Redwood City, California
February 11, 2003

Maxygen, Inc. (Nasdaq: MAXY) today reported financial results for the fourth quarter and year ended December 31, 2002.

For the year ended December 31, 2002, Maxygen reported a pro forma net loss of $26.6 million, or $0.79 per share, compared to a pro forma net loss in 2001 of $24.2 million, or $0.74 per share, in both cases exclusive of stock compensation expense and amortization of intangible assets. Including such charges, Maxygen reported a net loss of $33.9 million, or $1.01 per share for the year ended December 31, 2002, compared to a net loss of $45.0 million, or $1.38 per share, in 2001.

Revenue for the year ended December 31, 2002 was $41.8 million compared to $30.5 million in 2001, an increase of 37 percent. The increase in revenue was due to the addition of new alliances formed in 2002 and the ongoing success of existing alliances.

At December 31, 2002, cash, cash equivalents and marketable securities totaled $228.1 million, $21.7 million of which is controlled by Maxygen's majority-owned subsidiary, Codexis.

For the fourth quarter of 2002, Maxygen reported a pro forma net loss of $7.9 million, or $0.23 per share, compared to a pro forma net loss of $7.0 million, or $0.21 per share, in the same period in 2001, exclusive of stock compensation expense and amortization of intangible assets. Including such charges, Maxygen reported a net loss of $9.0 million, or $0.26 per share, for the fourth quarter of 2002 compared to a net loss of $11.5 million, or $0.35 per share, in the fourth quarter of 2001.

"2002 was another very positive year for Maxygen. We continued our track record of increasing revenue year to year, successfully delivered on existing partnerships and advanced several products," said Russell Howard, Ph.D., Chief Executive Officer of Maxygen. "During 2002, Maxygen intensified its focus on advancing human therapeutic products with high potential commercial value. We continue to maintain a strong cash position of approximately $200 million to support the advancement of these
promising products. Our currently partnered products also continue to move forward. This year we announced progress in our collaboration with H. Lundbeck A/S for the optimization of interferon beta to treat nervous system diseases such as multiple sclerosis, and in our collaboration with Intermune Inc. for the development of a next- generation version of ACTIMMUNE(R) (interferon gamma 1-b) to treat idiopathic pulmonary fibrosis and other diseases."

"Consistent with Maxygen's focus on human therapeutics, our industrial businesses made significant progress in 2002 in further establishing their independence. Codexis, formerly Maxygen's chemicals business, completed a $25 million financing in October and is now a majority-owned subsidiary of Maxygen. Codexis also received from Pfizer and DSM the first revenues for the use of processes developed using MolecularBreeding(TM) directed molecular evolution technologies. Verdia, our agriculture business, has been established as a wholly-owned subsidiary of Maxygen. Each of Maxygen's industrial businesses are now positioned for success in their respective markets with independent and experienced management teams, separate brand identities, multiple partnerships and broad product pipelines to help enable their growth."

"Today, Maxygen has a broad product pipeline of human therapeutics from which to select promising candidates for partnering or internal development as well as a skilled team and the financial resources to advance these products. In addition, we expect that our increasingly strong industrial businesses will enable Maxygen to capture the value of our product optimization technologies in their respective industries. We are confident that we will continue to successfully advance the company in 2003 and that we will deliver on our partnering, product advancement and financial goals."

Select Year 2002 Company Highlights:

Success delivered to therapeutic partners

• In February 2002, Maxygen announced that the product under development in its collaboration with H. Lundbeck A/S is an optimized interferon beta for the treatment of nervous system disease, such as multiple sclerosis, and that the companies planned to move this lead compound forward rapidly into human clinical trials. The lead compound, which is currently in manufacturing scale-up, has been engineered by Maxygen to have an improved drug profile for therapy, with reduced immunogenicity, increased bioavailability and substantially improved half life. Combined, these properties should minimize side effects and maximize therapeutic efficacy.
• In September 2002, Maxygen received a $1 million milestone payment from InterMune for successfully achieving drug performance criteria in the companies' alliance to develop a next-generation version of ACTIMMUNE(R) (interferon gamma 1-b). Maxygen developed a series of
  preclinical candidates that have been shown in animal models to have improved pharmacokinetic properties that should allow a once-per-week dosing regimen rather than the current regimen of three times per week. These compounds are now in further preclinical development.

Increased focus on key therapeutic products and controlled cash burn

In November 2002, Maxygen announced restructuring efforts intended to reduce operating costs and provide greater flexibility in rapidly advancing the most promising product candidates from its broad human therapeutics pipeline for internal development or later-stage partnering.

Received first commercial payments

In 2002, Codexis announced that it had received its first payments from partners DSM and Pfizer for the use of processes developed using MolecularBreeding(TM) directed molecular evolution technologies. This commercial success represents the achievement of one of Maxygen's corporate objectives for 2002.

Increased independence and strength of industrial businesses

Verdia

• In March 2002, Maxygen established a wholly-owned subsidiary through which to operate its agricultural business. In October 2002, it was renamed Verdia, Inc.
• In May 2002, Verdia established a joint venture with Delta and Pine Land Company called DeltaMax Cotton LLC. DeltaMax Cotton LLC was formed to develop and commercialize innovative gene leads that were developed using MolecularBreeding(TM) directed molecular evolution technologies for the cotton seed market. The global market for genetically modified cotton seed was estimated to be approximately $480 million in 2001 and is expected to grow to over $1.9 billion in the next ten years. The first DeltaMax cotton product, a glyphosate-resistant product lead, was moved into cotton product development in October 2002.

Codexis

• In October 2002, Codexis (formerly Maxygen's chemicals business) successfully closed a $25 million private financing, its first independent financing since its establishment as a subsidiary of Maxygen in January 2002. The financing included investments by CMEA Ventures, Pequot Ventures, Inc., ChevronTexaco Technology Ventures and Maxygen.
• Codexis established two new collaborations in 2002: The first, with Cargill Dow, focuses on the development of a novel synthesis for a key raw material for Cargill Dow's NatureWorks(TM) PLA (polylactide); the second, with Eli Lilly and Company, focuses on the development of improved fermentation processes for several of Lilly's natural product drugs.

Maxygen's 2003 Goals and Financial Outlook

"Our major focus for 2003 is to advance the company's therapeutic business by forming new product partnerships, delivering success to our existing partners and advancing key high-value products from our human therapeutics pipeline," said Dr. Howard. "At the same time, we expect that our industrial businesses will continue their strong growth, allowing Maxygen to capture the value of our product optimization technologies across multiple industries.

"Specifically our 2003 goals are to:

• Enhance the value of Maxygen's therapeutics business
  * Advance key pre-clinical leads
  * Deliver success to therapeutics corporate partners
  * Establish two additional therapeutics collaborations
• Position products in pre-clinical development for the filing of INDs in 2004
• Continue growth in the value of Verdia and Codexis
  * Advance internal and partnered products
  * Maintain a controlled level of cash investment by Maxygen
  * Maintain a strong cash position relative to cash burn via focused investment in key product opportunities

"Our forward-looking guidance with respect to Maxygen's financial outlook for 2003 is as follows:

Revenue: In 2003, Maxygen and its subsidiaries expect to receive revenue in the range of $35 to $40 million consisting of strategic alliance revenue, grant revenue and royalties on product sales. This assumes the establishment of new collaborations and that our collaborations with Intermune and Lundbeck will begin to wind down on schedule.

Operating Expenses: Maxygen expects operating expenses to be in the range of $80 to $85 million.

Net Cash Utilization (cash burn): Maxygen expects its cash burn for 2003 to be in the range of $38 to $43 million. Excluding Codexis and Verdia, Maxygen's cash burn is expected to be approximately $30 million for 2003."

Maxygen, Inc. headquartered in Redwood City, California, is focused on creating novel products using its integrated proprietary technologies for human therapeutics and industrial applications. Maxygen's technologies bring together advances in molecular biology and protein modification to create novel biotechnology products. Maxygen has strategic collaborations with leading companies including Aventis, InterMune, Lundbeck, ALK-Abello and the International AIDS Vaccine Initiative (IAVI). Additionally, Maxygen has a range of other strategic alliances in industrial applications, as well as funding from U.S.A. government organizations including USAID, NIST-ATP and U.S. Army Medical Research and Materiel Command.

This news release contains forward-looking statements about our research and business prospects, including those relating to: the future success of our industrial subsidiaries and their ability to grow; our ability to capture value through our product optimization technologies in multiple industries; the ability to achieve our 2003 goals; the timetable on which our optimized interferon beta will advance into human clinical trials; the attributes of our next-generation interferon gamma 1-b; the future market size of genetically- modified cotton seed; and our projected revenue, operating expenses and net cash utilization. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Among other things these risks and uncertainties include, but are not limited to: the inability to develop or commercialize product candidates; competitors producing superior products; the inherent uncertainties of biological research; public acceptance of products obtained through genetic manipulation; changing research and business priorities of Maxygen and/or its collaborators and our future ability to enter into and/or maintain research and commercialization collaborations. These and other risk factors are more fully discussed in our Form 10-K for the year ended December 31, 2001, 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.

Maxygen and MolecularBreeding are trademarks of Maxygen. Codexis is a trademark of Codexis. Verdia is a trademark of Verdia.
ACTIMMUNE(R) is a registered trademark of InterMune.