VaxGen finalizes commercial rights to anthrax vaccine.

VaxGen, Inc. (Brisbane, CA) has entered into a license agreement with the United States Army Medical Research Institute of Infectious Diseases (USAMRIID) (Fort Detrick, MD) that gives VaxGen exclusive, worldwide rights to develop and commercialize a recombinant anthrax vaccine candidate based on technology developed by USAMRIID. The agreement is subject to certain rights retained by the government.

The license agreement obligates VaxGen to pay USAMRIID an execution fee, patent maintenance fees, anniversary fees, milestones and royalties. It gives VaxGen exclusive license to United States Patent 6,387,665 (Method of Making a Vaccine for Anthrax) and an exclusive field of use license to United States Patent 6,316,006 (Asporagenic B. anthracis Expression System) for the purpose of developing and commercializing a vaccine against anthrax.

VaxGen had been using the technology since early 2002 under a Cooperative Research and Development Agreement and a letter of intent regarding patent rights with USAMRIID. It is the same technology VaxGen is using to develop its recombinant Protective Antigen anthrax vaccine, rPA102, under contract from the National Institute of Allergy and Infectious Diseases (NIAID). VaxGen announced on September 30, 2003 that it had been awarded an $80.3 million NIAID contract to fund many of the steps required for the advanced development of rPA102.

VaxGen's anthrax vaccine candidate is based on the pioneering work of USAMRIID. The vaccine combines the potential safety benefits of a product made through modern recombinant technology with efficacy demonstrated in animal models. The vaccine candidate is composed of an alum adjuvant and the purified protein rPA102, which is designed to induce antibodies that neutralize anthrax toxins. The vaccine candidate cannot cause anthrax infection.

VaxGen is engaged in the development, manufacture and commercialization of biologic products for the prevention and treatment of serious human infectious diseases. The company is developing preventive vaccines against anthrax, smallpox and HIV and is the largest shareholder in Celltrion, Inc., a joint venture formed to build operations for the manufacture of biopharmaceutical products, including VaxGen's vaccine candidates.

USAMRIID is a medical research laboratory for the United States Biological Defense Research Program, and plays a key role in national defense and in infectious disease research. The Institute's mission is to conduct basic and applied research on biological threats resulting in medical solutions -- such as vaccines, drugs and diagnostics -- to protect war-fighters. USAMRIID is a subordinate laboratory of the United States Army Medical Research and Materiel Command.

VaxGen, Inc.

[phone]

www.vaxgen.com