Maxygen Reports First Quarter 2009 Financial Results

REDWOOD CITY, Calif.--(Business Wire)--
Maxygen, Inc. (Nasdaq: MAXY), a biotechnology company focused on the development
of improved protein drugs, today announced financial and business results for
the quarter ended March 31, 2009.

First Quarter 2009 Financial Results

Maxygen reported a net loss of $1.1 million, or $0.03 per basic and diluted
share, for the first quarter of 2009, compared to a net loss of $13.7 million,
or $0.37 per basic share, for the same period in 2008. The decrease in net loss
was primarily due to an increase in revenue and a decrease in research and
development expenses.

Revenue for the first quarter of 2009 was $8.5 million, compared to $1.4 million
for the same period in 2008. The increase in revenue resulted from an increase
in collaborative research and development revenue received under the company`s
collaboration agreement with Astellas for its MAXY-4 program, which began in
September 2008, and an increase in technology and license revenue under
Maxygen`s license agreement with Codexis.

Total expenses were $10.0 million in the first quarter of 2009, compared to
$17.2 million in the first quarter of 2008. The decrease in expenses was
primarily due to reduced external research and manufacturing expenses associated
with the development of MAXY-VII and MAXY-G34 and decreased expenses due to the
cessation of operations at Maxygen`s Denmark site on February 29, 2008.

Excluding the impact of non-cash stock compensation expense under SFAS 123(R),
Maxygen reported non-GAAP net income (see Footnote A) of approximately $332,000,
or $0.01 per basic share, in the first quarter of 2009, compared to a non-GAAP
net loss of approximately $12.5 million, or $0.34 per basic share, in the first
quarter of 2008.

At March 31, 2009, cash, cash equivalents and marketable securities totaled
$200.9 million.

Business Results

In the first quarter of 2009, Maxygen recognized technology and license revenue
of approximately $3.6 million relating to amounts paid or payable to the company
under its license agreement with Codexis. Of the amount recognized, $3.2 million
is payable in connection with the recent expansion of the collaboration
agreement between Codexis and Royal Dutch Shell plc related to the development
of biofuels, which included an equity investment in Codexis by Shell. As a
result of the equity investment by Shell, Maxygen`s equity ownership in Codexis
was reduced to approximately 22% of Codexis` outstanding shares.

In April 2009, Maxygen completed the restructuring plan it announced in October
2008 that has resulted in the termination of approximately 30% of its workforce.
The company continues to actively pursue its revised corporate strategy
regarding the evaluation of potential strategic options, including the sale or
disposition of one or more corporate assets, a strategic business combination,
or other transactions.

In May 2009, Maxygen entered into an agreement with Cangene Corporation pursuant
to which Cangene was granted options to obtain certain licenses to intellectual
property rights associated with the MAXY-G34 program to fulfill potential future
government contracts related to the development, manufacture and procurement of
MAXY-G34 for the treatment or prevention of neutropenia associated with acute
radiation syndrome. Maxygen has received an option fee of $500,000 and is
eligible to receive an option exercise fee, as well as additional license fees
based on a percentage of net contract revenue received by Cangene, to the extent
that Cangene is awarded one or more applicable government contracts and
exercises an option for a license.

Conference Call

Maxygen will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to
discuss first quarter 2009 financial results. Participants in the U.S. can
access the call by dialing 866.804.6921 and using the passcode 85132066.
International participants can dial 857.350.1667 and use the same passcode. A
live webcast of the conference call will be available on the Maxygen web site at
www.maxygen.com/webcasts.

Telephone and webcast replays of the conference call will be available until
June 12, 2009. To access the telephone replay, dial 888.286.8010 (U.S.) or
617.801.6888 (international) and use the passcode 77659401. To access the
webcast archive, go to www.maxygen.com/webcasts.

About Maxygen

Maxygen is a biopharmaceutical company focused on developing improved versions
of protein drugs. The company`s portfolio includes MAXY-4, partnered with
Astellas Pharma, Inc., under which the company and Astellas are exploring new
CTLA4-Ig product candidates for the treatment of rheumatoid arthritis,
transplantation rejection and other autoimmune disorders. Maxygen also has a
MAXY-G34 program, designed to be an improved long-acting G-CSF for the treatment
of neutropenia. Maxygen uses its proprietary DNA shuffling technology and
extensive protein modification expertise to pursue the creation of biosuperior
proteins. www.maxygen.com

Forward-Looking Statements

This news release contains forward-looking statements about our research and
business prospects and financial position, including the plans or ability of
either us or Astellas Pharma, Inc. to continue the development of our MAXY-4
product candidates; whether we will receive any future payments under our
license agreement with Codexis; the plans or ability of Cangene to obtain any
government contracts that will result in the payment of any future license fees
to us under our agreement with Cangene; our ability or plans to continue the
development of our MAXY-G34 product candidate for the treatment of
chemotherapy-induced neutropenia or enter into a collaborative or other
arrangement with a third party to fund the further development of this product
candidate; and our continued evaluation of strategic options and whether such
evaluation will result in any specific transactions or outcomes. Such statements
involve risks and uncertainties that may cause results to differ materially from
those set forth in these statements. These and other risk factors are more fully
discussed in our Form 10-K for the year ended December 31, 2008, including under
the caption "Risk Factors," and in our other periodic SEC reports, all of which
are available from Maxygen at www.maxygen.com. Maxygen disclaims any obligation
to update or revise any forward-looking statement contained in this release as a
result of new information or future events or developments.

Selected Consolidated Financial Information

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Three Months Ended
March 31,
2009 2008
(unaudited)
Revenues:
Collaborative research and development revenue $ 3,996 $ --
Technology and license revenue (including related party) 3,611 157
Grant revenue 907 1,286
Total revenues 8,514 1,443

Expenses:
Research and development 7,033 13,106
General and administrative 2,885 3,513
Restructuring charge 98 533

Total operating expenses 10,016 17,152

Loss from operations (1,502 ) (15,709 )

Interest income and other (expense), net 382 1,991
Net loss $ (1,120 ) $ (13,718 )

Basic and diluted net loss per share $ (0.03 ) $ (0.37 )

Shares used in computing basic and diluted net loss per share 37,900 36,996

Condensed Consolidated Balance Sheets

(in thousands)

March 31, December 31,
2009 2008
(unaudited) (Note 1)

Cash, cash equivalents and marketable securities $ 200,868 $ 206,483
Related party receivable 3,198 --
Receivables, prepaid and other assets 7,099 4,727
Property and equipment, net 2,240 2,347
Total assets $ 213,405 $ 213,557

Other liabilities $ 7,234 $ 8,687
Restructuring accrual 382 1,114
Total deferred revenue 7,951 9,244
Stockholders' equity 197,838 194,512
Total liabilities and stockholders` equity $ 213,405 $ 213,557

Note 1: Derived from consolidated audited financial statements as of December 31,
2008.

Footnotes

(A) Non-GAAP Financial Measures

To supplement our consolidated financial statements, we have provided non-GAAP
net income (loss) and net income (loss) per share. The presentation of this
financial information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and presented
in accordance with GAAP.

Non-GAAP net income (loss) and net income (loss) per share excludes the impact
of stock compensation expense. We believe that it is useful as a supplemental
measure in assessing the performance of our business and is used by our
management to evaluate business results. Below is a reconciliation of GAAP net
loss and non-GAAP net income (loss) and net income (loss) per share (in
thousands, except per share amounts):

Three Months Ended
March 31,
2009 2008
Net loss $ (1,120 ) $ (13,718 )
Stock compensation expense 1,452 1,231
Non-GAAP net income (loss) $ 332 $ (12,487 )

Shares used in computing Non-GAAP basic net income (loss) per share 37,900 36,996

Non-GAAP basic net income (loss) per share $ 0.01 $ (0.34 )

Maxygen, Inc.
Dana Fruehling, 650-298-5486
dana.fruehling@maxygen.com

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