Exhibit 99.1

   VaxGen Presents Data Supporting Efficacy of its Smallpox Vaccine Candidate

      BRISBANE, Calif. - May 26, 2004 - VaxGen, Inc. (Nasdaq: VXGNE) today
presented results from two animal studies of the effectiveness of its attenuated
smallpox vaccine candidate, LC16m8. In both rabbits and mice, a single dose of
LC16m8 protected all animals against a lethal poxvirus challenge, and
demonstrated efficacy equivalent to the currently licensed vaccine, Dryvax(R).

      Detailed results from these studies were presented today at the Seventh
Annual Conference on Vaccine Research sponsored by the National Foundation for
Infectious Diseases (NFID) in Arlington, Virginia. LC16m8 is a live attenuated
vaccinia vaccine that has been licensed for use in humans in Japan since 1980.

      "Beyond demonstrating in animals that a single dose of LC16m8 provides
robust protection, these studies are significant for two reasons," said Lance K.
Gordon, Ph.D., VaxGen's president and chief executive officer. "First, the mouse
study shows that the vaccine protects against exposure to an aerosol of
challenge virus, which closely models how smallpox could be delivered during a
bioterrorist attack. Secondly, the rabbitpox model is important in that it
allows us to test for the impact of modifying a gene called B5R, which is
heavily involved in the disease process in rabbits, on the efficacy of LC16m8.
The rabbit study clearly demonstrates the ability of LC16m8 to confer protection
despite the fact that its B5R gene has been modified."

      LC16m8 Protects Mice Against Aerosolized Ectromelia Challenge

      In a study titled "The Attenuated Vaccinia-Lister Vaccine LC16m8 Protects
Mice from Severe Ectromelia Aerosol Challenge" three groups of mice were
vaccinated with LC16m8 (2 x 105 PFU), DryVax (2 x 105 PFU) or saline solution.
They were subsequently challenged with aerosolized ectromelia, a mouse
orthopoxvirus. All of the placebo mice became ill, with 9 of the 10 placebo mice
dying. In contrast, all mice that received LC16m8 or DryVax survived.

      After vaccination but before challenge, animals vaccinated with LC16m8 had
higher antibody titers compared to those vaccinated with DryVax and the
difference was statistically significant (geometric mean titers of 3,020 vs.
1,454 as measured by ELISA, p< 0.001). Cyril Empig, Ph.D. of VaxGen, R. Mark
Buller, Ph.D. Professor of Microbiology and Jill Schriewer, both of Saint Louis
University were co-investigators of the study. The National Institute of Allergy
and Infectious Diseases, a part of the National Institutes of Health, funded the
study.

      LC16m8 Protects Rabbits Against Lethal Rabbitpox Challenge



      A separate study titled "The Attenuated Vaccinia-Lister Vaccine LC16m8
Protects Rabbits from Lethal Rabbitpox Challenge" was funded by VaxGen and
conducted by scientists at VaxGen, University of Florida, University of
Pennsylvania and Vanderbilt University. In this study, three groups of 20
rabbits each were vaccinated with LC16m8, Dryvax or a placebo.

      Rabbits in each group were subsequently challenged with lethal doses (200
PFU or 1,000 PFU) of intradermal rabbitpox. All of the rabbits vaccinated with
LC16m8 or DryVax survived, while all except for one of the placebo recipients
died.

      Levels of neutralizing antibodies present in the rabbits following
vaccination with LC16m8 or DryVax were also measured. In two of the three
assays, the ELISA and IMV Neutralizing Assay, LC16m8 recipients had higher
levels of neutralizing antibodies compared to DryVax recipients and these
differences were statistically significant (p< 0.001).

      In the third assay, EEV Neutralization, antibody levels were equivalent in
Dryvax and LC16m8 recipients (47% vs. 45% neutralization at day 28, p=0.756).
Neutralizing antibodies are considered to be a measure of a vaccine's ability to
confer protection.

      Cyril Empig, Ph.D. of VaxGen, Richard Moyer, Ph.D., Senior Associate Dean
for Research Development and Professor, Department of Molecular Genetics and
Microbiology at the University of Florida, Gainesville, Stuart Isaacs, M.D.,
Assistant Professor of Medicine at the University of Pennsylvania and Terence
Dermody, M.D., Professor of Pediatrics and Microbiology and Immunology at
Vanderbilt University conducted the study.

      About LC16m8

      VaxGen is developing LC16m8 in collaboration with the
Chemo-Sero-Therapeutic Institute (Kaketsuken) of Japan. The company plans to
begin a Phase I/II trial in humans later this year to study LC16m8's safety and
ability to induce an immune response. VaxGen also intends to initiate a
large-scale safety trial in the second half of 2004. Additional animal studies
are also planned.

      LC16m8 is a next-generation, attenuated smallpox vaccine that is designed
to have a better safety profile, yet be equally effective, compared to
conventional smallpox vaccines. LC16m8 is produced in cell culture from vaccinia
virus that has been attenuated, or modified, so that it can initiate an immune
response without causing serious adverse side effects.

      LC16m8 has been licensed for use in Japan since 1980 and forms the basis
for that country's smallpox vaccine stockpile. It is the only attenuated vaccine
to be licensed for use in humans to prevent smallpox infection.

      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. VaxGen is also developing an anthrax
monoclonal antibody through an alliance with AVANIR Pharmaceuticals. VaxGen 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, statements regarding the timing, progress and results of
VaxGen's clinical development of LC16m8, the ultimate safety and efficacy of
LC16m8 and VaxGen's ability or intentions to sell the 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
Item 1 of the company's Annual Report on Form 10-K filed by VaxGen in March 30,
2004 under the heading "Additional Business Risks" 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.

Media Contact

Kesinee Angkustsiri Yip
Associate Director, Corporate Communications
Office: 650-624-2304

Investor Contact

Lance Ignon
Vice President, Corporate Affairs
650-624-1041