[March 25, 2014]

Transgene Successfully Completes Rights Issue and Private Placement

Regulatory News:

Not for distribution in or into Canada, Japan or Australia.
This communication is not offering material and is for information purposes only.

Transgene SA (Paris:TNG) (Euronext Paris: FR0005175080), a French biopharmaceutical company focused on discovering, developing and manufacturing targeted immunotherapies for the treatment of cancer and infectious diseases, announces that it has raised a total of €65.5 million via a two-step capital increase. The first step of this capital increase was the completion of a rights issue, launched on February 28, 2014, which raised total gross proceeds of €45.5 million through the issuance of 4,553,551 new ordinary shares. The second step carried out on March 24, 2014 was a private placement of €20 million through the issuance of 2 million additional shares.

Rights issue is a major success:

All 4,553,551 new shares were subscribed by the shareholders and purchasers of the preferential subscription rights. The exercise of preferential subscription rights by irrevocable entitlement (souscription à titre irréductible) amounted to 4,378,903 shares. All remaining shares were subscribed on a reducible basis (souscription à titre réductible).

The Institut Mérieux, through its subsidiary TSGH, fully subscribed to its pro rata stake of the rights offering, through the subscription of 2,482,574 shares for a total amount of €24,825,740.

Private placement largely oversubscribed:

Based on demand by a large number of qualified investors, partly outside of France, the Company carried out on March 24, 2014 a placement of 2 million additional shares at a price of €10.00 per share, raising €20 million.

This private placement was carried out in accordance with article L. 225-136 of the French Commercial Code and Resolution 12 of the Shareholders Meeting of June 19, 2013 and was only opened to investors within the meaning of article L. 411-2 II of the French Monetary and Financial Code ("qualified investors and/or small groups of investors acting on their own account"), in France and outside of France, including in the United States.

"These two financing transactions are major successes and indicate investor confidence in Transgene, which is on the brink of an important transformation, with the coming launch of two clinical studies intended for registration," stated Philippe Archinard, Chairman and Chief Executive Officer of Transgene. He added: "We would like to thank our shareholders, who have fully supported the Company in the context of the rights issue, as well as our new investors, most of whom are located outside of France, who gave us their trust. We are committed to lead Transgene to be one of the first European biotechnology companies with an integrated model, including research, development, production, marketing and sales. The confidence of our shareholders is essential to achieve this goal."

"With nearly €100 million in cash, we now have the means to take the next steps in Transgene's corporate development and implement our strategy with confidence," said Stéphane Boissel, Executive Vice President and Chief Financial Officer of Transgene. "Should Novartis exercise its option on TG4010, our cash runway would be extended to at least the end of 2016."

Settlement:

Th settlement and listing on Euronext Paris of the new ordinary shares to be issued under the rights issue and of the additional shares issued under the private placement are expected to take place on March 27, 2014. The 6,553,551 new ordinary shares represent 20.55% of Transgene's issued share capital prior to the capital increase and 17.05% post capital increase.

After the settlement, Institut Mérieux's stake in the Company, through its subsidiary TSGH, shall represent 51.95% of the share capital and 64.63% of the voting rights.

The new shares will be fungible with existing shares and will be traded on Euronext Paris (ISIN code FR0005175080). Transgene's ordinary share capital will amount to 87,964,029.39 euros, composed of 38,444,106 shares with a par value of 2.2881 euros.

About Transgene:

Transgene (NYSE-Euronext: TNG), a member of the Institut Mérieux Group, is a publicly traded French biopharmaceutical company focused on discovering, developing and manufacturing targeted immunotherapies for the treatment of cancer and infectious diseases. Transgene's programs utilize well-tolerated viruses with the goal of indirectly or directly killing infected or cancerous cells. The Company's four clinical-stage programs are: TG4010 for non-small cell lung cancer; Pexa-Vec for liver cancer; TG4001 for oropharyngeal cancer (under a collaboration agreement with the EORTC) and TG4040 for chronic Hepatitis C. Transgene has concluded corporate strategic agreements for the development of two of its immunotherapy products: an exclusive option agreement with Novartis for the development and commercialization of TG4010 and an in-licensing agreement with U.S.-based Jennerex, Inc. for the development and commercialization of Pexa-Vec in certain territories. The Company also has several programs in research and pre-clinical development that are based on its core viral vector technology.

Transgene is based in Strasbourg, France, and has additional operations in Lyon, as well as satellite offices in China and the U.S.

Disclaimer:

A prospectus approved by the AMF under visa No 14-062 on February 27, 2014 comprised of the Document de Référence filed with the AMF under number D.13-0315 on April 9, 2013 and its update filed with the AMF under number D.13-0315-A01 on February 27, 2014 and the note d'opération (including a summary of the prospectus), may be obtained free of charge from Transgene, as well as on the websites of Transgene (www.transgene.fr) and the AMF (http://www.amf-france.org/).

For a discussion of risks and uncertainties which could cause the Company's actual results, financial condition, performance or achievements to differ from forward-looking statements, please refer to the Risk Factors section of the Company's Document de Référence and its update filed with the AMF, which are available on the AMF website (http://www.amf-france.org/) or on Transgene's website (www.transgene.fr).

This press release and the information contained herein do not constitute an offer to sell or a solicitation of an offer to buy or subscribe to shares in Transgene in any country.

With respect to the member states of the European Economic Area which have implemented the Directive 2003/71/EC of the European Parliament and the Council of November 4, 2003 (as amended, the "Prospectus Directive"), no action has been undertaken or will be undertaken to make an offer to the public of the securities referred to herein requiring the publication of a prospectus in any relevant member state. As a result, the securities may not and will not be offered in any relevant member state except in accordance with the exemptions set forth in Article 3(2) of the Prospectus Directive, if they have been implemented in that relevant member state, or under any other circumstances which do not require the publication by Transgene of a prospectus pursuant to Article 3 of the Prospectus Directive and/or to applicable regulations of that relevant member state.

This press release is not an offer of securities for sale in the United States or any other jurisdiction. Securities may not be sold or offered in the United States unless they are registered or are exempt from the registration requirements of the U.S. Securities Act of 1933, as amended. Transgene does not intend to register any portion of this offering in the United States or to conduct a public offering of securities in the United States.

In the United Kingdom, this press release is only being distributed to, and is only directed at, persons that (i) are "investment professionals" (falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). In the United Kingdom, this press release is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this press release relates is available only to relevant persons and will be engaged in only with relevant persons.

It may be unlawful to distribute this press release in certain jurisdictions. This press release is not for distribution in Canada, Japan or Australia.

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