

maintain and protect our intellectual property and our ability to

raise capital when needed, as well as other risk factors described in

the section entitled " Factors Affecting Our Operating Results, Our

Business and Our Stock Price " in our Quarterly Report on Form 10-Q

for the period ended June 30, 2005. 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.

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