To the Stockholders of OXiGENE, Inc.:

In the face of the most turbulent capital market storm to ever buffet our industry, I am pleased to report that OXiGENE remains firmly focused on advancing and adding value to our VDA drug development programs, building an outstanding management team and drug development capability and advancing strategic corporate and business development objectives.

As a result, OXiGENE today has what we believe are three high-potential VDA drug development programs that are approaching value inflection points in the near term.

ZYBRESTAT® (fosbretabulin) for Oncology

Anaplastic Thyroid Cancer

Our product development pipeline is led by ZYBRESTAT (fosbretabulin), which is being evaluated in a multi-national, Phase 2/3 pivotal registration trial for anaplastic thyroid cancer (ATC) that is currently scheduled to reach a planned interim analysis by mid-year 2010. We refer to this trial as the FACT trial. If successful, we believe this study will provide the basis for marketing approval of ZYBRESTAT as the first approved drug for the treatment of ATC, which is among the most aggressive and lethal cancers.

In addition, we are encouraged by results from initial Phase 1 monotherapy studies with ZYBRESTAT in which patients with other forms of refractory thyroid cancer, such as medullary thyroid cancer, achieved stable disease, in several cases remaining free from disease progression for approximately one to two years. Based on these results, we believe that ZYBRESTAT may have additional therapeutic utility in other forms of refractory thyroid cancer, and over time, we plan to undertake additional clinical studies with ZYBRESTAT in this area. Thyroid cancer incidence is increasing at a relatively rapid rate—according to the National Cancer Institute, it is the cancer with the fastest rising number of new cases in women—and patients who fail standard therapy currently have limited treatment options. We believe refractory thyroid cancers represent an increasing unmet medical need that ZYBRESTAT could potentially address.

Advancing Phase 2 Programs in NSCLC and Ovarian Cancer

Our Phase 2 randomized, controlled study of ZYBRESTAT in non-small cell lung cancer (NSCLC), which we refer to as the FALCON study, is expected to yield interim data in the latter part of 2009, with final data to follow in 2010. If successful, we believe this study will provide support for initiating a subsequent pivotal registration study in NSCLC and further clinical validation for combining VDA and VEGF-pathway inhibiting anti-angiogenic agents. Our Phase 2 study is laying the groundwork for this novel anti-vascular therapeutic strategy as we are combining ZYBRESTAT with the widely used anti-VEGF monoclonal antibody therapeutic, bevacizumab (AVASTIN®).

We are looking forward to reporting results from our ongoing Simon two-stage design Phase 2 trial with ZYBRESTAT in platinum-resistant ovarian cancer at the annual meeting of the American Society of Clinical Oncology (ASCO) taking place in late May 2009. The interim results from this study have attracted significant notice from experts in the ovarian cancer field following a presentation by the study's principal investigator, Professor Gordon Rustin, in October 2008 at the International Gynecological Cancer Society's 12th Biennial meeting. In addition, leading investigators at an ovarian cancer-focused cooperative study group have recommended that we initiate further studies in ovarian cancer with ZYBRESTAT. We look forward to reviewing final data from our Phase 2 trial and determining next steps and studies in ovarian cancer.

OXi4503: A Promising 2nd-generation VDA

Our unique, second-generation, dual-action VDA, OXi4503, is also advancing in the clinic. We anticipate seeing further clinical data from the initial OXi4503 Phase 1 trial in advanced solid tumors later in 2009. In March 2009, we initiated a Phase 1b/2a study in patients with hepatic tumors and anticipate seeing initial data from this study next year.

We are also excited by the potential of OXi4503 in hematological malignancies, including acute myeloid leukemia (AML). We believe that preclinical results to be presented by OXiGENE researchers at the upcoming American Association for Cancer Research (AACR) meeting support evaluation of OXi4503 in hematological malignancies, and we anticipate that additional preclinical data from collaborators will be presented later in the year. We think this is an exciting scientific story that has significant clinical therapeutic implications.

ZYBRESTAT (fosbretabulin) for Ophthalmology.

In parallel with progress in our oncology drug development programs, we have also advanced and remain highly enthusiastic about our ZYBRESTAT ophthalmology program. Our goal is to develop a topical-route formulation of ZYBRESTAT for the treatment of ophthalmological diseases and conditions characterized by abnormal neovascularization. We believe that a safe and effective topical-route anti-vascular therapeutic could have significant advantages over current anti-angiogenic drugs, which must be injected into the eye, in some patients on a chronic monthly basis. The market opportunity for a safe, effective and convenient topical-route drug for neovascular diseases of the eye could be very large.

We have recently completed preclinical studies that further support the feasibility of topical administration with ZYBRESTAT in eye diseases where abnormal vascularization occurs in the back of the eye. At doses we anticipate will be well-tolerated, topical-route ZYBRESTAT penetrated to target tissues (retina and choroid) in the back of the eye and achieved concentrations in these tissues comparable to those achieved with ZYBRESTAT administered systemically at doses that are clinically active in preclinical models of choroidal neovascularization. We believe that this data sets the stage for further clinical development of topical-route ZYBRESTAT in ophthalmology.

In the first half of 2009, we anticipate initiating a trial of intravenous-route ZYBRESTAT in patients with a form of choroidal neovascularization where there is a significant unmet medical need that is not addressed with current therapeutic products, including approved VEGF inhibitors. With clinical data from this trial, and data from our preclinical topical-route ocular penetration studies, we expect to be able to estimate the topical-route dose necessary for therapeutic effect in humans. We believe that as a result of pursuing this drug development strategy we will be able to reduce the risk, cost and time associated with demonstrating human proof-of-concept with topical-route ZYBRESTAT in an ophthalmological indication.

Organizational Strength

In addition to making progress in all of our drug development programs, one of our greatest accomplishments is the outstanding drug development and support team we built in 2008. Our staff includes industry veterans who have proven experience in successfully advancing new drug candidates through all stages of the drug development process and taking them over the finish line to regulatory approval and commercial introduction. For me personally, it is a privilege to have the opportunity to work with such talented, experienced and capable professionals who approach the many challenges inherent in the development of new therapeutic products with enthusiasm, determination, perseverance and innovative thinking that more often than not leads to creative solutions.

Strategic Partnership with Symphony Capital Partners

Building upon the strength of our VDA drug program assets and enhanced organizational strength, in October 2008 we established a $40 million strategic partnership with Symphony Capital on what we believe are attractive terms. In addition to providing significant capital to support all of our drug development programs, we have gained a true partner and collaborator who brings extensive clinical, regulatory, and business expertise that augments our capabilities and supports our programs and our business. I believe that Symphony's confidence in OXiGENE's drug development programs is testimony to the significant inherent value of our pipeline and the capabilities of our team.

Looking forward

In closing, I would like to express appreciation to the employees of OXiGENE for their dedication and commitment, and to our board for their support and guidance. I would especially like to thank our chairman, Joel Citron, and board member Per-Olof Söderberg, for their support, counsel and longstanding service to the company. Joel and Per-Olof have opted not to seek re-election at the upcoming annual meeting on May 28.

On behalf of everyone at OXiGENE, I would sincerely like to thank the dedicated clinical investigators around the world who are working with us to explore the safety and therapeutic potential of ZYBRESTAT and OXi4503, and the patients and families who are bravely fighting diseases and participating in our clinical programs, and with whom we share hope for success.

We believe that the significant progress we made across all our clinical programs in 2008, and the strong internal drug development capability we have established have increased the value and attractiveness of our assets to potential corporate partners. Partnering remains an important strategic initiative for the company as a way to broaden the reach and defray the expenses of our clinical programs. We are actively engaged on the partnering front and continue to explore appropriate ways to finance our operations.

We have entered 2009 strongly positioned for significant progress and value creation. We believe that our drug development and support team is second to none. We have a knowledgeable and highly committed group of advisors who believe in our programs and add meaningful value to our efforts. As an organization, we are operating at a high level of efficiency, fiscal responsibility and quality. We have numerous milestones and value drivers in store for this year, and we are optimistic about our prospects.

We are confident that in our industry, the pathway to value creation is well-conceived drug development strategies and the timely achievement of key drug development program objectives. We're highly focused on delivering on our goals and objectives and look forward to keeping you apprised of our progress.

Thank you for your support.