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"SEATTLE, WA, Jul 26, 2007 (MARKET WIRE via COMTEX News Network) -- Targeted Genetics Corporation (NASDAQ: TGEN) provided an update today on its development program of tgAAC94, an investigational therapy for the treatment of inflammatory arthritis. This Phase I/II study is designed to assess the safety and potential efficacy of different doses of tgAAC94 administered directly into affected joints of subjects with inflammatory arthritis. As we previously announced on July 24, the Company and the United States Food and Drug Administration (FDA) stopped the trial as a precautionary measure after the occurrence of a Serious Adverse Event (SAE) in one subject. The individual who experienced this SAE has subsequently died.

"We are deeply saddened by the death of an individual enrolled in our clinical trial. The welfare of the trial participants is always our foremost consideration and concern," said H. Stewart Parker, president and chief executive officer of Targeted Genetics.

Parker adds, "The clinical course that this individual experienced has, to our knowledge, never been seen as a consequence of exposure to adeno-associated viral (AAV) vectors or naturally occurring AAV. We continue to work closely and diligently with the FDA and the study's independent Data Safety Monitoring Board to determine the cause of the SAE as quickly as possible."

Subjects already enrolled in the study will continue to be followed and monitored. Since the trial began in October 2005, 127 subjects have received an initial dose of active drug or placebo, 74 subjects out of the total 127 have received a second dose of active drug, and of those 74 subjects, 55 have received two doses of active drug.

tgAAC94 is an investigational therapy utilizing an adeno-associated virus (AAV) vector to deliver the gene encoding a soluble form of the receptor for TNF-alpha (TNFR: Fc). The TNFR:Fc protein is an inhibitor of tumor necrosis factor-alpha (TNF-alpha), a key mediator of inflammation. In March 2006, the Company received approval from the FDA to amend its protocol for the tgAAC94 clinical trial to include a higher dose group and increase the number of patients. 127 adults have been randomized into three dose levels to receive a single intra-articular injection of either tgAAC94 or placebo into the knee, ankle, wrist, metacarpophalangeal or elbow, followed by an open-label injection of tgAAC94 after 12 to 30 weeks, depending on when arthritis symptoms in the target joint meet criteria for re-injection".

Neil.