Genetic Therapy, Inc. Announces Issuance of Broad Gene Therapy Patent.

GAITHERSBURG, Md.--(BUSINESS WIRE)--March 21, 1995--Genetic Therapy, Inc.'s (Nasdaq: GTII) long-term collaboration with the National Institutes of Health (NIH) has resulted in the issuance today of a broad patent (U.S. pat. no. 5,399,346) resulting from pioneering work in the field of gene therapy. This patent, which is exclusively licensed to Genetic Therapy (GTI), claims any method of ex vivo (outside the body) human gene therapy involving the administration of human cells that have been genetically engineered in vitro to express a therapeutic protein.

The patented technology, known as ex vivo gene therapy, provides a mechanism for introducing human cells that have been genetically altered ex vivo into a patient to combat disease. The introduction of a gene expressing a therapeutic protein can help a patient fight an acquired disease or correct a genetic defect by introducing the correct version of the defective or missing gene into the human body.

Ex vivo gene therapy was developed by a team of researchers under the direction of W. French Anderson, M.D. the first inventor named on the patent. The team included Michael Blaese, M.D. and Steven Rosenberg, M.D., the co-inventors named on the patent. The research was conducted cooperatively between the NIH and GTI, a company founded to advance the science of gene therapy. A Cooperative Research and Development Agreement (CRADA) between the NIH and GTI formalized that relationship, and allowed the NIH to grant the company an exclusive license to commercialize the technology in recognition of its contribution to the research.

"We are delighted by the success of our collaboration with the National Institutes of Health. The clinical studies based on this technology that have taken place hold the promise of saving lives," said M. James Barrett, Ph.D., chairman and chief executive officer of Genetic Therapy, Inc. "The joint development of this technology, which resulted in the issuance of the patent, represents an important success for the transfer of technology between government and industry."

"In accordance with our agreement with the NIH, GTI intends to develop a responsible plan to introduce the technology to the commercial market, incorporating both sound business practices and the needs of the public for potentially life-saving gene therapies," Barrett added.

The Promise of Gene Therapy

Gene therapy was first attempted in 1990, when a clinical trial was initiated under the direction of Dr. Anderson. In this clinical trial, Anderson's team successfully treated 4-year-old Ashanthi DeSilva for a rare blood disorder known as adenosine deaminase deficiency, or ADA deficiency, a disease which renders the body unable to fight even mild forms of infection. ADA deficiency is a form of the disease suffered by David, the "boy in the bubble," who died in 1984 in Houston at age 12. ADA patients like Ashanthi have an incorrect version of the ADA gene.

Anderson's team extracted lymphocytes (white blood cells) from Ashanthi, which were then placed in a culture containing a viral "vector," or delivery system, carrying the correct version of the human ADA gene. The vectors transferred a correct version of the ADA gene to her cells. Cells with the beneficial new gene were returned to Ashanthi, where they began producing the ADA her body needed. A second ADA patient, 9-year-old Cynthia Cutshall, was later treated successfully during the same clinical trials. Both girls now lead relatively normal and healthy lives.

The newly issued patent is based on the collaboration leading up to those trials and on the trials themselves. It covers the process of introducing into patients human cells which have been genetically engineered in vitro by inserting a gene expressing a therapeutic protein. The technique is the foundation upon which much of today's clinical research in gene therapy is based.

"We're really just standing on the threshold of where gene therapy can take modern medicine," said Dr. Anderson, who now heads a research laboratory at the University of Southern California's Norris Cancer Center. "My career and the past 30 years of my life have been devoted to gene therapy. This technology will be key to combating many diseases which were previously untreatable."

Although the potential applications of gene therapy are still being investigated, researchers are currently studying therapies for a broad range of disorders, including several types of cancer; genetic disorders such as hemophilia, cystic fibrosis and Gaucher disease; and viral infections such as hepatitis B and the human immunodeficiency virus, which causes AIDS.

Currently, there are more than 100 approved gene therapy clinical trials relating to diseases including AIDS, genetic disorders and several types of cancer. The majority of these utilize ex vivo gene therapy technology.

Cooperative Research and Development Agreements

In 1988, GTI and the NIH signed a Cooperative Research and Development Agreement, pursuant to the Federal Technology Transfer Act of 1986. The Act was designed to encourage public-private research partnerships, and to provide a mechanism for private companies to take jointly-developed technologies from the laboratory to the marketplace.

Under the agreement, GTI supported Dr. Anderson's research at the NIH with important intellectual contributions and laboratory resources at a time when many scientists believed that gene therapy was impossible or highly improbable.

As intended by the CRADA provisions, in return for its contributions, the Company was granted an exclusive license to the patent. In the spirit of its agreement with the NIH, GTI will strive to introduce the technology to the commercial market as soon as is practicable, consistent with sound business and medical practices and judgment. GTI has already begun discussing potential relationships with pharmaceutical and biotechnology firms interested in bringing new therapies to the public using ex vivo gene therapy technology.

While this represents an important development for GTI, there is no assurance that this patent will not be challenged and, if challenged, that the Company will prevail.

About Genetic Therapy, Inc.

Genetic Therapy, Inc. was founded in May 1986 to develop and commercialize technology based on its gene therapy research collaboration with the NIH, and has been a pioneering company in gene therapy research and development.

A world leader in the development of products for human gene therapy, Genetic Therapy, Inc. is dedicated to bringing to market gene therapy techniques for the treatment of life-threatening genetic and acquired diseases. GTI has pioneered the use of gene therapy in humans and helped, through ongoing interaction with the regulatory agencies, establish the regulatory standard in the field.

In addition to its partnership role in the NIH's ex vivo gene therapy research, Genetic Therapy, Inc. has other gene therapy technology and products under development for treatment of such severe diseases as cancer, cystic fibrosis, Gaucher disease, hemophilia and AIDS.

CONTACT: Genetic Therapy, Inc.

Marc R. Schneebaum, 301/208-2415

Chief Financial Officer

301/208-2415

or

Burns McClellan, Inc.

Lilian S. Stern (Investor inquiries)

Karen L. Bergman or Lesley J. Wright (Media inquiries)

212/505-1919