ISS/Risk Metrics Group And Glass Lewis Recommend VaxGen Stockholders Vote 'For' Proposed Merger With OXiGENE

SOUTH SAN FRANCISCO, Calif., Jan. 25 /PRNewswire-FirstCall/ -- VaxGen, Inc. (OTC Bulletin Board: VXGN), announced today that Institutional Shareholder Services/Risk Metrics Group (ISS) and Glass, Lewis & Co. (Glass Lewis), two leading independent proxy advisory firms, recommend that VaxGen stockholders vote "FOR" the proposed merger of VaxGen, Inc. and OXiGENE, Inc. and "FOR" the Proposal to adjourn the VaxGen special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the first proposal.

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"We are pleased that both ISS and Glass Lewis, having thoroughly evaluated the proposed merger, agree with the VaxGen and OXiGENE boards of directors in recommending that stockholders vote in favor of these proposals," said James Panek, VaxGen President.  "We believe the merger with OXiGENE, which was carefully considered and unanimously approved by the VaxGen board of directors, provides the best alternative for our stockholders."

Both ISS and Glass Lewis recommend that VaxGen stockholders vote to approve both proposals:

• A vote FOR Proposal 1: To adopt the Agreement and Plan of Merger dated as of October 14, 2009 by and among OXiGENE, Inc., VaxGen. Inc., OXiGENE Merger Sub, Inc. and James Panek as the VaxGen stockholder representative, and the transactions contemplated thereby, including the merger;
• A vote FOR Proposal 2: To adjourn the VaxGen special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the first proposal .

In coming to their recommendation, ISS concluded that: "...the merger consideration, when taking into account the escrow shares, provides a premium to stockholders.  The company's strategic rationale appears reasonable: the merger consideration appears to offer a higher value than liquidation and the company's cash position will provide funding for OXiGENE's product candidates which are already in various clinical trial phases, offering stockholders the opportunity to participate in the future growth of the combined company." [1]

In concluding that the proposed transaction is favorable to current shareholders of VaxGen, Glass Lewis states in their report: "In addition, VaxGen shareholders will hold at least 20%, and as much as 28%, of an entity that is relatively more liquid than VaxGen..."

The VaxGen Board of Directors asks that stockholders carefully evaluate the information they have been provided, and encourages all stockholders, regardless of the number of shares they own, to vote "FOR" both proposals.

Stockholders are encouraged to vote their shares now so that their vote can be counted without delay.