Investor and Media Contact: Stacie D. Byars Director, Communications Targeted Genetics Corporation 206.521.7392 TARGETED GENETICS REPORTS FIRST QUARTER 2007 FINANCIAL RESULTS Seattle, WA

Genetics Corporation

GENETICS REPORTS FIRST QUARTER 2007 FINANCIAL RESULTS

2007 - Targeted Genetics Corporation (NASDAQ: TGEN) today announced its

financial results for the first quarter of 2007. As previously announced, the

Company will hold a conference call with analysts at 10:30 AM Eastern Time

today. The call will be broadcast live and can be accessed, along with replay

information, at www.targetedgenetics.com.

first quarter of 2007, the Company reported a net loss of $3.8 million, or

per common share, compared to a net loss of $3.7 million, or $0.42 per common

share, for the first quarter of 2006. Revenue for the first quarter of 2007

$1.7 million, compared to $2.4 million for the same quarter in the prior year.

Revenue consists primarily of development revenue earned under a congestive

heart failure collaboration agreement with Celladon Corporation (Celladon),

subcontract to develop AAV-based HIV/AIDS vaccines and development

revenue from an HIV/AIDS vaccine collaboration with the International AIDS

Vaccine Initiative (IAVI).

continue to make good progress in our lead clinical program for the treatment

inflammatory arthritis and are working towards multiple milestones in 2007.

are on track to complete enrollment on all 120 patients in the Phase I/II trial

and are scheduled to present interim Phase I/II data at both the American

Society of Gene Therapy meeting and the European League Against Rheumatism

Congress in June," said H. Stewart Parker, president and chief executive officer

of Targeted Genetics. "In the first quarter, we completed a private equity

financing netting $8.1 million. When combined with the funding anticipated

product development collaborations and contracts, we believe our operations

sufficiently funded into the fourth quarter of this year. We are currently

evaluating additional sources of financing to extend our runway further and

keep investors informed of our progress."

expenses decreased to $5.4 million for the first quarter of 2007, down from

million the first quarter of 2006. Research and development expenses were

unchanged at $3.7 million for the three months ended March 31, 2007 and 2006.

Costs related to the Company's inflammatory arthritis program increased due to

higher clinical trial activity and a higher number of enrolled subjects. This

cost increase was partially offset by lower costs related to the Company's

HIV/AIDS vaccine collaboration with IAVI as a result of less development

activity as the project has progressed into clinical testing. In addition,

research and preclinical development program expenses decreased due to modestly

lower research and development activity related to the Company's congestive

heart failure collaboration with Celladon. General and administrative expenses

for the first quarter of 2007 increased slightly to $1.6 million, from $1.5

million for the same period in 2006. The modest increase reflects higher patent

charges and compensation expense during the quarter offset by lower audit

cash equivalents were $11.3 million at March 31, 2007, as compared to $6.2

million at December 31, 2006. Total cash requirements for 2007 remain unchanged

compared to 2006 cash requirements and are estimated in the range of $13 to

Quarter 2007 Highlights

Call and Webcast Information

Company will host a conference call reviewing financial results and its product

portfolio, including an update on the development of its inflammatory arthritis

and other clinical and business developments, today beginning at 10:30

a.m. Eastern Time / 7:30 a.m. Pacific Time. You may access the live webcast

the "Events" section found on the Homepage of the Company's website at

www.targetedgenetics.com or via telephone at 800.240.7305 (domestic) or

303.262.2211 (international).

replay will be available for approximately 30 days at www.targetedgenetics.com;

telephone replay will be available following today's call at approximately 12:30

p.m. ET through 11:59 p.m. ET, Saturday, June 9, 2007, by calling 800.405.2236

(domestic) or 303.590.3000 (international); passcode 11089229#.

Genetics Corporation is a biotechnology company committed to the development

innovative targeted molecular therapies for the prevention and treatment of

acquired and inherited diseases with significant unmet medical need. Targeted

Genetics' proprietary Adeno-Associated Virus (AAV) technology platform allows it

to deliver genes that encode proteins to increase gene function or RNAi to

decrease or silence gene function. Targeted Genetics' product development

efforts target inflammatory arthritis, AIDS prophylaxis, congestive heart

failure and Huntington's disease. To learn more about Targeted Genetics, visit

Targeted Genetics' website at

www.targetedgenetics.com.

Harbor Statement under the Private Securities Litigation Reform Act of

release contains forward-looking statements regarding the Company's

achievements, the Company's business strategy and product development, the

Company's liquidity, the Company's ability to meet its ongoing financial

obligations and other statements about the Company's 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 actual

future events or results include, but are not limited to, the Company's ability

to raise capital when needed, the timing, nature and results of the Company's

clinical trials, potential development of alternative technologies or more

effective products by competitors, the Company's ability to obtain and maintain

regulatory or institutional approvals, the Company's ability to maintain its

listing on the NASDAQ Capital Market and the Company's ability to obtain,

maintain and protect its intellectual property, as well as other risk factors

described in "Item 1A. Risk Factors" in the Company's most recent annual report

on Form 10-K for the year ended December 31, 2006 filed with the SEC. The

Company anticipates updating the risk factors in its quarterly report on Form

10-Q for the quarter ended March 31, 2007, to be filed with the SEC. You should

not rely unduly on these forward-looking statements, which apply only as of

date of this release. The Company undertakes no duty to publicly announce or

report revisions to these statements as new information becomes available that

may change the Company's expectations.

GENETICS CORPORATION

thousands, except per share information)

GENETICS CORPORATION