Seoul, South Korea–February 25, 2002–VaxGen, Inc. (Brisbane, CA) and a group of South Korean investors have joined forces to build a $120 million facility in Incheon, South Korea, to manufacture VaxGen’s AIDS vaccine.

The joint venture will also fund the construction of a smaller facility in South San Francisco to support the commercial launch of the vaccine. If the U.S. Food and Drug Administration (FDA) approves, both facilities will be used to manufacture the vaccine, AIDSVAX.

The South Korean investors participating in the joint venture, known as Celltrion Inc., are Nexol Corp., Korea Tobacco & Ginseng Corp., and J. Stephen & Co. Ventures Ltd.

VaxGen will provide mammalian cell culture technology and biologics production expertise to Celltrion, but no cash, in exchange for a 44 percent interest in the joint venture.

VaxGen is Celltrion’s single-largest shareholder. The South Korean partners will provide the funding necessary to design and construct both facilities and to validate and operate the Incheon facility. The Incheon facility will be built on approximately 26 acres of land sold to Celltrion by the city of Incheon at a discount to prevailing market rates.

In its first phase of development, the Incheon facility is expected to be capable of producing up to 200 million doses of AIDSVAX per year. The smaller facility in South San Francisco could produce up to 10 million doses of the AIDS vaccine per year and may also be used to develop other pharmaceutical products.

Celltrion expects to complete construction of the smaller facility by the middle of 2003 and the Incheon facility by the end of 2003.