EXHIBIT 99.1

     VaxGen Further Restructures to Preserve Cash As It Pursues Strategic
Initiatives South San Francisco, Calif. - September 13, 2007 - VaxGen Inc. (Pink
Sheets: VXGN.PK) today announced further cost-cutting measures consistent with
its continuing commitment to align its cost structure with its pursuit of
strategic initiatives.

     VaxGen is reducing its workforce from 61 to 27 employees, which the company
expects will lower its monthly cash expenditures used in operating activities to
$1.4 million. The company will incur a restructuring charge of approximately
$1.1 million in connection with this action. The terminations include executive
officer Lance Ignon, Vice President of Corporate Affairs. This is VaxGen's third
restructuring since the U.S. Department of Health and Human Services (HHS)
cancelled the company's contract to provide a modern anthrax vaccine for
civilian biodefense in December 2006.

     "Throughout this year we have retained only those resources that management
felt could build value for our shareholders, either because they enhanced our
ability to complete a strategic transaction or they were required to meet
essential business objectives," said James P. Panek, VaxGen's President and CEO.
"Based on our understanding of the nature and structure of such potential
transactions, we are now able to take this further restructuring action. We
remain optimistic about completing a strategic transaction and are in various
stages of discussions with a variety of companies."

     VaxGen has retained key resources necessary to support its pursuit of
strategic transactions, including key scientific personnel for technical due
diligence. The company has also retained people associated with the company's
financial reporting obligations to the Securities and Exchange Commission.
"These are not easy decisions, especially when you are talking about letting go
of many talented and dedicated employees," Mr. Panek said. "In particular, Lance
Ignon has tirelessly and competently fulfilled a variety of responsibilities
during his more than seven years of service to VaxGen. Nonetheless, these
staffing decisions are appropriate given the opportunities we are pursuing and
the obligation we have to our shareholders."

     About VaxGen VaxGen is a biopharmaceutical company based in South San
Francisco, California. For more information, please visit the company's web site
at www.vaxgen.com.


         Contact:
         Matthew Pfeffer
         CFO
         (650) 624-2477

     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 company's ability to reduce monthly
cash expenditures used in operating activities and the possibility of selling or
merging the company's remaining assets. These statements are subject to risks
and uncertainties that could cause actual results and events to differ
materially from those anticipated. 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.