GenVec Reports Fourth Quarter And 2012 Year-End Financial Results

      GenVec Reports Fourth Quarter And 2012 Year-End Financial Results

PR Newswire

GAITHERSBURG, Md., March 22, 2013

GAITHERSBURG, Md., March 22, 2013 /PRNewswire/ --Today GenVec, Inc. (NASDAQ:
GNVC) announced financial results for the fourth quarter and year ended
December 31, 2012. For the year ended December 31, 2012, the Company reported
a net loss of $14.1 million, or $1.09 per share, compared with a net loss of
$7.4 million, or $0.58 per share, for the year ended December 31, 2011. GenVec
ended the year with $15.3 million in cash, cash equivalents, and short-term
investments.

"In 2012 we continued to make progress in our hearing restoration program,
partnered with Novartis, and advanced the development of our product pipeline
and core technologies," stated Cynthia Collins, GenVec's President and CEO.
"Other changes implemented since my joining GenVec in May were reducing our
workforce to preserve capital and discontinuing spending on non-funded
programs. We continue to seek sources of non-dilutive funding to advance our
programs and to reduce expenses to preserve cash."

2012 and Recent Corporate Highlights

Hearing Restoration

  oWe extended our Research Collaboration and License Agreement with
    Novartis. Under the extension, Novartis will fund research at GenVec
    through January 2014 to support its hearing loss and balance disorders
    program.

RSV Vaccine

  oGenVec conducted a successful pre-IND interaction with the U.S. Food and
    Drug Administration (FDA) to obtain guidance on the development plan for
    its vaccine against respiratory syncytial virus (RSV). The outcome of the
    pre-IND interaction was obtaining clarification on the nonclinical,
    clinical, and chemistry, manufacturing, and control (CMC) requirements
    that need to be met in order to submit an acceptable IND.
    
  oGenVec received a grant of approximately $590,000 over two years from the
    National Institute of Allergy and Infectious Diseases (NIAID) of the
    National Institutes of Health (NIH) to support the Company's RSV vaccine
    program. This grant will be used to further advance the novel pediatric
    RSV vaccine.
    
  oPromising data were presented on GenVec's RSV vaccine program at the 8th
    Annual International Respiratory Syncytial Virus Symposium, demonstrating
    that GenVec's pre-clinical, universal RSV vaccine candidate is highly
    immunogenic and produces durable and broad protection from a single
    intramuscular administration. Protection in cotton rat and mouse models
    was characterized by functional RSV neutralizing antibodies and no disease
    potentiation was observed.
    
  oEncouraging preclinical proof of concept data generated in non-human
    primates involving GenVec's RSV vaccine program were presented at the
    Keystone Symposia 2012 Meeting on Viral Immunity and Host Gene Influence.
    GenVec's vaccine technology induced neutralizing antibody and significant
    T-cell responses with a single administration. The immune responses were
    consistent with protective responses without disease potentiation, and
    multiple administrations increased the neutralizing antibody responses.

HSV Vaccine

  oGenVec conducted a successful pre-IND interaction with the U.S. Food and
    Drug Administration (FDA) to obtain guidance on the development plan for
    its vaccine against herpes simplex virus (HSV). The outcome of the
    pre-IND interaction was obtaining clarification on the nonclinical,
    clinical, and chemistry, manufacturing, and control (CMC) requirements
    that need to be met in order to submit an acceptable IND.
     
  oData were presented on GenVec's HSV vaccine program at the Keystone
    Symposia meeting on Immunological Mechanisms of Vaccination. The Company
    disclosed that a single administration of its genetic vaccine was
    effective against HSV2 in two industry-accepted HSV disease models.

Malaria Vaccine

  oGenVec signed an agreement worth approximately $3.5 million with the Naval
    Medical Research Center (NMRC) to support malaria vaccine development.
    Under the terms of the agreement, GenVec is responsible for producing
    clinical supplies of its malaria vaccine, which utilizes its novel,
    proprietary technology. The NMRC plans to use this clinical material to
    assess the safety and efficacy of this next-generation vectored vaccine
    using the clinical challenge model developed by the NMRC and the Walter
    Reed Army Institute of Research (WRAIR) malaria vaccine programs, which
    now are unified as the U.S. Military Malaria Vaccine Program (USMMVP).
    GenVec retains the right to commercialize this novel technology.
    
  oGenVec received a grant of $600,000 over two years from the NIAID to
    support the Company's malaria vaccine program. This grant will be used to
    identify novel antigens for malaria vaccine development.
    
  oData were presented on GenVec's malaria vaccine program at the American
    Society of Tropical Medicine and Hygiene (ASTMH) 61st Annual Meeting,
    which took take place in Atlanta, Georgia on November 11-15, 2012. Data
    presented at the conference highlighted GenVec's success in identifying
    novel antigens for use in its malarial vaccine development program. Using
    a proprietary screening technology, GenVec identified new antigens that
    are as protective as the gold standard, circumsporozoite protein (CSP) in
    an industry-accepted mouse model of malaria. Recent data suggest that
    new antigens are needed and that CSP, used in vaccines being developed by
    others, may not be sufficient to generate a protective response in an
    adequate percentage of people.

Core Technology

  oA research paper on GenVec's new vaccine vectors titled "Modification of
    Ad5 Hexon Hypervariable Regions Circumvents Pre-Existing Ad5 Neutralizing
    Antibodies and Induces Protective Immune Responses" was published online
    in PloS ONE.

Animal Health

  oThe Company's foot-and-mouth disease (FMD) vaccine for use in cattle
    received a conditional license from the U.S. Department of Agriculture's
    Animal and Plant Health Inspection Service (APHIS), which provides that
    the product may be distributed as authorized by Federal emergency
    management officials within USDA, should the need for the product arise.
    This is GenVec's first approved product and also the first FMD vaccine
    licensed by the USDA Center for Veterinary Biologics.

2012 Financial Results

Revenue decreased 47% to $9.4 million in 2012 from $17.7 million in 2011. The
decrease in 2012 is primarily due to decreased revenue of $5.6 million, $1.5
million, and $1.2 million generated by our hearing loss and balance disorders,
HIV, and foot and mouth disease programs, respectively, over the prior year.
We entered into a collaboration agreement with Novartis in January 2010, which
accounted for $0.9 million and $3.8 million of revenue in 2012 and 2011,
respectively, and a development agreement related to the supply of clinical
trial material related to activities under the collaboration agreement in
August 2010, which accounted for $3.5 million and $6.0 million in revenue in
2012 and 2011, respectively. A reduced work scope as we near completion of
our development work under the two Novartis agreements resulted in decreased
revenue in 2012 as compared to 2011. Decreased revenue associated with our
foot and mouth disease program is due mainly to a decrease in work scope and
the successful completion of field safety studies under our agreements with
the Department of Homeland Security (DHS). Decreased revenue associated with
our HIV program as compared to the prior year is due to reduced work scope.

Operating expenses for 2012 decreased 7% to $23.5 million from $25.2 million
in 2011. Research and development expenses decreased 18% to $14.3 million in
2012 from $17.4 million in 2011. In 2012 we experienced lower research and
development costs than in the prior year due primarily to decreased
manufacturing costs in the hearing and FMD programs, the closeout of the PACT
trial, reduced personnel costs as a result of our reduction in force, reduced
material costs for our funded programs, and reduced equipment purchases under
our hearing and FMD programs. These decreases were partially offset by
increased outside costs for our other research programs as compared to 2011.

General and administrative expenses increased 17% to $9.1 million in 2012 from
$7.8 million in 2011. General and administrative expenses were higher in 2012
primarily due to personnel costs, which included approximately $1.3 million in
non-recurring employment costs.

Fourth Quarter 2012 Results

For the fourth quarter ended December 31, 2012, GenVec reported a net loss of
$3.2 million, or $0.24 per share, compared with a net loss of $2.5 million, or
$0.19 per share, for the comparable prior year period. The Company reported
revenues of $1.5 million in the fourth quarter of 2012 compared to $3.4
million for the same period in 2011. This decrease was primarily due to
reduced revenue related to both our hearing loss and balance disorders
program, $1.3 million, and FMD program, $0.2 million. Reduced revenue in each
case is due to a reduced work scope in the 2012 period as compared to the same
period in 2011. Research and development expenses decreased 21% in 2012 from
$3.9 million in the fourth quarter of 2011 to $3.1 million in the fourth
quarter of 2012 due mainly to reduced personnel and manufacturing costs.
General and administrative expenses in the fourth quarter of 2012 decreased
20% to $1.6 million from $2.0 million in the comparable period in 2011
primarily due to decreased personnel and recruiting costs, partially offset by
higher professional costs.

2013 Guidance

GenVec's Senior Vice President and Chief Financial Officer, Douglas J.
Swirsky, commented, "For 2013, we anticipate our cash burn will be between
$8.0 million and $9.0 million."

Conference Call Information

GenVec will hold a conference call today at 10:00 a.m. EDT to discuss the
Company's financial results and 2013 business outlook. To listen to the live
conference call, please dial 877-558-0567 (U.S. or Canada) or 706-643-4980
(international) and use the following Conference ID: 17801867. An audio
replay of the conference call will be available starting at 1:00 p.m. EDT on
March 22, 2013 through March 29, 2013. To listen to the audio replay, dial
855-859-2056 or 404-537-3406 (international) and use access code 17801867.

A live webcast of the conference call will be available on the Company's
website and will be archived for 30 days. To access the webcast or the
replay, go to www.genvec.com, and click on "Investors and Media".

About GenVec

GenVec is a biopharmaceutical company using differentiated, proprietary
technologies to create superior therapeutics and vaccines. A key component of
our strategy is to develop and commercialize our product candidates through
collaborations. GenVec is working with leading companies and organizations
such as Novartis, Merial, and the U.S. Government to support a portfolio of
product programs that address the prevention and treatment of a number of
significant human and animal health concerns. GenVec's development programs
address therapeutic areas such as hearing loss and balance disorders; as well
as vaccines against infectious diseases including respiratory syncytial virus
(RSV), herpes simplex virus (HSV), dengue fever, malaria, and human
immunodeficiency virus (HIV). In the area of animal health we are developing
vaccines against foot-and-mouth disease (FMD). Additional information about
GenVec is available at www.genvec.com and in the Company's various filings
with the Securities and Exchange Commission.

Statements herein relating to future financial or business performance,
conditions or strategies and other financial and business matters, including
expectations regarding funding, grants, collaborations, revenues, cash burn
rates, the development of products and the success of the Company's
collaborations, including with Novartis and Merial, are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act. GenVec cautions that these forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time. Factors
that may cause actual results to differ materially from the results discussed
in the forward-looking statements or historical experience include risks and
uncertainties, including the failure by GenVec to secure and maintain
relationships with collaborators; risks relating to the early stage of
GenVec's product candidates under development; uncertainties relating to
research and development activities; risks relating to the commercialization,
if any, of GenVec's proposed product candidates; dependence on the efforts of
collaborators and third parties; dependence on intellectual property;
currently unanticipated expenses, and risks that we may lack the financial
resources and access to capital to fund our operations. Further information
on the factors and risks that could affect GenVec's business, financial
conditions and results of operations, are contained in GenVec's filings with
the U.S. Securities and Exchange Commission (SEC), which are available at
www.sec.gov. These forward-looking statements speak only as of the date of
this press release, and GenVec assumes no duty to update forward-looking
statements.

(Tables to follow)

GenVec, Inc.
Condensed Statements of Operations
(in thousands, except per share data)
                                    Quarters Ended       Years Ended
                                    December 31,
                                                         December 31,
                                    2012      2011       2012       2011
                                    (unaudited)          (unaudited)
Revenues                            $1,521    $3,389     $9,353     $17,744
Operating expenses:
Research and development            3,064     3,878      14,348     17,416
General and administrative          1,627     2,023      9,102      7,810
 Total operating expenses        4,691     5,901      23,450     25,226
Operating loss                      (3,170)   (2,512)    (14,097)   (7,482)
Other income:
Interest and other income, net      11        8          42         41
Net loss                            $(3,159)  $(2,504)   $(14,055)  $(7,441)
Basic and diluted net loss
                                    $(0.24)   $(0.19)    $(1.09)    $(0.58)
 per share
Shares used in computation of basic
                                    12,946    12,934     12,940     12,921
 and diluted net loss per share
GenVec, Inc.

Selected Balance Sheet Information
(in thousands)
                                                         As of December 31,
                                                         2012       2011
                                                         (unaudited)
Cash, cash equivalents and
                                                         $15,255    $26,446
 short-term investments
Working capital                                          12,741     25,739
Total assets                                             17,430     30,150
Stockholders' equity                                     13,743     26,538



Retail Investor and Media Contact: Institutional Investor Contact:
GenVec, Inc.                       S.A. Noonan Communications
Douglas J. Swirsky                 Susan A. Noonan
(240) 632-5510                     (212) 966-3650
dswirsky@genvec.com               susan@sanoonan.com

SOURCE GenVec, Inc.

Website: http://www.genvec.com