Vical second-quarter revenues decrease to $2.1 million

Aug 3 2010

Vical Incorporated (Nasdaq:VICL) today reported financial results for the three months and six months ended June 30, 2010. Revenues decreased to $2.1 million for the second quarter of 2010 from $4.0 million for the second quarter of 2009, primarily as a result of a $1.5 million milestone payment in 2009 from Merck & Co., Inc., based on Merck's ongoing Phase 1 clinical-stage development of an investigational cancer vaccine. Operating expenses increased to $10.6 million for the second quarter of 2010 from $9.8 million for the second quarter of 2009. The net loss was $8.4 million, or $0.15 per share, for the second quarter of 2010, compared with $6.0 million, or $0.14 per share, for the second quarter of 2009.

Revenues for the first six months of 2010 were $3.5 million, compared with revenues of $6.2 million for the first six months of 2009, reflecting the 2009 Merck payment and a reduction in revenue recognized from AnGes as the company approaches the completion of its Phase 3 Allovectin-7^® trial. The net loss for the first six months of 2010 was $16.9 million, or $0.30 per share, compared with a net loss of $14.3 million, or $0.34 per share, for the first six months of 2009.

Vical had cash and investments of $40 million at June 30, 2010. The company's net cash use for the first six months of 2010 was consistent with the company's prior guidance for the full year 2010 net cash use of $20 million to $24 million, which included anticipated receipts from new or expanded partnerships not currently contracted.

Allovectin-7^®

• An independent Safety Monitoring Board for Vical's Phase 3 trial of Allovectin-7^® in patients with metastatic melanoma completed the trial's fourth scheduled safety analysis and recommended that the trial continue per the protocol. 
• The June issue of Melanoma Research included updated data from the company's Phase 2 trial of high-dose Allovectin-7^® in patients with metastatic melanoma. A separate article in the May issue of Expert Opinion on Biological Therapy reviewed results from the Phase 2 trial and previous clinical studies of Allovectin-7^®.

Cytomegalovirus (CMV) Vaccine

• Vical's TransVax™ cytomegalovirus vaccine elicited sustained increases in both cellular and antibody immune responses compared with placebo through the final 12-month follow-up in an ongoing Phase 2 trial in hematopoietic cell transplant (HCT) recipients. 
• Vical entered into a collaboration with leading pediatric infectious disease researchers at Virginia Commonwealth University under a five-year, approximately $4.0 million grant from the National Institute of Allergy and Infectious Diseases. The grant will support development and animal testing of novel vaccine approaches designed to protect women of child-bearing potential from infection with CMV.

Pandemic Influenza Vaccine

• Vical completed enrollment in its Phase 1 trial of the company's Vaxfectin^®-formulated plasmid DNA vaccine against H1N1 pandemic influenza.

Herpes Simplex Type 2 Vaccine

• Vical's prophylactic Vaxfectin^®-formulated plasmid DNA (pDNA) vaccine against herpes simplex virus type 2 (HSV-2) protected mice against lethal challenge, provided sterilizing immunity and inhibited viral counts at both the primary and latent infection sites. A related vaccine significantly reduced the recurrence of HSV-2 lesions in a therapeutic model using guinea pigs with latent infection.

Key Future Developments

• Final results in the third quarter of 2010 from the Phase 2 trial of the company's TransVax™ CMV vaccine candidate for HCT recipients; and
• Data in the fourth quarter of 2010 from Vical's licensee, sanofi aventis Group, from the ongoing TAMARIS Phase 3 trial of its Temusi^® angiogenic gene therapy product candidate, intended to promote the growth of blood vessels to reduce the need for amputations in patients with reduced blood flow to the limbs.