VaxGen Stockholder Vote Insufficient to Approve Merger with OXiGENE

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Feb 04, 2010, 06:00 ET

SOUTH SAN FRANCISCO, Calif., Feb. 4 /PRNewswire-FirstCall/ -- VaxGen, Inc. (OTC Bulletin Board: VXGN) announced preliminary results of the vote from its special stockholder meeting held on February 3, 2010.

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VaxGen stockholders voted on two proposals. The first proposal, to approve and adopt the Agreement and Plan of Merger among OXiGENE, VaxGen, a wholly-owned subsidiary of OXiGENE, and James P. Panek as the VaxGen stockholder representative, was not approved. 13,229,539 shares voted FOR the merger, 9,492,159 shares voted AGAINST and 26,176 ABSTAINED. The approval of a majority of the Company's total outstanding shares was required to approve the merger. Therefore, a FOR vote totaling 16,553,263 shares was required to approve the merger.

The second proposal, to adjourn the special meeting if necessary, to solicit additional proxies if there were not sufficient votes in favor of the merger, was approved, with approximately 57.7% of the shares voted FOR and 42.3% AGAINST. This proposal needed only a majority of the votes cast to be approved. However, under the terms of the merger agreement, VaxGen was not permitted to adjourn or postpone the meeting without the prior consent of OXiGENE. Prior to the meeting, and based on this anticipated vote result, VaxGen requested OXiGENE's consent to adjourn the meeting to allow additional time to solicit proxies. The OXiGENE board of directors declined to provide OXiGENE's consent to the requested adjournment.

"We are obviously very disappointed that the proposed merger with OXiGENE did not receive the votes necessary for approval," said James P. Panek, VaxGen President. "We achieved substantial support for the merger from our stockholders, with approximately 58% of the shares voted in favor of the merger, representing 40% of the Company's total outstanding shares. However, more than 31% of the outstanding shares were not voted. We believe that with additional time, there was a reasonable likelihood that we could have achieved the necessary vote. We are disappointed that the OXiGENE board was unwilling to consent to an adjournment of our meeting to solicit these un-voted shares."

The VaxGen Board of Directors intends to immediately assess the Company's strategic alternatives.

About VaxGen

VaxGen is a biopharmaceutical company based in South San Francisco, California. The company owns a state-of-the-art biopharmaceutical manufacturing facility with a 1,000-liter bioreactor that can be used to make cell culture or microbial biologic products. The facility is contained within leased premises. For more information, please visit the company's web site at http://www.vaxgen.com.

Note: This press release contains "forward-looking statements" within the meaning of the federal securities laws, including statements regarding the Board of Directors' plans to assess strategic alternatives. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated. Additional information concerning these and other risk factors is contained in VaxGen's Annual Report on Form 10-K for the year ended December 31, 2008. 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.

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SOURCE VaxGen, Inc.