Media Release

Basel, 22 May 2003

Roche and Maxygen establish broad alliance to develop and commercialize next-generation interferon alpha and beta products

Roche further strengthens its position in hepatitis

Basel, Switzerland and Redwood City, Calif. - Roche and Maxygen, Inc. (Nasdaq: MAXY) announced today that they have formed a broad strategic alliance to collaborate on the global development and commercialization of Maxygen’s portfolio of next-generation interferon alpha and beta variants for a wide range of indications.

The collaboration will initially focus on the development of lead candidates for the treatment of infections with the hepatitis B virus (HBV) and hepatitis C virus (HCV). The drug candidates have been designed by Maxygen to have novel and superior efficacy compared to currently marketed interferon alpha products. This builds on Roche’s commitment to hepatitis, following Pegasys, a new generation interferon that provides significant benefit over conventional interferon therapy in patients infected with HCV.

Terms of the Agreement
Roche has licensed worldwide commercialization rights to specific novel interferon product candidates for HBV and HCV. Maxygen will receive an initial payment, full research and development funding for the first two years of the collaboration and option fees. In addition, Maxygen is eligible to receive milestone payments and royalties based on product sales.

The agreement also provides the companies with the option to expand the collaboration to develop other novel interferon alpha and beta products specifically tailored for indications outside of HBV and HCV, including oncology, autoimmune diseases, inflammatory diseases, and other infectious diseases such as HIV. Maxygen retains the right to develop such products while Roche may elect to acquire worldwide license and commercialization rights to these product candidates.
Maxygen has the option to co-develop in the United States any product to which Roche acquires a license in exchange for profit sharing or an increased royalty rate.

Based on the continued successful development of the novel interferon product candidates and the satisfaction of certain contingencies, payments to Maxygen could exceed $230 million plus royalties on product sales.

“Roche has a long tradition in successfully developing and commercializing anti-viral drugs, alone or in partnership with other companies. We believe with Pegasys and Copegus we are establishing a new standard of care. Maxygen’s portfolio of lead interferon product candidates represents an interesting and novel approach for further improvement in treatment. We are convinced that through our collaboration we will continue to be a clear leader in the treatment of patients suffering from this debilitating disease,” said William M. Burns, Head of Roche’s Pharmaceuticals Division.

“Maxygen’s strategy has always been to partner with world leaders in their respective fields, and with its track record of excellence and an established and strong franchise, Roche is clearly a leader in the development and commercialization of interferon therapies,” said Russell Howard, Ph.D., Chief Executive Officer of Maxygen. “This innovative collaboration is structured to maximize the commercial potential of Maxygen’s novel shuffled interferons by enabling their swift development and potential commercialization with a market leader in hepatitis. Importantly, Maxygen retains the right to conduct further discovery and development of novel interferons for additional indications. I am particularly excited about Maxygen’s option to co-develop these products for hepatitis B and C in the U.S., as this provides substantial potential for long-term value creation for the company.”

The Interferon Alpha Market
Total global interferon alpha sales (including ribavirin) for all indications including hepatitis B, C and several cancers were in excess of $2.9 billion in 2002.

About Hepatitis B
Hepatitis B is a blood-born virus that attacks the liver and is the most common serious liver infection in the world. The HBV virus is highly contagious and is relatively easy to transmit from one infected individual to another. It is 100 times more infectious than the HIV virus.

About Hepatitis C
Hepatitis C is a serious blood-born viral infection that attacks the liver, and in many patients it leads to liver disease, cirrhosis and cancer. It is the leading cause of liver transplantation. Only identified in 1989, the HCV virus has infected more than 170 million people world-wide, making it more common than the HIV virus.

Roche’s Commitment to Hepatitis
Roche is committed to the viral hepatitis disease area, having introduced Roferon-A for hepatitis B and then C, followed by Pegasys and Copegus in hepatitis C. Pegasys is a new generation hepatitis C therapy that is different by design and provides significant benefit over conventional interferon therapy in patients infected with HCV of all genotypes. The benefits of Pegasys are derived from its new generation large 40 kilodalton branched-chain polyethylene glycol (PEG) construction, which allows for constant viral suppression. Pegasys is approved for monotherapy and for use in combination with Copegus, our proprietary ribavirin product in more than 70 countries, including the European Union and the United States. The most recent approvals for Pegasys have occurred in China and New Zealand. Pegasys is also in phase III clinical development for patients infected with the HBV virus. Roche manufactures and sells the AMPLICOR™ HCV Test, v2.0 and the AMPLICOR HCV MONITOR™ Test, v2.0 - two tests used to detect the presence of HCV RNA (Ribo Nucleic Acid) in a person’s blood. Roche's commitment to hepatitis has been further reinforced by the in-licensing of Levovirin, which will be studied with the objective of demonstrating superior tolerability over the current standard, ribavirin.

About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading innovation-driven healthcare groups. Its core businesses are pharmaceuticals and diagnostics. Roche is number one in the global diagnostics market, the leading supplier of pharmaceuticals for cancer and a leader in virology and transplantation. As a supplier of products and services for the prevention, diagnosis and treatment of disease, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche employs roughly 62,000 people in 150 countries. The Group has alliances and research and development agreements with numerous partners, including majority ownership interests in Genentech and Chugai.

About Maxygen
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 pharmaceutical companies including Aventis, InterMune, Lundbeck, ALK-Abelló, 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, US Army Medical Research and Materiel Command and NIST-ATP.

Conditions
The transaction is being submitted for review by the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

All trademarks used or mentioned in this release are legally protected.

Webcast
Maxygen will host a conference call at 1:30PM PDT / 4:30PM EDT on Thursday, May 22, 2003 to discuss this announcement. The live webcast can be accessed by visiting the Investor Information section of the Company's website. Following the webcast, an archived version of the call will be available at the same address until June 22, 2003.

Maxygen Forward-looking Statements
This news release contains forward-looking statements about Maxygen’s research and business prospects, including those relating to: Maxygen’s ability to develop and commercialize next-generation interferons, their attributes and indications; the speed of such development and the potential payments Maxygen will receive from the collaboration. 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 viable commercial product candidates; changing research and business priorities of Maxygen and Roche; competitors producing superior products and the inherent uncertainties of biological and clinical research. These and other risk factors are more fully discussed in Maxygen’s Form 10-K for the year ended December 31, 2002, including under the caption “Risk Factors,” and in Maxygen’s 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 the Maxygen logo are registered trademarks of Maxygen.