Transgene's Adeno-Interferon Gamma Product Candidate Receives Orphan Drug Designation in Europe.

Transgene (Nasdaq: TRGNY; Nouveau Marche: FR0005175080) announced today that the European Commission has approved the designation of Transgene's immunotherapy product candidate Adeno-Interferon gamma (Ad-IFN gamma) as an "Orphan Medicinal Product" for the treatment of cutaneous T-cell lymphoma (CTCL), following the positive opinion of the Committee for Orphan Medicinal Products (COMP) of the European Agency for the Evaluation of Medicinal Products (EMEA).

The Committee for Orphan Medicinal Products of the EMEA found that Transgene's Ad-IFN gamma may be of significant benefit to patients affected by CTCL, particularly with respect to improved efficacy based on preliminary clinical results.

The European orphan drug designation promotes development of drugs to treat rare diseases or life-threatening conditions by providing marketing exclusivity to approved orphan products for ten years following regulatory approval, as well as protocol assistance by the EMEA for the development of the product.

"This European orphan drug designation may allow patient access to an improved therapy within an accelerated timeframe," stated Patrick Squiban, M.D., Transgene Vice-President for Medical and Regulatory Affairs. "It will give us the opportunity to interact with the regulatory authorities for the preparation of an optimized clinical development plan."

"This designation is very encouraging for supporting further development of our Ad-IFN gamma product as well as for validating our gene-based immunotherapy approach," added Jean-Francois Carmier, Chief Executive Officer of Transgene.

About Cutaneous T-Cell Lymphoma (CTCL):

CTCL encompasses a spectrum of diseases defined by a malignant clonal proliferation of cutaneous lymphocytes. With a prevalence of six patients per 100,000 people in European countries, CTCL ranks second to melanoma as the most frequent dermatologic life-threatening diseases. CTCL is characterized by its heterogeneity of clinical presentations, prognoses and therapeutic options.

Due to their heterogeneity, there are no universally applicable guidelines available for the treatment of cutaneous T-Cell lymphomas. In contrast with the excellent chance of cure at early stage, advanced disease is marked by burdensome, debilating tumors and a fatal outcome despite the use of very aggressive and often poorly-tolerated therapy.

About Ad-IFN gamma:

Ad-IFN gamma uses an improved version of Transgene's adenovirus vector carrying the interferon gamma gene.

Transgene initiated a Phase I clinical trial as a standard dose-escalation in nine patients with advanced primary cutaneous T-cell lymphomas or multilesional cutaneous B-cell lymphomas, which trial has been extended as a Phase I/II trial targeting a larger patient population in different cutaneous lymphomas subtypes, with the possibility for multi-tumor injections.

The results from 13 patients were presented on June 7, 2003 at the 6th Annual Meeting of the American Society of Gene Therapy in Washington D.C. and on July 14, 2003 at the Annual Meeting of the American Association for Cancer Research in Washington, D.C. These results demonstrated:

  *  good tolerance of Ad-IFN gamma up to the highest dose level (3.10(11)
     viral particles);

  *  clinical responses observed both locally and at distant sites, leading
     to an overall response rate of 60% (four complete and two partial
     responses out of ten evaluable patients);

  *  gene transfer and expression of the IFN gamma gene on both protein and
     messenger RNA levels;

  *  up-regulation of the genes involved in immune response.

  About Transgene:

Transgene, based in Strasbourg, France, is a biopharmaceutical company dedicated to the discovery and development of therapeutic vaccines, gene therapy products, and delivery technologies for the treatment of diseases for which there is no cure or adequate treatment at present, with a focus on the treatment of cancer. Transgene has five products in clinical development, two of which are in Phase II clinical trials and three of which have completed Phase I clinical trials. Transgene's proprietary vector technology platform consists of multiple vector families with an emphasis on adenovirus, poxvirus and non-viral vectors.

This press release contains forward-looking statements, including statements regarding the efficiency and safety of and potential market for Transgene's product candidates and prospects. Statements that are not historical facts are based on Transgene's current expectations, beliefs, estimates, forecasts and assumptions. The statements contained in this release are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Accordingly, actual outcomes and results may differ materially from what is expressed in those forward-looking statements. Important factors which may affect Transgene's future operating results include the following: Transgene's product candidates may not demonstrate therapeutic efficacy after initial promising results, Transgene may be unable to obtain regulatory approval for its product candidates, Transgene may be unable to conduct its clinical trials as quickly as it has predicted, Transgene may not have sufficient resources to complete the research and commercialization of any of its product candidates, competitors may develop technologies or products superior to Transgene's technologies or products, and other important factors described in Transgene's Annual Report on Form 20-F for the year ended December 31, 2002 filed with the U.S. Securities and Exchange Commission, including those factors described in the section entitled "Risk Factors."

CONTACT: Patrick Squiban, M.D., V.P., Medical & Regulatory Affairs of Transgene, [phone]; or Julio Cantre of Cohn & Wolfe, [phone]; or Marie-Carole de Groc of Euro RSCG C&O, [phone]