10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

Commission file number 000-28401

MAXYGEN, INC.

(Exact name of registrant as specified in its charter)

Delaware	77-0449487
(State of incorporation)	(I.R.S. Employer Identification No.)

411 Borel Avenue Suite 616

San Mateo, California 94402

(Address of principal executive offices, including zip code)

(650) 241-2292

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2013, there were 27,788,749 shares of the registrant’s common stock, $0.0001 par value per share, outstanding, which is the only class of common or voting stock of the registrant issued.

MAXYGEN, INC.

FORM 10-Q

QUARTER ENDED JUNE 30, 2013

INDEX
Part I FINANCIAL INFORMATION
Item 1: Financial Statements:
Condensed Consolidated Balance Sheets as of December 31, 2012 and June 30, 2013 (unaudited)	4
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six month periods ended June 30, 2012 and June 30, 2013 (unaudited)	5
Condensed Consolidated Statements of Cash Flows for the six month periods ended June  30, 2012 and June 30, 2013 (unaudited)	6
Notes to Condensed Consolidated Financial Statements	7
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3: Quantitative and Qualitative Disclosures About Market Risk	19
Item 4: Controls and Procedures	19
Part II OTHER INFORMATION
Item 1: Legal Proceedings	21
Item 1A: Risk Factors	21
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3: Defaults Upon Senior Securities	32
Item 4: Mine Safety Disclosures	32
Item 5: Other Information	32
Item 6: Exhibits	32
SIGNATURES	33

This report and the disclosures herein include, on a consolidated basis, the business and operations of Maxygen, Inc. and its wholly-owned subsidiary, Maxygen ApS (through its dissolution on June 13, 2013). In this report, “Maxygen,” the “company,” “we,” “us” and “our” refer to such consolidated entities, unless, in each case, the context indicates that the disclosure applies only to a named subsidiary.

Our web site is located at www.maxygen.com. We make available free of charge, on or through our web site, our annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing or furnishing such reports with the Securities and Exchange Commission, or SEC. Information contained on our web site is not part of this report.

Maxygen^® is a registered trademark of Maxygen, Inc. Other service marks, trademarks and trade names referred to in this report are the property of their respective owners.

Forward Looking Statements

This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of our management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “can,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology. In any forward-looking statement in which we express an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:

• strategic alternatives and transactions with respect to our MAXY-G34 product candidate or our company and the timing, likelihood and outcome thereof;

• our implementation, or our failure to implement, any additional distributions of our cash resources to stockholders and the treatment of any such distributions for tax purposes;

• our ability to estimate and maintain adequate reserves to fund our current and longer term operational requirements, pursue our ongoing strategic evaluation and provide for potential future liabilities and claims, such as liabilities, claims, adjustments, penalties, interest and other amounts resulting from potential future tax audits or from potential future litigation;

• our ability to continue operations and our estimates for future performance and financial position of the company;

• our ability to retain key employees to maintain our ongoing operations and, if necessary, our ability to successfully hire qualified personnel;

• our ability to protect and maintain our intellectual property portfolio and associated rights and obligations;

• our business strategies and plans; and

• other economic, business, competitive, and/or regulatory factors affecting our business and the market we serve generally.

These statements are only predictions. Risks and uncertainties and the occurrence of other events could cause actual results to differ materially from these predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these statements. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report are set forth in our Form 10-K for the year ended December 31, 2012 and in this report, including the factors described in the section entitled “Item 1A—Risk Factors” and “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as those discussed in our Current Reports on Form 8-K and other SEC filings. While we may elect to update these forward-looking statements at some point in the future, Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise, except to the extent required by applicable law.

Forward-Looking Statements about the Proposed Plan of Dissolution

This Quarterly Report on Form 10-Q contains forward-looking statements about our proposed plan of dissolution. These statements are based on the current expectations and beliefs of our management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Such risks and uncertainties include, but are not limited to, our ability to obtain stockholder approval of the proposed dissolution, our ability to accurately estimate the amounts required to pay all operating expenses, as well as other known, non-contingent liabilities, through the dissolution and wind-down process, our ability to settle, make reasonable provision for or otherwise resolve our liabilities and obligations, including the establishment of an adequate contingency reserve; the precise nature, amount and timing of any distributions to stockholders; the possibility that any distributions to stockholders, including our proposed initial liquidating distribution could be diminished and/or delayed by, among other things, sales of our assets, claim settlements with creditors, unexpected or greater than expected expenses; the possibility that distributions to stockholders may take several years to complete; the possibility that our Board of Directors could elect to abandon or delay implementation of the dissolution; the possibility that our stockholders could be liable to our creditors in the event we fail to create an adequate contingency reserve to satisfy claims against us; and our ability to evaluate alternatives or recommence our operations in the event that our stockholders do not approve the dissolution. These risks and uncertainties are further detailed in the definitive proxy statement we filed with the SEC on June 28, 2013 and from time to time in other relevant materials filed with the SEC. While we may elect to update these forward-looking statements at some point in the future, we are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements whether as a result of new information, future events, or otherwise, except to the extent required by applicable law.

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Additional Information about the Proposed Plan of Dissolution and Where to Find it

This Quarterly Report on Form 10-Q does not constitute a solicitation of any vote or approval. In connection with the proposed plan of dissolution, we filed a definitive proxy statement with the SEC on June 28, 2013 and have filed other relevant materials with the SEC. We may also file other relevant documents with the SEC regarding the proposed dissolution. INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC (IF AND WHEN THEY BECOME AVAILABLE) BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT US AND THE PLAN OF DISSOLUTION. You may obtain a free copy of the proxy statement and the other relevant materials (if and when they become available), and any other documents filed by us with the SEC, at the SEC’s web site at http://www.sec.gov. A free copy of the proxy statement and other documents filed with the SEC may also be obtained by directing a written request to: Maxygen, Inc., Attn: Secretary, 411 Borel Avenue, Suite 616, San Mateo, CA 94402, or by accessing the “Investor Relations” section of Maxygen’s website at www.maxygen.com. Shareholders are urged to read the proxy statement and the other relevant materials (if and when they become available) before making any voting or investment decision with respect to the plan of dissolution.

We and our executive officers and directors may be deemed to be participants in the solicitation of proxies from our stockholders with respect to the proposed plan of dissolution. Information regarding their direct or indirect interests, by security holdings or otherwise, in the solicitation is available in the proxy statement we filed with the SEC.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MAXYGEN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	December  31, 2012			June  30, 2013
				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	62,784		$	74,383
Short-term investments		19,996			5,000
Available-for-sale investment in equity securities		76			22
Prepaid expenses and other current assets		252			199
Total current assets		83,108			79,604
Property and equipment, net		113			87
Total assets	$	83,221		$	79,691
LIABILITIES AND STOCK HOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	245		$	381
Accrued compensation		947			2,142
Distribution payable		1,002			607
Other accrued liabilities		505			297
Total current liabilities		2,699			3,427
Non-current distribution payable		283			—
Other non-current liabilities		52			52
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2012 and June 30, 2013		—			—
Common stock, $0.0001 par value, 100,000,000 shares authorized, 27,512,340 and 27,670,228 shares issued and outstanding at December 31, 2012 and June 30, 2013, respectively		3			3
Additional paid-in capital		212,008			213,167
Accumulated other comprehensive income (loss)		(172	)		23
Accumulated deficit		(131,652	)		(136,981	)
Total stockholders’ equity		80,187			76,212
Total liabilities and stockholders’ equity	$	83,221		$	79,691

See accompanying notes.

4

MAXYGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

	Three months ended June 30,						Six months ended June 30,
	2012			2013			2012			2013
	(unaudited)
Technology and license revenue	$	30,000		$	—		$	30,006		$	3
Operating expenses:
Research and development		—			2			65			4
General and administrative		2,418			2,990			5,185			5,141
Total operating expenses		2,418			2,992			5,250			5,145
Income (loss) from operations		27,582			(2,992	)		24,756			(5,142	)
Gain on distribution of equity securities		68			37			143			60
Interest and other income (expense), net		(10	)		(243	)		169			(247	)
Income (loss) before income taxes		27,640			(3,198	)		25,068			(5,329	)
Income tax expense		(70	)		—			(70	)		—
Net income (loss)		27,570			(3,198	)		24,998			(5,329	)
Net income attributable to non-controlling interests		450			—			450			—
Net income (loss) attributable to Maxygen, Inc.	$	27,120		$	(3,198	)	$	24,548		$	(5,329	)
Other comprehensive income (loss):
Total change in other comprehensive income (loss)		33			212			(806	)		195
Comprehensive income (loss) attributable to Maxygen, Inc.	$	27,153		$	(2,986	)	$	23,742		$	(5,134	)
Basic net income (loss) per share attributable to Maxygen, Inc.	$	1.00		$	(0.12	)	$	0.90		$	(0.19	)
Diluted net income (loss) per share attributable to Maxygen, Inc.	$	0.99		$	(0.12	)	$	0.90		$	(0.19	)
Shares used in basic net income (loss) per share calculations		27,250			27,581			27,241			27,549
Shares used in diluted net income (loss) per share calculations		27,388			27,581			27,424			27,549

See accompanying notes.

5

MAXYGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six months ended June 30,
	2012			2013
	(unaudited)
Operating activities
Net income (loss)	$	24,998		$	(5,329	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		27			26
Gain on distribution of equity securities		(143	)		(60	)
Non-cash stock compensation		1,248			1,368
Amortization of discount on investments		(14	)		(8	)
Income tax expense		70			—
Loss (gain) on disposal of fixed assets		4			—
Valuation of stock portion of distribution payable		(161	)		4
Translation adjustment related to dissolution of subsidiary		—			252
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		115			53
Deposits and other non-current assets		124			—
Accounts payable		186			136
Accrued compensation		(357	)		1,009
Other accrued liabilities		(486	)		(208	)
Net cash provided by (used in) operating activities		25,611			(2,757	)
Investing activities
Purchase of available-for-sale securities		(37,975	)		(4,999	)
Maturities of available-for-sale securities		5,000			20,000
Acquisition of property and equipment		(27	)		—
Net cash provided by (used in) investing activities		(33,002	)		15,001
Financing activities
Cash distributions paid to common stockholders		(207	)		(622	)
Net liquidating dividend of subsidiary		(659	)		—
Proceeds from issuance of common stock, net of stock repurchased to settle employee tax obligations		(48	)		(23	)
Repurchase of common stock		(1,536	)		—
Net cash used in financing activities		(2,450	)		(645	)
Net increase (decrease) in cash and cash equivalents		(9,841	)		11,599
Cash and cash equivalents at beginning of period		154,572			62,784
Cash and cash equivalents at end of period	$	144,731		$	74,383

See accompanying notes.

6

MAXYGEN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. The information as of June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, includes all adjustments (consisting only of normal recurring adjustments) that the management of Maxygen, Inc. (the “Company”) believes necessary for fair presentation of the results for the periods presented. The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

In addition, results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

On May 30, 2013, the Company’s Board of Directors approved the dissolution and liquidation of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”). The Dissolution is subject to approval by the stockholders of the Company and the Company is seeking stockholder approval of the Dissolution at its annual meeting of stockholders, currently scheduled to be held on August 12, 2013.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the amounts of Maxygen, Inc. and the Company’s wholly-owned subsidiary, Maxygen ApS (through its dissolution on June 13, 2013). The Condensed Consolidated Financial Statements also include the amounts of the Company’s former majority-owned subsidiary, Maxygen Holdings LLC (through its dissolution on June 21, 2012), and its former wholly-owned subsidiaries, Maxygen Holdings (U.S.), Inc. and Maxygen Holdings, Inc. (through their dissolution on August 9, 2012).

Prior to the dissolution of its majority-owned subsidiary, Maxygen Holdings, LLC, on June 21, 2012, the Company was the primary beneficiary of Maxygen Holdings LLC. In May 2010, the Company sold a minority membership interest in Maxygen Holdings LLC to a third party for $200,000 in cash and a contingent promissory note. In connection with its dissolution, Maxygen Holdings LLC issued a liquidating dividend to each of its members and, as a result, the third party received $659,000. Prior to the dissolution, amounts pertaining to the ownership interest held by such third party in the operating results and financial position of Maxygen Holdings LLC were reported as a non-controlling interest.

Net Income (loss) Per Share

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. During the periods in which the Company has net income from continuing operations, the diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities.

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The following table presents a reconciliation of the numerators and denominators of the basic and dilutive net income (loss) per share computations and the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

	Three months ended June 30,					Six months ended June 30,
	2012		2013			2012		2013
Numerator:
Numerator for basic and diluted income (loss) attributable to Maxygen, Inc.	$	27,120	$	(3,198	)	$	24,548	$	(5,329	)
Denominator:
Basic and diluted:
Weighted-average shares used in computing basic net income (loss) per share		27,250		27,581			27,241		27,549
Effect of dilutive securities		138		—			183		—
Weighted-average shares used in computing diluted net income (loss) per share		27,388		27,581			27,424		27,549
Basic net income (loss) per share attributable to Maxygen, Inc.	$	1.00	$	(0.12	)	$	0.90	$	(0.19	)
Diluted net income (loss) per share attributable to Maxygen, Inc.	$	0.99	$	(0.12	)	$	0.90	$	(0.19	)

The total number of shares excluded from the calculations of diluted net income (loss) per share was approximately 5,413,000 options and 11,000 shares of restricted stock at June 30, 2012 and 4,238,000 options and 118,500 shares of restricted stock at June 30, 2013. These securities have been excluded from the calculation of diluted net income (loss) per share as their effect is anti-dilutive.

Comprehensive Income (loss)

Comprehensive income (loss) is primarily comprised of net income (loss), net unrealized gains or losses on available-for-sale securities, net of reclassification adjustments for gains (losses) included in net (income) loss, and their related tax effects and the impact of foreign currency translation.

	Three months ended June 30,						Six months ended June 30,
	2012			2013			2012			2013
Net income (loss) attributable to Maxygen, Inc.	$	27,120		$	(3,198	)	$	24,548		$	(5,329	)
Non-cash translation adjustment related to dissolution of subsidiary		—			252			—			252
Changes in unrealized gains on available-for-sale investments		31			(3	)		(733	)		3
Reclassification adjustments for gains included in net income (loss)		(68	)		(37	)		(143	)		(60	)
Tax effects of changes in unrealized gains on available-for-sale investments		70			—			70			—
Total change in other comprehensive income (loss)		33			212			(806	)		195
Comprehensive income (loss)	$	27,153		$	(2,986	)	$	23,742		$	(5,134	)

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The changes in unrealized gain (loss) on available-for-sale investment in equity securities represent the change in fair value of the Codexis, Inc. common stock held by the Company. The reclassification adjustments to changes in unrealized gains on available-for-sale investments include gains associated with the distribution of such common stock in both 2012 and 2013. The shares of Codexis, Inc. common stock being retained by the Company primarily represent shares reserved on behalf of the holders of certain outstanding equity awards.

The components of accumulated other comprehensive income (loss) was as follows (in thousands):

	December 31, 2012			June 30, 2013
Unrealized gains on available-for-sale investments	$	80		$	23
Foreign currency translation adjustments		(252	)		—
Accumulated other comprehensive income (loss)	$	(172	)	$	23

Stock-Based Compensation

For the three months ended June 30, 2012 and 2013, stock-based compensation expense of $722,000 and $752,000, respectively, was allocated entirely to general and administrative expense. For the six months ended June 30, 2012 and 2013, stock-based compensation expense of $1,248,000 and $1,368,000, respectively, was allocated entirely to general and administrative expense.

Stock Options

Stock options are generally scheduled to vest over four years and all options expire no later than 10 years from the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model. There were no stock options granted to employees during each of the three and six months ended June 30, 2012 and 2013. For the three months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $191,000 and $180,000, respectively. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $368,000 and $364,000, respectively. In connection with the Dissolution, the Company’s Board of Directors approved the accelerated vesting in full of all stock option awards that remained outstanding and unvested, effective July 31, 2013.

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Restricted Stock Awards

The Company has granted restricted stock awards (“RSAs”) under its 2006 Equity Incentive Plan (the “2006 Plan”) to certain employees and members of its board of directors. RSAs are generally scheduled to vest over four years. The 2006 Plan and related award agreement provide for forfeiture in certain events, such as voluntary termination of employment, and for acceleration of vesting in certain events, such as termination of employment without cause or a change in control of the Company. Compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. The Company did not grant any RSAs in the three and six months ended June 30, 2013. In the three and six months ended June 30, 2012, the Company granted RSAs to its board members representing an aggregate of 40,000 shares of Company common stock. For the three months ended June 30, 2012 and 2013, the Company recognized approximately $378,000 and $433,000, respectively, in stock-based compensation expense related to its RSAs. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with RSAs was $829,000 and $819,000, respectively. At June 30, 2013, the unrecognized compensation cost related to these awards was approximately $567,000, which is expected to be recognized on a straight-line basis over the requisite service period through June 2016. In accordance with the standard terms of the RSAs, all RSAs that remain outstanding and unvested would be accelerated and vest in full in connection with the Dissolution. In such case, all remaining unamortized expense would be immediately recognized in conjunction with accelerated vesting.

Contingent Performance Units

In September 2009, the Company granted contingent performance units (“CPUs”) under the 2006 Plan to all employees and board members who held options to purchase the Company’s common stock, and since that date the Company has also granted CPUs in connection with the grant of new stock option awards. CPUs vest on the earliest to occur of (i) a change in control of the Company, (ii) a corporate dissolution or liquidation of the Company, (iii) an involuntary termination of employment without cause, or (iv) the fourth anniversary of the grant date (the “Settlement Date”), generally so long as the holder continues to provide services for the Company on a continuous basis from the grant date to the Settlement Date. The CPUs are designed to protect holders of the Company’s stock options against a reduction in the share price of the Company’s common stock resulting from dividends or distributions to the Company’s stockholders, which could negatively affect outstanding options held by option holders of the Company since the options would not otherwise participate in any dividends or distributions to the Company’s stockholders. The earned value of any vested CPU will generally be settled in shares of common stock of the Company, but may also be settled entirely in cash. All unvested CPUs remaining following the Settlement Date will expire immediately. As noted above, in accordance with the standard terms of the CPU awards, all awards that remain outstanding would be accelerated and settled in connection with the Dissolution and, to the extent the Dissolution is approved by the Company’s stockholders, the Company’s Board of Directors has authorized that all remaining CPU awards be settled entirely in cash.

These awards were remeasured at estimated fair value as of June 30, 2013, as required for liability awards. During the six months ended June 30, 2012, approximately $42,000 in cash was paid to settle vested CPUs. During the six months ended June 30, 2013, approximately $12,000 in cash was paid to settle vested CPUs. The fair value of the remaining CPUs was approximately $1.0 million at June 30, 2013. The Company used the intrinsic value to measure the fair value of such awards at June 30, 2013. Given the majority of the awards’ proximity to their respective settlement dates, the Company does not believe there would be a material difference in the total fair value of such awards using the Monte Carlo simulation model, which was used in all prior periods, compared with using the intrinsic value method. The intrinsic value of such awards was based on the closing prices of Maxygen and Codexis’ common stock on June 28, 2013, which were $2.48 and $2.21, respectively. The fair value of such awards in all periods prior to June 30, 2013 was determined based on a Monte Carlo simulation using the following assumptions:

	As of June 30, 2012
Expected dividend yield	0%
Risk-free interest rate range	0.21% – 0.38%
Expected life	1.23 – 2.92 years
Expected volatility of Maxygen, Inc. common stock	21.8% to 36.5%
Expected volatility of Codexis, Inc. common stock	63.0% to 67.5%

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The risk-free interest rate is based on the U.S. Treasury yield in effect at each reporting date, with a term commensurate with the estimated remaining expected life of the award. Expected life is based on the estimated remaining time to settlement for each award. Expected volatility of both the Company’s common stock and the Codexis, Inc. common stock is based on the historical volatility, as available, of such stock commensurate with the expected life of each award.

The Company recorded compensation expense of approximately $153,000 and $139,000 in the three months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses. The Company recorded compensation expense of approximately $51,000 and $185,000 in the six months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses. As the CPUs are accounted for as liability awards, the Company re-measures their fair value at each reporting date and records compensation expense utilizing a straight-line attribution method.

2. Cash Equivalents and Investments

The Company’s cash equivalents and investments as of June 30, 2013 were as follows (in thousands):

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Money market funds	$	74,383		$	—	$	—	$	74,383
U.S. Treasury securities		4,999			1		—		5,000
Available-for-sale investment in equity securities		—			22		—		22
Total		79,382			23		—		79,405
Less amounts classified as cash equivalents		(74,383	)		—		—		(74,383	)
Total investments	$	4,999		$	23	$	—	$	5,022

The Company’s cash equivalents and investments as of December 31, 2012 were as follows (in thousands):

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Money market funds	$	62,784		$	—	$	—	$	62,784
U.S. Treasury securities		19,992			4		—		19,996
Available-for-sale investment in equity securities		—			76		—		76
Total		82,776			80		—		82,856
Less amounts classified as cash equivalents		(62,784	)		—		—		(62,784	)
Total investments	$	19,992		$	80	$	—	$	20,072

At June 30, 2013, all investments in debt securities had a contractual maturity of less than one year.

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3. Fair Value

Assets and liabilities recorded at fair value in the Condensed Consolidated Financial Statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to valuation of these assets and liabilities, are as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following tables represent the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) and financial liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012 (in thousands):

	As of June 30, 2013
	Estimated Fair Value		Level 1		Level 2		Level 3
Assets recorded on the balance sheet:
Money market funds	$	74,383	$	74,383	$	—	$	—
U.S. Treasury securities		5,000		5,000		—		—
Available-for-sale investment in equity securities		22		22		—		—
Total	$	79,405	$	79,405	$	—	$	—
Liabilities:
Stock portion of distribution payable	$	19	$	19	$	—	$	—
Total	$	19	$	19	$	—	$	—

	As of December 31, 2012
	Estimated Fair Value		Level 1		Level 2		Level 3
Assets recorded on the balance sheet:
Money market funds	$	62,784	$	62,784	$	—	$	—
U.S. Treasury securities		19,996		19,996		—		—
Available-for-sale investment in equity securities		76		76		—		—
Total	$	82,856	$	82,856	$	—	$	—
Liabilities:
Stock portion of distribution payable	$	75	$	75	$	—	$	—
Total	$	75	$	75	$	—	$	—

As of June 30, 2013, the Company held 9,978 shares of Codexis, Inc. common stock, which is reflected on the Company’s Condensed Consolidated Balance Sheet as available-for-sale investment in equity securities for $22,000. As the fair value of the Company’s investment in Codexis, Inc. common stock was based on the $2.21 closing price of such stock on June 28, 2013, and because an active market exists for such shares, the Company has classified the fair value of this asset as a Level 1 asset within the fair value hierarchy. As of December 31, 2012, the Company held 34,450 of such shares with a fair value of $76,000, based on the $2.21 closing price of such stock on December 31, 2012.

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At June 30, 2013, the Company had an obligation to distribute 8,621 shares of Codexis, Inc. common stock to holders of the Company’s restricted stock awards. The fair value of this obligation of $19,000 is determined based on the $2.21 closing price of such stock on June 28, 2013. As of December 31, 2012, the obligation totaled $75,000, based on 33,988 shares of such stock with a $2.21 closing price on December 31, 2012. As the fair value was based on a quoted price in an active market, the Company classified this liability as a Level 1 liability within the fair value hierarchy and as the Stock portion of distribution payable in the table above.

4. Repurchases of Common Stock

From December 2009 through June 30, 2013, the Company repurchased a total of 12,506,627 shares of its common stock for a total cost of approximately $67.9 million. As further summarized below, these stock repurchases were conducted pursuant to a modified “Dutch auction” offer and through open market repurchases and private transactions.

In December 2009, the Company repurchased 7,345,103 shares pursuant to a modified “Dutch auction” tender offer at a total cost of approximately $39.2 million. In March 2010, the Company repurchased 1,433,361 shares from entities affiliated with GlaxoSmithKline plc at a per share price of $5.55, and the Company repurchased an additional 1,204,604 shares during 2010 as part of an open market repurchase program at an average price of $5.72 per share.

On May 31, 2011, the Company announced a stock repurchase program under which the Company was authorized to purchase up to $10.0 million of its common stock through December 31, 2011. On September 8, 2011, this repurchase program was increased from $10.0 million to $20.0 million. During 2011, the Company repurchased 2,244,289 shares of its common stock under this program at an aggregate cost of approximately $12.3 million. This program expired on December 31, 2011.

In January 2012, the Company announced a new stock repurchase program under which it was authorized to purchase up to $10.0 million of its common stock through December 31, 2012. For the year ended December 31, 2012, the Company repurchased 279,270 shares of its common stock under this program at an aggregate cost of approximately $1.5 million. In November 2012, the Company announced the extension of this stock repurchase program through December 31, 2013. There were no repurchases of common stock during the six months ended June 30, 2013.

The table below summarizes the Company’s repurchases of its common stock since 2009:

Period	Total Number of Shares Purchased		Total Costs, Net of  Fees (In thousands)
Twelve months ended December 31, 2009		7,345,103	$	39,170
Twelve months ended December 31, 2010		2,637,965		14,889
Twelve months ended December 31, 2011		2,244,289		12,256
Twelve months ended December 31, 2012		279,270		1,536
Six months ended June 30, 2013		—		—
Total		12,506,627	$	67,851

5. Related Party Transactions

Waverley

On April 1, 2006, the Company entered into a consulting agreement with Waverley Associates, Inc. (“Waverley”), a private investment firm for which Mr. Isaac Stein is the president and sole stockholder. Mr. Stein also currently serves as the Company’s Chief Executive Officer and Chief Financial Officer and as Executive Chairman of the Company’s Board of Directors. The consulting agreement, as amended to date, provides for consulting fees payable to Waverley of $50,000 per month. The consulting agreement also provides for automatic renewal of the agreement for successive one-year terms and a two-year notice period for termination of the agreement by either party. Total expense under this arrangement was approximately $150,000 for each of the three month periods ended June 30, 2012 and 2013 and $300,000 for each of the six month periods ended June 30, 2012 and 2013. At June 30, 2013, $50,000 pertaining to this consulting agreement was recorded within accounts payable on the Company’s condensed consolidated balance sheet.

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6. Receipt of Contingent Payment from Bayer

In the three months ended June 30, 2012, the Company received a $30.0 million payment from Bayer HealthCare LLC (“Bayer”) in connection with Bayer’s continued clinical development of a recombinant factor VIIa product candidate for the treatment of hemophilia. The Company sold the recombinant factor VIIa product candidate (previously designated by the Company as MAXY-VII) to Bayer, together with its other hematology assets, in July 2008 for an upfront cash payment of $90.0 million. The additional $30.0 million contingent payment was based on the further clinical development of the factor VIIa product candidate by Bayer and was also subject to the satisfaction of certain patent conditions related to these assets. The $30.0 million payment was recorded within Technology and license revenue on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income in the three months ended June 30, 2012. There are no remaining payments to be received from Bayer under our agreements with Bayer.

7. Plan of Dissolution

On May 30, 2013, the Board of Directors of the Company approved the Dissolution pursuant to the Plan of Dissolution. The Dissolution is subject to approval by the stockholders of the Company and the Company plans to hold a stockholder meeting on August 12, 2013 to seek approval of the Dissolution.

The Plan of Dissolution contemplates an orderly wind down of the Company’s business and operations. If the Company’s stockholders approve the Dissolution, the Company intends to file a certificate of dissolution with the Delaware Secretary of State, satisfy or resolve its remaining liabilities and obligations, including but not limited to contingent liabilities and claims, lease obligations, severance for terminated employees, and costs associated with the liquidation and dissolution, and make distributions to its stockholders of cash available for distribution, subject to applicable legal requirements. Upon the filing of the certificate of dissolution, the Company intends to close its stock transfer books, discontinue recording transfers of shares of its stock, and seek relief from certain of its reporting obligations under the Securities Exchange Act of 1934, as amended. The Company also plans to request that NASDAQ suspend trading of the Company’s common stock on the NASDAQ Global Market effective at the close of business on the date the Company files the certificate of dissolution and will seek to delist its shares of common stock from the NASDAQ Global Market as soon as practicable thereafter.

The Company currently estimates that the aggregate amount of an initial liquidating distribution to stockholders will be between $68.2 million and $69.6 million, or between $2.45 and $2.50 per share, based on 27,788,749 shares of common stock outstanding as of July 31, 2013, provided that the Board may adjust such amount at a later date to ensure there is cash remaining to satisfy any potential liabilities. The Company expects to make the initial liquidating distribution as promptly as practicable after the filing of the certificate of dissolution. Additional liquidating distributions, which could total as much as approximately $0.09 per share, may be made as the required contingency reserves are released or contingent liabilities are paid over time.

If the stockholders of the Company approve the Dissolution pursuant to the Plan of Dissolution, the ultimate values realized for the Company’s assets and ultimate amounts paid to satisfy the Company’s liabilities may differ from the carrying value recorded. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

For more information regarding the Dissolution, please see the section in this report titled “Additional Information about the Proposed Plan of Dissolution and Where to Find it.”

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the related notes and other financial information appearing elsewhere in this report. This report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those indicated in forward-looking statements. See “Forward-Looking Statements” and “Risk Factors.”

Overview

We are a biopharmaceutical company that has historically focused on the discovery and development of improved next-generation protein pharmaceuticals for the treatment of disease and serious medical conditions.

Over the past several years, we have focused our efforts on maximizing stockholder value through sales, distributions and other arrangements involving our various assets. This includes the distribution of approximately $100.0 million in cash to our stockholders in September 2012 and the receipt of a final $30.0 million payment from Bayer HealthCare LLC, or Bayer, in May 2012 in connection with our sale of certain hematology assets to Bayer in July 2008. This also includes the receipt of $76.0 million in cash in May 2011 in connection with the sale of all of our interests in Perseid Therapeutics LLC, or Perseid, to a subsidiary of Astellas Pharma Inc., or Astellas. Perseid was a former majority-owned subsidiary that included substantially all of our research and development operations and personnel. In addition, from December 2009 through June 30, 2013, we repurchased approximately 12.5 million shares of our common stock at an aggregate cost of approximately $67.9 million. In connection with these and other transactions, we have returned over $250.0 million in cash and property to our stockholders since 2009 primarily through our distributions of cash and repurchases of our stock.

On May 30, 2013, our Board of Directors approved the dissolution and liquidation of the Company pursuant to a plan of complete liquidation and dissolution. The dissolution is subject to stockholder approval and we are seeking stockholder approval of the dissolution at our annual meeting of stockholders, which is currently scheduled to be held on August 12, 2013. If our stockholders approve the dissolution, we intend to file a certificate of dissolution with the Delaware Secretary of State, satisfy or resolve our remaining liabilities and obligations, including but not limited to contingent liabilities and claims, lease obligations, severance for terminated employees, and costs associated with the liquidation and dissolution, and make distributions to our stockholders of cash available for distribution, subject to applicable legal requirements. Upon the filing of the certificate of dissolution, we intend to close our stock transfer books, discontinue recording transfers of shares of our stock, and seek relief from certain of its reporting obligations under the Securities Exchange Act of 1934, as amended. We also plan to request that NASDAQ suspend trading of our common stock on the NASDAQ Global Market effective at the close of business on the date we file the certificate of dissolution and will seek to delist our shares of common stock from the NASDAQ Global Market as soon as practicable thereafter.

We currently estimate that the aggregate amount of an initial liquidating distribution to stockholders will be between $68.2 million and $69.6 million, or between $2.45 and $2.50 per share, based on 27,788,749 shares of common stock outstanding as of July 31, 2013, provided that our Board may adjust such amount at a later date to ensure there is cash remaining to satisfy any potential liabilities. We expect to make the initial liquidating distribution as promptly as practicable after the filing of the certificate of dissolution. Additional liquidating distributions, which could total as much as approximately $0.09 per share, may be made as the required contingency reserves are released or contingent liabilities are paid over time.

For more information regarding the Dissolution, please see the section in this report titled “Additional Information about the Proposed Plan of Dissolution and Where to Find it.”

At present, we have no significant source of recurring revenues. Our cash, cash equivalents and short-term investments totaled $79.4 million as of June 30, 2013 and we continue to retain all rights to our MAXY-G34 product candidate, a next-generation pegylated, granulocyte colony stimulating factor, or G-CSF, for the treatment of chemotherapy-induced neutropenia and acute radiation syndrome, or ARS.

For the purposes of this report, our continuing operations consist of the results of Maxygen, Inc. and our wholly-owned subsidiary, Maxygen ApS (through its dissolution on June 13, 2013). Our condensed consolidated financial statements also include the amounts of our former majority-owned subsidiary, Maxygen Holdings LLC (through its dissolution on June 21, 2012), and our former wholly-owned subsidiaries, Maxygen Holdings (U.S.), Inc. and Maxygen Holdings, Inc. (through their dissolution on August 9, 2012).

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Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make judgments, estimates and assumptions in the preparation of our consolidated financial statements and accompanying notes. Actual results could differ from those estimates. We believe there have been no significant changes in our critical accounting policies as discussed in our Annual Report on Form 10-K for the year ended December 31, 2012.

Results of Operations

Revenues

Our revenues have been derived primarily from collaboration agreements, technology and license arrangements. No technology and license revenue was recorded in the three month period ended June 30, 2013 and revenue recorded in the six month period ended June 30, 2013 consisted of certain miscellaneous licensing fees received from third parties. Technology and license revenue of $30.0 million recorded in both the three and six month periods ended June 30, 2012 consisted of revenue attributable to a payment we received in May 2012 from Bayer in connection with our sale of certain hematology assets in July 2008. While we will continue our efforts to create value from sales or other transactions involving our remaining non-cash assets, primarily consisting of our MAXY-G34 program, there can be no assurance that we will be able to consummate any transaction for the sale or other disposition of our MAXY-G34 product candidate or any other non-cash assets, and we do not otherwise expect to receive any significant source of revenue in the future.

Research and Development Expenses

Our research and development expenses have historically consisted of external collaborative research expenses (including contract manufacturing, contract research and clinical trial expenses), salaries and benefits, facility costs, supplies, research consultants, depreciation and stock compensation expense. As a result of the acquisition of Perseid by Astellas in May 2011, our research and development expenses have been substantially reduced and are currently attributable to limited research and development activities related to our MAXY-G34 product candidate. Research and development expenses were $2,000 in the three months ended June 30, 2013, while no research and development expenses were recorded in the three months ended June 30, 2012. Research and development expenses were $4,000 in the six months ended June 30, 2013, compared to $65,000 in the six months ended June 30, 2012. Research and development expenses in all periods primarily related to limited stability and other testing of our MAXY-G34 product candidate.

If our dissolution is approved by our stockholders, we expect to further reduce or eliminate all remaining research and development expenses. However, any further development of our MAXY-G34 product candidate that we may undertake in connection with a potential transaction could result in a significant increase in our research and development expenses. In addition, if our dissolution is not approved by our stockholders, we may be required to pursue other alternatives or recommence active business operations, which could result in increased research and development expenses.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel costs for finance, legal, general management, business development and human resources, stock compensation expense, insurance premiums, business consultants and professional expenses, such as expenditures for legal, accounting services and board fees. General and administrative expenses were $3.0 million and $5.1 million for the three and six months ended June 30, 2013, compared to $2.4 million and $5.2 million in the comparable periods in 2012. The increase in our general and administrative expenses from the three month period ended June 30, 2012 to the comparable period of 2013 was primarily attributable to employee severance costs, which was partially offset by a decrease in salary and related costs as a result of lower headcount and a reduction in consulting expenses. Our general and administrative expenses did not change materially from the six month period ended June 30, 2012 to the comparable period of 2013, with increases in employee severance costs and stock compensation expense being offset by decreases in salary and related costs as a result of lower headcount, consulting expenses and professional expenses, including accounting and tax services.

If our dissolution is approved by stockholders, we expect to further curtail our general and administrative expenses, other than those expenses incurred in connection with our process to wind-down the company, such as severance related obligations for our remaining employees. In addition, if our dissolution is not approved by our stockholders, we may be required to pursue other alternatives or recommence active business operations, which could result in increased general and administrative expenses. Our general and administrative expenses also may increase significantly if we pursue any strategic transactions.

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Gain on Distribution of Equity Securities

In connection with the distribution to our stockholders on December 14, 2010 of substantially all of the Codexis, Inc. common stock we held, we retained shares of such stock on behalf of the holders of certain outstanding equity awards. As of June 30, 2013, we held 9,978 shares of such stock. In the three and six months ended June 30, 2013, we recorded a gain on distribution of equity securities of $37,000 and $60,000, compared to $68,000 and $143,000 in the comparable periods in 2012, as a result of the release of such stock pursuant to the vesting of restricted stock awards.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net, represents income earned on our cash, cash equivalents and short-term investments, change in value of stock portion of distribution payable, foreign currency gains or losses, and other expenses. Amounts included in interest income, net, are as follows (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2012			2013			2012			2013
Interest income	$	15		$	6		$	21		$	16
Foreign exchange gains (losses)		(17	)		—			(9	)		(7	)
Translation adjustment related to dissolution of subsidiary		—			(252	)		—			(252	)
Change in value of stock portion of distribution payable		(4	)		3			161			(4	)
Gain (loss) on disposal of equipment		(4	)		—			(4	)		—
Total interest and other income (expense), net	$	(10	)	$	(243	)	$	169		$	(247	)

The decrease in interest income and other income (expense), net from both the three and six month periods ended June 30, 2012 to the comparable periods of 2013 was primarily due to the translation adjustment recorded as a result of the dissolution of our remaining subsidiary, Maxygen ApS, in the three months ended June 30, 2013. Also contributing to the decrease in the six months ended June 30, 2012 was a change in value of the stock portion of distribution payable.

Net Income Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests of $450,000 for each of the three and six month periods ended June 30, 2012 reflect the portion of the income of Maxygen Holdings LLC allocated to a third party member. No income attributable to non-controlling interests was recorded in the three and six month periods ended June 30, 2013 as there were no further third-party interests in any of our subsidiaries after the dissolution of Maxygen Holdings LLC in June 2012.

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Liquidity and Capital Resources

Since inception, we have financed our continuing operations primarily through the sale or license of various assets, the public offerings and private placements of equity securities and research and development funding from collaborators and government grants. As of June 30, 2013, we had $79.4 million in cash, cash equivalents and short-term investments.

From December 2009 through June 30, 2013, we repurchased approximately 12.5 million shares of our common stock at an aggregate cost of approximately $67.9 million. These repurchases were conducted through a “Dutch auction” tender offer, private transactions, and under various open market repurchase programs. We have not repurchased any stock during the three or six months ended June 30, 2013 under our current open market repurchase program, which is scheduled to expire on December 31, 2013, but will be terminated earlier upon the effectiveness of our dissolution.

In May 2011, Astellas acquired all of our interests in Perseid for $76.0 million in cash. Perseid, a former majority-owned subsidiary, included substantially all of our research and development operations and personnel. As a result of the acquisition of Perseid by Astellas, we have no further interests or obligations with respect to the business and operations of Perseid, except for the ongoing technology license agreement between the companies entered into as a part of the 2009 joint venture arrangement.

In May 2012, we received the final $30.0 million payment from Bayer related to the sale of our hematology assets to Bayer in July 2008.

On September 6, 2012 we made a special cash distribution of $3.60 for each outstanding share of our common stock, equal to approximately $100.0 million in the aggregate. For U.S. Federal income tax purposes, approximately 4.7% of the payment was deemed a dividend, with the balance being treated as a return of capital. The tax treatment to our stockholders of such distribution was based on our current and cumulative earnings and profits through 2012.

On May 30, 2013, our Board of Directors approved the dissolution and liquidation of the company pursuant to a plan of complete liquidation and dissolution. If our stockholders approve the dissolution, we currently estimate that the aggregate amount of the initial liquidating distribution to stockholders will be between $68.2 million and $69.6 million, or between $2.45 and $2.50 per share, based on 27,788,749 shares of common stock outstanding as of July 31, 2013, provided that the Board may adjust such amount at a later date to ensure there is cash remaining to satisfy any potential liabilities. We expect to make the initial liquidating distribution as promptly as practicable after the filing of the certificate of dissolution. Additional liquidating distributions, which could total as much as approximately $0.09 per share, may be made as the required contingency reserves are released or contingent liabilities are paid over time.

The amount distributable to stockholders, however, may vary substantially from the amount estimated above based on a number of factors, including the resolution of outstanding known and contingent liabilities, the possible assertion of claims that are currently unknown to us and costs incurred to wind down our business. The Board of Directors, in consultation with its advisors, has evaluated our known and potential contingent liabilities, as well as other matters, in order to make a determination about reasonable amounts to reserve, which is reflected in the estimated reserve described above. Delaware law requires that our Board of Directors make reasonable provision for contingent and unknown obligations in connection with our dissolution and liquidation, which requires that a portion of our assets be reserved until the resolution of such matters. Further, if additional amounts are ultimately determined to be necessary to satisfy any of these obligations, stockholders may receive substantially less than the current estimates.

In addition, if our dissolution is not approved by our stockholders, our Board of Directors will explore what, if any, alternatives are available to us, which may include selling all of our stock or assets, changing our business focus, continuing our efforts to identify a merger partner or a reverse merger partner, or seeking voluntary dissolution at a later time and with diminished assets. In such event, we would expect our Board of Directors also to consider and evaluate additional distributions to our stockholders of a portion of our cash resources in excess of any future operational requirements. Such distributions could be accomplished through cash dividends, stock repurchases or other mechanisms and may be fully or partially taxable depending on the circumstances of such distribution.

Net cash used in operating activities was $2.8 million in the six months ended June 30, 2013, compared to cash provided by operating activities of $25.6 million in the comparable period in 2012. The net cash used in operating activities in the 2013 period was primarily attributable to a net loss, adjusted to exclude certain non-cash items, and a reduction in other accrued liabilities, partially

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offset by an increase in accrued compensation, which was largely as a result of the accrual of certain employee severance obligations. The net cash provided by operating activities in the 2012 period was primarily attributable to the $30.0 million payment received from Bayer and the resulting net income, adjusted to exclude certain non-cash items, and a reduction in other accrued liabilities and accrued compensation. The non-cash adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities included $1.2 million and $1.4 million in non-cash stock compensation in the 2012 and 2013 periods, respectively. In addition, the 2013 period included a $252,000 non-cash translation adjustment related to the dissolution of Maxygen, ApS in the three months ended June 30, 2013, while the 2012 period included an adjustment of $161,000 pertaining to the valuation of the stock portion of our distribution payable.

Net cash provided by investing activities was $15.0 million in the six months ended June 30, 2013, compared to net cash used in investing activities of $33.0 million in the comparable period in 2012. The net cash provided by investing activities in the 2013 period reflected maturities of available-for-sale securities in excess of purchases of such securities. The net cash used in investing activities during the 2012 period was primarily attributable to purchases of available-for-sale securities in excess of maturities of such securities.

Net cash used in financing activities was $645,000 in the six months ended June 30, 2013, compared to $2.5 million in the comparable period in 2012. The net cash used in financing activities during 2013 was primarily due to the distribution of cash, upon vesting, to holders of restricted stock awards. The net cash used in financing activities during 2012 was primarily due to repurchases of our common stock and the payment of a liquidating dividend to a minority investor in connection with the dissolution of Maxygen Holdings LLC, a former majority owned subsidiary.

The following are contractual commitments as of June 30, 2013, consisting solely of our operating lease obligations (in thousands):

	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years
Operating lease obligations	$	57	$	57	$	—	$	—	$	—
Total	$	57	$	57	$	—	$	—	$	—

As of June 30, 2013, we had $79.4 million in cash, cash equivalents and short-term investments. We believe that our current cash, cash equivalents and short-term investments will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next twelve months.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Management

We are exposed to market risks, including changes in interest rates. There were no significant changes in our market risk exposures during the three or six months ended June 30, 2013. These activities are discussed in further detail in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“the Exchange Act”)) as of the end of the period

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covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in reaching a reasonable level of assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control

There has been no change in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in claims and legal proceedings that arise in the ordinary course of our business. Currently, we are not a party to any legal proceedings that we believe would have a material effect on our financial position or results of operations.

ITEM 1A. RISK FACTORS

A restated description of the risk factors associated with our business is set forth below, including risks associated with our proposed dissolution, which was approved by our Board of Directors on May 30, 2013 and remains subject to approval by our stockholders. This description includes all material changes to and supersedes the description of the risk factors associated with our business previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012.

You should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business could be harmed. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

The impact and results of our ongoing strategic process, including our proposed dissolution, are uncertain and may not be successful.

Over the past several years, we have focused our strategic efforts on maximizing stockholder value through sales, distributions and other arrangements involving our various assets. The acquisition of Perseid Therapeutics LLC, a former majority-owned subsidiary that included substantially all of our research and development operations and personnel, by Astellas Pharma Inc., in May 2011, our receipt of the final $30.0 million payment from Bayer HealthCare LLC and the distribution of approximately $100.0 million in cash to our stockholders in September 2012 have all been part of this multi-year strategic process to restructure our operations and maximize stockholder value.

While our Board of Directors and management devoted substantial time and effort in identifying and pursuing additional opportunities to further enhance stockholder value, on May 30, 2013, our Board of Directors reached the conclusion that it is in the best interest of the company and its stockholders to dissolve the company.

However, our dissolution is subject to numerous significant risks and uncertainties, including, but not limited to, our ability to obtain stockholder approval of the proposed dissolution, our ability to accurately estimate the amounts required to pay all operating expenses, as well as other known, non-contingent liabilities, through the dissolution and wind-down process, our ability to settle, make reasonable provision for or otherwise resolve our liabilities and obligations, including the establishment of an adequate contingency reserve; the precise nature, amount and timing of any distributions to stockholders; the possibility that any distributions to stockholders, including our proposed initial liquidating distribution could be diminished and/or delayed by, among other things, sales of our assets, claim settlements with creditors, unexpected or greater than expected expenses; the possibility that distributions to stockholders may take several years to complete; the possibility that our Board of Directors could elect to abandon or delay implementation of the dissolution; the possibility that our stockholders could be liable to our creditors in the event we fail to create an adequate contingency reserve to satisfy claims against us; and our ability to evaluate alternatives or recommence our operations in the event that our stockholders do not approve the dissolution.

As a result, given the substantial restructuring of our operations over the past several years and the significant risks and uncertainties associated with our proposed dissolution, it may be difficult to evaluate our current business and future prospects on the basis of historical operating performance.

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If our stockholders vote against our proposed dissolution, it would be very difficult for us to continue our business operations.

If our stockholders do not approve our dissolution, our ability to continue our business operations may suffer as a result of our announced intent to dissolve and liquidate. We are not actively conducting any research and development activities, have generally ceased normal business operations and have only three full-time employees. Prospective employees, vendors and other third parties may refuse to form relationships or conduct business with us if they do not believe we will continue to operate as a going concern.

Other alternatives to dissolution have significant risks and uncertainties that may further diminish the value of Maxygen.

If our stockholders do not approve the dissolution, our Board of Directors will explore what, if any, alternatives are available for the future of Maxygen, particularly in light of the fact that we have commenced the process of winding up our business and will continue to incur net losses for the foreseeable future. Our business operations have been substantially curtailed, and rehiring employees and reinitiating active business operations in a timely and cost-effective manner may not be possible. Any such decision to recommence active business operations could result in the expenditure of cash and other resources that would otherwise be available to distribute to our stockholders.

Other possible alternatives, including selling all of our stock or assets, changing our business focus, continuing our efforts to identify a merger partner or a reverse merger partner, or seeking voluntary dissolution at a later time and with diminished assets, are likewise subject to risks and may prove to be disadvantageous to our stockholders compared to the dissolution of Maxygen and return of cash to our stockholders. If our stockholders do not approve the dissolution, we expect that our cash resources will continue to diminish and we would face risks related to continuing our historical business described in this proxy statement. These risks could materially and adversely affect our business, financial condition or operating results and the value of our common stock, and you may lose all or part of your investment.

The dissolution and liquidation of the company, if approved by stockholders, may be a lengthy process, yield unexpected results and diminish or delay any potential distributions to our stockholders.

If our stockholders approve our plan of liquidation and dissolution, we will be required, as part of the liquidation process under Delaware law, to pay our outstanding obligations and to make reasonable provision for contingent obligations, as well as unknown obligations that could arise during the dissolution process or during the post-dissolution period, including potential tax liabilities and potential claims in litigation.

In addition, any further wind-down or dissolution of our company may be a lengthy and complex process, yield unexpected results and delay any potential distributions to our stockholders. Such process may also require the further expenditure of company resources, such as legal and accounting fees and expenses and other related charges, which would decrease the amount of resources available for distributions to our stockholders.

Our Board of Directors expects to continue its evaluation of potential strategic business combinations and other transactions. We may not be successful in identifying or implementing any such transaction and any strategic transactions that we may consummate in the future could have negative consequences.

If, prior to our dissolution, we receive an offer for a strategic business combination or other transaction that will, in the view of our Board of Directors, provide superior value to stockholders compared to the value of the estimated distributions under the proposed dissolution, taking into account all factors that could affect valuation, including timing and certainty of payment and closing, proposed terms and other factors, the proposed dissolution could be abandoned in favor of such a transaction.

Even if our stockholders approve the dissolution, our Board of Directors has reserved the right, in its discretion, to the extent permitted by Delaware law, to abandon or delay implementation of the dissolution if such action is determined to be in our best interests and in the best interests of our stockholders, in order, for example, to permit us to pursue new business opportunities or strategic transactions.

Any such decision to abandon or delay implementation of the dissolution may result in us incurring additional operating costs and liabilities, which could reduce the amount available for distribution to our stockholders.

In addition, there can be no assurance that we would be able to successfully consummate any particular strategic transaction. The process of evaluating such potential transaction may be very costly, time-consuming and complex and we have incurred, and may in the future incur, significant costs related to this evaluation, such as legal and accounting fees and expenses and other related charges. A considerable portion of these costs will be incurred regardless of whether any such transaction is completed. Any such expenses will decrease the remaining cash available for use in our business and may diminish or delay any future distributions to our stockholders.

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In addition, any strategic business combination or other transactions that we may consummate in the future could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affects our business and decreases the remaining cash available for use in our business or the execution of our strategic plan. For example, a transaction may require us to increase our near and long-term expenditures, pose significant integration challenges or result in dilution to our existing stockholders. Accordingly, there can be no assurances that any business arrangement or transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value, or achieve the anticipated results. Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our stockholders.

Even if the proposed dissolution is not approved by our stockholders, we may make additional distributions to our stockholders of a portion of our cash resources, which may restrict our funds available for other actions and negatively affect the market price of our securities.

Given that we continue to have large cash reserves, if the proposed dissolution is not approved by our stockholders, our Board of Directors may consider and evaluate additional distributions to our stockholders of a portion of our cash resources in excess of our future operational requirements, amounts we consider appropriate to pursue any additional strategic evaluation and adequate reserves for potential future liabilities. Such distributions may be accomplished through cash dividends, stock repurchases or other mechanisms and may be fully or partially taxable depending on the circumstances of such distribution. Any such distribution may not have the effects anticipated by our Board of Directors and may instead harm the market price and liquidity of our securities or result in unintended tax consequences. The full implementation of any additional distribution could use a significant portion of our remaining cash reserves, and this use of cash could limit our future flexibility to operate our business, invest in our existing assets or pursue other transactions.

In addition, the implementation of certain distribution mechanisms, such as stock repurchases, could also result in an increase in the percentage of common stock owned by our existing stockholders, and such increase may trigger disclosure or other regulatory requirements for our larger stockholders. As a result, these stockholders may liquidate a portion of their holdings, which may have a negative impact on the market price of our securities. Furthermore, repurchases of stock may affect the trading of our common stock to the extent we fail to satisfy continued-listing requirements of the exchange on which our stock trades, including those based on numbers of holders or public float of our common stock. Under certain circumstances, stock repurchases could impact our ability to utilize certain tax benefits, including net operating losses. Any stock repurchases would also reduce the number of shares of our common stock in the market, which may impact the continuation of an active trading market in our stock, causing a negative impact on the market price of our stock.

If we are unable to sell our remaining non-cash assets, including our MAXY-G34 program, or if such sales take longer than expected, our stockholders may be unable to realize any value for these assets or receive any additional liquidating distributions related to such assets.

Our remaining non-cash assets consist primarily of our MAXY-G34 program and related intellectual property rights. To date, we have not been successful in identifying any potential transaction for the MAXY-G34 program and there can be no assurance that we will be successful in identifying and consummating any such transaction during the wind-down and dissolution process. If we are unable to consummate any transaction for the sale or other disposition of our MAXY-G34 product candidate or any other non-cash assets, stockholders may be unable to realize any value for these assets or receive any additional liquidating distributions related to such assets.

Moreover, we have incurred, and may in the future incur, significant costs related to the continued evaluation of potential strategic options for our MAXY-G34 product candidate, including research and development expenses that we may incur in connection with any potential transaction, as well as legal and accounting fees and expenses and other related charges. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any such transaction is completed. These expenses will decrease the remaining cash available for use in our business or the execution of our strategic plan and may diminish or delay any future liquidating or other distributions to our stockholders.

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The prospects for further development and commercialization of our MAXY-G34 product candidate are highly uncertain, which will likely make it more difficult for us to secure a strategic transaction or other arrangement for this product candidate or to realize any value for this program.

The further development and commercialization of our MAXY-G34 product candidate is subject to numerous significant risks, including, but not limited to, risks of failure inherent in drug development, risks associated with the maintenance of adequate protection of our intellectual property for this program and our ability to avoid the infringement of the intellectual property of third parties, competition from existing G-CSF products, as well as potential biosimilar G-CSF products, and risks that regulatory action may prevent or limit the commercial potential of the program.

Our ability to realize any value for our MAXY-G34 program will depend in part on our ability to maintain adequate protection of our intellectual property for this program in the United States and other countries and to avoid infringing patents or other proprietary rights of third parties. In particular, we believe that the existence of a U.S. patent issued to Amgen in 2008 with certain claims to mutated G-CSF molecules (Patent No. 7,381,804) has made it more difficult for us to secure a strategic transaction or other arrangement for our MAXY-G34 product candidate or otherwise realize any value from this product candidate. While we are currently engaged in an inter partes reexamination of the Amgen patent with the U.S. Patent Office, or PTO, and the PTO has issued a right of appeal notice to Amgen maintaining the PTO’s rejection of the claims in the Amgen patent, Amgen is appealing this decision and any final ruling by the PTO may be appealed to the U.S. federal courts. As a result, there can be no assurances that we will ultimately prevail or do so in a timely manner, or that a third party would be successful in the development, commercialization or other utilization of the MAXY-G34 program, even if ultimately successful in this reexamination process.

If approved for sale by regulatory authorities for chemotherapy-induced neutropenia, our MAXY-G34 product candidate would likely compete with already approved earlier-generation products based on the same protein, primarily Neulasta^® and Neupogen^®, and we would expect the product to face significant competition from biosimilar drug products. We are aware that Teva Pharmaceutical Industries Ltd. and Sandoz International GmbH are currently developing biosimilar G-CSF products to compete in this market. Further, even if regulatory approval to sell MAXY-G34 is received, the approved label may entail limitations on the indicated uses for which the product can be marketed and any failure to obtain broad labeling for this product allowing approved use with multiple chemotherapy regimens for multiple cancers would limit its adoption by hospital formularies and its commercial success.

We had been seeking government funding for the development of this program for the ARS indication and, in May 2011, we submitted a proposal to the Biomedical Advanced Research and Development Authority, or BARDA, for the development of this product candidate as a potential medical countermeasure for ARS. However, in November 2011, our proposal was rejected by BARDA primarily due to BARDA’s lack of available funding. Although BARDA indicated that our MAXY-G34 program would be reconsidered by BARDA if the circumstances related to BARDA’s funding availability changed in the future, there can be no assurances that the circumstances related to BARDA’s funding availability will change, that BARDA will open a future solicitation applicable to the MAXY-G34 program or ARS, or that we or a third party would submit a proposal for, or be awarded a contract for MAXY-G34 under, any potential future BARDA solicitation or any other government funded program. The rejection of our proposal by BARDA significantly impaired our ability to realize any value from this program.

Finally, our suspension of manufacturing and development activities for our MAXY-G34 product candidate for the treatment of chemotherapy-induced neutropenia in 2008 has likely had an adverse impact on the timeline for any potential commercialization of MAXY-G34 for chemotherapy-induced neutropenia, which could limit any commercial potential of MAXY-G34.

Any of the foregoing factors could make it more difficult for us to identify and consummate a strategic transaction or other arrangement for our MAXY-G34 product candidate or realize any value for this program.

Potential future liabilities and claims, such as liabilities and claims resulting from any potential future tax audits or potential future legal proceedings, may result in material liabilities that could cause our stock price to decline or could impede our ability to enter into a strategic transaction or could significantly diminish or delay potential future distributions to our stockholders.

We remain subject to examination for certain tax years by U.S. Federal and state income tax authorities. The years that remain subject to examination by U.S. Federal and state tax authorities include years in which we did not incur a tax liability, despite the recognition of significant income and capital gains, due to our utilization of sufficient capital losses, net operating losses and certain tax credits. As a result, U.S. Federal and state income tax authorities could challenge tax positions we have taken with respect to these losses and credits.

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While the Internal Revenue Service, or IRS, has concluded examinations of our federal tax returns for the 2008, 2009 and 2010 tax years without assessing any adjustments, there can be no assurances that the IRS will not commence a future examination of any other tax returns, or reopen its examination of any previously audited tax return, and assess material adjustments, penalties, interest and other amounts in connection with any such potential future examination.

In addition, while we are not currently a party to any material legal proceedings or otherwise aware of any potential or threatened claims, we may in the future become involved in claims and legal proceedings that arise in the ordinary course of our business. In any such legal proceeding, we could incur substantial legal fees in responding to the litigation and, if such litigation were to be decided adversely to us, we could be required to pay monetary damages and other amounts.

We cannot predict the likelihood or outcome of any potential future tax audits or legal proceedings and cannot guarantee the outcome of any such audits or legal proceedings. Any such audits or legal proceedings may result in material liabilities, such as adjustments, damages, penalties, interest and other amounts. The possibility of such audits and legal proceedings and our need to reserve amounts from time to time that we deem appropriate to cover any possible exposure from such potential future audits and legal proceedings could impede our ability to enter into a strategic transaction or effect a wind-down or dissolution and could significantly delay, and if they ultimately materialize, diminish, any future distributions to our stockholders.

If we do not retain key employees, our ability to maintain our ongoing operations or execute a potential strategic option could be impaired.

As of July 31, 2013, we had three full-time employees and we will rely heavily on the services of our existing employees to manage our ongoing operations and execute our strategic plans. The loss of services from any of our existing employees could substantially disrupt our operations. To be successful and achieve our strategic objectives, we must retain qualified personnel. Our recent restructurings and the continued review of our strategic options may create continued uncertainty for our employees and this uncertainty may adversely affect our ability to retain key employees and to hire new talent necessary to maintain our ongoing operations or to execute additional potential strategic options, which could have a material adverse effect on our business.

In addition, our current strategy and any changes to this strategy could place significant strain on our resources and our ability to maintain our ongoing operations. We may also be required to rely more heavily on temporary or part-time employees, third party contractors and consultants to assist with managing our operations. These consultants are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. We will have only limited control over the activities of these consultants and can generally expect these individuals to devote only limited time to our activities. Failure of any of these persons to devote sufficient time and resources to our business could harm our business.

Accordingly, we may fail to maintain our ongoing operations or execute our strategic plan if we are unable to retain or hire qualified personnel or to manage our employees and consultants effectively.

We expect to incur additional operating losses for the foreseeable future and will continue to incur significant costs as a result of operating as a public company.

We currently have no significant source of revenues and expect that our operating expenses, including costs associated with operating as a public company, will exceed our revenues, if any, for the foreseeable future. In addition, we may incur increased expenses in connection with any research and development activities for our MAXY-G34 program that we may undertake in connection with any potential strategic transaction for the program or our company. These operating expenses will decrease the remaining cash available for use in our business or the execution of our strategic plan and will diminish any future distributions to our stockholders.

Litigation or other proceedings or third party claims of intellectual property infringement could require us to spend time and money, which could impede our ability to enter into a strategic transaction or could significantly diminish or delay potential future distributions to our stockholders.

In October 2010, we sold substantially all of the intellectual property rights and certain other assets relating to the MolecularBreeding™ directed evolution platform to Codexis. The intellectual property portfolio we sold to Codexis will continue to be subject to existing exclusive and nonexclusive licenses that we previously granted to third parties under agreements that we will

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remain a party to. These existing license agreements, the related sublicenses to third party technologies and the license agreement with Codexis, and the interplay between those agreements, are highly complex and rely on highly technical definitions to delineate permitted and restricted activities. As a result of this complexity, the agreements may be subject to differing interpretations by the counterparties that could lead to disputes or litigation, including for alleged breaches or claims that our activities or the activities of a third party are not covered by the scope of the licenses. Codexis, as the owner of these intellectual property rights, has the right to control prosecution, maintenance and enforcement of these patent rights. If Codexis or an acquirer of Codexis chooses not to enforce the intellectual property rights on which these licensees rely, or enforces those rights ineffectively and has them invalidated, the ability of these licensees to effectively use its licensed rights may be adversely impacted. While we have certain rights to continue prosecution or maintenance of patent rights that Codexis chooses to abandon, we may be unable to exercise these rights effectively.

While Codexis is obligated to comply with the terms of these agreements and to indemnify us for certain losses under these agreements, any action or omission by Codexis that causes us to breach any of our obligations under these agreements may subject us to liability and, to the extent indemnification by Codexis is not available, we may be required to pay damages to such third party. Any such litigation may divert management time from focusing on business operations and could cause us to spend significant amounts of money. If such litigation were to be decided adversely to us, we could be required to pay monetary damages.

We may be subject to costly product liability claims and may not have adequate insurance.

Because we have conducted clinical trials in humans in the past, we face the risk that the prior use of our product candidates may have resulted in adverse effects. We expect to maintain product liability insurance for these prior clinical trials, however, such liability insurance may not be adequate to fully cover any liabilities that arise from these clinical trials. We may not have sufficient resources to pay for any liabilities resulting from a claim excluded from, or beyond the limit of, such insurance coverage.

Any claims relating to improper handling, storage or disposal of the hazardous chemicals and radioactive and biological materials that we used, or may in the future use, in our business could be time-consuming and costly.

Our research and development processes have in the past involved the controlled use of hazardous materials, including chemicals and radioactive and biological materials and our operations have in the past produced hazardous waste products. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of hazardous materials. We may be sued for any injury or contamination that resulted from our use or the use by third parties of these materials. Compliance with environmental laws and regulations is expensive and any claims relating to improper handling, storage or disposal of the hazardous chemicals and radioactive and biological materials we use in our business could be time-consuming and costly.

Our business is subject to increasingly complex corporate governance, public disclosure and accounting requirements that could adversely affect our business and financial results.

We are subject to changing rules and regulations of federal and state government as well as the stock exchange on which our common stock is listed. These entities, including the Public Company Accounting Oversight Board, or PCAOB, the Securities and Exchange Commission, or SEC, and The NASDAQ Global Market, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations and requirements in response to laws enacted by Congress. On July 21, 2010, the Dodd-Frank Wall Street Reform and Protection Act, or the Dodd-Frank Act, was enacted. The Dodd-Frank Act contains significant corporate governance and executive compensation-related provisions, some of which the SEC has recently implemented by adopting additional rules and regulations in areas such as executive compensation. If we fail to comply with the Sarbanes Oxley Act of 2002, the Dodd-Frank Act and associated SEC rules, or any other regulations, we could be subject to a range of consequences, including the de-listing of our common stock from The NASDAQ Global Market, significant fines, or other sanctions or litigation. Our efforts to comply with these requirements have resulted in, and are likely to continue to result in significant expenses and a diversion of management’s time from other business activities.

In particular, our internal control over financial reporting is required to comply with the standards adopted by the PCAOB in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Accordingly, we are currently required to document and test our internal controls and procedures to assess the effectiveness of our internal control over financial reporting. In addition, our independent registered public accounting firm is currently required to report on management’s assessment of the effectiveness of our internal control over financial reporting and the effectiveness of our internal control over financial reporting. In the future, we may identify material weaknesses and deficiencies which we may not be able to remediate in a timely manner. If we fail to maintain effective internal control over financial reporting in accordance with Section 404, we will not be able to conclude that we

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have and maintain effective internal control over financial reporting or our independent registered accounting firm may not be able to issue an unqualified report on the effectiveness of our internal control over financial reporting. As a result, our ability to report our financial results on a timely and accurate basis may be adversely affected, we may be subject to sanctions or investigation by regulatory authorities, including the SEC or The NASDAQ Global Market and investors may lose confidence in our financial information, which in turn could cause the market price of our common stock to decrease. In addition, testing and maintaining internal control in accordance with Section 404 requires increased management time and resources. Any failure to maintain adequate internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 or prevent or detect material misstatements in our annual or interim consolidated financial statements in the future could materially harm our business and cause our stock price to decline.

Our revenues, expenses and operating results are subject to fluctuations that may cause our stock price to decline.

Our revenues, expenses and operating results have fluctuated in the past and may do so in the future. These fluctuations could cause our stock price to fluctuate significantly or decline. Some of the factors that could cause our revenues, expenses and operating results to fluctuate include:

• strategic alternatives and transactions with respect to our MAXY-G34 product candidate or our company and the timing, likelihood and outcome thereof;

• our implementation, or our failure to implement, any additional distributions of our cash resources to stockholders;

• our ability to estimate and maintain adequate reserves to fund our current and longer term operational requirements, pursue our on-going strategic evaluation and provide for potential future liabilities and claims, such as liabilities, claims, adjustments, penalties, interest and other amounts resulting from current or potential future tax audits or potential future litigation;

• our ability to continue operations and our estimates for future performance and financial position of the company;

• our ability to retain key employees to maintain our ongoing operations and, if necessary, our ability to successfully hire qualified personnel;

• our ability to protect our intellectual property portfolio and rights; and

• general and industry specific economic conditions.

Due to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results are not a good indication of our future performance. Our operating results in some quarters may not meet the expectations of investors. In that case, our stock price would likely decline.

If current levels of market disruption and volatility continue or worsen, we may not be able to preserve our cash balances or access such sources if necessary.

As of June 30, 2013, we had $79.4 million in cash, cash equivalents and short-term investments. While we maintain an investment portfolio typically consisting of money market funds, U.S. Treasury securities and short-term commercial paper and have not experienced any liquidity issues with respect to these securities, we may experience reduced liquidity with respect to some of our investments if current levels of market disruption and volatility continue or worsen. Under extreme market conditions, there can be no assurance that we would be able to preserve our cash balances or that such sources would be available or sufficient for our business.

Our stock price has been, and may continue to be, volatile, and an investment in our stock could decline in value.

The trading prices of life science company stocks in general have experienced significant price fluctuations in the last several years and broad market and industry factors may decrease the trading price of our common stock, regardless of our performance or financial condition. In addition, our stock price could be subject to wide fluctuations in response to factors including the following:

• our implementation, or our failure to implement, the proposed plan of dissolution;

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• our consummation, or our failure to consummate, any strategic transaction;

• our implementation, or our failure to implement, any additional distributions of our cash resources to stockholders;

• conditions or trends in the biotechnology and life science industries;

• changes in the market valuations of other biotechnology or life science companies;

• developments in domestic and international governmental policy or regulations;

• changes in general economic, political and market conditions, such as recessions, interest rate changes, terrorist acts and other factors;

• developments in or challenges relating to our patent or other proprietary rights, including lawsuits or proceedings alleging patent infringement based on the development, manufacturing or commercialization of MAXY-G34; and

• sales of our common stock or other securities in the open market.

In the past, stockholders have often instituted securities class action litigation after periods of volatility in the market price of a company’s securities. If a stockholder files a securities class action suit against us, we could incur substantial legal fees and our management’s attention and resources would be diverted from operating our business to respond to the litigation.

Other Risks Related to the Proposed Plan of Dissolution

The amount we distribute to our stockholders in the initial liquidating distribution may be substantially less than the estimates set forth in our proxy statement and we cannot assure you of the exact timing of the initial liquidating distribution.

At present, we cannot determine with certainty the timing or amount of our initial liquidating distribution to our stockholders. The amount of cash ultimately distributed to our stockholders in the initial liquidating distribution and the timing of such distribution depends on, among other things, the amount of our liabilities, obligations and expenses and claims against us, and the amount of the reserves that we establish during the liquidation process. Our estimates of these amounts may be inaccurate. Factors that could impact our estimates and the timing of the initial distribution include the following:

• if any of the estimates regarding the dissolution, including the expenses to satisfy outstanding obligations, liabilities and claims during the liquidation process, are inaccurate;

• if unforeseen claims are asserted against us, we will have to defend or resolve such claims or establish a reasonable reserve before making distributions to our stockholders;

• if the estimates regarding the expenses to be incurred in the liquidation process, including expenses of personnel required and other operating expenses (including legal, accounting and other professional fees) necessary to dissolve and liquidate the company, are inaccurate; and

• if we are unable to obtain relief from certain reporting requirements under the Exchange Act, we will continue to incur significant expenses related to ongoing reporting obligations.

If any of the foregoing occurs, the amount we initially distribute to our stockholders may be substantially less than the amount we currently estimate and the timing of such initial distribution could be delayed.

We cannot assure you of the exact amount or timing of any additional liquidating distributions to our stockholders under the plan of dissolution and any such distributions may be substantially less than the estimates set forth in our proxy statement.

The dissolution and liquidation process is subject to numerous uncertainties, and may not result in any capital remaining for additional liquidating distributions to our stockholders following the initial liquidating distribution. The precise amount and timing of any additional liquidating distribution to our stockholders will depend on and could be delayed or diminished due to many factors, including, without limitation:

• if a creditor or other third party seeks an injunction against the making of distributions to our stockholders on the basis that the amounts to be distributed are needed to provide for the satisfaction of our liabilities or other obligations;

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• if we become a party to lawsuits or other claims asserted by or against us, including any claims or litigation arising in connection with our decision to liquidate and dissolve;

• if we are unable to sell our remaining non-cash assets or if such sales take longer than expected;

• if we are subject to future tax audits or incur material tax liabilities, such as adjustments, penalties, interest and other amounts; or

• if we are unable to resolve claims with creditors or other third parties, or if such resolutions take longer than expected.

If any of the foregoing occurs, any additional liquidating distributions may be substantially less than the estimates set forth in this proxy statement.

In addition, under the DGCL, claims and demands may be asserted against us at any time during the three years following the effective date of the filing of the certificate of dissolution. Accordingly, our Board of Directors may obtain and maintain insurance coverage for such potential claims. Our Board of Directors also expects to set aside a reserve of between $11.5 million and $12.9 million, and may also set aside additional amounts of cash or other assets as a reserve to satisfy claims against and obligations that may arise during the three-year period following the effective date of the filing of the certificate of dissolution. As a result of these factors, we may retain for distribution at a later date, some or all of the estimated amounts that we expect to distribute to stockholders.

We may not be able to settle all of our liabilities to creditors, which may delay or reduce liquidating distributions to our stockholders.

We have current and future liabilities to creditors. Our estimated distributions to stockholders takes into account all of our known liabilities and certain possible contingent liabilities and our best estimate of the amount reasonably required to satisfy such liabilities. As part of the wind-down process, we will attempt to settle all liabilities with our creditors. We cannot assure you that unknown liabilities that we have not accounted for will not arise, that we will be able to settle all of our liabilities or that they can be settled for the amounts we have estimated for purposes of calculating the range of distribution to stockholders. If we are unable to reach an agreement with a creditor relating to a liability, that creditor may bring a lawsuit against us. Amounts required to settle liabilities or defend lawsuits in excess of the amounts estimated by us will reduce the amount of net proceeds available for distribution to stockholders.

Our Board of Directors may abandon or delay implementation of the dissolution even if approved by our stockholders.

Even if our stockholders approve the dissolution, our Board of Directors has reserved the right, in its discretion, to the extent permitted by Delaware law, to abandon or delay implementation of the dissolution if such action is determined to be in our best interests and in the best interests of our stockholders, in order, for example, to permit us to pursue new business opportunities or strategic transactions. Any such decision to abandon or delay implementation of the dissolution may result in us incurring additional operating costs and liabilities, which could reduce the amount available for distribution to our stockholders.

The payment of liquidating distributions, if any, to our stockholders could be delayed.

Although our Board of Directors has not established a firm timetable for liquidating distributions to our stockholders, the Board of Directors intends, subject to contingencies inherent in winding down our business, to make such liquidating distributions, if any, as promptly as practicable as creditor claims and contingent liabilities are paid or settled. However, we are currently unable to predict the precise timing of any such liquidating distributions or whether any liquidating distributions will occur at all. The timing of any such liquidating distributions will depend on and could be delayed by, among other things, the timing of sales of our non-cash assets and claim settlements with creditors. Additionally, a creditor could seek an injunction against the making of such distributions to our stockholders on the basis that the amounts to be distributed were needed to provide for the payment of our liabilities and expenses. Any action of this type could delay or substantially diminish the amount available for such distribution to our stockholders.

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We will continue to incur claims, liabilities and expenses that will reduce the amount available for distribution.

Claims, liabilities and expenses from operations, such as operating costs, salaries, directors’ and officers’ insurance, payroll and local taxes, legal, accounting and consulting fees and miscellaneous office expenses, will continue to be incurred as we wind down. These expenses could be much higher than currently anticipated and would reduce the amount of assets available for ultimate distribution to stockholders.

If we fail to create an adequate reserve for payment of our expenses and liabilities, each stockholder receiving liquidating distributions could be held liable for payment to our creditors of his, her or its pro rata share of amounts owed to creditors in excess of the reserve, up to the amount actually distributed to such stockholder in dissolution.

If the dissolution is approved by our stockholders, we expect to file a certificate of dissolution with the Delaware Secretary of State dissolving Maxygen. Pursuant to the DGCL, we will continue to exist for three years after our dissolution or for such longer period as the Delaware Court of Chancery shall direct, for the purpose of prosecuting and defending suits against us and enabling us gradually to close our business, to dispose of our property, to discharge our liabilities and to distribute to our stockholders any remaining assets. Under the DGCL, in the event we fail to create during this three-year period an adequate reserve for payment of our expenses and liabilities (and otherwise do not have sufficient assets for payment of our expenses and liabilities), each stockholder who receives a liquidating distribution could be held liable for payment to our creditors of such stockholder’s pro rata share of amounts owed to creditors in excess of the reserve, up to the amount actually distributed to such stockholder in dissolution.

Although the liability of any stockholder is limited to the amounts previously received by such stockholder from us (and from any liquidating trust or trusts) pursuant to the dissolution, this means that a stockholder could be required to return all liquidating distributions previously made to such stockholder and receive nothing from us under the plan of dissolution. Moreover, in the event a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a stockholder incurring a net tax cost if the stockholder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. There can be no guarantee that the reserves established by us will be adequate to cover all such expenses and liabilities.

Further stockholder approval will not be required in connection with the implementation of the dissolution, including for the sale of all or substantially all of our non-cash assets as contemplated in the plan of dissolution.

The approval of the dissolution by our stockholders also will authorize, without further stockholder action, our Board of Directors to take such actions as it deems necessary, appropriate or desirable, in its absolute discretion, to implement the dissolution and the transactions contemplated thereby. Accordingly, depending on the timing of a stockholder vote on the dissolution, we may dispose of our MAXY-G34 program and any and all of our other remaining non-cash assets without further stockholder approval. As a result, our Board of Directors may authorize actions in implementing the dissolution, including the terms and prices for the sale of our MAXY-G34 program and our other remaining non-cash assets, with which our stockholders may not agree.

We intend to have our common stock delisted from the NASDAQ Global Market and our stock transfer books closed in connection with our dissolution, after which time it will not be possible for stockholders to publicly trade our stock.

We anticipate that trading in our common stock on the NASDAQ Global Market will cease at the close of business on the effective date of the filing of the certificate of dissolution with the Delaware Secretary of State and we intend to close our stock transfer books and discontinue recording transfers of our common stock at that time. Thereafter, certificates representing our common stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. We anticipate that the proportionate interests of all of our stockholders will be fixed on the basis of their respective stock holdings at the close of business on the effective date of the filing of the certificate of dissolution, and, after such date, any distributions made by us will be made solely to the stockholders of record at the close of business on that final record date, except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of law. In addition, it is possible that the trading of our common stock on the NASDAQ Global Market will effectively terminate before the final record date if we are unable to meet NASDAQ’s requirements for continued listing.

We expect to apply for relief from certain reporting requirements under the Exchange Act, which may substantially reduce publicly-available information about us.

Our common stock is currently registered under the Exchange Act, which requires that we, and our officers and directors with respect to Section 16 of the Exchange Act, comply with certain public reporting and proxy statement requirements thereunder.

30

Compliance with these requirements is costly and time-consuming. We anticipate that, if our stockholders approve the dissolution, in order to curtail expenses, we will, after the effective date of the filing of the certificate of dissolution, seek to suspend certain of our reporting obligations under the Exchange Act. However, the SEC may not grant any such relief, in which case we would be required to continue to bear the expense of being a public reporting company.

Our Board of Directors will be responsible for overseeing the dissolution; however, most of the current directors are expected to resign, and the Board’s authority could effectively be transferred to a liquidating trustee or some other party.

Under Delaware law, a company’s board of directors retains ultimate decision-making authority following the company’s dissolution, and therefore our Board of Directors would initially be responsible for overseeing the dissolution. We are seeking the reelection of five of our directors at the Annual Meeting. However, all directors except Mr. Stein have indicated that they expect to resign from the Board of Directors prior to or in connection with the dissolution. Mr. Stein is expected to remain the sole director of Maxygen throughout the wind-down and dissolution process, but he could resign at any time. In addition, pursuant to the dissolution, a liquidating trust could be used to complete the dissolution process, or, under Delaware law, any director, creditor, stockholder or other party showing good cause could seek court appointment of a trustee or receiver to complete the process.

If we decide to use a liquidating trust, interests of our stockholders in such a trust may not be transferable.

As discussed above, shares of our common stock generally will not be transferable following dissolution. In addition, if we were to establish a liquidating trust, the interests of our stockholders in such liquidating trust may not be transferable, which could adversely affect our stockholders’ ability to realize the value of such interests. Even if transferable, the interests are not expected to be listed on a national securities exchange, and the extent of any trading market therein cannot be predicted. Moreover, the interests may not be accepted by commercial lenders as security for loans as readily as more conventional securities with established trading markets. In addition, as stockholders will be deemed to have received a liquidating distribution equal to their pro rata share of the value of the net assets distributed to an entity which is treated as a liquidating trust for tax purposes, the distribution of non-transferable interests would result in tax liability to the interest holders without their being readily able to realize the value of such interest to pay such taxes or otherwise.

Stockholders will lose the opportunity to capitalize on potential growth opportunities from the continuation of our business.

Once we dissolve, our stockholders will lose the opportunity to participate in future growth opportunities that may have arisen if we were to continue to pursue our strategic plan and consummate an attractive strategic transaction. For example, as a public company with limited operations, we could be the target of a “reverse” acquisition, meaning the acquisition of a public company by a private company in order to bypass the costly and time consuming initial public offering process. If we file a certificate of dissolution with the Delaware Secretary of State, we will no longer be a potential target for a “reverse” acquisition of this type, and our stockholders will not receive any proceeds or interests that they would otherwise have received in such a transaction. It is possible that these opportunities could have proved to be more valuable than the liquidating distributions our stockholders would receive pursuant to the dissolution.

The members of our Board of Directors may have a potential conflict of interest in recommending approval of the dissolution.

Because of the compensation and benefits payable as a result of termination of employment or other events, an indemnification insurance policy purchased for the benefit of directors and officers and/or our continuing indemnification obligations to directors, our directors and officers may be deemed to have a potential conflict of interest in recommending approval of the dissolution.

Stockholders may not be able to recognize a loss for U.S. federal income tax purposes until they receive a final distribution from us.

As a result of our dissolution and liquidation, for U.S. federal income tax purposes, our stockholders generally will recognize gain or loss equal to the difference between (1) the sum of the amount of cash and the fair market value (at the time of distribution) of property, if any, distributed to them, and (2) their tax basis for their shares of our common stock. Liquidating distributions pursuant to the plan of dissolution may occur at various times and in more than one tax year. Any loss generally will be recognized by a stockholder only when the stockholder receives our final liquidating distribution to stockholders, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder’s tax basis for that share. Stockholders are urged to consult their own tax advisors as to the specific tax consequences to them of our dissolution and liquidation pursuant to the plan of dissolution.

31

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

On January 10, 2012, we announced that our board authorized a new stock repurchase program under which we were authorized to purchase up to $10.0 million of our common stock through December 31, 2012. In November 2012, we announced the extension of this stock repurchase program through December 31, 2013. There were no stock repurchase activities from January 1, 2013 through June 30, 2013. The approximate dollar value of shares that may yet be purchased is $8.5 million at June 30, 2013. Our board has authorized the termination of our existing stock repurchase program, contingent upon stockholder approval of our proposed plan of dissolution.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report:

31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

32

SIGNATURES

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, thereunto duly authorized.

	MAXYGEN, INC.
August 7, 2013	By:	/s/ Isaac Stein
	Isaac Stein
	Chief Executive Officer & Chief Financial Officer

33

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Isaac Stein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Maxygen, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2013

/s/ Isaac Stein

Isaac Stein

Chief Executive Officer & Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

I, Isaac Stein, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Quarterly Report of Maxygen, Inc. on Form 10-Q for the quarterly period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Maxygen, Inc.

By:	/s/ Isaac Stein
Name:	Isaac Stein
Title:	Chief Executive Officer & Chief Financial Officer
Date:	August 7, 2013

XML

Repurchases Of Common Stock (Tables)

6 Months Ended

Jun. 30, 2013

Repurchases Of Common Stock [Abstract]

Schedule of Repurchases of Common Stock

Period	Total  Number of Shares Purchased	Total Costs, Net of Fees (In thousands)
Twelve months ended December 31, 2009.................................	7,345,103	$39,170
Twelve months ended December 31, 2010.................................	2,637,965	14,889
Twelve months ended December 31, 2011.................................	2,244,289	12,256
Twelve months ended December 31, 2012.................................	279,270	1,536
Six months ended June 30, 2013....................................................	—	—
Total...............................................................................................................	12,506,627	$67,851

XML

Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) [Abstract]
Technology and license revenue		$ 30,000	$ 3	$ 30,006
Operating expenses:
Research and development	2		4	65
General and administrative	2,990	2,418	5,141	5,185
Total operating expenses	2,992	2,418	5,145	5,250
Income (Loss) from operations	(2,992)	27,582	(5,142)	24,756
Gain on distribution of equity securities	37	68	60	143
Interest and other income (expense), net	(243)	(10)	(247)	169
Income (loss) before income taxes	(3,198)	27,640	(5,329)	25,068
Income tax expense		(70)		(70)
Net Income (loss)	(3,198)	27,570	(5,329)	24,998
Net income attributable to non-controlling interests		450		450
Net income (loss) attributable to Maxygen, Inc.	(3,198)	27,120	(5,329)	24,548
Other comprehensive income (loss):
Total change in other comprehensive income (loss)	212	33	195	(806)
Comprehensive income (loss) attributable to Maxygen, Inc.	$ (2,986)	$ 27,153	$ (5,134)	$ 23,742
Basic net income (loss) per share attributable to Maxygen, Inc.	$ (0.12)	$ 1.00	$ (0.19)	$ 0.90
Diluted net income (loss) per share attributable to Maxygen, Inc.	$ (0.12)	$ 0.99	$ (0.19)	$ 0.90
Shares used in basic net income (loss) per share calculations	27,581	27,250	27,549	27,241
Shares used in diluted net income (loss) per share calculations	27,581	27,388	27,549	27,424

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

5. Related Party Transactions

Waverley

On April 1, 2006, the Company entered into a consulting agreement with Waverley Associates, Inc. (“Waverley”), a private investment firm for which Mr. Isaac Stein is the president and sole stockholder. Mr. Stein also currently serves as the Company’s Chief Executive Officer and Chief Financial Officer and as Executive Chairman of the Company’s Board of Directors. The consulting agreement, as amended to date, provides for consulting fees payable to Waverley of $50,000 per month. The consulting agreement also provides for automatic renewal of the agreement for successive one-year terms and a two-year notice period for termination of the agreement by either party. Total expense under this arrangement was approximately $150,000 for each of the three month periods ended June 30, 2012 and 2013 and $300,000 for each of the six month periods ended June 30, 2012 and 2013. At June 30, 2013, $50,000 pertaining to this consulting agreement was recorded within accounts payable on the Company’s condensed consolidated balance sheet.

XML

Fair Value (Narrative) (Details) (USD $)	0 Months Ended	6 Months Ended	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2013	Dec. 31, 2012	Jun. 28, 2013
Available-for-sale investment in equity securities	$ 76,000	$ 22,000	$ 76,000
Codexis, Inc. [Member]
Shares of common stock held	34,450	9,978	34,450
Available-for-sale investment in equity securities	76,000	22,000	76,000
Closing price	$ 2.21		$ 2.21	$ 2.21
Shares obligated to distribute		8,621	33,988
Fair value of shares obligated to distribute	$ 75,000	$ 19,000	$ 75,000
Closing price of stock obligated to distribute	$ 2.21

XML

Basis Of Presentation And Significant Accounting Policies (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended	6 Months Ended				6 Months Ended						3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	May 31, 2010	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 28, 2013 Maxygen, Inc. [Member]	Jun. 28, 2013 Codexis, Inc. [Member]	Jun. 30, 2013 Stock Options [Member]	Jun. 30, 2012 Stock Options [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 Stock Options [Member] Y	Jun. 30, 2012 Stock Options [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 General and Administrative [Member]	Jun. 30, 2012 General and Administrative [Member]	Jun. 30, 2013 General and Administrative [Member]	Jun. 30, 2012 General and Administrative [Member]	Jun. 30, 2013 General and Administrative [Member] Contingent Performance Units [Member]	Jun. 30, 2012 General and Administrative [Member] Contingent Performance Units [Member]	Jun. 30, 2013 General and Administrative [Member] Contingent Performance Units [Member]	Jun. 30, 2012 General and Administrative [Member] Contingent Performance Units [Member]	Jun. 30, 2013 General and Administrative [Member] Stock Options [Member]	Jun. 30, 2012 General and Administrative [Member] Stock Options [Member]	Jun. 30, 2013 General and Administrative [Member] Stock Options [Member]	Jun. 30, 2012 General and Administrative [Member] Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net Liquidating Dividend Of Subsidiary	$ 659,000
Fair value of remaining CPUs			1,000,000
Cash paid to settle vested CPUs			12,000	42,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount							4,238,000	5,413,000	118,500	11,000
Total stock-based compensation expense within continuing operations													433,000	378,000	819,000	829,000	752,000	722,000	1,368,000	1,248,000	139,000	153,000	185,000	51,000	180,000	191,000	364,000	368,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period											4 years				4 years
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized													567,000		567,000
ShareBasedCompensationArrangementByShare Based Payment Award Award Expiration Period											10
Proceeds from Divestiture of Interest in Consolidated Subsidiaries	$ 200,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross		40,000		40,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross											0	0	0	0
Share Price					$ 2.48	$ 2.21

XML

Repurchases Of Common Stock (Schedule Of Repurchases Of Common Stock) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended		6 Months Ended	12 Months Ended				43 Months Ended	54 Months Ended
	Mar. 31, 2010	Dec. 31, 2009	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2013	Jun. 30, 2013
Repurchases Of Common Stock [Abstract]
Repurchased Common Stock, Shares, Acquired	1,433,361	7,345,103	0	279,270	2,244,289	2,637,965	7,345,103	12,506,627	12,506,627
Repurchased Common Stock, Value, Acquired, Cost			$ 0	$ 1,536	$ 12,256	$ 14,889	$ 39,170		$ 67,851

XML

Repurchases of Common Stock (Narrative) (Details) (USD $)	0 Months Ended			1 Months Ended		6 Months Ended	12 Months Ended				43 Months Ended	54 Months Ended	9 Months Ended
	Jan. 30, 2012	Sep. 08, 2011	May 31, 2011	Mar. 31, 2010	Dec. 31, 2009	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2010 Share Repurchase Program [Member]
RepurchasedCommonStockAcquiredAverageCostPerShare				$ 5.55									$ 5.72
Repurchased Common Stock, Shares, Acquired				1,433,361	7,345,103	0	279,270	2,244,289	2,637,965	7,345,103	12,506,627	12,506,627	1,204,604
Repurchased Common Stock, Value, Acquired, Cost						$ 0	$ 1,536,000	$ 12,256,000	$ 14,889,000	$ 39,170,000		$ 67,851,000
Stock Repurchase Program, Authorized Amount	$ 10,000,000	$ 20,000,000	$ 10,000,000

XML

Fair Value (Schedule Of Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	$ 79,405	$ 82,856
Liabilities, Total	19	75
Estimated Fair Value [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	74,383	62,784
Estimated Fair Value [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	5,000	19,996
Estimated Fair Value [Member] | Available-For-Sale Investment In Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	22	76
Estimated Fair Value [Member] | Stock Portion Of Distribution Payable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Total	19	75
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	79,405	82,856
Liabilities, Total	19	75
Level 1 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	74,383	62,784
Level 1 [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	5,000	19,996
Level 1 [Member] | Available-For-Sale Investment In Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	22	76
Level 1 [Member] | Stock Portion Of Distribution Payable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Total	19	75
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Liabilities, Total	0	0
Level 2 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 2 [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 2 [Member] | Available-For-Sale Investment In Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 2 [Member] | Stock Portion Of Distribution Payable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Total	0	0
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Liabilities, Total	0	0
Level 3 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 3 [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 3 [Member] | Available-For-Sale Investment In Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Total	0	0
Level 3 [Member] | Stock Portion Of Distribution Payable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Total	$ 0	$ 0

XML

Basis Of Presentation And Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Basis Of Presentation And Significant Accounting Policies [Abstract]

Basis Of Presentation And Significant Accounting Policies

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. The information as of June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, includes all adjustments (consisting only of normal recurring adjustments) that the management of Maxygen, Inc. (the “Company”) believes necessary for fair presentation of the results for the periods presented. The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

In addition, results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

On May 30, 2013, the Company’s Board of Directors approved the dissolution and liquidation of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”).  The Dissolution is subject to approval by the stockholders of the Company and the Company is seeking stockholder approval of the Dissolution at its annual meeting of stockholders, currently scheduled to be held on August 12, 2013.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the amounts of Maxygen, Inc. and the Company’s wholly-owned subsidiary, Maxygen ApS (through its dissolution on June 13, 2013).  The Condensed Consolidated Financial Statements also include the amounts of the Company’s former majority-owned subsidiary, Maxygen Holdings LLC (through its dissolution on June 21, 2012), and its former wholly-owned subsidiaries, Maxygen Holdings (U.S.), Inc. and Maxygen Holdings, Inc. (through their dissolution on August 9, 2012).

Prior to the dissolution of its majority-owned subsidiary, Maxygen Holdings, LLC, on June 21, 2012, the Company was the primary beneficiary of Maxygen Holdings LLC. In May 2010, the Company sold a minority membership interest in Maxygen Holdings LLC to a third party for $200,000 in cash and a contingent promissory note. In connection with its dissolution, Maxygen Holdings LLC issued a liquidating dividend to each of its members and, as a result, the third party received $659,000. Prior to the dissolution, amounts pertaining to the ownership interest held by such third party in the operating results and financial position of Maxygen Holdings LLC were reported as a non-controlling interest.

Net Income (loss) Per Share

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. During the periods in which the Company has net income from continuing operations, the diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities.

The following table presents a reconciliation of the numerators and denominators of the basic and dilutive net income (loss) per share computations and the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Numerator:
Numerator for basic and diluted income (loss) attributable to  Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Denominator:
Basic and diluted:
Weighted-average shares used in computing basic net income (loss) per share		27,250		27,581		27,241		27,549
Effect of dilutive securities		138		—		183		—
Weighted-average shares used in computing diluted net income (loss) per share		27,388		27,581		27,424		27,549
Basic net income (loss) per share attributable to Maxygen, Inc.	$	1.00	$	(0.12)	$	0.90	$	(0.19)
Diluted net income (loss) per share attributable to Maxygen, Inc.	$	0.99	$	(0.12)	$	0.90	$	(0.19)

The total number of shares excluded from the calculations of diluted net income (loss) per share was approximately 5,413,000 options and 11,000 shares of restricted stock at June 30, 2012 and 4,238,000 options and 118,500 shares of restricted stock at June 30, 2013. These securities have been excluded from the calculation of diluted net income (loss) per share as their effect is anti-dilutive.

Comprehensive Income (loss)

Comprehensive income (loss) is primarily comprised of net income (loss), net unrealized gains or losses on available-for-sale securities, net of reclassification adjustments for gains (losses) included in net (income) loss, and their related tax effects and the impact of foreign currency translation.

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Net income (loss) attributable to Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Non-cash translation  adjustment related to dissolution of subsidiary		-		252		-		252
Changes in unrealized gains on available-for-sale investments		31		(3)		(733)		3
Reclassification adjustments for gains included in net income (loss)		(68)		(37)		(143)		(60)
Tax effects of changes in unrealized gains on available-for-sale investments		70		-		70		-
Total change in other comprehensive income (loss)		33		212		(806)		195
Comprehensive income (loss)	$	27,153	$	(2,986)	$	23,742	$	(5,134)

The changes in unrealized gain (loss) on available-for-sale investment in equity securities represent the change in fair value of the Codexis, Inc. common stock held by the Company. The reclassification adjustments to changes in unrealized gains on available-for-sale investments include gains associated with the distribution of such common stock in both 2012 and 2013. The shares of Codexis, Inc. common stock being retained by the Company primarily represent shares reserved on behalf of the holders of certain outstanding equity awards.

The components of accumulated other comprehensive income (loss) was as follows (in thousands):

	December 31, 2012	June 30, 2013
Unrealized gains on available-for-sale investments.........................	$ 80	$ 23
Foreign currency translation adjustments.............................................	(252)	-
Accumulated other comprehensive income (loss).............................	$ (172)	$ 23

Stock-Based Compensation

For the three months ended June 30, 2012 and 2013, stock-based compensation expense of $722,000 and $752,000, respectively, was allocated entirely to general and administrative expense. For the six months ended June 30, 2012 and 2013, stock-based compensation expense of $1,248,000 and $1,368,000, respectively, was allocated entirely to general and administrative expense.

Stock Options

Stock options are generally scheduled to vest over four years and all options expire no later than 10 years from the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model. There were no stock options granted to employees during each of the three and six months ended June 30, 2012 and 2013. For the three months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $191,000 and $180,000, respectively. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $368,000 and $364,000, respectively. In connection with the Dissolution, the Company’s Board of Directors approved the accelerated vesting in full of all stock option awards that remained outstanding and unvested, effective July 31, 2013.

Restricted Stock Awards

The Company has granted restricted stock awards (“RSAs”) under its 2006 Equity Incentive Plan (the “2006 Plan”) to certain employees and members of its board of directors. RSAs are generally scheduled to vest over four years. The 2006 Plan and related award agreement provide for forfeiture in certain events, such as voluntary termination of employment, and for acceleration of vesting in certain events, such as termination of employment without cause or a change in control of the Company. Compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. The Company did not grant any RSAs in the threeand six months ended June 30,  2013. In the three and six months ended June 30, 2012, the Company granted RSAs to its board members representing an aggregate of 40,000 shares of Company common stock. For the three months ended June 30, 2012 and 2013, the Company recognized approximately $378,000 and$433,000, respectively, in stock-based compensation expense related to its RSAs. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with RSAs was $829,000 and $819,000, respectively. At June 30, 2013, the unrecognized compensation cost related to these awards was approximately $567,000, which is expected to be recognized on a straight-line basis over the requisite service period through June 2016. In accordance with the standard terms of the RSAs, all RSAs that remain outstanding and unvested would be accelerated and vest in full in connection with the Dissolution. In such case, all remaining unamortized expense would be immediately recognized in conjunction with accelerated vesting.

Contingent Performance Units

In September 2009, the Company granted contingent performance units (“CPUs”) under the 2006 Plan to all employees and board members who held options to purchase the Company’s common stock, and since that date the Company has also granted CPUs in connection with the grant of new stock option awards. CPUs vest on the earliest to occur of (i) a change in control of the Company, (ii) a corporate dissolution or liquidation of the Company, (iii) an involuntary termination of employment without cause, or (iv) the fourth anniversary of the grant date (the “Settlement Date”), generally so long as the holder continues to provide services for the Company on a continuous basis from the grant date to the Settlement Date. The CPUs are designed to protect holders of the Company’s stock options against a reduction in the share price of the Company’s common stock resulting from dividends or distributions to the Company’s stockholders, which could negatively affect outstanding options held by option holders of the Company since the options would not otherwise participate in any dividends or distributions to the Company’s stockholders. The earned value of any vested CPU will generally be settled in shares of common stock of the Company, but may also be settled entirely in cash. All unvested CPUs remaining following the Settlement Date will expire immediately. As noted above, in accordance with the standard terms of the CPU awards, all awards that remain outstanding would be accelerated and settled in connection with the Dissolution and, to the extent the Dissolution is approved by the Company’s stockholders, the Company’s Board of Directors has authorized that all remaining CPU awards be settled entirely in cash.

These awards were remeasured at estimated fair value as of June 30, 2013, as required for liability awards.  During the six months ended June 30, 2012, approximately $42,000 in cash was paid to settle vested CPUs. During the six months ended June 30, 2013, approximately $12,000 in cash was paid to settle vested CPUs. The fair value of the remaining CPUs was approximately  $1.0 million at June 30, 2013. The Company used the intrinsic value to measure the fair value of such awards at June 30, 2013. Given the majority of the awards’ proximity to their respective settlement dates, the Company does not believe there would be a material difference in the total fair value of such awards using the Monte Carlo simulation model, which was used in all prior periods, compared with using the intrinsic value method. The intrinsic value of such awards was based on the closing prices of Maxygen and Codexis’ common stock on June 28, 2013, which were $2.48 and $2.21, respectively. The fair value of such awards in all periods prior to June 30, 2013 was determined based on a Monte Carlo simulation using the following assumptions:

			As of
			June 30, 2012
Expected dividend yield			0	%
Risk-free interest rate range	0.21	%	-	0.38	%
Expected life	1.23		-	2.92	years
Expected volatility of Maxygen, Inc. common stock	21.8	%	to	36.5	%
Expected volatility of Codexis, Inc. common stock	63.0	%	to	67.5	%

The risk-free interest rate is based on the U.S. Treasury yield in effect at each reporting date, with a term commensurate with the estimated remaining expected life of the award. Expected life is based on the estimated remaining time to settlement for each award. Expected volatility of both the Company’s common stock and the Codexis, Inc. common stock is based on the historical volatility, as available, of such stock commensurate with the expected life of each award.

The Company recorded compensation expense of approximately $153,000 and $139,000 in the three months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses. The Company recorded compensation expense of approximately $51,000 and $185,000 in the six months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses.  As the CPUs are accounted for as liability awards, the Company re-measures their fair value at each reporting date and records compensation expense utilizing a straight-line attribution method.

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Fair Value

6 Months Ended

Jun. 30, 2013

Fair Value [Abstract]

Fair Value

3. Fair Value

Assets and liabilities recorded at fair value in the Condensed Consolidated Financial Statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to valuation of these assets and liabilities, are as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following tables represent the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) and financial liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012 (in thousands):

	As of June 30, 2013
	Estimated Fair Value	Level 1	Level 2	Level 3
Assets recorded on the balance sheet:
Money market funds...............................................................................................................	$ 74,383	$ 74,383	$—	$—
U.S. Treasury securities.......................................................................................................	5,000	5,000	—	—
Available-for-sale investment in equity securities....................................................	22	22	—	—
Total.................................................................................................................................................	$ 79,405	$ 79,405	$—	$—
Liabilities:
Stock portion of distribution payable...............................................................................	$ 19	$ 19	$—	$—
Total.................................................................................................................................................	$ 19	$ 19	$—	$—

	As of December 31, 2012
	Estimated Fair Value	Level 1	Level 2	Level 3
Assets recorded on the balance sheet:..........................................................................
Money market funds...............................................................................................................	$ 62,784	$ 62,784	$—	$—
U.S. Treasury securities.......................................................................................................	19,996	19,996	—	—
Available-for-sale investment in equity securities....................................................	76	76	—	—
Total.................................................................................................................................................	$ 82,856	$ 82,856	$—	$—
Liabilities:......................................................................................................................................
Stock portion of distribution payable...............................................................................	$ 75	$ 75	$—	$—
Total.................................................................................................................................................	$ 75	$ 75	$—	$—

As of June 30, 2013, the Company held 9,978 shares of Codexis, Inc. common stock, which is reflected on the Company’s Condensed Consolidated Balance Sheet as available-for-sale investment in equity securities for $22,000. As the fair value of the Company’s investment in Codexis, Inc. common stock was based on the $2.21 closing price of such stock on June 28, 2013, and because an active market exists for such shares, the Company has classified the fair value of this asset as a Level 1 asset within the fair value hierarchy. As of December 31, 2012, the Company held 34,450 of such shares with a fair value of $76,000, based on the $2.21 closing price of such stock on December 31, 2012.

At June 30, 2013, the Company had an obligation to distribute 8,621 shares of Codexis, Inc. common stock to holders of the Company’s restricted stock awards. The fair value of this obligation of $19,000 is determined based on the $2.21 closing price of such stock on June 28, 2013. As of December 31, 2012, the obligation totaled $75,000, based on 33,988 shares of such stock with a $2.21 closing price on December 31, 2012. As the fair value was based on a quoted price in an active market, the Company classified this liability as a Level 1 liability within the fair value hierarchy and as the Stock portion of distribution payable in the table above.

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Receipt Of Contingent Payment From Bayer

6 Months Ended

Jun. 30, 2013

Receipt Of Contingent Payment From Bayer [Abstract]

Receipt Of Contingent Payment From Bayer

6. Receipt of Contingent Payment from Bayer

In the three months ended June 30, 2012, the Company received a $30.0 million payment from Bayer HealthCare LLC (“Bayer”) in connection with Bayer’s continued clinical development of a recombinant factor VIIa product candidate for the treatment of hemophilia. The Company sold the recombinant factor VIIa product candidate (previously designated by the Company as MAXY-VII) to Bayer, together with its other hematology assets, in July 2008 for an upfront cash payment of $90.0 million. The additional $30.0 million contingent payment was based on the further clinical development of the factor VIIa product candidate by Bayer and was also subject to the satisfaction of certain patent conditions related to these assets. The $30.0 million payment was recorded within Technology and license revenue on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income in the three months ended June 30, 2012. There are no remaining payments to be received from Bayer under our agreements with Bayer.

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Repurchases Of Common Stock

6 Months Ended

Jun. 30, 2013

Repurchases Of Common Stock [Abstract]

Repurchases Of Common Stock

4. Repurchases of Common Stock

From December 2009 through June 30, 2013, the Company repurchased a total of 12,506,627 shares of its common stock for a total cost of approximately $67.9 million. As further summarized below, these stock repurchases were conducted pursuant to a modified “Dutch auction” offer and through open market repurchases and private transactions.

In December 2009, the Company repurchased 7,345,103 shares pursuant to a modified “Dutch auction” tender offer at a total cost of approximately $39.2 million. In March 2010, the Company repurchased 1,433,361 shares from entities affiliated with GlaxoSmithKline plc at a per share price of $5.55, and the Company repurchased an additional 1,204,604 shares during 2010 as part of an open market repurchase program at an average price of $5.72 per share.

On May 31, 2011, the Company announced a stock repurchase program under which the Company was authorized to purchase up to $10.0 million of its common stock through December 31, 2011. On September 8, 2011, this repurchase program was increased from $10.0 million to $20.0 million. During 2011, the Company repurchased 2,244,289 shares of its common stock under this program at an aggregate cost of approximately $12.3 million. This program expired on December 31, 2011.

In January 2012, the Company announced a new stock repurchase program under which it was authorized to purchase up to $10.0 million of its common stock through December 31, 2012. For the year ended December 31, 2012, the Company repurchased 279,270 shares of its common stock under this program at an aggregate cost of approximately $1.5 million. In November 2012, the Company announced the extension of this stock repurchase program through December 31, 2013. There were no repurchases of common stock during the six months ended June 30, 2013.

The table below summarizes the Company’s repurchases of its common stock since 2009:

Period	Total  Number of Shares Purchased	Total Costs, Net of Fees (In thousands)
Twelve months ended December 31, 2009.................................	7,345,103	$39,170
Twelve months ended December 31, 2010.................................	2,637,965	14,889
Twelve months ended December 31, 2011.................................	2,244,289	12,256
Twelve months ended December 31, 2012.................................	279,270	1,536
Six months ended June 30, 2013....................................................	—	—
Total...............................................................................................................	12,506,627	$67,851

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Related Party Transactions (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Related Party Transactions [Abstract]
Consulting fees payable per month			$ 50,000
Automatic renewal period, years			1 year
Period for termination of agreement, years			2 years
Total expense	150,000	150,000	300,000	300,000
Amount pertaining to consulting agreement recorded in accounts payable	$ 50,000		$ 50,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	27,670,228	27,512,340
Common stock, shares outstanding	27,670,228	27,512,340

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Basis Of Presentation And Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Basis Of Presentation And Significant Accounting Policies [Abstract]

Schedule Of Earnings Per Share

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Numerator:
Numerator for basic and diluted income (loss) attributable to  Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Denominator:
Basic and diluted:
Weighted-average shares used in computing basic net income (loss) per share		27,250		27,581		27,241		27,549
Effect of dilutive securities		138		—		183		—
Weighted-average shares used in computing diluted net income (loss) per share		27,388		27,581		27,424		27,549
Basic net income (loss) per share attributable to Maxygen, Inc.	$	1.00	$	(0.12)	$	0.90	$	(0.19)
Diluted net income (loss) per share attributable to Maxygen, Inc.	$	0.99	$	(0.12)	$	0.90	$	(0.19)

Schedule Of Comprehensive Loss

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Net income (loss) attributable to Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Non-cash translation  adjustment related to dissolution of subsidiary		-		252		-		252
Changes in unrealized gains on available-for-sale investments		31		(3)		(733)		3
Reclassification adjustments for gains included in net income (loss)		(68)		(37)		(143)		(60)
Tax effects of changes in unrealized gains on available-for-sale investments		70		-		70		-
Total change in other comprehensive income (loss)		33		212		(806)		195
Comprehensive income (loss)	$	27,153	$	(2,986)	$	23,742	$	(5,134)

Schedule Of Accumulated Other Comprehensive Income (Loss)

	December 31, 2012	June 30, 2013
Unrealized gains on available-for-sale investments.........................	$ 80	$ 23
Foreign currency translation adjustments.............................................	(252)	-
Accumulated other comprehensive income (loss).............................	$ (172)	$ 23

Schedule Of Assumptions Used to Determine The Fair Value

			As of
			June 30, 2012
Expected dividend yield			0	%
Risk-free interest rate range	0.21	%	-	0.38	%
Expected life	1.23		-	2.92	years
Expected volatility of Maxygen, Inc. common stock	21.8	%	to	36.5	%
Expected volatility of Codexis, Inc. common stock	63.0	%	to	67.5	%

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities
Net income (loss)	$ (5,329)	$ 24,998
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	26	27
Gain on distribution of equity securities	(60)	(143)
Non-cash stock compensation	1,368	1,248
Amortization of discount on investments	(8)	(14)
Income tax expense		70
Loss (gain) on disposal of fixed assets		4
Valuation of stock portion of distribution payable	4	(161)
Translation adjustment related to dissolution of subsidiary	252
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	53	115
Deposits and other non-current assets		124
Accounts payable	136	186
Accrued compensation	1,009	(357)
Other accrued liabilities	(208)	(486)
Net cash provided by (used in) operating activities	(2,757)	25,611
Investing activities
Purchase of available-for-sale securities	(4,999)	(37,975)
Maturities of available-for-sale securities	20,000	5,000
Acquisition of property and equipment		(27)
Net cash provided by (used in) investing activities	15,001	(33,002)
Financing activities
Cash distributions paid to common stockholders	(622)	(207)
Net liquidating dividend of subsidiary		(659)
Proceeds from issuance of common stock, net of stock repurchased to settle employee tax obligations	(23)	(48)
Repurchase of common stock		(1,536)
Net cash used in financing activities	(645)	(2,450)
Net increase (decrease) in cash and cash equivalents	11,599	(9,841)
Cash and cash equivalents at beginning of period	62,784	154,572
Cash and cash equivalents at end of period	$ 74,383	$ 144,731

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 74,383	$ 62,784
Short-term investments	5,000	19,996
Available-for-sale investment in equity securities	22	76
Prepaid expenses and other current assets	199	252
Total current assets	79,604	83,108
Property and equipment, net	87	113
Total assets	79,691	83,221
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	381	245
Accrued compensation	2,142	947
Distribution payable	607	1,002
Other accrued liabilities	297	505
Total current liabilities	3,427	2,699
Non-current distribution payable		283
Other non-current liabilities	52	52
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2012 and June 30, 2013
Common stock, $0.0001 par value, 100,000,000 shares authorized, 27,512,340 and 27,670,228 shares issued and outstanding at December 31, 2012 and June 30, 2013, respectively	3	3
Additional paid-in capital	213,167	212,008
Accumulated other comprehensive income (loss)	23	(172)
Accumulated deficit	(136,981)	(131,652)
Total stockholders' equity	76,212	80,187
Total liabilities and stockholders' equity	$ 79,691	$ 83,221

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Receipt of Contingent Payment from Bayer (Details) (USD $)	3 Months Ended	6 Months Ended		1 Months Ended	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jul. 31, 2008 Bayer, LLC. [Member]	Jun. 30, 2012 Bayer, LLC. [Member]
Upfront cash payment				$ 90,000,000
Licenses Revenue	$ 30,000,000	$ 3,000	$ 30,006,000		$ 30,000,000

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Cash Equivalents And Investments (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Restricted Cash and Cash Equivalents Items [Line Items]
Amortized Cost	$ 79,382,000	$ 82,776,000
Gross Unrealized Gains	23,000	80,000
Estimated Fair Value	79,405,000	82,856,000
Contract maturity length, maximum	1 year
Money Market Funds [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Amortized Cost	74,383,000	62,784,000
Estimated Fair Value	74,383,000	62,784,000
U.S. Treasury Securities [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Amortized Cost	4,999,000	19,992,000
Gross Unrealized Gains	1,000	4,000
Estimated Fair Value	5,000,000	19,996,000
Cash and Cash Equivalents [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Amortized Cost	74,383,000	62,784,000
Estimated Fair Value	74,383,000	62,784,000
Securities (Assets) [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Amortized Cost	4,999,000	19,992,000
Gross Unrealized Gains	23,000	80,000
Estimated Fair Value	5,022,000	20,072,000
Available-For-Sale Investment In Equity Securities [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Gross Unrealized Gains	22,000	76,000
Estimated Fair Value	$ 22,000	$ 76,000

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Basis Of Presentation And Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2013

Basis Of Presentation And Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. The information as of June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, includes all adjustments (consisting only of normal recurring adjustments) that the management of Maxygen, Inc. (the “Company”) believes necessary for fair presentation of the results for the periods presented. The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

In addition, results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

On May 30, 2013, the Company’s Board of Directors approved the dissolution and liquidation of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”).  The Dissolution is subject to approval by the stockholders of the Company and the Company is seeking stockholder approval of the Dissolution at its annual meeting of stockholders, currently scheduled to be held on August 12, 2013.

Principles Of Consolidation

Principles of Consolidation

The Condensed Consolidated Financial Statements include the amounts of Maxygen, Inc. and the Company’s wholly-owned subsidiary, Maxygen ApS (through its dissolution on June 13, 2013).  The Condensed Consolidated Financial Statements also include the amounts of the Company’s former majority-owned subsidiary, Maxygen Holdings LLC (through its dissolution on June 21, 2012), and its former wholly-owned subsidiaries, Maxygen Holdings (U.S.), Inc. and Maxygen Holdings, Inc. (through their dissolution on August 9, 2012).

Prior to the dissolution of its majority-owned subsidiary, Maxygen Holdings, LLC, on June 21, 2012, the Company was the primary beneficiary of Maxygen Holdings LLC. In May 2010, the Company sold a minority membership interest in Maxygen Holdings LLC to a third party for $200,000 in cash and a contingent promissory note. In connection with its dissolution, Maxygen Holdings LLC issued a liquidating dividend to each of its members and, as a result, the third party received $659,000. Prior to the dissolution, amounts pertaining to the ownership interest held by such third party in the operating results and financial position of Maxygen Holdings LLC were reported as a non-controlling interest.

Net Loss Per Share

Net Income (loss) Per Share

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. During the periods in which the Company has net income from continuing operations, the diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities.

The following table presents a reconciliation of the numerators and denominators of the basic and dilutive net income (loss) per share computations and the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Numerator:
Numerator for basic and diluted income (loss) attributable to  Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Denominator:
Basic and diluted:
Weighted-average shares used in computing basic net income (loss) per share		27,250		27,581		27,241		27,549
Effect of dilutive securities		138		—		183		—
Weighted-average shares used in computing diluted net income (loss) per share		27,388		27,581		27,424		27,549
Basic net income (loss) per share attributable to Maxygen, Inc.	$	1.00	$	(0.12)	$	0.90	$	(0.19)
Diluted net income (loss) per share attributable to Maxygen, Inc.	$	0.99	$	(0.12)	$	0.90	$	(0.19)

The total number of shares excluded from the calculations of diluted net income (loss) per share was approximately 5,413,000 options and 11,000 shares of restricted stock at June 30, 2012 and 4,238,000 options and 118,500 shares of restricted stock at June 30, 2013. These securities have been excluded from the calculation of diluted net income (loss) per share as their effect is anti-dilutive.

Comprehensive loss

Comprehensive Income (loss)

Comprehensive income (loss) is primarily comprised of net income (loss), net unrealized gains or losses on available-for-sale securities, net of reclassification adjustments for gains (losses) included in net (income) loss, and their related tax effects and the impact of foreign currency translation.

		Three months ended				Six months ended
		June 30,				June 30,
		2012		2013		2012		2013
Net income (loss) attributable to Maxygen, Inc.	$	27,120	$	(3,198)	$	24,548	$	(5,329)
Non-cash translation  adjustment related to dissolution of subsidiary		-		252		-		252
Changes in unrealized gains on available-for-sale investments		31		(3)		(733)		3
Reclassification adjustments for gains included in net income (loss)		(68)		(37)		(143)		(60)
Tax effects of changes in unrealized gains on available-for-sale investments		70		-		70		-
Total change in other comprehensive income (loss)		33		212		(806)		195
Comprehensive income (loss)	$	27,153	$	(2,986)	$	23,742	$	(5,134)

The changes in unrealized gain (loss) on available-for-sale investment in equity securities represent the change in fair value of the Codexis, Inc. common stock held by the Company. The reclassification adjustments to changes in unrealized gains on available-for-sale investments include gains associated with the distribution of such common stock in both 2012 and 2013. The shares of Codexis, Inc. common stock being retained by the Company primarily represent shares reserved on behalf of the holders of certain outstanding equity awards.

The components of accumulated other comprehensive income (loss) was as follows (in thousands):

	December 31, 2012	June 30, 2013
Unrealized gains on available-for-sale investments.........................	$ 80	$ 23
Foreign currency translation adjustments.............................................	(252)	-
Accumulated other comprehensive income (loss).............................	$ (172)	$ 23

Stock-Based Compensation

Stock-Based Compensation

For the three months ended June 30, 2012 and 2013, stock-based compensation expense of $722,000 and $752,000, respectively, was allocated entirely to general and administrative expense. For the six months ended June 30, 2012 and 2013, stock-based compensation expense of $1,248,000 and $1,368,000, respectively, was allocated entirely to general and administrative expense.

Stock Options

Stock options are generally scheduled to vest over four years and all options expire no later than 10 years from the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model. There were no stock options granted to employees during each of the three and six months ended June 30, 2012 and 2013. For the three months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $191,000 and $180,000, respectively. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with stock options was $368,000 and $364,000, respectively. In connection with the Dissolution, the Company’s Board of Directors approved the accelerated vesting in full of all stock option awards that remained outstanding and unvested, effective July 31, 2013.

Restricted Stock Awards

The Company has granted restricted stock awards (“RSAs”) under its 2006 Equity Incentive Plan (the “2006 Plan”) to certain employees and members of its board of directors. RSAs are generally scheduled to vest over four years. The 2006 Plan and related award agreement provide for forfeiture in certain events, such as voluntary termination of employment, and for acceleration of vesting in certain events, such as termination of employment without cause or a change in control of the Company. Compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. The Company did not grant any RSAs in the threeand six months ended June 30,  2013. In the three and six months ended June 30, 2012, the Company granted RSAs to its board members representing an aggregate of 40,000 shares of Company common stock. For the three months ended June 30, 2012 and 2013, the Company recognized approximately $378,000 and$433,000, respectively, in stock-based compensation expense related to its RSAs. For the six months ended June 30, 2012 and 2013, stock-based compensation expense associated with RSAs was $829,000 and $819,000, respectively. At June 30, 2013, the unrecognized compensation cost related to these awards was approximately $567,000, which is expected to be recognized on a straight-line basis over the requisite service period through June 2016. In accordance with the standard terms of the RSAs, all RSAs that remain outstanding and unvested would be accelerated and vest in full in connection with the Dissolution. In such case, all remaining unamortized expense would be immediately recognized in conjunction with accelerated vesting.

Contingent Performance Units

In September 2009, the Company granted contingent performance units (“CPUs”) under the 2006 Plan to all employees and board members who held options to purchase the Company’s common stock, and since that date the Company has also granted CPUs in connection with the grant of new stock option awards. CPUs vest on the earliest to occur of (i) a change in control of the Company, (ii) a corporate dissolution or liquidation of the Company, (iii) an involuntary termination of employment without cause, or (iv) the fourth anniversary of the grant date (the “Settlement Date”), generally so long as the holder continues to provide services for the Company on a continuous basis from the grant date to the Settlement Date. The CPUs are designed to protect holders of the Company’s stock options against a reduction in the share price of the Company’s common stock resulting from dividends or distributions to the Company’s stockholders, which could negatively affect outstanding options held by option holders of the Company since the options would not otherwise participate in any dividends or distributions to the Company’s stockholders. The earned value of any vested CPU will generally be settled in shares of common stock of the Company, but may also be settled entirely in cash. All unvested CPUs remaining following the Settlement Date will expire immediately. As noted above, in accordance with the standard terms of the CPU awards, all awards that remain outstanding would be accelerated and settled in connection with the Dissolution and, to the extent the Dissolution is approved by the Company’s stockholders, the Company’s Board of Directors has authorized that all remaining CPU awards be settled entirely in cash.

These awards were remeasured at estimated fair value as of June 30, 2013, as required for liability awards.  During the six months ended June 30, 2012, approximately $42,000 in cash was paid to settle vested CPUs. During the six months ended June 30, 2013, approximately $12,000 in cash was paid to settle vested CPUs. The fair value of the remaining CPUs was approximately  $1.0 million at June 30, 2013. The Company used the intrinsic value to measure the fair value of such awards at June 30, 2013. Given the majority of the awards’ proximity to their respective settlement dates, the Company does not believe there would be a material difference in the total fair value of such awards using the Monte Carlo simulation model, which was used in all prior periods, compared with using the intrinsic value method. The intrinsic value of such awards was based on the closing prices of Maxygen and Codexis’ common stock on June 28, 2013, which were $2.48 and $2.21, respectively. The fair value of such awards in all periods prior to June 30, 2013 was determined based on a Monte Carlo simulation using the following assumptions:

			As of
			June 30, 2012
Expected dividend yield			0	%
Risk-free interest rate range	0.21	%	-	0.38	%
Expected life	1.23		-	2.92	years
Expected volatility of Maxygen, Inc. common stock	21.8	%	to	36.5	%
Expected volatility of Codexis, Inc. common stock	63.0	%	to	67.5	%

The risk-free interest rate is based on the U.S. Treasury yield in effect at each reporting date, with a term commensurate with the estimated remaining expected life of the award. Expected life is based on the estimated remaining time to settlement for each award. Expected volatility of both the Company’s common stock and the Codexis, Inc. common stock is based on the historical volatility, as available, of such stock commensurate with the expected life of each award.

The Company recorded compensation expense of approximately $153,000 and $139,000 in the three months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses. The Company recorded compensation expense of approximately $51,000 and $185,000 in the six months ended June 30, 2012 and 2013, respectively, related to changes in the fair value of the CPU liability within General and administrative expenses.  As the CPUs are accounted for as liability awards, the Company re-measures their fair value at each reporting date and records compensation expense utilizing a straight-line attribution method.

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Plan of Dissolution (Details) (USD $) In Millions, except Share data, unless otherwise specified			6 Months Ended		6 Months Ended	1 Months Ended		1 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Liquidating dividend Distribution One [Member]	Jul. 31, 2013 Liquidating dividend Distribution One [Member]	Jun. 30, 2013 Liquidating dividend Distribution Two [Member]	Aug. 12, 2013 Maximum [Member] Scenario, Forecast [Member] Liquidating dividend Distribution One [Member]	Aug. 12, 2013 Maximum [Member] Scenario, Forecast [Member] Liquidating dividend Distribution Two [Member]	Aug. 12, 2013 Minimum [Member] Scenario, Forecast [Member] Liquidating dividend Distribution One [Member]
Dividends Payable [Line Items]
Dividends, Common Stock, Cash						$ 69.6		$ 68.2
Dividends Payable, Amount Per Share						$ 2.50	$ 0.09	$ 2.45
Common Stock, Shares, Outstanding	27,670,228	27,512,340		27,788,749
Dividends Payable, Nature			The Company currently estimates that the aggregate amount of an initial liquidating distribution to stockholders will be between $68.2 million and $69.6 million, or between $2.45 and $2.50 per share, based on 27,788,749 shares of common stock outstanding as of July 31, 2013, provided that the Board may adjust such amount at a later date to ensure there is cash remaining to satisfy any potential liabilities. The Company expects to make the initial liquidating distribution as promptly as practicable after the filing of the certificate of dissolution.		Additional liquidating distributions, which could total as much as approximately $0.09 per share, may be made as the required contingency reserves are released or contingent liabilities are paid over time.

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value [Abstract]

Schedule Of Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis

	As of June 30, 2013
	Estimated Fair Value	Level 1	Level 2	Level 3
Assets recorded on the balance sheet:
Money market funds...............................................................................................................	$ 74,383	$ 74,383	$—	$—
U.S. Treasury securities.......................................................................................................	5,000	5,000	—	—
Available-for-sale investment in equity securities....................................................	22	22	—	—
Total.................................................................................................................................................	$ 79,405	$ 79,405	$—	$—
Liabilities:
Stock portion of distribution payable...............................................................................	$ 19	$ 19	$—	$—
Total.................................................................................................................................................	$ 19	$ 19	$—	$—

	As of December 31, 2012
	Estimated Fair Value	Level 1	Level 2	Level 3
Assets recorded on the balance sheet:..........................................................................
Money market funds...............................................................................................................	$ 62,784	$ 62,784	$—	$—
U.S. Treasury securities.......................................................................................................	19,996	19,996	—	—
Available-for-sale investment in equity securities....................................................	76	76	—	—
Total.................................................................................................................................................	$ 82,856	$ 82,856	$—	$—
Liabilities:......................................................................................................................................
Stock portion of distribution payable...............................................................................	$ 75	$ 75	$—	$—
Total.................................................................................................................................................	$ 75	$ 75	$—	$—

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Plan Of Dissolution

6 Months Ended

Jun. 30, 2013

Plan Of Dissolution [Abstract]

Plan Of Dissolution

7. Plan of Dissolution

On May 30, 2013, the Board of Directors of the Company approved the Dissolution pursuant to the Plan of Dissolution.  The Dissolution is subject to approval by the stockholders of the Company and the Company plans to hold a stockholder meeting on August 12, 2013 to seek approval of the Dissolution.

The Plan of Dissolution contemplates an orderly wind down of the Company’s business and operations. If the Company’s stockholders approve the Dissolution, the Company intends to file a certificate of dissolution with the Delaware Secretary of State, satisfy or resolve its remaining liabilities and obligations, including but not limited to contingent liabilities and claims, lease obligations, severance for terminated employees, and costs associated with the liquidation and dissolution, and make distributions to its stockholders of cash available for distribution, subject to applicable legal requirements. Upon the filing of the certificate of dissolution, the Company intends to close its stock transfer books, discontinue recording transfers of shares of its stock, and seek relief from certain of its reporting obligations under the Securities Exchange Act of 1934, as amended.The Company also plans to request that NASDAQ suspend trading of the Company’s common stock on the NASDAQ Global Market effective at the close of business on the date the Company files the certificate of dissolution and will seek to delist its shares of common stock from the NASDAQ Global Market as soon as practicable thereafter.

The Company currently estimates that the aggregate amount of an initial liquidating distribution to stockholders will be between $68.2 million and $69.6 million, or between $2.45 and $2.50 per share, based on 27,788,749 shares of common stock outstanding as of July 31, 2013, provided that the Board may adjust such amount at a later date to ensure there is cash remaining to satisfy any potential liabilities. The Company expects to make the initial liquidating distribution as promptly as practicable after the filing of the certificate of dissolution.Additional liquidating distributions, which could total as much as approximately $0.09 per share, may be made as the required contingency reserves are released or contingent liabilities are paid over time.

If the stockholders of the Company approve the Dissolution pursuant to the Plan of Dissolution, the ultimate values realized for the Company’s assets and ultimate amounts paid to satisfy the Company’s liabilities may differ from the carrying value recorded.   The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

For more information regarding the Dissolution, please see the section in this report titled “Additional Information about the Proposed Plan of Dissolution and Where to Find it.”

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Cash Equivalents And Investments

6 Months Ended

Jun. 30, 2013

Cash Equivalents And Investments [Abstract]

Cash Equivalents And Investments

2. Cash Equivalents and Investments

The Company’s cash equivalents and investments as of June 30, 2013 were as follows (in thousands):

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Money market funds...................................................................................................	$ 74,383	$—	$—	$ 74,383
U.S. Treasury securities...........................................................................................	4,999	1	—	5,000
Available-for-sale investment in equity securities........................................	—	22	—	22
Total.....................................................................................................................................	79,382	23	—	79,405
Less amounts classified as cash equivalents................................................	(74,383)	—	—	(74,383)
Total investments.........................................................................................................	$ 4,999	$ 23	$—	$ 5,022

The Company’s cash equivalents and investments as of December 31, 2012 were as follows (in thousands):

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Money market funds...............................................................................................	$ 62,784	$—	$—	$ 62,784
U.S. Treasury securities.......................................................................................	19,992	4	—	19,996
Available-for-sale investment in equity securities....................................	—	76	—	76
Total.................................................................................................................................	82,776	80	—	82,856
Less amounts classified as cash equivalents............................................	(62,784)	—	—	(62,784)
Total investments.....................................................................................................	$ 19,992	$ 80	$—	$ 20,072

At June 30, 2013, all investments in debt securities had a contractual maturity of less than one year.

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Basis Of Presentation And Significant Accounting Policies (Schedule Of Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator:
Numerator for basic and diluted income (loss) attributable to Maxygen, Inc.	$ (3,198)	$ 27,120	$ (5,329)	$ 24,548
Denominator:
Weighted-average shares used in computing basic net income (loss) per share	27,581	27,250	27,549	27,241
Effect of dilutive securities		138		183
Weighted-average shares used in computing diluted net income (loss) per share	27,581	27,388	27,549	27,424
Basic net income (loss) per share attributable to Maxygen, Inc.	$ (0.12)	$ 1.00	$ (0.19)	$ 0.90
Diluted net income (loss) per share attributable to Maxygen, Inc.	$ (0.12)	$ 0.99	$ (0.19)	$ 0.90

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Cash Equivalents And Investments (Tables)

6 Months Ended

Jun. 30, 2013

Cash Equivalents And Investments [Abstract]

Schedule Of Cash Equivalents And Investments

The Company’s cash equivalents and investments as of June 30, 2013 were as follows (in thousands):

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Money market funds...................................................................................................	$ 74,383	$—	$—	$ 74,383
U.S. Treasury securities...........................................................................................	4,999	1	—	5,000
Available-for-sale investment in equity securities........................................	—	22	—	22
Total.....................................................................................................................................	79,382	23	—	79,405
Less amounts classified as cash equivalents................................................	(74,383)	—	—	(74,383)
Total investments.........................................................................................................	$ 4,999	$ 23	$—	$ 5,022

The Company’s cash equivalents and investments as of December 31, 2012 were as follows (in thousands):

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
Money market funds...............................................................................................	$ 62,784	$—	$—	$ 62,784
U.S. Treasury securities.......................................................................................	19,992	4	—	19,996
Available-for-sale investment in equity securities....................................	—	76	—	76
Total.................................................................................................................................	82,776	80	—	82,856
Less amounts classified as cash equivalents............................................	(62,784)	—	—	(62,784)
Total investments.....................................................................................................	$ 19,992	$ 80	$—	$ 20,072

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Basis Of Presentation And Significant Accounting Policies (Schedule Of Stock Option Assumptions) (Details) (Contingent Performance Units [Member])	6 Months Ended
	Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.38%
Expected life	2 years 11 months 1 day
Maximum [Member] | Maxygen, Inc. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	36.50%
Maximum [Member] | Codexis, Inc. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	67.50%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.21%
Expected life	1 year 2 months 23 days
Minimum [Member] | Maxygen, Inc. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	21.80%
Minimum [Member] | Codexis, Inc. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	63.00%

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Basis Of Presentation And Significant Accounting Policies (Schedule Of Comprehensive Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basis Of Presentation And Significant Accounting Policies [Abstract]
Net income (loss) attributable to Maxygen, Inc.	$ (3,198)	$ 27,120	$ (5,329)	$ 24,548
Non-cash translation adjustment related to dissolution of subsidiary	252		252
Changes in unrealized gains on available-for-sale investments	(3)	31	3	(733)
Reclassification adjustments for gains included in net income (loss)	(37)	(68)	(60)	(143)
Tax effects of changes in unrealized gains on available-for-sale investments		70		70
Total change in other comprehensive income (loss)	212	33	195	(806)
Comprehensive income (loss) attributable to Maxygen, Inc.	$ (2,986)	$ 27,153	$ (5,134)	$ 23,742

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013
Entity Registrant Name	MAXYGEN INC
Entity Central Index Key	0001068796
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		27,788,749

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Basis Of Presentation And Significant Accounting Policies (Schedule of Accumulated Other Comprehensive Loss) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Basis Of Presentation And Significant Accounting Policies [Abstract]
Unrealized gains on available-for-sale investments	$ 23	$ 80
Foreign currency translation adjustments		(252)
Accumulated other comprehensive income (loss)	$ 23	$ (172)