##### 



Investor and Media Contact:
 TARGETED GENETICS REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS
 Seattle, WA
    First Quarter and Recent 2006 Corporate Highlights
 4




---



##### 




    
    Amended clinical protocol of Phase I tgAAC94 trial in patients
with inflammatory arthritis to include a higher dose and 120
patients; study now designated a Phase I/II;
    
    Raised $5 million in common stock offering;
    
    Realigned operations to reduce expenses and concentrate resources
on key product development programs and business development
activities; reduced anticipated cash burn for 2006 by 25% over
2005 results to a range of $13  $16 million;
    
    In collaboration with IAVI, initiated Phase II HIV/AIDS Vaccine
clinical trials at five sites in Uganda and now Zambia; Parallel
trials are currently underway at three sites in South Africa;
    
    Further strengthened intellectual property portfolio for AAV
vector manufacturing processes with the issuance of two additional
patents;
    
    Appointed David J. Poston as Chief Financial Officer.
 Conference call and Webcast information  www.targetedgenetics.com
 Replay Access  www.targetedgenetics.com
 About Targeted Genetics
 Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:  This release contains forward-looking statements regarding the Companys business strategy, the
Companys product development, the Companys liquidity and the Companys ability to meet the
Companys ongoing financial obligations and other statements about the Companys plans, objectives,
intentions and expectations. These unaudited results announced herein may differ from what the
Company eventually files in its Annual Report on Form 10-K for the fiscal year ended December 31,
2006. In particular, the statements regarding the Companys future 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 the
Companys actual 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, and the Companys ability to obtain,
maintain and protect the Companys intellectual property, as well as other risk factors described
in the Section 1A entitled Risk Factors in the Companys Annual Report on Form 10-K for the
period ended December 31, 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 the
Companys expectations.
 5




---



##### 



TARGETED GENETICS CORPORATION
 (in thousands, except per share information)
 Quarter endedMarch 31,Statement of Operations Information:
    
    2006
    
    
    2005(unaudited)
    
    
    (unaudited)Revenue from collaborative agreements
    
    $
    2,430
    
    
    $
    2,000Operating expenses:Research & development
    
    
    3,677
    
    
    
    4,539General & administrative
    
    
    1,481
    
    
    
    1,885Restructure charges
    
    
    1,042
    
    
    
    219Total operating expenses
    
    
    6,200
    
    
    
    6,643Loss from operations
    
    
    (3,770
    )
    
    
    (4,643
    )Investment income
    
    
    151
    
    
    
    100Interest expense
    
    
    (113
    )
    
    
    (129
    )Net loss
    
    $
    (3,732
    )
    
    $
    (4,672
    )Net loss per common share
    
    $
    (0.04
    )
    
    $
    (0.05
    )Shares used in computation of net loss
per common share
    
    
    88,692
    
    
    
    85,628
 6




---



##### 



TARGETED GENETICS CORPORATION  in thousands)
 March 31,
    
    
    December 31,Balance Sheet Information:
    
    2006
    
    
    2005(unaudited)Cash and cash equivalents
    
    $
    15,998
    
    
    $
    14,122Other current assets
    
    
    1,610
    
    
    
    1,063Property and equipment, net
    
    
    1,611
    
    
    
    1,747Other assets
    
    
    31,864
    
    
    
    31,866Total assets
    
    $
    51,083
    
    
    $
    48,798Current liabilities
    
    $
    3,917
    
    
    $
    4,628Long-term obligations and other liabilities
    
    
    15,258
    
    
    
    13,599Shareholders equity
    
    
    31,908
    
    
    
    30,571Total liabilities and shareholders equity
    
    $
    51,083
    
    
    $
    48,798
 7