Maxygen today reported financial results for the second quarter ended June 30, 2000. For the second quarter, exclusive of stock compensation expense and a one time charge of $0.9 million relating to in-process research and development, Maxygen reported a net loss of $0.2 million, or $0.01 per share, compared to a net loss of $1.8 million, or $0.24 per share in the second quarter of 1999. Including stock compensation expense and a one time charge relating to in-process research and development, Maxygen reported a net loss of $4.3 million, or $0.14 per share, compared to a net loss of $2.4 million, or $0.31 per share in the second quarter of 1999.

At June 30, 2000, cash, cash equivalents and marketable securities totaled $271 million.

For the quarter ended June 30, 2000, revenue was $6.2 million compared to $3.6 million for the same period in 1999, an increase of 71 percent. The increased revenue was derived from the Company's collaborations with DuPont/Pioneer Hi-Bred, AstraZeneca, DSM, Rio Tinto and from Maxygen's government grants with the Defense Advanced Research Projects Agency (DARPA) and the National Institute of Standards and Technology-Advanced Technology Program (NIST-ATP).

In the second quarter of 2000, research and development expenses increased to $7.8 million compared to $4.5 million for the same period in 1999. This increase was primarily attributable to increases in operating expenses related to the growth of research and development activities.

"This has been a very productive quarter,'' said Russell Howard, CEO of Maxygen. "In April, we announced our intent to acquire privately-held ProFound Pharma, a protein pharmaceutical company based in Denmark, and in June, we announced the advancement of two product development programs with our collaborators DSM and Novo Nordisk. In our DSM collaboration, we achieved an important milestone and announced their acceptance of certain catalysts developed using Maxygen's proprietary MolecularBreeding(TM) directed molecular evolution technologies for commercial development. In our collaboration with Novo Nordisk, we announced the advancement into manufacturing scale-up of an industrial enzyme evolved using our proprietary technologies.''

"We are pleased to have accomplished three additional goals that we promised for 2000,'' said Simba Gill, President of Maxygen. "The acquisition of Profound Pharma, which is scheduled to close in the third quarter, doubles our pipeline of protein pharmaceutical product candidates from five to ten, and their preclinical development capabilities assist us in moving this pipeline into the development phase. In addition, we believe that ProFound's technologies are highly synergistic with our proprietary MolecularBreeding(TM) technologies and will help Maxygen establish a stronger position in the development of novel and improved protein pharmaceuticals. The advancement of the two development programs with DSM and Novo Nordisk, further validates the efficiency of our proprietary technologies.''

Maxygen, Inc., headquartered in Redwood City, CA, is a public biotechnology company focused on creating novel products using its proprietary MolecularBreeding(TM) directed molecular evolution technologies for a broad range of industries. Maxygen's proprietary technologies bring together the advances in molecular biology and classical breeding while capitalizing on the large amount of genetic information generated by genomics. Maxygen's target markets include protein pharmaceuticals, preventative and therapeutic vaccines, chemicals and agriculture. Maxygen has strategic collaborations with several companies including Novo Nordisk, DuPont/Pioneer Hi-Bred, DSM, AstraZeneca, and Rio Tinto as well as government funding from DARPA and NIST-ATP.

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