***Certain
                confidential information contained in this document, marked by brackets,
                has been omitted and filed with the Securities and Exchange Commission
                pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
                amended.**




**AMENDMENT
      NO. 3 TO**


**EXCLUSIVE
      SUBLICENSE AGREEMENT**




THIS
      AMENDMENT NO. 3 to the exclusive sublicense agreement (the “Amendment”) is made
      and entered into as of March 9, 2007 by and between Alkermes, Inc., a
      Pennsylvania corporation with its principal offices at 88 Sidney Street,
      Cambridge, MA 02139 (hereinafter referred to as “Alkermes”), and Targeted
      Genetics Corporation, a Washington corporation with its principal offices at
      1100 Olive Way, Suite 100, Seattle, Washington 98101 (hereinafter referred
      to as
“Targeted”).




WHEREAS,
      Alkermes and Targeted entered into an Exclusive Sublicense Agreement dated
      as of
      June 9, 1999, as previously amended on March 12, 2002 and May 29, 2003 (the
      “Agreement”); and




WHEREAS,
      the parties desire to amend the diligence requirements of the Agreement in
      accordance with the terms and conditions hereinafter set forth.




NOW,
      THEREFORE, in consideration of the foregoing premises, the parties hereto agree
      as follows:




1.  Unless
      otherwise provided herein, all defined terms utilized in this Amendment shall
      have the same meanings as set forth in the Agreement.




2.  Section
      2.6 of the Agreement shall be amended and replaced as follows:




At
      any
      time after the date which is the **[*]** anniversary of the Effective Date, Targeted shall, upon receipt of notice from
      Alkermes to such effect, enter into good faith negotiations to enter into a
      sublicense agreement with a proposed sublicensee designated by Alkermes in
      such
      notice, with respect to any of the Additional Fields of Use for which Targeted,
      its Affiliates or Sublicensee(s) have not initiated Phase I Clinical Trials;
      provided that entering into such negotiations is not inconsistent with
      obligations of Targeted to any Sublicensee. Targeted shall consider a request
      from Alkermes to conduct good faith negotiations to enter into a sublicense
      agreement with a proposed sublicensee, prior to the **[*]** anniversary, in fields in which Targeted does not have any ongoing research
      efforts, but shall have no obligation to enter into such sublicense agreement.
      Any sublicense agreement described in this Section 2.6, if entered into, shall
      be subject to Section 2.4 above.




3.  Except
      as
      specifically modified or amended hereby, the Agreement shall remain in full
      force and effect. No oral promise, covenant or representation of any character
      or nature has been made to induce any party to enter into this Amendment. No
      provision of this Amendment may be modified or amended except expressly in
      a
      writing signed by all parties nor shall any term be waived except expressly
      in a
      writing signed by the party charged therewith.




***Confidential
        Treatment Requested**







4.  This
      Amendment may be executed in two or more counterparts, each which shall be
      deemed an original but all of which taken together constitute one and the same
      instrument.




IN
      WITNESS WHEREOF, the parties hereto have signed this Amendment as of the day
      and
      year first above written.





Alkermes,
                Inc.
            Targeted
                Genetics CorporationBy:
                /s/ Michael Landine
              Print
                Name: Michael Landine
              Its:
                Vice President
            By:
                /s/ B.G. Susan Robinson
              Print
                Name: B.G. Susan Robinson
              Its:
                Vice President, Business
                Development





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