Exhibit 99.1

             VaxGen Clarifies Agreement to Develop Smallpox Vaccine

      Brisbane, Calif. - December 19, 2002 - VaxGen, Inc. (Nasdaq: VXGN) today
announced the correction of statements reported in the news media, including
Bloomberg Business News, The New York Times, Reuters, San Jose Mercury News and
other publications that report or suggest VaxGen has commercial rights to market
and sell in the U.S. an attenuated smallpox vaccine which VaxGen is developing
with the Chemo-Sero-Therapeutic Research Institute ("Kaketsuken"). These
statements are incorrect. As the company announced in its press release dated
December 17, 2002, VaxGen has entered into an agreement to initiate clinical
development and pursue regulatory approval from the FDA for the vaccine. VaxGen
is currently negotiating the specific terms of commercial arrangements between
VaxGen and Kaketsuken. Such an agreement for marketing and sale of the vaccine
in the U.S. and internationally is dependant on successfully developing and
receiving approval for sale by regulatory authorities. No definitive agreement
with regard to the commercial terms, including exclusivity or territories, has
been reached with Kaketsuken. Statements made by VaxGen to Bloomberg and in our
conference call of December 17, 2002, with respect to commercial terms were
statements of belief as to the expected outcome of VaxGen's negotiations based
on discussions and proposals with Kaketsuken.


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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 the timing, and announcement of results, of our
clinical trials or other development efforts with respect to LC16-Kaketsuken ,
our beliefs regarding the future success of and ability to commercialize
LC16-Kaketsuken and the results of our negotiations with Kaketsuken with respect
to the marketing and sale of any successfully developed vaccine. 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 VaxGen's Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission on November 14, 2002, under the heading "Risk Factors" and
to VaxGen's Annual Report on Form 10-K, filed with the Securities and Exchange
Commission on April 1, 2002, under the heading "Business" for a more detailed
description of such factors. 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 or to reflect the occurrence of anticipated events.

         Contact:
         Lance Ignon
         Vice President, Corporate Communications
         (650) 624-1016

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