Vical to Discontinue Clinical Development of VL-2397 as it Considers Near Term Strategic Alternatives

SAN DIEGO, Feb. 19, 2019 (GLOBE NEWSWIRE) -- Vical Incorporated (Nasdaq:VICL) today announced that it has decided to discontinue the Phase 2 clinical trial of VL‑2397 that was initiated in the first quarter of 2018. The decision was based on the Company’s decision to conserve its cash resources while it pursues its strategic alternative review process, as well as low patient accrual rates. The Phase 2 clinical trial was evaluating VL-2397 as a potential first-line treatment for invasive aspergillosis in immunocompromised adults with acute leukemia or recipients of an allogeneic hematopoietic cell transplant.

“While we believe in the potential benefits of VL-2397, we have made a strategic decision to discontinue our current development activities and conserve cash,” stated Vijay Samant, chief executive officer at Vical. “We want to thank the study investigators and their patients who participated in the trial for their support.”

In the third quarter of 2018, Vical announced plans to explore a range of strategic options to enhance shareholder value. The Company retained MTS Health Partners, L.P. to assist in the strategic review process. Given the decision announced today, the Company will focus on concluding the strategic review process.

Vical also plans to undertake a restructuring, including an appropriate reduction in staff. As a result, the Company will incur a restructuring related charge in the first quarter of 2019.

Fourth Quarter 2018 Financial and Operating Results

Vical also reported financial results for the three months ended December 31, 2018. Net loss for the fourth quarter of 2018 was $3.6 million, or $0.17 per share, compared with a net loss of $3.7 million, or $0.21 per share, for the fourth quarter of 2017. Revenues for the fourth quarter of 2018 were $0.1 million, compared with revenues of $4.0 million for the fourth quarter of 2017, reflecting revenues from Astellas Pharma Inc. for services performed under the prior ASP0113 collaborative agreements. Vical had cash and investments of $50.5 million at December 31, 2018. The Company’s net cash burn for 2018 was $12.4 million. The Company will not provide additional cash guidance until the strategic review process is complete.

About Vical
Vical develops biopharmaceutical products for the prevention and treatment of chronic or life-threatening infectious diseases. 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. Forward-looking statements include plans to complete a restructuring and the estimated impact on cash resources, as well as Vical’s plans to complete its review of strategic alternatives and the potential benefits of a strategic transaction. Risks and uncertainties include whether the termination of VL-2397 development and the planned restructuring will have the intended impact of conserving cash resources, Vical’s ability to identify potential strategic transactions and to complete any transaction that it pursues; whether Vical will be able to realize the expected benefits of any transaction; 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.

Selected Condensed Financial Information (Unaudited) 
 Three Months Ended Twelve Months Ended 
Statements of OperationsDecember 31, December 31, 
(in thousands, except per share amounts)2018 2017 2018 2017 
Contract revenue$114 $3,943 $1,582 $13,401 
License and royalty revenue 10  10  40  418 
Total revenues 124  3,953  1,622  13,819 
Operating expenses:            
Research and development 2,558  4,448  12,327  14,391 
Manufacturing and production -  1,790  1,436  6,479 
General and administrative 1,517  1,596  7,505  6,335 
Total operating expenses 4,075  7,834  21,268  27,205 
Loss from operations (3,951)  (3,881)  (19,646)  (13,386) 
Net investment and other income 346  153  3,392  426 
Net loss$(3,605) $(3,728) $(16,254) $(12,960) 
Basic and diluted net loss per share$(0.17) $(0.21) $(0.74) $(1.01) 
Weighted average shares used in computing            
basic and diluted net loss per share21,844 17,778 21,842 12,888 
Balance Sheets      December 31, December 31, 
(in thousands)      2018 2017 
Cash, cash equivalents, and marketable            
securities, including restricted      $48,071 $60,691 
Other current assets       1,128  15,626 
Total current assets       49,199  76,317 
Long-term investments       2,386  2,209 
Property and equipment, net       100  606 
Other assets       659  1,362 
Total assets      $52,344 $80,494 
Liabilities and stockholders' equity:            
Current liabilities      $3,581 $16,917 
Stockholders' equity       48,763  63,577 
Total liabilities and stockholders' equity      $52,344 $80,494 

Contacts:        Andrew Hopkins                                            Anthony Ramos
                       (858) 646-1127                                              Vice President and Chief Financial Officer
                       Website:  www.vical.com

The following information was filed by Vical Inc (VICL) on Wednesday, February 20, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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