OXiGENE Reports First-Quarter 2006 Operational and Financial Results

OXiGENE Secures Regulatory Clearance in Russia for its OngoingMyopic Macular Degeneration (MMD) Phase II Clinical Trial; PatientScreening To Begin Shortly

Company Highlights First Quarter Accomplishments, Including:

-- Initiation of a Phase II Clinical Trial in the United States in Stage IIIa/IIIb Non Small Cell Lung Cancer (NSCLC)

-- Completion of Patient Enrollment in a Phase II Clinical Trial in Solid Tumors

-- A Newly Granted Patent for Combretastatin A4P (CA4P)

OXiGENE, Inc. (NASDAQ: OXGN, XSSE: OXGN), an emergingpharmaceutical company developing novel small-molecule therapeutics totreat cancer and eye diseases, today reported operational andfinancial results for the first quarter ended March 31, 2006.

"Following what we believe was a very strong conclusion to fiscalyear-end 2005, the first quarter of 2006 was marked with clinicalprogress and operational successes," stated Frederick Driscoll,President and Chief Executive Officer of OXiGENE. "We remain steadfastin our commitment to achieving the requisite steps necessary to beginpatient enrollment later this year in our U.S. and European clinicaltrials in NSCLC, and we continue to concentrate our efforts on drivingpatient enrollment in OXiGENE's core clinical programs in oncology andophthalmology indications."

Financial Results

The Company's net loss for the three months ended March 31, 2006was $3.3 million or $0.12 per share, compared with a net loss of $2.0million, or $0.12 per share, in the first quarter of 2005.

On January 1, 2006, OXiGENE adopted SFAS 123R, "Share-BasedPayment," requiring the expense recognition of the estimated fairvalue of all share-based payments issued to employees. Prior to this,the estimated fair value associated with such awards was not recordedas an expense, but rather was disclosed in a footnote to the Company'sfinancial statements. For the three months ended March 31, 2006,OXiGENE recorded approximately $315,000 of expense associated withshare-based payments as a result of SFAS 123R. In addition, theCompany recorded an expense of $160,000 for restricted stock awardsfor the three months ended March 31, 2006, compared to $0 for thethree months ended March 31, 2005.

At March 31, 2006, OXiGENE had cash, cash equivalents andmarketable securities of approximately $55.4 million, compared withapproximately $58.9 million at December 31, 2005.

Clinical Progress: Ophthalmology

OXiGENE announced today that it has received clearance fromregulatory authorities in Russia to initiate its ongoing Phase IIclinical trial with CA4P for the treatment of Myopic MacularDegeneration. Russia's top five ophthalmology clinics have elected toparticipate in the trial. Regional oversight boards have granted therequired ethics approvals and patient screening is expected to beginshortly.

"With our sights squarely focused on the on-time completion ofpatient enrollment in this indication, we have elected to initiatethis trial in an area of the world where the current, approvedtreatment for MMD is cost prohibitive, making it inaccessible for mostindividuals afflicted," stated Mr. Driscoll. "With these sites readyto commence patient screening, and in combination with the ongoingactivity in centers in the US, Canada and Taiwan, we remain confidentthat we will achieve our target of completing patient enrollment inthe first half of this year."

Mr. Driscoll added, "We believe that clearance to commence thistrial in Russia is an important and strategically significantregulatory achievement for OXiGENE as we contemplate the potentialnext steps in this indication. This clearance may create regulatoryand potential registrational opportunities for CA4P in Russia, as wellas other geographic areas in eastern Europe, not only in thisindication, but also for other indications, such as oncology."

Clinical Progress: Oncology

OXiGENE advanced its lead therapeutic candidate, CA4P, into aPhase II clinical trial in the United States for the treatment ofpatients with Stage IIIa/IIIb NSCLC. The trial, which was cleared toproceed by the United States Food and Drug Administration (FDA) inFebruary 2006, is currently recruiting participation from clinicaltrial sites. OXiGENE expects patient enrollment to begin on schedule,in the third quarter of 2006.

OXiGENE also announced this quarter that patient enrollment is nowcomplete in a Phase II clinical trial of CA4P in imageable, solidtumors. The trial, which is being conducted in the United States underOXiGENE's Investigational New Drug (IND) application on file with theFDA, is designed to evaluate the safety and anti-cancer activity ofthe triple combination of CA4P with the widely-used chemotherapyagents, carboplatin and paclitaxel. The objectives of this trial areto assess the safety of several dose levels of CA4P in combinationwith the two chemotherapeutic agents, gather data on anti-tumoractivity and establish a recommended Phase II/III dose. Additionally,the study is designed to assess, by Magnetic Resonance Imaging (MRI),changes in tumor blood flow, which may provide additional insight intothe biological activity of CA4P. With several patients enrolled inthis trial continuing to receive prolonged therapy, OXiGENEanticipates that top-line data from this trial will be available laterin 2006.

OXiGENE's second clinical candidate, OXi4503, continues to beevaluated in a Phase I dose-escalating safety trial in solid tumors.Since the initiation of this clinical trial, clinical investigatorshave increased the dose of OXi4503 to several times the compound'sinitial dosing level, and have yet to achieve the maximum tolerateddose in humans. Depending on when maximum tolerated dose is reached,OXiGENE anticipates that this trial will be concluded by year's end.

Presentation of Data

OXiGENE anticipates that clinical investigators will present dataat scientific conferences later this year. More specifically, theCompany expects interim clinical trial data to be presented in June2006 at the American Society for Clinical Oncology (ASCO) conferencefrom an ongoing Phase II clinical trial evaluating CA4P as amonotherapy for treatment of advanced Anaplastic Thyroid Cancer. TheCompany also believes that data will be presented from the recentlycompleted Phase II clinical trial combining CA4P with carboplatin andpaclitaxel in imageable, solid tumors at the Conference of the TumorMicroenvironment (TME) in September.

Operational Update

In the first quarter, OXiGENE announced the issuance of U.S.Patent No. 7,018,987 for novel methods of synthesizing its leadtherapeutic candidate, CA4P. This award provides patent coverage forat least 13 years, through 2019. The patent award also providesbroad-based patent protection for additional salt-form compositions ofCA4P. The patent was granted to Arizona State University, whereresearchers discovered and isolated CA4P and other Combretastatincompounds. OXiGENE has exclusive, worldwide rights to themanufacturing and commercialization of products based on selectCombretastatins.

About OXiGENE, Inc.

OXiGENE is an emerging pharmaceutical company developing novelsmall-molecule therapeutics to treat cancer and eye diseases. TheCompany's major focus is the clinical advancement of drug candidatesthat selectively disrupt abnormal blood vessels associated with solidtumor progression and visual impairment. OXiGENE is dedicated toleveraging its intellectual property position and therapeuticdevelopment expertise to bring life saving and enhancing medicines topatients.

Safe Harbor Statement

Certain statements in this news release concerning OXiGENE'sbusiness are considered "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995. Thesestatements include, but are not limited to: the timing and success ofPhase II and Phase III clinical trials of CA4P for NSCLC and a PhaseII clinical trial of CA4P for imageable, solid tumors; OXiGENE'sability to enroll patients in a Phase II clinical trial for myopicmacular degeneration in a timely manner; the potential tumor killingeffect of OXi4503 and its promise as a candidate for advanced cancers;and, the timing, success or advancement of OXiGENE's ongoingpreclinical research and clinical trials. Any or all of theforward-looking statements in this press release may turn out to bewrong. They can be affected by inaccurate assumptions OXiGENE mightmake or by known or unknown risks and uncertainties, including, butnot limited to: the early stage of product development; the ability tosecure necessary patents; uncertainties as to the future success ofongoing and planned clinical trials; and the unproven safety andefficacy of products under development. Consequently, noforward-looking statement can be guaranteed, and actual results mayvary materially. Additional information concerning factors that couldcause actual results to materially differ from those in theforward-looking statements is contained in OXiGENE's reports to theSecurities and Exchange Commission, including OXiGENE's reports onForm 10-Q, 8-K and 10-K. However, OXiGENE undertakes no obligation topublicly update forward-looking statements, whether because of newinformation, future events or otherwise.
OXiGENE, Inc.
Condensed Balance Sheets
(All amounts in 000's)
(Unaudited)
Assets March 31, December 31,
2006 2005
----------- -----------

Cash, cash equivalents and
marketable securities $ 55,391 $ 58,855
Licensing agreement 849 873
Other assets 771 540

----------- -----------
Total assets $ 57,011 $ 60,268
=========== ===========

Liabilities and stockholders' equity

Accounts payable $ 392 $ 693
Accrued expenses 2,954 3,041
Total stockholders' equity 53,665 56,534

----------- -----------
Total liabilities and
stockholders' equity $ 57,011 $ 60,268
=========== ===========

OXiGENE, Inc.
Condensed Statements of Operations
(All amounts in 000's except per share amounts)
(Unaudited)

Three months ended
------------------

March 31,
--------
2006 2005
---- ----


License revenue $ - $ -

Costs and expenses:

Research and development 2,321 1,217
General and administrative 1,621 997
-------------- --------------

Total costs and expenses: 3,942 2,214

Operating loss (3,942) (2,214)

Investment income 612 181
Other (expense) income, net (6) 5


Net loss $ (3,336) $ (2,028)
============== ==============


Basic and diluted net loss per common
share $ (0.12) $ (0.12)


Weighted average number of common
shares outstanding 27,517 17,604