Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On August 10, 2009, Targeted Genetics Corporation (the "Company") received a staff determination letter from the Nasdaq Stock Market informing the Company that it has failed to regain compliance with Nasdaq Listing Rule 5550(a)(2), which requires companies listed on the Nasdaq Capital Market to maintain a minimum $1.00 bid price per share. The letter stated that the Company's non-compliance with the bid price requirement serves as an additional basis for delisting the Company's common stock from the Nasdaq Capital Market, in addition ot the Company's non-compliance with the shareholders' equity requirement of Listing Rule 5550(b) previously reported by the Company.

As previously reported, on July 23, 2009 the Nasdaq staff notified the Company of its determination to delist the Company's securities on the grounds of the Company's non-compliance with the shareholders' equity requirement. The Company appealed the Nasdaq staff's determination and was granted a hearing before a Nasdaq hearing panel, and the delisting has been stayed until the hearing is completed and the panel has issued a written decision. The Nasdaq hearing panel will consider the Company's non-compliance with both the shareholders' equity requirement and the bid price requirement in rendering its decision regarding the Company's continued listing on the Nasdaq Capital Market. A written decision is expected within 35 days from the hearing date. There can be no assurance that, following the hearing, the panel will grant the Company's request for continued listing on the Nasdaq Capital Market, or that the Company will be able to regain or maintain compliance with the Nasdaq listing requirements.

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