Vical shares plunge after cancer drug trial failure

SAN DIEGO—Monday saw Vical Inc. make history in a way it didn't desire, as its stock price plunged 57 percent to $1.53, the biggest one-day drop the company has seen since it first went public some 20 years ago, after shares having risen 23 percent this year up until Aug. 9. The reason: top-line results announced from a Phase III trial of Allovectin (velimogene aliplasmid), an investigational intratumoral cancerimmunotherapy, in patients with metastatic melanoma.

In the announcement, Vical reported that the 390-subjecttrial failed to demonstrate a statistically significant improvement vs.first-line chemotherapy for either the primary endpoint of objectiveresponse rate at 24 weeks or more after randomization or the secondaryendpoint of overall survival.

"We are disappointed that the trial did not meet either the primary orsecondary efficacy endpoints, even though we believe it waswell-designed and well-executed," said Vijay B. Samant, president andCEO of Vical. "Based on this outcome, we areterminating the Allovectin program and focusing our resources on ourinfectious disease vaccine programs."

Vical notes that despite the disappointing results, it has multiple independent and collaborative infectious diseasevaccine programs with promise, among them:

• Astellas Pharma Inc. initiated a multinational 500-patient Phase IIItrial of ASP0113, Vical's investigational therapeutic vaccine designedto control cytomegalovirus (CMV) in transplant recipients, forhematopoietic cell transplant recipients in June and expects toinitiate a Phase II trial of ASP0113 for solid organ transplant recipients later this year.
• The company is planning to initiate a Phase I/II clinical trial ofits Vaxfectin-formulated therapeutic vaccine against herpes simplexvirus type 2 before the end of 2013.
• The company's Vaxfectin-formulated CyMVectin prophylacticvaccine, designed to prevent CMV infection before and during pregnancy,has completed preclinical development and has an allowed investigationalnew drug application. Vical is seeking a partner for furtherdevelopment.
• Vical has licensed its proprietary Vaxfectin adjuvant toBristol-Myers Squibb Co. for use in the production of antibodies,and to Cyvax Inc., a privately held vaccine development company, foruse in malaria vaccines. The company is pursuing additional licensingopportunities for Vaxfectin.

"In the coming weeks, we will make the necessary changes to focusresources on our infectious disease vaccine programs and reduce expensesto conserve cash," noted Samant. The company reported cash andinvestments of $70 million at June 30, which it believes isadequate for its anticipated needs at least through the end of 2014.