Exhibit 99.1
Vical Announces Fourth-Quarter and Year-End 2003 Financial Results
Change in Conference Call Webcast Address;
Live Call Begins at Noon EST Today at http://ir.vical.com
SAN DIEGO, Feb. 10 /PRNewswire-FirstCall/ -- Vical Incorporated
(Nasdaq: VICL) today reported revenues of $1.7 million for the fourth quarter
which ended December 31, 2003, compared with revenues of $0.5 million for the
fourth quarter of the prior year. Revenues for the full year 2003 were
$8.1 million compared with $7.0 million for the full year 2002. Results for
the full year 2003 reflected higher grant and contract manufacturing revenues,
partially offset by lower license and milestone payments.
The net loss for the fourth quarter of 2003 was $6.9 million or $0.35 per
share, compared with a net loss of $7.5 million or $0.37 per share for the
fourth quarter of 2002. For the full year 2003, the company reported a net
loss of $24.5 million or $1.22 per share compared with a net loss of
$27.9 million or $1.39 per share for 2002. The reported full-year net losses
included a $0.5 million write-down in 2003, and a $4.2 million write-down in
2002, of the company's investment in Corautus Genetics Inc., formerly Vascular
Genetics Inc. Higher revenues and lower general and administrative spending
for the full year were essentially offset by lower returns on investments and
increased spending on research and development. At December 31, 2003, the
company had cash, cash equivalents and marketable securities of $85 million
compared with $112 million at December 31, 2002.
Vijay B. Samant, Vical's President and Chief Executive Officer, said,
"2003 was a very important year for Vical, with completion of patient
enrollment and encouraging interim data in our Allovectin-7(R) melanoma
immunotherapy program and good progress in our two lead infectious disease
vaccine programs. We will report on continued advances throughout 2004 in our
independent and partnered programs. Our net loss was in line with our
expectations, coming in at the low end of our forecast range of $24 million to
$28 million. We expect our contract manufacturing activity to increase
beginning in the second half of the year, and our projected net loss for 2004
is between $26 million and $29 million."
Allovectin-7(R)
Vical has initiated discussions with the U.S. Food and Drug Administration
(FDA) regarding whether the results from the company's high-dose Phase 2 trial
could potentially support accelerated approval for marketing Allovectin-7(R)
for use in certain patients with recurrent and/or otherwise treatment-
intolerant metastatic melanoma. The company expects these discussions will
lead to two formal End-of-Phase 2 (EOP2) meetings within the next few months.
The Product EOP2 meeting would focus on manufacturing and other product-
related topics. The Clinical EOP2 meeting would focus on clinical and non-
clinical data supporting claims of efficacy and safety. In preparation for
the Clinical EOP2 meeting, the company took a snapshot, in November 2003, of
the efficacy data from the complete high-dose cohort after all enrolled
patients had an opportunity to complete two cycles of Allovectin-7(R) therapy.
Based on the outcome of these two meetings, by the end of the second quarter
of 2004, Vical expects to finalize the company's approach to seeking market
approval of Allovectin-7(R).
In February 2001, the company began a high-dose Phase 2 trial evaluating
the Allovectin-7(R) gene-based immunotherapeutic for patients with Stage III
or IV melanoma, who have few other treatment options. The company presented
unaudited data at the annual meeting of the American Society of Clinical
Oncology (ASCO) in May 2003 from interim analyses performed in early March
2003 for the first 91 patients in the high-dose cohort, indicating an
objective response rate of 13 percent with continued excellent safety and
tolerability. An update in July 2003 yielded an estimated median duration of
response of at least 6.4 months. Patient enrollment was completed in July
2003 with a total of 133 patients, including 6 in an initial dose-escalation
cohort and 127 in the high-dose cohort. Key clinical data on the full high-
dose cohort are expected to be presented in a scientific meeting in June 2004.
CMV
The company made significant preclinical progress in 2003 with its DNA-
based immunotherapeutic vaccine against cytomegalovirus (CMV) and expects to
begin clinical testing in the next few months in support of an initial
application in bone marrow transplant patients. The majority of the required
preclinical testing has been completed; a bivalent vaccine encoding two known
immunogenic CMV proteins has been formulated with a poloxamer; and clinical
supplies have been manufactured. The company has established working
relationships with some of the country's leading transplant centers, which
have contributed to the trial design and may participate in upcoming CMV
vaccine trials.
Anthrax
The company's second-generation, bivalent, cationic-lipid formulated
anthrax vaccine is designed to provide broader protection against weaponized
forms of anthrax than the currently approved anthrax vaccine. Preclinical
data from the anthrax vaccine program demonstrated complete protection of
rabbits at 7.5 months post-vaccination against a lethal aerosolized spore
inhalation challenge. The company plans to proceed with human clinical
testing of the vaccine pending completion of ongoing preclinical studies and
contingent on government funding, which directly depends on the priorities and
appropriations for the U.S. government's Project BioShield. Work continues on
the non-clinical development of the anthrax vaccine, which is being supported
by a three-year, $5.7 million grant awarded by the NIH in July 2003.
NIH/VRC Collaborations
In February 2004, Vical received orders for approximately $6 million for
production of DNA vaccines under two subcontracts managed by SAIC-Frederick,
Inc., for the Vaccine Research Center at the National Institute of Allergy and
Infectious Diseases of the National Institutes of Health. Production will
begin in the first half of 2004 in the company's existing Eastgate
manufacturing facility, but the majority will be completed in the second half
of 2004 in the company's new Pacific Center Court manufacturing facility.
Additional orders may be placed under both subcontracts.
Outlook
The company expects to achieve the following operational milestones in
2004:
* Formal End-of-Phase 2 meetings with the FDA within the next few months
to determine whether the high-dose Phase 2 trial could potentially
support accelerated approval of Allovectin-7(R) for certain patients
with recurrent and/or otherwise treatment-intolerant metastatic
melanoma,
* Presentation of key clinical data from the Allovectin-7(R) high-dose
Phase 2 trial as of November 2003 at a scientific meeting in June,
* Start of the initial CMV vaccine human safety trial within the next
several months,
* Continued progress with non-clinical development of the anthrax
vaccine under the existing NIH grant, and potential additional
government funding to support an advance into human clinical testing,
* A new product development program in solid tumors as an initial
application of electroporation technology by year-end 2004,
* Contract manufacturing in the new facility in the second half of the
year, and
* At least one new collaboration in 2004.
Conference Call
Vical will conduct a conference call and webcast to discuss the financial
results with invited analysts and institutional investors today, February 10,
at noon Eastern Time. The call is open on a listen-only basis to any
interested parties. The company will provide additional details on
independent and partnered development programs and expectations for financial
and operational progress during 2004 in the conference call and webcast.
To listen to the conference call, dial (800) 432-7890, or (973) 317-1168
for international participants. A replay of the call will be available for
48 hours beginning about two hours after the call. To listen to the replay,
dial (800) 428-6051, or (973) 709-2089 for international participants, and
enter conference identification number 330811. Due to temporary technical
issues with the Vical web site, the call also will be available live and
archived at http://ir.vical.com. Once those issues are resolved, the archived
webcast will be available through the webcast center at www.vical.com. For
further information, contact Vical's Investor Relations department by phone at
(858) 646-1127 or by e-mail at info@vical.com.
About Vical
Vical researches and develops biopharmaceutical products based on its
patented DNA delivery technologies for the prevention and treatment of serious
or life-threatening diseases. Potential applications of the company's DNA
delivery technology include DNA vaccines for infectious diseases or cancer, in
which the expressed protein is an immunogen; cancer immunotherapeutics, in
which the expressed protein is an immune system stimulant; and cardiovascular
therapies, in which the expressed protein is an angiogenic growth factor. The
company has retained all rights to its internally developed product
candidates. In addition, the company collaborates with major pharmaceutical
companies and biotechnology companies that give it access to complementary
technologies or greater resources. These strategic partnerships provide the
company with mutually beneficial opportunities to expand its product pipeline
and serve significant unmet medical needs. Additional information on Vical is
available at www.vical.com.
This press release contains forward-looking statements subject to risks
and uncertainties that could cause actual results to differ materially from
those projected. Forward-looking statements include statements about expected
recognition of revenues in future quarters; the company's projected financial
performance; advancement of the company's research and development activities;
expectations regarding the company's high dose Allovectin-7(R) Phase 2 trial,
including results of that trial, whether the trial could potentially support
accelerated marketing approval for Allovectin-7(R) and the date by which the
company expects to finalize the regulatory pathway for Allovectin-7(R); the
company's infectious disease vaccine development efforts and plans for
commencing clinical trials for these vaccine candidates; the potential
revenues and other benefits of contract services agreements and grants; as
well as potential applications of the company's technology and arrangements
with collaborative partners. Risks and uncertainties that could adversely
affect actual results include risks and uncertainties related to whether the
company will achieve the levels of revenues and be able to control expenses to
meet projected financial performance; whether results of the company's high-
dose Allovectin-7(R) Phase 2 trial will demonstrate sufficient efficacy to
support accelerated marketing approval or further development of that product
candidate; whether data on the full high-dose cohort from this trial will be
available by June 2004 and whether the regulatory pathway for Allovectin-7(R)
will be finalized by then; whether the company will successfully complete
preclinical testing allowing advancement of anthrax and CMV vaccine candidates
into clinical testing on schedule or at all; whether additional government
funding for clinical testing of the anthrax vaccine will be available; whether
leading transplant centers will participate in the company's CMV vaccine
trials; whether any additional orders will be placed under the DNA vaccine
manufacturing subcontract and whether production runs for the NIH will begin
at the company's new facility in the second half of the year; whether the
company's independent or partnered research and development efforts will lead
to viable product candidates; whether the company will successfully announce a
new clinical program in solid tumors and at least one new collaboration by
year-end 2004; the scope and enforceability of the company's intellectual
property; whether any product candidates will be shown to be safe and
efficacious in clinical trials; the timing of clinical trials; and additional
risks set forth in the company's filings with the Securities and Exchange
Commission. These forward-looking statements represent the company's judgment
as of the date of this release. The company disclaims, however, any intent or
obligation to update these forward-looking statements.
VICAL INCORPORATED
STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
2003 2002 2003 2002
Revenues:
License/royalty
revenue $532 $375 $2,066 $3,999
Contract revenue 1,163 153 6,012 3,008
Total revenues 1,695 528 8,078 7,007
Expenses:
Research and
development 6,952 6,490 26,777 26,374
General and
administrative 1,894 2,314 6,923 8,061
Write-down of
investment -- -- 482 4,200
Total expenses 8,846 8,804 34,182 38,635
Loss from operations (7,151) (8,276) (26,104) (31,628)
Net investment income 205 803 1,654 3,696
Net loss $(6,946) $(7,473) $(24,450) $(27,932)
Net loss per common
share
(basic and diluted) $(0.35) $(0.37) $(1.22) $(1.39)
Shares used in
per share
calculation 20,091,711 20,091,344 20,091,436 20,078,591
VICAL INCORPORATED
CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31,
2003 2002
Assets:
Cash and cash equivalents $18,929 $32,609
Marketable securities 65,588 78,904
Other current assets 5,386 5,894
Total current assets 89,903 117,407
Investment -- 800
Property and equipment, net 14,336 4,943
Other assets 6,468 6,276
$110,707 $129,426
Liabilities and Stockholders' Equity:
Current liabilities $12,223 $10,800
Long-term obligations 8,662 4,319
Stockholders' equity 89,822 114,307
$110,707 $129,426
SOURCE Vical Incorporated
-0- 02/10/2004
/CONTACT: Martha J. Demski, Vice President and Chief Financial Officer,
or Alan R. Engbring, Executive Director, Investor Relations, +1-858-646-1127,
both of Vical Incorporated/
/Web site: http://www.vical.com
http://ir.vical.com /
(VICL)
CO: Vical Incorporated; Corautus Genetics Inc.; Vascular Genetics Inc.; SAIC-
Frederick, Inc.
ST: California
IN: ARO BIO HEA MTC
SU: ERN CCA