Exhibit 99.1
Vical Announces Third-Quarter 2004 Financial Results
SAN DIEGO, Nov. 2 /PRNewswire-FirstCall/ -- Vical Incorporated (Nasdaq:
VICL) today reported a net loss for the third quarter ended September 30, 2004,
of $4.9 million or $0.21 per share, compared with $3.6 million or $0.18 per
share for the third quarter of 2003. For the nine months ended September 30,
2004, the net loss was $19.3 million or $0.86 per share, compared with $17.5
million or $0.87 per share for the same period in 2003.
Revenues for the third quarter and first nine months of 2004 were $2.9
million and $9.5 million, respectively, compared with revenues of $4.9 million
and $6.4 million, respectively, for the same periods in the prior year. The
year-over-year decrease in revenues for the third quarter was primarily the
result of the timing of contract manufacturing shipments. The year-over-year
increase in revenues for the first nine months was driven by a milestone payment
under the company's agreement with Gencell SAS, a wholly-owned subsidiary of
Aventis Pharma SA; increased contract manufacturing shipments; grant funding for
the company's immunotherapeutic vaccine for cytomegalovirus (CMV); and a license
agreement with Merial Ltd., a joint venture between Merck & Co., Inc. and
Aventis, S.A.
The reported net losses for the third quarter and first nine months of 2004
were consistent with the company's projected net loss for the full year 2004
ranging from $26 million to $29 million. The company had cash, cash equivalents
and marketable securities of $79 million at September 30, 2004, compared with
$85 million at December 31, 2003.
Vijay B. Samant, Vical's President and Chief Executive Officer, said, "We
have made significant progress during the last quarter in both our independent
development programs and our collaborations, and our revenues from contract
manufacturing continued to show strength as we began the transition to
production in our new facility. We are pleased to announce today our new program
for gene-based delivery of IL-2 in solid tumors followed by electroporation."
Independent Development Programs
In October 2004, the company exercised an option to establish an exclusive
worldwide licensing and supply agreement with Genetronics Biomedical Corporation
to use Genetronics' electroporation technology for specified applications. The
initial product application is for delivery of the gene encoding interleukin-2
(IL-2), a potent immunotherapeutic agent, directly into solid tumors. The
company expects to begin Phase 1 safety testing in 2005 in certain patients with
metastatic melanoma. The company also exercised an option specifying HIV as a
second application.
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. During the third
quarter of 2004, the company completed its data collection and locked the
database for the high-dose Phase 2 Allovectin-7(R) trial. The company intends to
present its audited data from the high-dose study in November 2004 at the annual
meeting of the International Society for Biological Therapy of Cancer.
The company is in active discussions with the U.S. Food and Drug
Administration (FDA) regarding the design of a registration trial with high-dose
Allovectin-7(R) for certain patients with metastatic melanoma, and expects to
complete a Special Protocol Assessment (SPA) in the fourth quarter of 2004. The
company is exploring potential partnerships for the further development and
commercialization of Allovectin-7(R).
During the third quarter of 2004, the company began a Phase 1 trial with a
three-component (trivalent) immunotherapeutic vaccine candidate for CMV. The
trivalent vaccine candidate includes the two components in the company's
bivalent vaccine candidate plus a third component encoding the highly
immunogenic CMV immediate early 1 (IE1) gene product. The company's
two-component (bivalent) vaccine candidate entered Phase 1 testing in March
2004. Having established the safety and immunogenicity of both vaccine
candidates in laboratory animals, the company is now evaluating the safety and
immunogenicity of both vaccine candidates in humans. Initial safety data from
the bivalent vaccine trial, presented at the 44th Annual Interscience Conference
on Antimicrobial Agents and Chemotherapy, showed the vaccine to be safe and
well-tolerated.
Non-clinical development of the company's anthrax vaccine is being supported
by a three-year, $5.9 million Small Business Innovation Research (SBIR) grant
awarded in July 2003 from the National Institute of Allergy and Infectious
Diseases (NIAID), part of the National Institutes of Health (NIH). Additionally,
in June 2004, NIAID advised the company that it would support a Phase 1 clinical
trial of the company's anthrax vaccine at two NIAID-funded Vaccine and Treatment
Evaluation Units.
The trial, which began in July 2004, is testing the vaccine in healthy adult
volunteers for safety and immune responses. Successful completion of this trial
could lead to potentially larger trials to support marketing approval under the
FDA's Animal Rule and could encourage development of other vaccines using the
same technology. Continued development of the anthrax program is dependent on
additional government funding, which the company continues to pursue.
Collaborations
Corautus Genetics, a licensee of the company's DNA delivery technology,
announced in September 2004 the initiation of a Phase 2b clinical trial to
evaluate the safety and efficacy of gene-based delivery of VEGF-2, an angiogenic
factor intended to promote the localized growth of blood vessels as a treatment
for severe cardiovascular disease.
A DNA vaccine for Ebola, based on Vical's patented gene delivery technology,
is being developed by the Vaccine Research Center (VRC), NIAID, NIH. Human
safety testing of the investigational Ebola vaccine began in November 2003.
Enrollment in this trial has been completed. The company also has manufactured
for the VRC initial clinical trial material of West Nile Virus and SARS
vaccines. Initial human studies for the West Nile Virus vaccine are planned for
early 2005, subject to review and allowance by the FDA.
Recent Events
As previously announced, in October 2004 the company appointed Jill M.
Church as Vice President, Chief Financial Officer, and Secretary.
Conference Call
Vical will conduct a conference call and webcast to discuss the financial
results with invited analysts and institutional investors today, November 2, 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 (888) 224-3260, or (913) 905-1086 for
international participants. A replay of the call will be available for 48 hours
beginning approximately 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 887718. 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 and expectations regarding future trials and regulatory
approval channels; 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, including
current and future clinical trials for product candidates covered by these
arrangements. 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 end 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 company will identify and reach agreement with a potential
partner for the further development and commercialization of Allovectin-7(R);
whether the ongoing Phase 1 CMV vaccine trials will be completed as scheduled,
if at all, and lead to further development; whether the company will complete
Phase 1 clinical testing of its anthrax vaccine candidate on schedule, if at
all, and if completed, whether completion would lead to larger trials to support
marketing approval under the Animal Rule or encourage development of other
vaccines using the same technology; whether additional government funding will
be available to support further development of the company's anthrax vaccine
candidate; whether the NIH will begin human testing of a West Nile Virus vaccine
in early 2005, if at all; whether the company will begin Phase 1 safety testing
in the IL-2/electroporation program in 2005, if at all; 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, Executive
Director, Investor Relations, or Jill M. Church, Vice President and Chief
Financial Officer, both of Vical Incorporated, +1-858-646-1127.
VICAL INCORPORATED
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited) (in thousands, except share and
per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2004 2003 2004 2003
Revenues:
License and royalty
revenue $476 $526 $3,025 $1,534
Contract and grant revenue 2,415 4,347 6,517 4,849
Total revenues 2,891 4,873 9,542 6,383
Expenses:
Research and development 6,791 6,923 23,621 19,825
General and administrative 1,835 1,738 6,316 5,029
Write-down of investment -- -- -- 482
Total expenses 8,626 8,661 29,937 25,336
Loss from operations (5,735) (3,788) (20,395) (18,953)
Net investment income 860 231 1,129 1,449
Net loss $(4,875) $(3,557) $(19,266) $(17,504)
Basic and diluted
net loss per share $(0.21) $(0.18) $(0.86) $(0.87)
Shares used in
per share calculation(1) 23,478,712 20,091,344 22,427,482 20,091,344
(1) Shares used in per share calculations for the three months and nine
months ended September 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
(Unaudited)
(in thousands)
Sept. 30, Dec. 31, 2004 2003
Assets:
Cash and cash equivalents $28,303 $16,574
Cash equivalents - restricted 4,943 2,355
Marketable securities - available
for sale 46,051 65,588
Other current assets 3,828 5,386
Total current assets 83,125 89,903
Property and equipment, net 15,127 14,336
Other assets 6,290 6,468
$104,542 $110,707
Liabilities and stockholders' equity:
Current liabilities $9,001 $12,223
Long-term obligations 8,040 8,662
Stockholders' equity 87,501 89,822
$104,542 $110,707
SOURCE Vical Incorporated
-0- 11/02/2004
/CONTACT: Alan R. Engbring, Executive Director, Investor Relations, or
Jill M. Church, Vice President and Chief Financial Officer, both of Vical
Incorporated, +1-858-646-1127/
/Web site: http://www.vical.com /
(VICL)
CO: Vical Incorporated
ST: California
IN: HEA MTC BIO
SU: ERN CCA