Richmond, California
October 30, 2002

Sangamo BioSciences, Inc. (Nasdaq: SGMO) today reported financial results for the third quarter ended September 30, 2002. The consolidated net loss, which includes non-cash and restructuring charges, was $20.9 million, or $0.85 per share. In the comparable quarter of 2001, Sangamo reported a consolidated net loss of $17.4 million, or $0.72 per share. Excluding the non-cash and restructuring charges, the consolidated core operating loss in the third quarter of 2002 was $2.5 million, or $0.10 per
share, as compared to a consolidated core operating loss of $3.4 million, or $0.14 per share, in the same period last year.

Revenues for the third quarter of 2002 were $1.0 million as compared to third quarter 2001 revenues of $739,000. The principal components of third quarter 2002 revenues were Universal GeneTools(TM) revenues and revenues from Sangamo's partnerships in the areas of human therapeutics and plant agriculture.

Excluding the non-cash and restructuring charges, total third quarter 2002 operating expenses were $4.2 million as compared to $4.9 million in the prior year period. Research and development expenses were $3.2 million for the three months ended September 30, 2002 as compared to $3.9 million for the third quarter of 2001. General and administrative expenses were $966,000 for the third quarter of 2002 as compared to $987,000 for the same period last year.

Non-cash and restructuring charges were $18.4 million in the third quarter of 2002 comprised of $181,000 in restructuring charges relating to the restructuring at Gendaq, $255,000 of stock-based compensation and patent amortization expense and $18.0 million in goodwill and patents impairment (further described below). Non-cash charges in the third quarter of 2001 were $14.1 million including a $13.1 million charge for in-process research and development expense related to the acquisition of Gendaq in July 2001, and a $1.0 million charge related to stock-based compensation expenses.

Net interest income for the third quarter of 2002 was $295,000 as compared to $783,000 in the comparable period last year. The decrease in interest income was due to lower cash balances and lower interest rates. Other income in the third quarter of 2002 comprises a $367,000 recognized gain on cumulative currency translation resulting from the closure of Sangamo's U.K. facility. At September 30, 2002, the company had cash, cash equivalents, and investments of $52.5 million. Total shares outstanding at September 30, 2002 were 24.6 million.

In July 2001, Sangamo acquired Gendaq Limited ("Gendaq"), a privately held biotechnology company headquartered in London. In accounting for the acquisition, Sangamo recorded goodwill of $15.3 million and patents of $3.4 million. In January of 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Other Intangible Assets," which requires companies to perform an initial impairment test as of the beginning of the fiscal year in which SFAS 142 was adopted and subsequent impairment tests, at least annually, on the
carrying value of goodwill and intangible assets that are not amortized. On adoption of SFAS 142, there were no indicators of impairment present. Sangamo performed its annual impairment test effective September 30, 2002 in accordance with SFAS 142, the results of which indicated that goodwill was impaired. As a result, Sangamo recorded a goodwill impairment charge of $15.3 million representing the entire balance of goodwill. In addition, management reviewed the carrying value of Sangamo's long-lived assets in accordance with Statement of Financial Accounting Standards No. 144 (SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived Assets," and concluded that operational adjustments, including, but not limited to, the post-acquisition review and rationalization of Gendaq, indicated that carrying value of patents were impaired. Management assessed the extent of the impairment and recorded an impairment charge of $2.7 million, representing the entire balance of patents.

Third-Quarter 2002 Highlights
Highlights of the quarter included:

• Sangamo entered into a small molecule screening collaboration with Icagen, Inc. Under this agreement, Sangamo scientists will design and engineer zinc finger DNA binding protein transcription
  factors (ZFP TFs) and use them to generate cell lines in which specific proteins of therapeutic interest are over expressed. Icagen will then use these ZFP TF cell lines in its internal drug discovery programs. The non-exclusive agreement includes an upfront payment, research funding, product development milestones and royalties on product sales.
• Sangamo scientists and collaborators at the University of Alabama were awarded a Federal grant of $1 million to conduct research into the application of Sangamo's ZFP TF technology in the development of a treatment for sickle cell disease.
• Sangamo scientists presented the company's small molecule drug discovery platform at the 8th Annual Conference of the Society for Biomolecular Screening held in The Hague, The Netherlands in September. Data presented included a description of a novel approach to avoid cDNA patents by using Sangamo's ZFP TFs engineered to upregulate the expression of endogenous genes of therapeutic importance for the generation of cell lines for high throughput screening. Scientists also presented a screening system based on the use of ZFPs to generate cell lines that could be used to screen for drugs that affect signaling pathways. One of the advantages of this novel approach is that several different signaling pathway targets can be tested at the same time in the same cell line.
• Sangamo and Avigen, Inc. established a collaborative research agreement to evaluate potential therapies for chronic pain based on Sangamo's ZFP TF technology and Avigen's adeno-associated virus (AAV) gene delivery system. Sangamo's scientists will design and engineer ZFP TFs that down regulate the expression of genes encoding several proteins that are expressed in nerve cell membranes and have been shown to have a role in chronic pain.

Nine-Month Results

For the nine-month period ended September 30, 2002 the net loss was $29.1 million, or $1.19 per share, compared to $21.9 million, or $0.96 per share in the comparable period in 2001. Included in the nine-month period in 2002 net loss were non-cash and restructuring charges totaling $2.1 million and $18.0 million in recognized impairment charges for patents and goodwill. Comparatively, the company reported non-cash charges of $2.5 million and a $13.1 million charge for acquired in-process research and development related to the acquisition of Gendaq in the nine-month period ending September 30, 2001. Excluding these charges, the core operating loss was $9.0 million, or $0.37 per share in the first
nine months of 2002 and $6.3 million, or $0.28 per share in the comparable period of 2001. Revenues for the first nine months of 2002 were $1.9 million as compared to $2.7 million in the same period of 2001. Excluding non-cash and restructuring charges, total operating expenses for the nine months ended September 30, 2002 and 2001 were $12.3 million and $11.6 million, respectively.

Sangamo recognizes revenues in accordance with the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 101, which summarizes the SEC's views on applying generally accepted accounting principles to revenue recognition and specifically addresses revenue recognition for upfront non-refundable fees earned in connection with research collaboration agreements. Upfront fees are required to be recognized over the term of the individual contract rather than at the time of receipt.

Sangamo BioSciences, Inc., of Richmond, CA, is focused on the research and development of novel transcription factors for the regulation of gene expression. The company's most advanced therapeutic development program involves the use of transcription factors for the treatment of cardiovascular disease and peripheral vascular disease. Other therapeutic development programs are focused on cancer, ophthalmic and infectious diseases. Sangamo's proprietary technology enables the engineering of transcription factors known as zinc finger DNA-binding proteins, or ZFPs. By engineering ZFPs so that they can recognize a specific gene, Sangamo has created ZFP transcription factors (ZFP TFs) that can control gene expression and, consequently, cell function. The company is developing ZFP TFs as a fundamentally enabling technology for commercial applications in human therapeutics, pharmaceutical discovery, clinical diagnostics, agriculture and industrial biotechnology. Over twenty leading pharmaceutical and biotechnology companies have utilized ZFP TFs.