Vical Announces Restructuring and Staff Reduction
SAN DIEGO, Aug. 22, 2013 (GLOBE NEWSWIRE) -- Vical Incorporated (Nasdaq:VICL)
today announced a restructuring to conserve capital, including a staff
reduction of 47 employees, approximately 39% of the company's total workforce.
Following the restructuring, the company will have approximately 74 employees.
In addition, the company is focusing its resources on its infectious disease
vaccine programs and terminating activities related to Allovectin^®, the
company's investigational cancer immunotherapy which recently failed to meet
its Phase 3 efficacy endpoints.
"We have evaluated our organization and priorities and are restructuring to
extend our cash runway to ensure that our promising infectious disease vaccine
programs are adequately resourced to create maximum shareholder value," said
Vijay Samant, Vical's President and Chief Executive Officer. "This has been a
very difficult process and we regret the impact this business decision has on
our departing employees. We acknowledge their commitment and contributions to
Vical over the years and wish them continued success."
Restructuring Impact and Financial Guidance
The company expects to incur personnel-related restructuring charges of
approximately $2.2 million in the third quarter of 2013. The net cash burn of
approximately $17 million for the first half of 2013 was slightly below the
projected range of $18 million to $20 million. Vical had cash and investments
of approximately $70 million at June 30, 2013. The company is projecting net
cash burn for the second half of 2013, including anticipated cash severance
payments in connection with the restructuring, of $13 million to $15 million.
The company believes its currently available cash and investments will be
adequate to satisfy its needs at least through 2015.
Vical has multiple independent and collaborative infectious disease vaccine
*Astellas Pharma Inc. initiated a multinational 500-patient Phase 3 trial
of ASP0113, Vical's investigational therapeutic vaccine designed to
control cytomegalovirus (CMV) in transplant recipients, for hematopoietic
cell transplant (HCT) recipients in June and expects to initiate a Phase 2
trial of ASP0113 for solid organ transplant (SOT) recipients later this
*The company is planning to initiate a Phase 1/2 clinical trial of its
Vaxfectin^®-formulated therapeutic vaccine against herpes simplex virus
type 2 (HSV-2) before the end of 2013.
*The company's Vaxfectin^®-formulated CyMVectin™ prophylactic vaccine,
designed to prevent CMV infection before and during pregnancy, has
completed preclinical development and has an allowed investigational new
drug application (IND). Vical is seeking a partner for further
*Vical has licensed its proprietary Vaxfectin^® adjuvant to Bristol-Myers
Squibb Company for use in the production of antibodies, and to Cyvax,
Inc., a privately held vaccine development company, for use in malaria
vaccines. The company is pursuing additional licensing opportunities for
*Two of the company's licensees have products approved for use in animal
*In 2005, Vical's licensee Aqua Health, a subsidiary of Novartis Animal
Health, received Canadian approval to market its proprietary product,
Apex^®-IHN, a DNA vaccine to protect farm-raised salmon against
infectious hematopoietic necrosis virus (IHNV).
*In 2009, Vical's licensee Merial, now a subsidiary of Sanofi, received
approval from the U.S. Department of Agriculture to sell a therapeutic
DNA vaccine, ONCEPT^®, designed to aid in extending the survival time of
dogs with oral melanoma.
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 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
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 anticipated restructuring
charges, net cash use guidance, as well as anticipated developments in
independent and collaborative programs, including the initiation and
completion of clinical trials. Risks and uncertainties include whether Vical
will effectively focus resources on its infectious disease vaccine programs;
whether Vical, Astellas or others will continue development of ASP0113, the
HSV-2 vaccine, CyMVectin™, or any other independent or collaborative programs;
whether Astellas will initiate the planned Phase 2 trial of ASP0113 for SOT
recipients later this year, if at all; whether Vical or others will initiate a
Phase 1/2 clinical trial of the HSV-2 vaccine in the second half of 2013, if
at all; whether Vical will achieve levels of revenues and control expenses to
meet its financial projections; whether Vical or others will continue
development of any independent or collaborative programs; whether any product
candidates will be shown to be safe and efficacious in clinical trials; the
timing of clinical trials; whether Vical or its collaborative partners will
seek or gain approval to market any product candidates; 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.
CONTACT: Susan Neath
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