PRNewswire - October 19, 2001

The agreement provides VaxGen with approximately 26 acres free of charge for 10 years in Songdo Industrial Park, which is being developed by Incheon Metropolitan City. The site, which is near the new Seoul/Incheon International Airport, includes room for pharmaceutical manufacturing facilities, administrative offices and a research and development center. Incheon is located about an hour from Seoul on the country's west coast.

"In view of the advanced stage of our pivotal trials, VaxGen has placed a priority on establishing manufacturing capacity," said Lance K. Gordon, Ph.D., VaxGen's chief executive officer. "We believe having a large-scale manufacturing facility under our control would provide a consistent supply of AIDSVAX to help address worldwide demand."

Ki-Sun Choi, Incheon's mayor, said: "The establishment of this facility is part of Incheon's and South Korea's long-term vision to become a world leader in biopharmaceutical manufacturing. And if AIDSVAX proves effective, Incheon will have the honor of making a major contribution to the struggle against AIDS."

VaxGen is working with South Korean partners to raise financing in South Korea for the project. The partners are not part of the city of Incheon.

VaxGen is the worldwide leader in developing vaccines for the prevention of HIV/AIDS. It is the only company with preventive HIV vaccines in Phase III trials, the final stage before regulatory approval can be sought. The company's two Phase III trials -- one in North America and Europe and another in Thailand -- are designed to determine how well the vaccine, AIDSVAX, prevents HIV infection in humans. VaxGen's North American/European trial is scheduled to conclude no later than the end of 2002, with the Thai trial scheduled for conclusion the following year. VaxGen is located in Brisbane, California. For more information, please visit the company's web site at http://www.vaxgen.com.

NOTE: AIDSVAX® is a registered trademark of VaxGen.

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to known and unknown risks, uncertainties or other factors that may cause VaxGen's actual results to be materially different from historical results, expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to, uncertainties related to the progress, costs and results of the Company's Phase III clinical trials, the progress of other internal research and development projects, the Company's ability to demonstrate efficacy of AIDSVAX in clinical trials, the Company's ability to obtain regulatory approval to market AIDSVAX and the Company's ability to secure commercial-scale manufacturing for AIDSVAX. Reference should be made to VaxGen's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 2001, under the headings "Factors Affecting Future Results" and "Business" and to VaxGen's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 14, 2001, under the heading "Risk Factors," 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 or to reflect the occurrence of anticipated events.

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