TRANSGENE’s TG1042 Meets Primary End Point in Step One of Cutaneous B-cell lymphoma Phase II Trial

Strasbourg, France, November 21, 2008 – Transgene (Euronext Paris: FR0005175080) today announced that the primary end point has been met in the first step of the ongoing Phase II trial with its immunotherapy product TG1042 (Ad-IFN?) in patients with relapsing primary cutaneous B-cell lymphoma (CBCL). This clinical study is the first prospective multicenter trial ever initiated in patients suffering from relapsed primary CBCL, an orphan indication.

Data analysis on overall safety demonstrated that TG1042 was well tolerated by patients and the trial’s primary objective, to reach eight responding patients out of 13, has been met.

In the first step of this open label trial, 13 patients who relapsed after radiotherapy or other first line therapies were enrolled in France, Switzerland and the US. They received intra-lesional injections of 5 x 1010 viral particles (vp) of TG1042 per lesion, three times a month, for up to four months.

The data shows that, out of the 12 patients evaluable for response, 10 patients presented an objective response after injection with TG1042. Of these 10 patients, five showed a complete response and five presented a partial response. The two other patients were considered stable under treatment. The most frequent adverse effects were moderate injection-site reactions and transient fever. One patient left the study before the first evaluation due to an episode of fever after injections.

As planned in the study protocol, an independent Data and Safety Monitoring Board (DSMB) was held on November 13, 2008. The DSMB performed a complete review of the available results and concluded that the efficacy and safety data of step one of the trial were encouraging, justifying continued clinical development.

Looking forward, Philippe Archinard stated: “In light of these promising clinical results, our product development strategy for TG1042 has evolved to a more ambitious one. We now plan to optimize the product’s potential not just in cutaneous lymphoma, but also in other more frequent dermatological malignancies. As a consequence, we are halting sole development of TG1042 and are seeking a pharmaceutical partner to undertake clinical development in a number of onco-dermatology indications. Today, we are convinced that a partnering strategy will fully optimize our adenovirus franchise, thereby creating more value for the company.”

About TG1042

TG1042 is an antigen-independent immunotherapy product for the local production of the interferon gamma cytokine. It consists of a suspension of an adenoviral vector containing the human interferon gamma gene.

Clinical results of a previous Phase I/II clinical trial performed by Transgene had shown that five out of five patients with CBCL responded favourably to treatment with TG1042.

About cutaneous B-cell lymphomas (CBCL)

Primary cutaneous lymphomas are the second most common type of extranodal non-Hodgkin’s lymphoma and comprise a heterogeneous group of lymphoproliferative disorders characterized by clonal accumulation of T-lymphocytes (CTCL) or B-lymphocytes (CBCL) homing to the skin. The annual incidence of cutaneous lymphomas is estimated at about 1 in 100 000 individuals in the US.

Primary cutaneous B-cell lymphomas (CBCL) are much less common than primary cutaneous T-cell lymphomas (CTCL) and represent approximately 20-25% of all primary cutaneous lymphomas. Its clinical presentation often consists of a single or small number of lesions restricted to a local area of skin. First line standard treatment consists of radiotherapy and no drug is registered for the treatment of relapsing CBCL.

About Transgene

Transgene is a France-based biopharmaceutical company dedicated to the development of therapeutic vaccines and immunotherapeutic products in oncology and infectious diseases. The company has three compounds in Phase II trials (TG4001/R3484, TG4010 and TG1042) and one compound in Phase I studies (TG4040). Transgene has concluded a strategic partnership agreement with Roche for the development of its TG4001/R3484 therapeutic vaccine to treat HPV-mediated diseases. Transgene has bio-manufacturing capacities for viral-based vectors and technologies available for out-licensing. Additional information about Transgene is available on the Internet at www.transgene.fr.

Cautionary note regarding forward-looking statements

This press release contains forward-looking statements referring to the planned development and clinical testing of Transgene’s vaccine candidates. However, successful product development and clinical testing depend on a variety of factors, including the timing and success of future patient enrolment and the risk of unanticipated adverse patient reactions. Results from future studies with more data may show less favourable outcomes than prior studies, and there is no certainty that product candidates will ever demonstrate adequate therapeutic efficacy or achieve regulatory approval or commercial use For further information on the risks and uncertainties involved in the testing of Transgene’s product candidates, and in connection generally with the development of its products, see Transgene’s Document de référence on file with the French Autorité des marchés financiers on its website at http://www.amf-france.organd Transgene’s website at http://www.transgene.fr.

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