Targeted Genetics Corporation Courtney Self 206.521.7392 TARGETED GENETICS REPORTS THIRD QUARTER 2004 FINANCIAL RESULTS - Clinical Programs Remain on Track; Results Expected in First Half of 2005 - Seattle, WA

Targeted Genetics Corporation

TARGETED GENETICS REPORTS THIRD QUARTER 2004

- Clinical Programs Remain on Track; Results Expected in First Half of 2005 -

Seattle, WA November 4, 2004 Targeted Genetics Corporation (NASDAQ: TGEN)

today announced its financial results for the third quarter of 2004. As

previously announced, the Company will hold a conference call with analysts

today at 10:30 AM EST. The call will be broadcast live over the Internet and

can be accessed, along with replay information, at www.targetedgenetics.com.

Revenue for the third quarter of 2004 was $2.4 million compared to $5.0 million

for the third quarter of 2003. Revenue for the nine months ended September 30,

2004 decreased to $6.5 million from $12.7 million for the same period of 2003.

Revenues in 2004 reflect amounts earned under the Company s AIDS vaccine

collaboration with the International AIDS Vaccine Initiative (IAVI) and the

Columbus Children s Research Institute, which increased in 2004 compared to

2003, and to a lesser degree contract manufacturing revenue earned in the first

quarter of 2004. Revenue for the three and nine months ending September 30,

2004 decreased compared to the same periods in 2003 as a result of revenues

received in 2003 under the Company s former collaborations with Wyeth and

Biogen that ended in 2003.

One of our primary areas of focus in 2004 has been enrolling patients in our

three core clinical programs, and we continue to make significant progress in

this regard, said H. Stewart Parker, President and Chief Executive Officer of

Targeted Genetics. During the third quarter, we completed patient enrollment

in our AIDS vaccine Phase I clinical trial. We continue to enroll patients in

our rheumatoid arthritis Phase I clinical trial, and we also remain on track to

complete enrollment of our Phase II cystic fibrosis clinical trial by the end

of the year. This puts us in a strong position to present data from these

programs in the first half of 2005, on schedule with our goals.

Ms. Parker continued, At the annual North American Cystic Fibrosis Conference,

Targeted Genetics announced results of planned safety reviews from our ongoing

Phase II cystic fibrosis clinical trial. This analysis, conducted by an

independent Data Monitoring Committee, indicated no safety concerns with the

study thus far. These results follow on the heels of a successful interim

analysis for the same study held in June of this year.

For the quarter ended September 30, 2004, the Company reported a net loss of

$2.7 million, or $0.03 per common share, compared to a net loss of $780,000, or

$0.01 per common share for the third quarter of 2003. For the nine months

ended September 30, 2004, the Company reported a net loss of $12.0 million, or

$0.15 per common share, compared to a net loss of $8.5 million, or $0.16 per

common share for the same period in 2003. Higher losses in 2004 primarily

reflect the absence of revenues from Biogen and Wyeth under collaborations that

Operating expenses were $6.1 million for the third quarter of 2004, compared to

$5.5 million for the third quarter of 2003, and were $19.4 million for the nine

months ended September 30, 2004, down from $20.3 million for the same period in

2003. Expenses in 2004 reflect increased research and development expenses,

primarily attributable to the Company s AIDS vaccine and rheumatoid arthritis

programs and higher general and administrative expenses, reflecting increases

in patent issuances and regulatory compliance costs. Total expenses for the

nine months ended September 30, 2004 decreased as a result of a $3.6 million

charge recorded during the comparable period in 2003, primarily related to the

Company s facility in Bothell, Washington.

Operating results for the quarter and nine months ended September 30, 2004 also

reflect a gain of $1.0 million from the sale of the Company s cell therapy

subsidiary, CellExSys, in July 2004. The sale of CellExSys was intended to

provide a solid infrastructure for the purpose of advancing CellExSys

technology through clinical development with the goal of product

commercialization. These technologies were outside of Targeted Genetics core

focus, and the sale of CellExSys was intended to enable the advancement of the

technologies in a manner that provides Targeted Genetics with an ability to

maintain long-term investment potential.

Recent highlights include:

About Targeted Genetics

Targeted Genetics Corporation develops gene-based products for preventing and

treating acquired and inherited diseases. The Company has three clinical

product development programs, targeting cystic fibrosis, AIDS prophylaxis and

rheumatoid arthritis. The Company also has a promising pipeline of product

candidates focused on hemophilia and cancer, and a broad platform of gene

delivery technologies for application in nucleic acid-based drug development.

For more information about Targeted Genetics, visit its website at

www.targetedgenetics.com.

NOTE: This release contains forward-looking statements regarding our projected

financial resources, intellectual property, clinical trials and regulatory

filings and anticipated data from our clinical and preclinical programs. 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. Actual results could differ materially from expectations for a

number of reasons, including failure of our partners to provide funding, our

failure to make progress with our clinical trials, our failure to obtain

positive results from our preclinical programs, our failure to obtain or

maintain regulatory approvals, our failure to maintain or protect our

intellectual property and the other risks 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 quarter ended June 30, 2004. 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 expectation.

TARGETED GENETICS CORPORATION

(in thousands, except per share information)

TARGETED GENETICS CORPORATION