Exhibit 99.1

          VaxGen Reviewing Accounting Treatment for Warrants Associated
             with 2001 Financing and May Restate Certain Financial
                 Statements; No Impact on Cash Position Expected

      BRISBANE, Calif. - October 23, 2003 - VaxGen, Inc. (Nasdaq: VXGN)
announced today that it may revise the accounting treatment for common stock
warrants issued in connection with its May 2001 Series A 6% Cumulative
Convertible Preferred Stock financing. Such a revision of the accounting
treatment could result in a restatement of the company's financial results for
2001 and 2002 but would not affect the company's cash position.

      Since the issuance of the warrants, their value has been consistently
included in the stockholders' equity section of the company's balance sheet. A
recent review of the warrants indicated that they may need to be reclassified as
a mezzanine liability due to their cash redemption feature. If this is the case,
the company would initially reclassify $3.5 million - the initial value assigned
to the warrants at the time of their issuance - from stockholders' equity to a
mezzanine liability as of June 30, 2001. VaxGen also would record in each
subsequent quarter a non-cash expense or credit based on the fair market value
of the warrants measured as of the end of each quarter.

      VaxGen and its accounting firm, KPMG LLP, are currently evaluating whether
the revised accounting treatment is required and, if so, whether the change
would be sufficiently material to require a restatement of prior periods. KPMG
has been VaxGen's independent auditor since the company's inception.

      There are currently outstanding warrants to purchase 609,508 shares of
VaxGen's common stock at $12.32 per share. The terms and conditions of the
warrants, including the cash redemption feature, have been fully disclosed in
VaxGen's public filings since May 2001. The current redemption price of the
warrants is less than the exercise price of the warrants, and therefore the
current cash value of the warrants, if redemption were triggered, is zero.

      All of the Series A 6% Cumulative Convertible Preferred Stock issued in
the May 2001 financing have converted to common shares, with the majority of the
conversions having taken place in 2002.



      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. Based in Brisbane, Calif., the company
is developing preventive vaccines against anthrax, smallpox and HIV and is the
largest stockholder 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 the need to restate any of the
Company's financial statements or the impact of any restatement on the Company's
financial condition or results of operations for any prior or future periods.
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) 624-1016