Transgene Announces First Quarter 2004 Financial Results STRASBOURG, France, May 5 /PRNewswire-FirstCall/ -- Transgene (Nasdaq: TRGNY; Nouveau Marche: FR0005175080) today announced financial results for the first quarter ended March 31, 2004. Transgene had total revenues of euro 0.7 million (US$ 0.9 million) in the first quarter of 2004, compared to euro 0.9 million (US$ 1.1 million) for the same period in 2003. In the first quarter of 2003, Transgene recorded the upfront payment related to the license agreement signed with Merck & Co., Inc. Operating expenses increased by euro 0.2 million (US$ 0.2 million) to euro 6.3 million (US$ 7.7 million) for the first quarter of 2004 compared to euro 6.1 million (US$ 7.5 million) for the first quarter of 2003, due primarily to an increase in clinical trial expenses. Interest and other income was euro 0.2 million (US$ 0.2 million) in the first quarter 2004 compared to euro 0.4 million (US$ 0.5 million) in the same period of 2003, due to lower cash and cash equivalent held. Transgene recorded a net loss of euro 5.4 million (US$ 6.6 million), or euro 0.54 (US$ 0.66) per share, for the first quarter of 2004 compared to a net loss of euro 4.8 million (US$ 5.9 million), or euro 0.48 (US$ 0.59) per share for the same period in 2003. Net cash expenditures were euro 5.3 million (US$ 6.5 million) for the first quarter of 2004, resulting in cash and cash equivalents totaling euro 29.6 million (US$ 36.4 million) at March 31, 2004. Transgene believes that this amount will be sufficient to meet its cash requirements for working capital and capital expenditures through mid-2005. First Quarter Highlights * Transgene released positive interim data in three phase II trials with the MVA-MUC1-IL2 cancer vaccine candidate in patients with lung, kidney and prostate cancer. * Transgene released positive data from the phase II trial with the MVA-HPV-IL2 cancer vaccine candidate in patients with human papilloma virus (HPV)-related disease, demonstrating dose-related effect and safety at the highest dose given. Transgene, based in Strasbourg, France, is a biopharmaceutical company dedicated to the discovery and development of therapeutic vaccines, immunotherapy 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, two in Phase I/II and one that has completed Phase I clinical trial. Transgene's proprietary vector technology platform consists of adenovirus and poxvirus. This press release contains forward-looking statements, including statements regarding Transgene's revenues, capital requirements 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 has a history of operating losses; it may not have sufficient resources or may fail to obtain the capital necessary to complete the research and commercialization of any of its product candidates; Transgene may be unable to conduct its clinical trials as quickly as it has predicted; Transgene's clinical trials may not produce results sufficient to justify further product development; Transgene's product candidates may not demonstrate therapeutic efficacy; Transgene may be unable to obtain regulatory approval for its product candidates; Transgene's patent and proprietary rights may not provide it with any benefit and the patents of others may prevent it from commercializing its products; proceedings to obtain patents and litigation of third party infringement claims are expensive and could limit its patent and proprietary rights; 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." Note: The official financial information of Transgene is stated in Euros. The financial information expressed in US$ is translated solely for the convenience of the reader at euro 1.00 = $ 1.2292, the noon buying rate of the Federal Reserve Bank of New York on March 31, 2004. Condensed Consolidated Balance Sheets (US GAAP) (Amounts in thousands) March 31, December 31, 2004 2004 2003 US$ euro euro (unaudited) (unaudited) ASSETS Cash and cash equivalents 36,404 29,616 34,940 Other current assets 3,059 2,489 2,522 Total current assets 39,463 32,105 37,462 Property, plant and equipment, net 9,626 7,831 8,034 Other assets 256 208 322 Total assets 49,345 40,144 45,818 LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities 6,193 5,038 5,301 Total long-term liabilities 7,325 5,959 5,998 Total shareholders' equity 35,827 29,147 34,519 Total liabilities and shareholders' equity 49,345 40,144 45,818 Condensed Consolidated Statements of Operations US GAAP (Amounts in thousands except share and per share data) Three months ended March 31, 2004 2004 2003 US$ euro euro (Unaudited) Revenues Revenues from collaborative and licensing agreements 803 653 896 Grants received for research and development 0 0 0 Total revenues 803 653 896 Operating expenses Research and development (6,657) (5,416) (5,174) General & administrative (1,063) (865) (919) Restructuring 0 0 0 Total operating expenses (7,721) (6,281) (6,093) Loss from operations (6,918) (5,628) (5,197) Interest and other income, net 252 205 357 Income tax benefit 0 0 0 Net loss (6,666) (5,423) (4,840) Loss per ordinary share (0.66) (0.54) (0.48) Weighted average number of shares outstanding 10,055,760 10,055,760 10,055,760 Loss per ADS (American Depositary Share) (0.22) (0.18) (0.16) Weighted average number of ADSs outstanding 30,167,280 30,167,280 30,167,280 Notes: The official financial information of Transgene is stated in Euros. The financial information expressed in US$ is translated solely for the convenience of the reader at euro 1.00 = $ 1.2292, the noon buying rate of the Federal Reserve Bank of New York on March 31, 2004. The 2003 accounts have been restated to SFAS 123 "Accounting for Stock based Compensation." DATASOURCE: Transgene CONTACT: Philippe Poncet, Chief Financial Officer of Transgene, +33-3-88-27-91-21; or Michael Long of Cohn & Wolfe, +1-212-798-9775; or Estelle Guillot-Tantay, +33-1-53-70-74-93, or Laurence Heilbronn, +33-1-53-70-74-64, both of Image 7, all for Transgene Web site: http://www.transgene.fr/

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