Exhibit 99.1

            VaxGen Awarded $80.3 Million NIAID Contract for Advanced
                    Development of Anthrax Vaccine Candidate

      BRISBANE, Calif. - September 30, 2003 - VaxGen, Inc. (Nasdaq: VXGN)
announced today that it has been awarded an $80.3 million contract from the
National Institute of Allergy and Infectious Diseases (NIAID) for the advanced
development of its anthrax vaccine candidate, rPA102. The 3-year contract is
intended to fund many of the steps required for commercial licensure of the
vaccine candidate and could pave the way for a significantly larger contract for
a national stockpile of anthrax vaccine.

      "We are pleased to have been awarded a contract that plays such an
important role in our nation's defense," said Lance K. Gordon, Ph.D., VaxGen's
chief executive officer. "We believe we were awarded this contract on the
strengths of the pre-clinical and clinical results of rPA102 and the company's
performance under the NIAID anthrax contract we received last year. We look
forward to continuing what has been a very productive partnership between the
public and private sectors."

      The new NIAID contract is intended to fund animal studies, Phase II
clinical trials, the scale up and validation of the vaccine manufacturing
process and production of 3 million doses of finished product. The vaccine's
efficacy will be determined through animal testing, based on the U.S. Food and
Drug Administration's two-animal rule model, instead of large Phase III studies
in humans.

      VaxGen plans to manufacture the protein antigen used in rPA102 in its
manufacturing facility in South San Francisco, Calif. VaxGen believes the
facility, as currently equipped, has the capacity to produce approximately 100
million doses of rPA102 bulk vaccine per year. Filling, packaging and labeling
of the vaccine will be done at contract manufacturing sites.

      The contract has been funded in whole with Federal funds from the National
Institute of Allergy and Infectious Diseases, National Institutes of Health,
under Contract No. N01-AI-30053.

      Project BioShield

      Whereas the most recent NIAID contract is meant to fund continued
development of a recombinant Protective Antigen (rPA) anthrax vaccine, pending
legislation known as Project BioShield is meant to procure a large stockpile of
rPA anthrax vaccine, as well as other biodefense countermeasures. Project
BioShield is pending approval by the U.S. Senate after having been approved by
the U.S. House of Representatives in July by a vote of 421-to-2.

      If Project BioShield is signed into law this year, the U.S. Department of
Health and Human Services could begin purchasing an rPA anthrax vaccine as early
as next year, while the product is still considered an Investigational New Drug
and before it is approved for commercial


use. Such a purchase would be used to build a stockpile of the vaccine for
emergency use, with additional purchases made when and if the FDA licenses the
vaccine for commercial use.

      In its current form, Project BioShield earmarks $1.4 billion for the
purchase, maintenance and replenishment of 60 million doses of an rPA anthrax
vaccine between 2004 and 2013. According to the Congressional Budget Office, the
federal government intends to spend $700 million to purchase the 60-million dose
stockpile of rPA anthrax vaccine and another $700 million to maintain and
replenish the stockpile.

      "If Project BioShield is signed into law, VaxGen intends to bid
aggressively for an rPA anthrax vaccine contract," Gordon said. "As we've
developed the rPA vaccine, we've enhanced VaxGen's capabilities and our capacity
to manufacture and supply the large quantities of anthrax vaccine that are being
considered under the pending BioShield legislation."

      About rPA102

      VaxGen began accelerated development of rPA102 in the fall of 2002 under a
previous contract from the NIAID. That contract funded the manufacture of 2,000
doses, animal challenge studies and a Phase I clinical trial. The company's
Phase I trial was launched at four leading U.S. medical centers in June and is
now fully enrolled with all participants having received their immunizations.
The trial is scheduled to be completed early next year.

      Battelle Memorial Institute and the Health Protection Agency of England
and Wales were subcontractors on the original development contract and are
expected to fulfill similar roles on the latest contract.

      VaxGen's anthrax vaccine candidate is based on the pioneering work of the
U.S. Army Medical Research Institute of Infectious Diseases. 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 a purified protein (rPA) designed
to induce antibodies that neutralize anthrax toxins. The vaccine candidate
cannot cause anthrax infection.

      VaxGen began developing rPA102 to address the need for an anthrax vaccine
that has an improved safety profile and a more practical dosing schedule
compared to the existing anthrax vaccine. The only currently licensed anthrax
vaccine in the United States, AVA, requires six doses administered over an
18-month period. The rPA102 anthrax vaccine is expected to be well characterized
and produced using modern manufacturing methods.



      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 disease. Based in Brisbane, Calif., 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, should they be licensed. 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 awards of future government contracts,
the timing, progress and the Company's ability to meet the requirements of its
NIAID anthrax vaccine contracts, including the completion of Phase II trials,
animal testing and manufacture of the product. 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 August 18, 2003, under the heading "Risk Factors", and the company's Annual
Report on Form 10-K, filed with the Securities and Exchange Commission on March
31, 2003, 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 except as required by law.

Contact:
Lance Ignon
Vice President
Corporate Communications
(650) 624-1041