Cell Genesys Announces Plans to Commence Exchange Offer for Its Outstanding 3.125% Convertible Notes

and Settlement of Insolvency Litigation
SOUTH SAN FRANCISCO, Calif.--(Business Wire)--
Cell Genesys, Inc. (NASDAQ:CEGE) today announced that the Company expects to
commence an exchange offer to exchange all of the $68.3 million aggregate
principal amount of its outstanding 3.125% Convertible Senior Notes due in 2011
("Existing Notes") at a purchase price for each $1,000 principal amount of (i)
$500 in cash, plus accrued interest, (ii) $140 worth of common stock equal to
approximately 206 shares of common stock, and (iii) $310 of new 3.125%
convertible senior notes due in May 2013 ("New Notes").

On May 5, 2009, Tang Capital Partners, LP filed a creditor derivative lawsuit in
The Court of Chancery of the State of Delaware against Cell Genesys and its
directors and executive officers. The lawsuit seeks, among other things, a
declaration that the Company is insolvent and an injunction prohibiting
previously disclosed executive retention payments. On May 10, 2009, the Company
and Tang Capital Partners, LP entered into a settlement and exchange offer
agreement pursuant to which the Company agreed to commence and offer to exchange
all of the $68.3 million aggregate principal amount of Existing Notes at a
purchase price for each $1,000 principal amount of (i) $500 in cash, plus
accrued interest, (ii) $140 worth of common stock equal to approximately 206
shares of common stock, and (iii) $310 of New Notes. The New Notes will have a
conversion price of $0.68 per share. If all holders of the Existing Notes tender
into the exchange offer, the exchange is estimated to result in a cash
expenditure of approximately $34.2 million plus approximately $0.2 million in
accrued interest, the issuance of approximately 14.1 million new shares of
common stock and approximately $21.2 of New Notes. Tang Capital Partners, LP has
agreed to tender into the exchange offer and withdraw the lawsuit if the
exchange offer is consummated. The exchange offer has a minimum exchange
requirement of 87.5% of the outstanding aggregate principal amount of the
Existing Notes. The settlement and exchange offer agreement is subject to a
number of terms and conditions.

This release is for informational purposes only and is not an offer to buy or
the solicitation of an offer to sell any security. An exchange offer will only
be made pursuant to exchange offer documents that are to be made available to
the holders of the Existing Notes and filed with the Securities and Exchange
Commission ("SEC"). Holders of Existing Notes are advised to read the exchange
offer documents when they become available, as these documents will contain
important information about the exchange offer. Copies of the exchange offer
documents and other filed documents will be available for free at the SEC`s
website.

About Cell Genesys, Inc.

Cell Genesys is headquartered in South San Francisco, California. For additional
information, please visit the Company`s website at www.cellgenesys.com.

Forward-Looking Statements made herein about the Company, other than statements
of historical fact, including statements about settlement of litigation,
commencing an exchange offer, the results of an exchange offer, and cash
expenditures and other costs to repurchase additional amounts of convertible
notes are forward-looking statements and are subject to a number of
uncertainties that could cause actual results to differ materially from the
statements made, including risks and uncertainties associated with the ability
to successfully complete the exchange offer, the ability to successfully
complete a strategic transaction, the occurrence of additional costs, expenses
or other liabilities if the Company enters into a strategic transaction or
pursues other strategic alternatives, including without limitation as a result
of any litigation or claim asserted in connection with a potential transaction,
the possibility that in the event of liquidation the stockholders may receive
little or no distribution from the Company, the ability to raise capital,
operating expense levels, and other risks. For information about these and other
risks which may affect Cell Genesys, please see the Company's reports on Form
10-K, 10-Q, and 8-K and other reports filed from time to time with the
Securities and Exchange Commission. The Company assumes no obligation to update
the forward-looking information in this press release.

Cell Genesys, Inc.
Victoria Soares, 650-266-3200
Investor Relations

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