EXHIBIT 99.1
Vical Announces Second-Quarter 2004 Financial Results
SAN DIEGO, Aug. 3 /PRNewswire-FirstCall/ -- Vical Incorporated
(Nasdaq: VICL) today reported a net loss for the second quarter ended
June 30, 2004, of $5.3 million or $0.23 per share, compared with $6.9
million or $0.34 per share for the second quarter of 2003. The decrease in net
loss reflected increased license and contract revenues partially offset by
increases in spending on independent development programs. Investment income
declined as a result of reductions in interest rates and lower average
investment balances. For the six months ended June 30, 2004, the net loss was
$14.4 million or $0.66 per share, compared with $13.9 million or $0.69 per share
for the first six months of 2003. Per share amounts for the second quarter and
first six months of 2004 reflect the increased weighted average numbers of
shares outstanding for those periods as a result of the registered direct
placement of approximately 3.4 million shares of stock during the first quarter
of 2004, which generated net proceeds of approximately $17.3 million.
Revenues for the second quarter of 2004 were $5.7 million compared with
revenues of $0.6 million for the second quarter of the prior year. Revenues were
$6.7 million for the six months ended June 30, 2004, compared with revenues of
$1.5 million for the first six months of 2003. Revenues for the second quarter
and first six months of 2004 reflected increased contract manufacturing
shipments; accomplishment of a milestone under the company's agreement with
Gencell SAS, a wholly-owned subsidiary of Aventis Pharma SA; and a new license
agreement with Merial Ltd., a joint venture between Merck & Co., Inc. and
Aventis, S.A.
The reported net losses for the second quarter and first six months of
2004 were consistent with the company's projected net loss for the full year
2004 of between $26 million and $29 million. The company had cash, cash
equivalents and marketable securities of $85 million at June 30, 2004.
Vijay B. Samant, Vical's President and Chief Executive Officer, said, "We
are pleased with the progress of our independent and collaborative product
development programs and will provide additional details in our conference call
today. Financial results were consistent with our projections, and we remain on
track to meet our forecast for the full year."
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 high- dose Phase 2 trial
completed enrollment in July 2003. A summary of efficacy and safety data as of
November 2003 was reported in June 2004 at meetings of the American Society of
Clinical Oncology and the American Society of Gene Therapy.
The company has completed two End of Phase 2 meetings with the U.S. Food
and Drug Administration (FDA) for Allovectin-7(R), and has received detailed
guidance from those meetings. As a result, the company is designing a
registration trial with high-dose Allovectin-7(R) for certain patients with
metastatic melanoma. The trial design would include an interim analysis that
could provide the basis for seeking approval before trial completion. The
company intends to review the design of the new registration trial with the FDA
through a Special Protocol Assessment, which it intends to complete in the
second half of 2004.
CMV
In early March, the company announced the notification of funding of two
grants from the U.S. National Institutes of Health (NIH) of approximately $1
million for research and development related to the company's vaccine for
cytomegalovirus (CMV). In late March, the company announced the initiation of a
Phase 1 clinical trial of its bivalent CMV vaccine. This initial Phase 1 trial
tests the vaccine for safety and immunogenicity in preparation for future
clinical trials in hematopoietic cell transplant (HCT) patients. Enrollment of
healthy volunteers in the trial is ongoing, and the company expects to report
initial safety and immunogenicity data from the trial at the Interscience
Conference on Antimicrobial Agents and Chemotherapy (ICAAC) beginning October
30, 2004.
Anthrax
The company's second-generation, bivalent, cationic-lipid formulated
anthrax vaccine is designed to provide broader protection against 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.
Non-clinical development of the anthrax vaccine is being supported by a
three-year, $5.9 million NIH grant awarded in July 2003. In June 2004, the
National Institute of Allergy and Infectious Diseases (NIAID) of the NIH advised
the company that it will support a Phase 1 clinical trial of the company's
anthrax vaccine at two NIAID-funded Vaccine and Treatment Evaluation Units. The
trial began in July 2004, and will test the vaccine in up to 52 healthy adult
volunteers for safety and immune responses. Successful completion of this trial
could lead to potential larger trials to support marketing approval under the
FDA's Animal Rule, and could encourage development of other vaccines using the
same technology.
Collaborations
In May 2004, the company granted an exclusive license to Merial, a world
leader in animal health products, for use of its patented DNA delivery
technology in a vaccine to protect certain companion animals against a
particular type of cancer.
A DNA vaccine for Ebola, based on Vical's patented gene delivery
technology, is being developed by the Vaccine Research Center, NIAID, NIH. Human
safety testing of the investigational Ebola vaccine began in November 2003, and
enrollment is now complete. The company believes this is the only Ebola vaccine
program that has advanced to human testing. Data from this study is expected to
be available in the next several months, and could provide human
proof-of-concept for the company's vaccine technology. This vaccine would likely
be approved under the FDA's Animal Rule.
Change in Independent Public Accountants
The company also announced that it has engaged Deloitte & Touche LLP as
its independent public accountants for fiscal periods subsequent to the second
quarter, replacing KPMG LLP, its current accounting firm.
Conference Call
Vical will conduct a conference call and webcast to discuss the financial
results with invited analysts and institutional investors today, August 3, 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 in the conference call and webcast.
To listen to the conference call, dial (800) 888-5452, or (719) 867-0660
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
(888) 203-1112, or (719) 457-0820 for international participants, and enter
conference identification number 172823. The call also will be available live
and archived 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 our
patented DNA delivery technologies for the prevention and treatment of serious
or life-threatening diseases. Potential applications of our 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. We have retained
all rights to our internally developed product candidates. In addition, we
collaborate with major pharmaceutical companies and biotechnology companies that
give us access to complementary technologies or greater resources. These
strategic partnerships provide us with mutually beneficial opportunities to
expand our product pipeline and serve significant unmet medical needs.
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 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) program, including plans for, and the proposed design of, a
high-dose Allovectin-7(R) registration trial; the company's infectious disease
vaccine development programs including results from ongoing 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
the company will establish with the FDA, by the second half of 2004, if at all,
the design of a high-dose Allovectin-7(R) registration trial adequate to support
clinical and regulatory requirements for approval; whether the company will have
the resources to conduct such a registration trial independently, if at all;
whether results of such a registration trial will demonstrate sufficient
efficacy to support approval before trial completion, if at all; whether the
ongoing Phase 1 CMV vaccine trial will be completed as scheduled to allow the
company to report safety and immunogenicity data in the second half of 2004;
whether the company will complete Phase 1 clinical testing of its anthrax
vaccine candidate on schedule, if at all; whether additional government funding
will be available to support further development of the company's anthrax
vaccine candidate; whether the company's independent or partnered research and
development efforts will lead to viable product candidates; 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.
For further information, please contact: Alan R. Engbring, Director,
Investor Relations of Vical Incorporated, +1- 858-646-1127.
VICAL INCORPORATED
STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues:
License/royalty revenue $1,927 $512 $2,549 $1,008
Contract revenue 3,815 90 4,102 502
Total revenues 5,742 602 6,651 1,510
Expenses:
Research and development 8,654 6,318 16,830 12,902
General and administrative 2,535 1,751 4,481 3,291
Write-down of investment -- -- -- 482
Total expenses 11,189 8,069 21,311 16,675
Loss from operations (5,447) (7,467) (14,660) (15,165)
Net investment income 131 545 269 1,218
Net loss $(5,316) $(6,922) $(14,391) $(13,947)
Net loss per share
(basic and diluted) $(0.23) $(0.34) $(0.66) $(0.69)
Shares used in
per share calculation(1) 23,475,585 20,091,344 21,896,091 20,091,344
(1) Shares used in per share calculations for the three months and six
months ended June 30, 2004, reflect the increased weighted average
numbers of shares outstanding for those periods as a result of the
registered direct placement of approximately 3.4 million shares of
stock during the first quarter of 2004.
VICAL INCORPORATED
CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
June 30, December 31,
2004 2003
Assets:
Cash and cash equivalents,
including restricted $14,913 $18,929
Marketable securities,
including restricted 70,576 65,588
Other current assets 5,687 5,386
Total current assets 91,176 89,903
Property and equipment, net 15,048 14,336
Other assets 6,369 6,468
$112,593 $110,707
Liabilities and Stockholders' Equity:
Current liabilities $10,467 $12,223
Long-term obligations 9,148 8,662
Stockholders' equity 92,978 89,822
$112,593 $110,707
SOURCE Vical Incorporated
-0- 08/03/2004
/CONTACT: Alan R. Engbring, Director, Investor Relations of Vical
Incorporated, +1-858-646-1127/
/First Call Analyst: /
/FCMN Contact: /
/Web site: http://www.vical.com /
(VICL)
CO: Vical Incorporated
ST: California
IN: MTC BIO HEA FIN
SU: ERN CCA