TGEND Targeted Genetics Corp

Targeted Genetics Corporation (Nasdaq:TGEND) reported preliminary efficacy data from its ongoing Phase I/II trial of tgAAC94 in patients with inflammatory arthritis yesterday at the American Society of Gene Therapy (ASGT) 2006 Annual Meeting. Alison Heald, M.D., Senior Director, Clinical Affairs at Targeted Genetics presented preliminary efficacy data from the first two cohorts of the Phase I/II trials in a talk, titled "Clinical Studies of Intra-Articular Administration of a Recombinant Adeno-Associated Vector Contain a TNF-alpha Antagonist Gene in Inflammatory Arthritis," in an oral abstract session on bone and joint disease. tgAAC94 utilizes an adeno-associated virus (AAV) vector to deliver the gene encoding a soluble form of the receptor for tumor necrosis factor-alpha (TNFR:Fc) directly to affected joints. TNFR:Fc protein is a potent inhibitor of tumor necrosis factor alpha (TNF-alpha), a key mediator of inflammation. In the ongoing Phase I/II study, approximately 120 adults are being randomized into three dose groups to receive a single intra-articular injection of either tgAAC94 or placebo, followed by an open-label injection of tgAAC94 after 12 to 30 weeks, depending on when swelling in the target joint meets criteria for re-injection. Entry criteria for this study are similar to that of the Phase I trial, except that concurrent TNF-alpha antagonist use is permitted in the Phase I/II trial. To date, approximately 40 subjects have received an injection of blinded study drug or placebo. Preliminary data indicate tgAAC94 is safe and well-tolerated at doses of up to 5x10(12) particles (DRP) /mL in subjects with and without systemic TNF-alpha antagonists. Data from the first cohort of subjects treated with doses of 1x10(11) (DRP)/mL of joint volume demonstrate a trend toward sustained improvement in tenderness and swelling in treated joints, compared to placebo. Additionally, fewer patients receiving tgAAC94 had symptoms requiring re-injection at the 12-week time point, compared with patients in the placebo arm. Although the numbers are small, the data also suggest a trend toward greater responses to tgAAC94 in patients taking systemic TNF-alpha antagonist therapy compared with patients not on these therapies. "The past few years have brought significant advances in the treatment of inflammatory arthritis, however many patients still experience significant unmet medical need despite treatment with systemic agents," said H. Stewart Parker, president and chief executive officer of Targeted Genetics. "Although still at an early stage, the results of the trial so far suggest that local administration of tgAAC94 directly to affected joints may induce a treatment effect and we believe lay the groundwork to commercialization of the first gene therapeutic for rheumatoid arthritis. We are very encouraged by these interim results, and plan to report data on additional subjects in November 2006." About tgAAC94 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. The product candidate uses Targeted Genetics' recombinant AAV (rAAV) vector technology to deliver a DNA sequence 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 within joint cells, reducing the activity of TNF-alpha within the joint and, potentially, leading to a decrease in the signs and symptoms of inflammatory disease and inhibition of joint destruction. 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, HIV/AIDS and other acquired and inherited diseases with significant unmet medical need. Targeted Genetics uses its considerable knowledge and capabilities in the development and manufacturing of gene delivery technologies to advance a diverse product development pipeline. Its product development efforts target inflammatory arthritis, HIV/AIDS, congestive heart failure, Huntington's disease, and hyperlipidemia. To learn more about Targeted Genetics, visit its 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 data to be collected in this trial, the establishment or determination of efficacy endpoints from the data collected in the trial, the timely and complete accrual of patients in the trial and our ability to commercialize tgAAC94, our expected use of these proceeds and other statements about our 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 our actual results include, but are not limited to, our ability to obtain, maintain and protect our intellectual property, our ability to raise capital when needed, our ability to recruit and enroll suitable trial participants, the timing, nature and results of research and clinical trials, potential development of alternative technologies or more effective processes by competitors, and, our ability to obtain and maintain regulatory or institutional approvals, as well as other risk factors described in described in Item 1A. Risk Factors in our report on Form 10-K for the year ended December 31, 2005 and updated in Item 1A. Risk Factors in our Form 10-Q for the quarter ended March 31, 2006. 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.