SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                           _________________________

                                   FORM 8-K

                                CURRENT REPORT

                    Pursuant to Section 13 or 15(d) of the

                        Securities Exchange Act of 1934

                               December 15, 1999
                         -----------------------------
                               (Date of Report)

                         TARGETED GENETICS CORPORATION
              --------------------------------------------------
              (Exact Name of Registrant as Specified in Charter)
                                                                 
          Washington                        000-23930                        91-1549568
- -------------------------------      -----------------------            --------------------
 (State or Other Jurisdiction         (Commission File No.)                 (IRS Employer
      of Incorporation)                                                  Identification No.)



             1100 Olive Way, Suite 100, Seattle, Washington 98101
- --------------------------------------------------------------------------------
         (Address of Principal Executive Offices, including Zip Code)

                                (206) 623-7612
- --------------------------------------------------------------------------------
             (Registrant's Telephone Number, Including Area Code)

                                     None
- --------------------------------------------------------------------------------
         (Former Name or Former Address, if Changed Since Last Report)


Item 5.   Other Events

     On December 15, 1999, we revised the factors included under "Risk Factors"
in Amendment No. 3 to Targeted Genetics' Registration Statement on Form S-3
(file no. 333-86509) and in Post-Effective Amendment No. 2 to Targeted Genetics'
Registration Statement on Form S-3 (file no. 333-51625) to comply with the SEC's
plain English requirements. So that investors do not have to rely on the risk
factors included in our most recent annual report, we have included the full
text of the revised risk factors in this current report. These factors, among
others, could cause actual results to differ materially from those contained in
forward-looking statements made by us or our management in our periodic reports
or elsewhere from time to time.

                                  RISK FACTORS

If we are unable to secure financing on terms acceptable to us for future
capital needs, we will be unable to fund continuing operations.

  Developing and commercializing our potential products will require
substantial additional financial resources. Because we cannot expect internally
generated cash flow to fund development and commercialization of our products,
we will look to outside sources for funding. These sources could involve one or
more of the following types of transactions:

  .  technology partnerships,

  .  technology sales,

  .  technology licenses,

  .  issuing debt or

  .  equity arrangements.

  If we cannot obtain additional financing when needed or on acceptable terms,
we will be unable to fund continuing operations. In addition, if we raise
additional funds by issuing equity securities, our shareholders will likely
experience significant dilution of their ownership interest. We estimate that
we have sufficient funding from on-hand balances, expected revenue and other
contractually committed funding to meet our expected needs until at least the
second quarter of 2001.

We have a history of losses and may never become profitable, which could result
in a decline in the value of our common stock and a loss of your investment.

  We have generated small amounts of revenue and incurred significant net
losses since we began business. As of September 30, 1999, we have incurred
losses totaling $100.4 million. We expect to continue to incur substantial
additional losses in the future, due primarily to the following factors:

  .  all of our products are in a testing phase and have not received
     regulatory approval, and

  .  we will likely spend significant amounts on operating expenses.

  We may never generate profits, and if we do become profitable, we may be
unable to sustain or increase profitability on a quarterly or annual basis. As
a result, the trading price of our stock could decline and you could lose all
or part of your investment.

If our clinical trials are unsuccessful or we do not receive regulatory
approval for our products, which are in the early stage of product development,
we may be unable to generate sufficient revenues to maintain our business.

  We do not yet have products in the commercial markets. All of our potential
products, including tgAAV-CF, our cystic fibrosis product candidate, and tgDCC-
E1A, our cancer product candidate, are in research and development or in early-
stage clinical trials. We cannot apply for regulatory approval of our potential
products until we have performed additional research and development and
testing. Our clinical trials may not demonstrate the safety and efficacy of our
potential products, and we may encounter unacceptable side effects or other
problems in the clinical trials. Should this occur, we may have to delay or
discontinue development of the potential product that causes the problem. After
a successful clinical trial, we cannot market products in the United States
until we receive regulatory approval. If we are unable to gain regulatory
approval of our products after successful clinical trials and then
commercialize and sell those products, we may be unable to introduce and sell a
quantity of products sufficient to maintain our business or secure additional
financing to fund our operations.




Delays or unexpected costs in obtaining approval of our products or complying
with governmental regulatory requirements could decrease our ability to
generate revenue and make funding our operations more difficult.

  The regulatory process in the gene and cell therapy industry is costly, time-
consuming and subject to unpredictable delays. Accordingly, we cannot predict
with any certainty how long it will take or how much it will cost to obtain
regulatory approvals for clinical trials or for manufacturing or marketing our
potential products. Delays in bringing a potential product to market or
unexpected costs in obtaining regulatory approval could decrease our ability to
generate revenue and make it more difficult to obtain additional financing
necessary to fund our operations. In addition, all manufacturing operations are
subject on an ongoing basis to the current Good Manufacturing Practices
requirement of the Food and Drug Administration. While we currently anticipate
that we will be able to manufacture product that meets this requirement, we may
be unable to attain or maintain compliance with current or future Good
Manufacturing Practices requirements. If we discover previously unknown
problems after we receive regulatory approval of a potential product or fail to
comply with applicable regulatory requirements, we may suffer restrictions on
our ability to market the product, including mandatory withdrawal of the
product from the market. This, or an unexpected increase in the cost of
compliance, could decrease our ability to generate revenue.

Failure to recruit patients could delay or prevent clinical trials of our
potential products, which could cause a delay or inability to introduce
products to market and a resulting decrease in our ability to generate revenue.

  Identifying and qualifying patients to participate in testing our potential
products is critical to our near-term success. The timing of our clinical
trials depends on the speed at which we can recruit patients to participate in
testing our products. Delays in recruiting or enrolling patients to test our
products could result in increased costs, delays in advancing our product
development, delays in proving the usefulness of our technology or termination
of the clinical trials altogether. If we are unable to timely introduce
potential products to market after successful clinical trials, our ability to
generate revenue may decrease and we may be unable to secure additional
financing.

We may be unable to adequately protect our proprietary rights, which may limit
our ability to compete effectively.

  Our success depends in part on our ability to protect our proprietary rights.
We own or have licenses to patents on a number of genes, processes, practices
and techniques critical to our present and potential products. If we fail to
obtain and maintain patent protection for our technology, our competitors may
market competing products that threaten our market position. The failure of our
licensors to obtain and maintain patent protection for technology they license
to us could similarly harm our business. Patent positions in the field of
biotechnology are highly uncertain and involve complex legal, scientific and
factual questions. Our patent applications may not result in issued patents.
Even if we secure a patent, the patent may not afford adequate protection
against our competitors.

  We also rely on unpatented proprietary technology. Because this technology
does not benefit from the protection of patents, we may be unable to
meaningfully protect this proprietary technology from unauthorized use or
misappropriation by a third party.

Intellectual property claims and litigation could subject us to significant
liability for damages and invalidation of our proprietary rights.

  As the biotechnology industry expands, the risk increases that other
companies may claim that our processes and potential products infringe on their
patents. Defending these claims would be costly and would likely divert
management's attention and resources away from our operations. If we infringe
on another company's patented processes or technology, we may have to pay
damages or obtain a license in order to

                                       2



continue manufacturing or marketing the affected product or using the affected
process. We may be unable to obtain a license on acceptable terms.

  Our potential tgAAV-CF product uses our proprietary AAV delivery technology to
deliver a normal copy of a CFTR gene to which we have rights under a
nonexclusive license. The United States Patent and Trademark Office has declared
an interference proceeding to determine the priority of invention of this gene.
While we do not expect to directly participate in the CFTR gene interference
proceedings, we have an interest in the outcome. If the eventual outcome does
not favor our licensor, we would have to secure a license to the CFTR gene from
the prevailing party to continue with development of tgAAV-CF. The costs of
licensing the CFTR gene could be substantial and could include royalties greater
than those we currently pay. If we cannot secure this license on acceptable
terms and on a timely basis, we may be unable to develop or deliver our
potential tgAAV-CF product, which could result in decreased ability to generate
revenue and difficulty in obtaining additional financing to fund our operations.

If we or our business partners are unable to successfully market and distribute
our products, our business will fail.

  We have no experience in sales and marketing. To market any products that may
result from our development programs, we will need to develop marketing and
sales capabilities, either on our own or with others. We intend to enter into
collaborations with corporate partners to utilize the mature marketing and
distribution capabilities of our partners. While we believe that these
collaborative partners will be motivated to market and distribute our potential
products, our current and potential future partners may not commit sufficient
resources to commercializing our technology on a timely basis. Furthermore, our
present or future collaborators may pursue the development or marketing of
competing products. If our business partners do not successfully market and
distribute our products and we are unable to develop sufficient marketing and
distribution capabilities on our own, our business will fail.

The intense competition and rapid technological change in our market may result
in pricing pressures and failure of our products to achieve market acceptance.

  We presently face competition from other companies developing gene and cell
therapy technologies and from companies using more traditional approaches to
treating human diseases. Most of our competitors have substantially more
experience and financial and infrastructure resources than we do in the
following areas:

  .  research and development,

  .  clinical trials,

  .  obtaining Food and Drug Administration and other regulatory approvals,

  .  manufacturing, and

  .  marketing and distribution.

Consequently, our competitors may be able to commercialize new products more
rapidly than we do, or manufacture and market competitive products more
successfully than we do. This could result in pricing pressures or the failure
of our products to achieve market acceptance.

  In addition, gene and cell therapy are new and rapidly evolving fields and
are expected to continue to undergo significant and rapid technological change.
Rapid technological development by our competitors could result in our actual
and proposed technologies, products or processes losing market share or
becoming obsolete.

If we do not attract and retain qualified personnel and scientific
collaborators, we will be unable to successfully and timely develop our
potential products and may be unable to generate sufficient revenue to maintain
our business.

  Our future success depends in part on our ability to attract and retain key
employees. We have programs in place to retain personnel, including programs to
create a positive work environment and competitive compensation packages.
Because competition for employees in our field is intense, however, we may be
unable to retain our existing personnel or attract additional qualified
employees. If we experience turnover or difficulties recruiting new employees,
our research and development could be delayed and we could experience
difficulties in generating sufficient revenue to maintain our business.

  Our success also depends on the continued availability of outside scientific
collaborators to perform research and develop processes to advance and augment
our internal research efforts. Competition for collaborators in gene and cell
therapy is intense. If we were unsuccessful in recruiting or maintaining our
relationships with scientific collaborators, we could experience delays in our
research and development or loss of access to important enabling technology.

Our limited manufacturing capability may limit our ability to successfully
introduce our potential products.

  We currently do not have the capacity to manufacture large-scale clinical or
commercial quantities of our potential products. To do so, we will need to
expand our current facilities and staff or supplement them through the use of
contract providers. We may be unable to obtain or develop the necessary
manufacturing capabilities. If we cannot, we will be unable to introduce
sufficient product to sustain our business.

Our use of hazardous materials to develop our products exposes us to liability
risks and the risk of regulatory limitation of our use of these materials,
either of which could reduce our ability to generate revenue and make it more
difficult to fund our operations.

  Our research and development activities involve the controlled use of
hazardous materials. Although we believe that our safety procedures for handling
and disposing of these materials comply with applicable laws and regulations, we
cannot eliminate the risk of accidental contamination or injury from hazardous
materials. If a hazardous material accident occurred, we would be liable for any
resulting damages. This liability could exceed our financial resources.
Additionally, hazardous materials are subject to regulatory oversight. Accidents
unrelated to our operations could cause federal, state or local regulatory
agencies to restrict our access to hazardous materials needed in our research
and development efforts. If our access to these materials is limited, we could
experience delays in our research and development programs. Paying damages or
experiencing delays caused by restricted access could reduce our ability to
generate revenues and make it more difficult to fund our operations.

The costs of product liability claims and product recalls could exceed the
amount of our insurance, which could significantly harm our results of
operations or our reputation and result in a decline in the value of our stock.

  Our business activities expose us to the risk of liability claims or product
recalls and any adverse publicity that might result from a liability claim
against us. We currently have only limited amounts of product liability
insurance, and the amounts of claims against us may exceed our insurance
coverage. Product liability insurance is expensive and may not continue to be
available on acceptable terms. A product liability claim not covered by
insurance or in excess of our insurance or a product recall could significantly
harm our financial results or our reputation. Either of these could result in a
decrease in our stock price, and you could lose all or part of your investment.


                                       3




                                   SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                       TARGETED GENETICS CORPORATION


Dated:  December 17, 1999              By:  /s/ H. Stewart Parker
                                          --------------------------------------
                                               H. Stewart Parker
                                          President and Chief Executive Officer