( BW)(WA-TARGETED-GENETICS)(TGEN) Targeted Genetics Presents
Additional Data from Its Inflammatory Arthritis Program at the 13th
Annual Congress of the European Society of Gene Therapy

    Business Editors/Biotech Writers
    The 13th Annual Congress of the European Society of Gene Therapy 

    SEATTLE & PRAGUE, Czech Republic--(BUSINESS WIRE)--Oct. 31,
2005--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. Carter, 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
Carter. "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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    CONTACT: Targeted Genetics Corporation
             Stacie D. Byars, 206-521-7392