Exhibit 99.1

     VaxGen Receives Notice from Nasdaq Regarding Failure to File Quarterly
                               Report on Form 10-Q

BRISBANE, Calif. - May 20, 2004 - VaxGen (Nasdaq: VXGNE) announced today that
due to the company's failure to file its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004, and in accordance with standard procedures, The
Nasdaq Stock Market notified VaxGen on May 18, 2004 that the company is not in
compliance with Marketplace Rule 4310(c)(14) and will be delisted from the
exchange on May 27, 2004 unless the company files its Form 10-Q on or before
that date or requests a hearing with Nasdaq no later than May 25, 2004. The
request for a hearing, which VaxGen made today, will stay the delisting of the
company's common stock pending a decision by a Nasdaq Listing Qualifications
Panel.

As a result of the notice from Nasdaq, the company's common stock will begin
trading under the symbol VXGNE at the opening of business today. The addition of
the "E" to VaxGen's trading symbol indicates that the company has not met the
deadline for filing its Form 10-Q.

VaxGen is working diligently to ensure that it files its Form 10-Q as soon as
possible and thereby avoid delisting.

As previously disclosed, VaxGen has delayed the filing of its Form 10-Q for the
period ended March 31, 2004 while it examines its revenue recognition policy
with respect to certain contracts, most of which are with the National Institute
of Allergy and Infectious Diseases (NIAID). VaxGen currently recognizes NIAID
cost-plus fixed-fee contract revenue only after completing contract milestones.
The company is examining whether it should recognize revenue from these and
other similar contracts as it incurs costs related to these contracts. VaxGen
invoices NIAID monthly for work performed under the contracts.

If the revenue recognition policy is changed, VaxGen will restate its financial
results for the fourth quarter and year ended December 31, 2002 and all of 2003.
The change would accelerate the recognition of revenue, and would result in a
material decrease in the net loss applicable to common stockholders and an
increase in revenue for the combined periods. VaxGen intends to file its Form
10-Q for the quarter ended March 31, 2004 as soon as possible once the review of
its revenue recognition policy is completed.

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 and smallpox and an anthrax
monoclonal antibody through an alliance with AVANIR



Pharmaceuticals. VaxGen also is the largest shareholder in Celltrion, Inc., a
joint venture formed to build operations for the manufacture of
biopharmaceutical products, including VaxGen's product candidates. 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, the timing of the filing and the content of the company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and the
potential restatement of the fourth quarter and year ended December 31, 2002 and
the year ended December 31, 2003; the ability of the company's common stock to
remain quoted on The Nasdaq National Market, and the timing and results of any
hearing before Nasdaq's Listing Qualifications Hearings Department. 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 1 of the company's Annual Report on Form 10-K filed by VaxGen on
March 30, 2004, under the heading "Additional Business Risks" 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.

Contact:

Lance Ignon
Vice President, Corporate Affairs
650-624-1016