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<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>

<P align="center" style="font-size: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P align="center" style="font-size: 10pt"><B>Date of Report (Date of
earliest event reported): October 30, 2008</B>

<P align="center">

<P align="center" style="font-size: 24pt"><B>VAXGEN, INC.<BR></B>
<FONT style="font-size: 10pt">(Exact name of registrant as specified in its charter)
</FONT>

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    <TD width="32%">&nbsp;</TD>
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    <TD width="33%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>DELAWARE</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>0-26483</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>94-3236309</B></TD>
</TR>
<TR valign="top">
    <TD>(State or other Jurisdiction of Incorporation)</TD>
    <TD>&nbsp;</TD>
    <TD>(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>(IRS Employer Identification No.)</TD>
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</TABLE>

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    <TD width="49%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>349 OYSTER POINT BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA<BR></B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>94080</B></TD>
</TR>
<TR valign="top">
    <TD>(Address of Principal Executive Offices)</TD>
    <TD>&nbsp;</TD>
    <TD>(Zip Code)</TD>
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<P align="center" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>(650) 624-1000</B>


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</TR>
<TR>
    <TD nowrap>(Former name or former address if changed since last report.)</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:

<P align="left" style="font-size: 10pt">
<FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P align="left" style="font-size: 10pt"><B>SECTION 1&#151;REGISTRANT&#146;S BUSINESS AND OPERATIONS</B>


<P align="left" style="font-size: 10pt"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement.</B>


<P align="left" style="font-size: 10pt"><B>Note Repurchase Agreement</B>


<P align="left" style="font-size: 10pt; text-indent: 4%">On October&nbsp;27, 2008, VaxGen, Inc. (&#147;VaxGen&#148;) entered into a Note Repurchase Agreement with Drawbridge Special
Opportunities Fund LP (the &#147;Drawbridge Agreement&#148;), whereby VaxGen agreed to repurchase its 5 <FONT style="font-size: 75%">1/2</FONT>% convertible senior
subordinated notes due April&nbsp;2010 (each, a &#147;Note,&#148; and collectively, the &#147;Notes&#148;).


<P align="left" style="font-size: 10pt; text-indent: 4%">Pursuant to the Drawbridge Agreement, VaxGen agreed to repurchase its Notes in the principal amount of $5,000,000
at a purchase price of $4,150,000, plus accrued interest of $20,625.03 based on an assumed settlement date of October
28, 2008.


<P align="left" style="font-size: 10pt; text-indent: 4%">The transaction described above was initiated by the noteholder and was not the result of any solicitation by or
on behalf of VaxGen.


<P align="left" style="font-size: 10pt; text-indent: 4%">The Drawbridge Agreement is attached to this report as Exhibit&nbsp;10.1. The foregoing description is qualified in its
entirety by reference to the full text of the Drawbridge Agreement.


<P align="left" style="font-size: 10pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits.</B>

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit<BR>
Number
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;<BR>
Description</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Note Repurchase Agreement, dated October&nbsp;27, 2008, by and between
VaxGen, Inc. and Drawbridge Special Opportunities Fund LP.</TD>
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<P align="center" style="font-size: 10pt; display: none">2
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<P align="left" style="font-size: 10pt"><B>SIGNATURE</B>


<P align="left" style="font-size: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



<P align="left" style="margin-left:45%; font-size: 10pt">VaxGen, Inc.
<BR>
(Registrant)


<P align="left" style="font-size: 10pt">Dated: October 30, 2008



<P align="left" style="margin-left:45%; font-size: 10pt; margin-top: -11pt">By:
<U>/s/&nbsp;James P. Panek</U>
<BR>
James P. Panek
<BR>
President and Chief Executive Officer

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<P align="left" style="font-size: 10pt"><B>EXHIBIT INDEX</B>

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    <TD width="11%">&nbsp;</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit<BR>
Number
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;<BR>
Description</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Note Repurchase Agreement, dated October&nbsp;27, 2008, by and between
VaxGen, Inc. and Drawbridge Special Opportunities Fund LP.</TD>
</TR>
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Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): October 30, 2008
VAXGEN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
0-26483
94-3236309
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
349 OYSTER POINT BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA
94080
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
(650) 624-1000
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
SECTION 1—REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01. Entry into a Material Definitive Agreement.
Note Repurchase Agreement
On October 27, 2008, VaxGen, Inc. ("VaxGen") entered into a Note Repurchase Agreement with Drawbridge Special
Opportunities Fund LP (the "Drawbridge Agreement"), whereby VaxGen agreed to repurchase its 5
1/2
% convertible senior
subordinated notes due April 2010 (each, a "Note," and collectively, the "Notes").
Pursuant to the Drawbridge Agreement, VaxGen agreed to repurchase its Notes in the principal amount of $5,000,000
at a purchase price of $4,150,000, plus accrued interest of $20,625.03 based on an assumed settlement date of October
28, 2008.
The transaction described above was initiated by the noteholder and was not the result of any solicitation by or
on behalf of VaxGen.
The Drawbridge Agreement is attached to this report as Exhibit 10.1. The foregoing description is qualified in its
entirety by reference to the full text of the Drawbridge Agreement.
Item 9.01. Financial Statements and Exhibits.
Exhibit
Number
Description
10.1
Note Repurchase Agreement, dated October 27, 2008, by and between
VaxGen, Inc. and Drawbridge Special Opportunities Fund LP.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VaxGen, Inc.
(Registrant)
Dated: October 30, 2008
By:
/s/ James P. Panek
James P. Panek
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number
Description
10.1
Note Repurchase Agreement, dated October 27, 2008, by and between
VaxGen, Inc. and Drawbridge Special Opportunities Fund LP.