| Title: Vical Reports Second Quarter 2006 Financial Results Date:
8/1/2006 7:30:00 AM
SAN DIEGO, Aug. 1 /PRNewswire-FirstCall/ -- Vical Incorporated
(Nasdaq: VICL) today reported financial results for the quarter ended June 30,
2006. Revenues for the second quarter of 2006 were $7.3 million compared with
$4.8 million for the same period of 2005. The 2006 revenues were driven
primarily by shipments of HIV vaccine to the National Institutes of Health
(NIH) in support of a planned, large Phase 2 trial, while the 2005 revenues
consisted primarily of option exercise fees from Merck & Co., Inc., for three
cancer vaccine targets, and an initial upfront license fee from AnGes MG,
Inc., for DNA delivery of Hepatocyte Growth Factor (HGF) for cardiovascular
applications.
The net loss for the second quarter of 2006 was $3.2 million or $0.11 per
share, compared with $5.0 million or $0.21 per share for the second quarter of
2005. Financial results were consistent with the company's projection for an
adjusted net loss for the full year 2006 of between $22 million and $26
million. This projection excludes non-cash, stock-based compensation expense
and, as a result, is not calculated in accordance with U.S. generally accepted
accounting principles (GAAP). See "Use of Non-GAAP Financial Measure" below.
Vical had cash and investments of $60 million at June 30, 2006.
Recent Highlights
* Vical and AnGes MG, Inc. entered into a collaborative agreement for
Vical's Allovectin-7(R) cancer immunotherapeutic. Under the agreement,
AnGes will provide up to $100 million in ongoing clinical trial funding
and future sales-based milestones as Allovectin-7(R) is successfully
commercialized. Vical retains exclusive marketing rights for
Allovectin-7(R) in the United States and the rest of the world outside
of specified Asian countries, for which AnGes received exclusive rights.
Through a scheduled series of cash payments and equity investments
totaling $22.6 million, including an initial equity investment of $6.9
million, AnGes will fund the Phase 3 pivotal trial of Allovectin-7(R) to
be conducted by Vical in the United States in accordance with a Special
Protocol Assessment (SPA) completed with the U.S. Food and Drug
Administration (FDA).
* Vical's lead three-component influenza (flu) DNA vaccine candidate
provided 100% protection in mice and ferrets against lethal challenges
with a highly virulent H5N1 avian influenza virus in studies conducted
by Richard J. Webby, Ph.D., at St. Jude Children's Research Hospital.
Additionally, in these and earlier studies in mice, simplified versions
of Vical's vaccine candidate using only two of the three components
provided high levels of protection against multiple human flu strains
and against the H5N1 avian flu strain.
* The National Institute of Allergy and Infectious Diseases (NIAID), part
of the NIH, after reviewing the mouse and ferret protection data from
the flu DNA vaccine program, gave Vical accelerated access to
$2.6 million in funding for further development of the vaccine under a
grant awarded in September 2005. The funds will be used to complete
preclinical development of the vaccine and file an Investigational New
Drug Application (IND) with the FDA, which would allow initiation of a
Phase 1 safety trial in human volunteers.
* A West Nile virus (WNV) vaccine candidate administered using Vical's
proprietary DNA delivery technology was safe and well-tolerated, and
produced neutralizing antibody WNV-specific responses in all 11 healthy
volunteers who returned for follow-up testing after completing the
three-dose vaccination schedule. The WNV vaccine program is
fully-funded by the NIH. The Phase 1, open-label clinical trial study
was sponsored by NIAID and conducted at the NIH Clinical Center. The
data were presented at the American Society of Gene Therapy 2006 Annual
Meeting in Baltimore, MD.
Conference Call
Vical will conduct a conference call and webcast to discuss the financial
results and program updates with invited analysts and institutional investors
today, August 1, at noon Eastern Time. The call and webcast are open on a
listen-only basis to any interested parties. 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 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 2549584. 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 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 developed certain infectious disease vaccines and cancer
therapeutics internally. 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.
Forward-Looking Statements
This press release contains forward-looking statements subject to risks
and uncertainties that could cause actual results to differ materially from
those projected, including: whether the company will achieve levels of
revenues and control expenses to meet projected financial performance; whether
Vical or others will continue development of Allovectin-7(R), the influenza
vaccine candidate, the Ebola vaccine candidate, the WNV vaccine candidate, or
any other product candidates being developed by Vical, its collaborators or
licensees; the timing, nature and cost of any additional development; whether
Vical will receive all of the clinical trial funding from AnGes under the
collaborative agreement, which will depend on continued development of
Allovectin-7(R) and certain other conditions; whether Vical will receive any
or all of the sales-based milestone payments and royalties for sales in the
specified Asian countries, which will depend on the efforts of AnGes in
obtaining regulatory approval and commercializing Allovectin-7(R) in those
countries; whether H5N1 or other strains of avian influenza will emerge as
pandemic threats; whether the company will earn all of the remaining
$2.6 million available under the NIAID influenza grant; whether the company
will successfully complete preclinical development of its influenza vaccine
candidate and file an IND; whether the company will secure additional funding
to support Phase 1 human testing of its influenza vaccine candidate; whether
Allovectin-7(R), the influenza vaccine candidate, the Ebola vaccine candidate,
the WNV vaccine candidate, or any other product candidates being developed by
Vical, its collaborators or licensees will be shown to be safe and effective
in 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.
Use of Non-GAAP Financial Measure
This press release contains adjusted net loss projections that are not
calculated in accordance with GAAP. Specifically, the company's adjusted net
loss projection for 2006 excludes an estimated $2 million to $3 million of
non-cash, stock-based compensation expense associated with adoption of
Statement of Financial Accounting Standards No. 123R, "Share-Based Payment,"
on January 1, 2006. As the final amount of such expense cannot yet be
determined, the company currently cannot make a net loss projection in
accordance with GAAP or reconcile its non-GAAP net loss projection to a net
loss projection calculated in accordance with GAAP.
Vical believes that this non-GAAP financial measure provides meaningful
information regarding the company's performance by excluding expenses that may
not be indicative of the company's core operating results. In addition, Vical
believes that the use of this non-GAAP financial measure enhances the
consistency and comparability of the company's reported financial results and
enables investors to better evaluate the company's current performance
compared to its past performance. However, this information should not be
considered in isolation or as an alternative to financial information
calculated in accordance with GAAP.
Contacts: Alan R. Engbring
Executive Director, Investor Relations
Jill M. Church
Vice President and Chief Financial Officer
(858) 646-1127
Website: www.vical.com
VICAL INCORPORATED
Selected Condensed Financial Information (Unaudited)
Statements of Operations Three Months Ended Six Months Ended
(in thousands, except per June 30, June 30,
share amounts) 2006 2005 2006 2005
Revenues:
Contract and grant revenue $7,100 $487 $12,679 $2,940
License and royalty revenue 156 4,320 192 4,551
Total revenues 7,256 4,807 12,871 7,491
Operating expenses:
Research and development 4,171 4,756 8,815 9,229
Manufacturing and
production 4,499 3,353 8,051 7,265
General and administrative 2,406 1,923 4,848 4,038
Total operating expenses 11,076 10,032 21,714 20,532
Loss from operations (3,820) (5,225) (8,843) (13,041)
Net investment income 576 243 1,126 481
Net loss $(3,244) $(4,982) $(7,717) $(12,560)
Basic and diluted
net loss per share $(0.11) $(0.21) $(0.27) $(0.53)
Shares used to calculate
basic and diluted net
loss per share 28,817 23,517 28,555 23,513
Balance Sheets June 30, December 31,
(in thousands) 2006 2005
Assets:
Cash, cash equivalents, and marketable
securities $59,685 $66,486
Other current assets 11,046 5,778
Total current assets 70,731 72,264
Property and equipment, net 14,229 15,170
Other assets 6,278 7,096
Total assets $91,238 $94,530
Liabilities and stockholders' equity:
Current liabilities $6,406 $8,780
Long-term obligations 4,083 5,444
Stockholders' equity 80,749 80,306
Total liabilities and stockholders' equity $91,238 $94,530
SOURCE Vical Incorporated
-0- 08/01/2006
/CONTACT: Alan R. Engbring, Executive Director, Investor Relations, or
Jill M. Church, Vice President and Chief Financial Officer, both of Vical,
+1-858-646-1127/
/Web site: http://www.vical.com /
(VICL)
CO: Vical Incorporated
ST: California
IN: HEA MTC BIO
SU: ERN CCA
CC-CM
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3180 08/01/2006 07:30 EDT http://www.prnewswire.com
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