Targeted Genetics Corporation Receives Nasdaq Delisting Notice

SEATTLE, WA--(Marketwire - April 14, 2009) - Targeted Genetics Corporation (NASDAQ: TGEN) today announced that, on April 8, 2009, it received a notification letter from the Nasdaq Stock Market indicating that the Company no longer complies with Nasdaq Marketplace Rule 4310(c)(3), which requires companies listed on the Nasdaq Capital Market to maintain a minimum of $2.5 million in shareholders’ equity. Under the Nasdaq Marketplace Rules, the Company has until April 23, 2009 to submit a plan to regain compliance. If the Company submits a plan to regain compliance and the Nasdaq staff accepts the plan, the Company may be provided with up to 105 calendar days from April 8, 2009 to demonstrate compliance. The Company has not yet determined what action it will take in response to this continued listing issue and is currently evaluating potential alternatives in the context of its business plan.

The Company reported a shareholders’ deficit of $3.8 million in its annual report on Form 10-K for the fiscal year ended December 31, 2008. This negative net worth results from the Company’s restructure charges totaling $7.6 million at December 31, 2008, which relate to obligations under a facility lease, in combination with the goodwill impairment charge of $7.9 million recorded for the fourth quarter of 2008.

As previously announced, the Company is also in non-compliance with the $1.00 minimum bid price required for continued listing on the Nasdaq Capital Market under Marketplace Rule 4310(c)(4). The Nasdaq Stock Market has suspended enforcement of this requirement until July 20, 2009, at which time the Company will have five business days to regain compliance. If, on July 27, 2009, the Company meets all of the Nasdaq Capital Market’s initial listing criteria other than the bid price criterion, the Company will be afforded an additional 180 calendar days to regain compliance.

If the Company is not in compliance with a listing standard at the end of the applicable compliance period, the Nasdaq staff will provide written notification that the Company’s securities will be delisted. The Company may appeal the Nasdaq staff’s determination to a listing qualifications panel, but there can be no assurance that the Company would be successful if it were to appeal.

About Targeted Genetics Corporation

Targeted Genetics Corporation is a biotechnology company committed to the development of innovative therapies for the prevention and treatment of diseases with significant unmet medical need. A key area of focus for Targeted Genetics is applying its proprietary Adeno-Associated Virus (AAV) technology platform to deliver genetic constructs to increase gene function or silence gene function. Targeted Genetics’ lead product development efforts target ocular and neurological indications, two therapeutic areas where AAV delivery may have competitive advantages over other therapeutic modalities. 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, including statements regarding the Company’s listing on the Nasdaq Capital Market and the process for regaining compliance with the standards for continued listing. 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 and cause actual results to differ materially from those expected or implied by the forward-looking statements. Factors that could affect actual future events or results include, but are not limited to, the risk that, if the Company pursues a plan to regain compliance with the standards for continued listing on the Nasdaq Capital Market, the Company will not be provided with additional time to regain compliance, the risk that the Company will not be able to regain compliance with the standards for continued listing on the Nasdaq Capital Market and its securities will be delisted and the risk factors described in the section entitled “Risk Factors” in Part I, Item 1A of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2008, filed with the Securities and Exchange Commission on March 31, 2009. You should not rely unduly on these forward-looking statements, which apply only as of the 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.