Press Release Source: VaxGen, Inc. - FDA Maintains Clinical Hold on VaxGen's Anthrax Vaccine Trial

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Press Release Source: VaxGen, Inc. FDA Maintains Clinical Hold on

VaxGen's Anthrax Vaccine Trial

Monday December 18, 8:30 am ET

http://biz./prnews/061218/sfm048.html?.v=73

BRISBANE, Calif., Dec. 18 /PRNewswire-FirstCall/ -- VaxGen, Inc. (Pink Sheets:

VXGN.PK - News) announced today that the Food and Drug Administration's Center

for Biologics Evaluation and Research (CBER) has informed the company that it is

maintaining its clinical hold on the company's second Phase II trial for its

investigational anthrax vaccine. The hold is due to CBER's continued concerns

about the vaccine candidate's stability.

The Department of Health and Human Services (HHS), under its contract with

VaxGen to purchase 75 million doses of its recombinant anthrax vaccine, rPA102,

had imposed a deadline of today, December 18, for the company to initiate its

next clinical trial for the vaccine candidate. The Office of Public Health

Emergency Preparedness (OPHEP), the office within HHS that administers the

contract, has yet to inform VaxGen what direction it intends to take with

respect to the contract. At a recent meeting with CBER, which was also

attended by OPHEP representatives, VaxGen presented its expanded number of

methods for measuring the vaccine's potency and stability, and its progress

toward further enhancing the stability of the vaccine's formulation. Based on

that exchange, VaxGen believes that CBER wishes to engage the company in

additional, more detailed technical discussions about the analytical methods and

formulation development. However, the clinical hold will remain in

place until sufficient vaccine stability has been demonstrated to resume

clinical testing. About VaxGen VaxGen, Inc. is a biopharmaceutical

company engaged in the development, manufacture and commercialization of

biologic products for the prevention and treatment of human infectious diseases,

including anthrax and smallpox. VaxGen has been awarded an $877.5 million

contract by HHS to provide 75 million doses of a modern anthrax vaccine for

civilian biodefense. Based in Brisbane, Calif., VaxGen operates a wholly owned

manufacturing facility in California and owns a minority interest in Celltrion,

Inc., a company in the Republic of Korea established to provide contract

manufacturing to the global pharmaceutical industry. For more information,

please visit the company's web site at www.vaxgen.com . Note: This press

release contains " forward-looking statements " within the meaning of the federal

securities laws. These forward-looking statements include, without

limitation, statements regarding VaxGen's ability to address FDA/CBER's

concerns over vaccine stability, to resolve the clinical hold imposed by

FDA/CBER and to perform under its contract with HHS. These statements are

subject to risks and uncertainties that could cause actual results and events to

differ materially from those anticipated. Reference should be made to Item 8.01

of the company's Current Report on Form 8-K filed by VaxGen on February 16, 2006

under the heading " Risk Factors " for a more detailed description of such risks.

Readers are cautioned not to place undue reliance on these forward-looking

statements that speak only as of the date of this release. VaxGen undertakes no

obligation to update publicly any forward-looking statements to reflect new

information, events, or circumstances after the date of this release except as

required by law.

Randi J. Airola, © 517-819-5926

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