| Title: Vical Reports Third Quarter 2006 Financial Results Date:
11/2/2006 6:30:00 AM
SAN DIEGO, Nov. 2 /PRNewswire-FirstCall/ -- Vical Incorporated
(Nasdaq: VICL) today reported financial results for the quarter ended
September 30, 2006. Revenues for the third quarter of 2006 were $0.6 million
compared with $2.7 million for the same period of 2005. The net loss for the
third quarter of 2006 was $7.5 million or $0.24 per share, compared with
$6.1 million or $0.26 per share for the third quarter of 2005.
Financial results were consistent with the company's guidance of a
projected adjusted net loss for the full year 2006 of between $22 million and
$26 million. This adjusted net loss 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 approximately
$70 million at September 30, 2006, including the net proceeds of $9.7 million
from a registered direct offering in August 2006, in which the company sold
approximately 2.1 million shares of its common stock to a single institutional
investor. Vical completed two additional registered direct offerings in
October 2006, selling approximately 7.5 million shares of its common stock to
institutional investors for estimated net proceeds of $37.4 million.
Recent Highlights
* In the most recent offering, Temasek Holdings (Private) Ltd. purchased
approximately 5.0 million shares of Vical's common stock for
$25.0 million, making it the company's largest shareholder. Temasek
manages a diversified U.S.$80 billion portfolio for the Singapore
government, and has generated total shareholder returns of
18% compounded annually since its inception in 1974.
Temasek conducted extensive research over a period of months to
evaluate Vical's technology, intellectual property, development
programs, management, and financial position before making the decision
to invest. A major area of focus in Temasek's investigation was
Vical's program to develop a DNA vaccine to protect humans against
emerging strains of influenza virus that have the potential to cause a
pandemic. Proceeds from the offering will support Phase 1 human
clinical testing of the vaccine expected to begin in 2007.
* At the Influenza Vaccines for the World Conference in October, the
company announced that a single injection of its avian influenza DNA
vaccine candidate provided 100% protection in ferrets against lethal
challenge with a highly virulent H5N1 virus (Vietnam/1203/2004).
Conventional vaccines under development for avian flu typically have
required two or more doses in humans, even with novel adjuvants, to
produce the immunogenicity levels expected to provide protection.
* In September, the company was issued U.S. Patent No. 7,105,574 covering
both the novel Vaxfectin(TM) adjuvant and its use with conventional
vaccines against infectious diseases and cancer. At the Infectious
Diseases Society of America (IDSA) conference in October, the company
presented data from a study in mice showing that the Vaxfectin(TM)
adjuvant, originally developed to boost the immune response to DNA
vaccines, also boosts the immune response to a conventional seasonal
influenza vaccine. Results from the studies suggest that Vaxfectin(TM)
has the potential to be used as a dose-sparing agent with conventional
flu vaccines against seasonal or pandemic flu strains.
* Also at the October IDSA conference, the company presented conclusions
from anthrax DNA vaccine studies in non-human primates, suggesting a
potential new pathway to evaluation of DNA vaccine efficacy.
* The company announced in August that a "prime-boost" vaccine regimen
tested in 40 HIV-uninfected subjects in a National Institutes of Health
sponsored Phase 1 clinical trial was safe and well-tolerated, and was
highly effective in inducing T-cell immune responses with multiple
functions that may be important for controlling HIV infection. The
trial involved priming an immune response with a DNA vaccine based on
Vical's proprietary technology, and boosting the response with an
adenoviral vector vaccine at a later date. The same prime-boost
vaccine combination is being tested in 480 HIV-uninfected subjects
through a multinational Phase 2 trial initiated in October 2005. The
combination also is being tested in 15 HIV-infected subjects receiving
highly active antiretroviral therapy (HAART) through a Phase 1 trial
initiated in August 2006. A larger multinational Phase 2 trial in
several thousand HIV-uninfected subjects is expected to begin in
early 2007.
* In September 2006, Vical announced grants of non-exclusive, academic
licenses for its broad DNA delivery technology patent estate to six
additional leading research institutions: Fred Hutchinson Cancer
Research Center, Texas Tech University Health Sciences Center,
University of Iowa, University of Notre Dame, University of Pittsburgh,
and University of Washington. Earlier this year, the company announced
the grant of academic licenses on the same terms to Stanford
University, Harvard University, Yale University, and the Massachusetts
Institute of Technology.
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, November 2, 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 4320688. The call also will be available live and
archived through the events page 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 is developing 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 address 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 the influenza vaccine candidate,
the anthrax vaccine candidate, the HIV vaccine candidate, or any other product
candidates being developed by Vical, its collaborators or licensees; whether
Vical or others will continue evaluation of Vaxfectin(TM) as an adjuvant for
conventional vaccines against seasonal or pandemic flu; whether Vaxfectin(TM)
will be used as a dose-sparing agent with conventional flu vaccines; whether
results in animal studies will be predictive of results in human studies;
whether H5N1 or other strains of avian influenza will emerge as pandemic
threats; whether Temasek's investment in the company will generate returns
consistent with its historical returns; whether the company will begin Phase 1
human clinical testing of its pandemic influenza DNA vaccine candidate in
2007, if at all; whether the NIH will begin a Phase 2 trial of several
thousand HIV-uninfected subjects using the company's technology in early 2007,
if at all; whether any 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 non-cash, stock-based
compensation expense associated with adoption of Statement of Financial
Accounting Standards No. 123R, "Share-Based Payment," on January 1, 2006.
This non-cash expense and is currently estimated at $1 million to $2 million.
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 Nine Months Ended
(in thousands, except per Sept. 30, Sept. 30,
share amounts) 2006 2005 2006 2005
Revenues:
Contract and grant revenue $412 $2,502 $13,091 $5,442
License and royalty revenue 154 205 346 4,756
Total revenues 566 2,707 13,437 10,198
Operating expenses:
Research and development 4,038 4,252 12,853 13,481
Manufacturing and production 2,899 2,976 10,950 10,241
General and administrative 1,904 1,887 6,752 5,925
Total operating expenses 8,841 9,115 30,555 29,647
Loss from operations (8,275) (6,408) (17,118) (19,449)
Net investment income 766 277 1,892 758
Net loss $(7,509) $(6,131) $(15,226) $(18,691)
Basic and diluted net loss
per share $(0.24) $(0.26) $(0.52) $(0.79)
Shares used to calculate
basic and diluted net loss
per share 30,714 23,524 29,282 23,517
Balance Sheets Sept. 30, December 31,
(in thousands) 2006 2005
Assets:
Cash, cash equivalents, and marketable
securities $69,902 $66,486
Other current assets 4,433 5,778
Total current assets 74,335 72,264
Property and equipment, net 13,890 15,170
Other assets 5,939 7,096
Total assets $94,164 $94,530
Liabilities and stockholders' equity:
Current liabilities $6,902 $8,780
Long-term obligations 3,428 5,444
Stockholders' equity 83,834 80,306
Total liabilities and stockholders' equity $94,164 $94,530
SOURCE Vical Incorporated
-0- 11/02/2006
/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
LP
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4399 11/02/2006 06:30 EST http://www.prnewswire.com
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