Vical Incorporated (VICL-NASDAQ)
March 26, 2010 Issue
The Most Powerful Name In Corporate News and Information
With Four Key Programs Ongoing Including Immunotherapy Allovectin-7® For Melanoma In Phase 3 Clinical Studies That Has Shown To Be Well Tolerated With Little Side-Effects, Vical Incorporated Is Well Positioned For Future Growth
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.
Interview conducted by: Walter Banks, Publisher, CEOCFOinterviews.com, Published – March 26, 2010
There are some exciting things going on at Vical, with four key programs.
The first is Allovectin-7®, our program in melanoma, which has
just completed a Phase 3 trial, and right now we are in the data collection
mode and the data will be available in the middle of 2011. The program is
particularly important because it is immunotherapy and because nothing has
been approved in the field of melanoma for almost twenty years. In addition,
there are not too many Phase 3 trials going on. We think we have a good shot
at getting this drug approved because we have planned the study very
systematically. The key factor in cancer immunotherapy is to choose patients
likely to live long enough to benefit from the treatment. Immunotherapy is a
technique for teaching the immune system to fight the cancer cells, and that
takes time, but when it works, the results are better. However that training
of the immune system takes time, so the patients must be healthy enough to
live long enough to train the immune system. If the patients don’t live long
enough for their immune systems to be trained to fight this cancer, then the
therapy is not going to work. So what we have done is we have applied a
different set of criteria in recruiting patients to make sure that we
include patients that are chemo-naive, which means they haven’t had
chemotherapy, because generally patients who had chemotherapy have
compromised immune systems. We also pick patients who have no brain
metastases or liver mets, and that is because people with brain mets die
very quickly. The third thing we use in selecting patients is an important
biomarker known as LDH. If the levels of LDH are normal, the patients with
melanoma live longer; if the levels of LDH are elevated, then the patients
live for a shorter period of time. So we have done three things: we have
chemo-naive patients; we have patients who don’t have brain mets or liver
mets; and patients with normal LDH. As a result we are picking patients who
have healthier immune systems.
The other beauty of this program is the Phase 3 trial was largely funded by our Japanese partner and our safety profile to date has been excellent with this drug. Remember most chemotherapy or cancer drugs have a lot of terrible side effects. We have had 3 successful safety reviews, so the drug is very well tolerated. It’s also a patient-friendly treatment given as one injection per week for six weeks followed by a two-week observation period. The patient goes home after each injection, with no pre-treatment or post-treatment required. We are pretty excited with how this program is going and hopefully all our hard work will translate to a product approval, which would be the first product approval in the field of melanoma in nearly two decades, if Allovectin-7® is successful.
CEOCFO: Chemotherapy has often been described as a race against time!
Mr. Samant: You used the exact words, ‘race against time,’ and we are leveraging this race against time to make sure that the immunotherapy can benefit the patient by beating the time.
CEOCFO: What about your other programs?
In the field of angiogenesis we have two programs. This is a concept where
you inject an angiogenic growth factor into the muscle to promote the growth
of blood vessels locally. It is a magical concept. Many people have suffered
from this disease known as peripheral arterial disease, or PAD, where they
get blockages of blood flow in the legs. This is because of high
cholesterol, from the high-fat food intake that we are all subjected to
because of our busy lives. The disease PAD manifests itself initially as
pains in the legs and calf muscles when you walk. As the disease progresses,
you get that pain continually when you sit at a chair, table, desk, or lie
on a bed. If you are a diabetic eventually this leads to ulcers and these
ulcers progress to gangrene, and that leads to amputation. It is a pretty
nasty disease. There are almost 10 million people impacted by this disease
in the United States. The annual healthcare burden in the United States
because of amputations is about $10 billion. As people are living longer the
amputation burden is going to increase. People’s lifestyles are changing;
younger people are going to get PAD disease, so the market potential for
this kind of application is huge.
CEOCFO: It sounds like it is a disease that would affect those with leukemia as well, say if they needed a bone marrow transplant!
Most of the people with leukemia require bone marrow transplant. It is a
very exciting development.
CEOCFO: Will you tell us about your H5N1 program?
The platform that we have is ideally suited to deal with any emerging
pathogens. Pandemic influenza is just one of them. SARS is another, Ebola is
another, West Nile is another. These are all new pathogens which we have not
seen. Our technology is ideally suited for dealing with them for three
reasons. First of all we can make a vaccine very quickly because we don’t
need the bug itself; all we need is the recipe for the gene sequence for
that bug. For example, in the H1N1 case we were the first company to make
the vaccine before anyone else made it because the minute the bug was
identified and the CDC published the genome of the H1N1 virus, we were able
to make a vaccine and test it on animals. The second thing is our speed in
making the vaccine, and the simplicity of manufacturing it, because most
vaccines require capital intensive equipment. However, we produce it by
simple fermentation. The third most important thing is we can keep our
vaccine in a frozen state for five years where conventional vaccines only
can be kept for two years. We use the same process to make any vaccine,
whether we are making it for Ebola, H1N1 or SARS. With our Allovectin-7®
cancer immunotherapy, it is the same process. So that is the beauty of it.
We applied this technology along with an adjuvant that we have developed
known as Vaxfectin® for H5N1 and our data was terrific. We showed
seroconversion of 50% to 67% of the patients responding to that particular
vaccine, whereas the government stockpiled vaccine for the bird flu
generated a response of 44%. So our vaccine was even more immunogenic than
what the government stockpiled. The problem is we need to demonstrate not
just with H5N1; the government wants us to do more human studies. We were
the first company to make the H1N1 vaccine and we are the only company to
our knowledge that has actual government funding to develop this program. We
are working with a group within the US Department of Defense known as
Transformational Medical Technologies Initiative, or TMTI. The whole purpose
of this group is to make sure that they have a platform that they can work
to make three million doses against new emerging pathogens and stockpile
them. Why three million doses? Because there are approximately three million
people in the U.S. military. The goal is to make sure those key people are
protected. It is a very manageable production volume for us. 400 million
doses is beyond our current capacity, so that is the reason for the
collaboration and we will be starting very shortly our swine flu study.
CEOCFO: What is so important about this Vaxfectin®, I don’t fully understand it?
Mr. Samant: I mentioned to you our adjuvant known as Vaxfectin®. Adjuvants are very important in vaccines because if the vaccine is not working well enough, it makes it work better. Or if the vaccine is working well, it allows you to use a lower dose of the vaccine. Why is that lower dose important? That means that if one dose is required for one person, with the adjuvant I may be able to reduce that to one-tenth of a dose. Therefore, I can then increase the availability of the vaccine ten-fold. We have shown Vaxfectin® with the currently licensed influenza vaccine has the ability to increase immunogenicity by a factor of 200 in mice and that means you can take one million doses and spread it to 200 million people if it was translated to humans. You have to make sure the adjuvant is reasonably safe, and that it doesn’t cause all kinds of side-effects and reactions in human beings. So that is the reason we have taken Vaxfectin® in humans and so far it has been well tolerated. We wanted to develop it for several other applications. This is a synthetically developed adjuvant, so it has no products derived from animals or humans, which are hard for the FDA to accept. The other interesting thing is that no adjuvant has been approved in the last 50 years other than just recently for GSK, so there is a big opportunity to bring this new adjuvant technology. We own a lot of intellectual property on Vaxfectin® going beyond 2020. It works with DNA vaccines; it works with conventional vaccines; it works with proteins, so we are pretty excited. It could be an independent value driver for the company.
CEOCFO: How is Vical doing financially today and are you looking to raise additional funds?
Mr. Samant: Financially we are in great shape. We had close to $60 million in cash after the recent warrant exercises. We have burned historically in the 20’s, so we have at least two plus years of cash. We are being conservative when we say two years of cash. We have no immediate desire to raise money, but we are always open to opportunistic raises if the stock price does well. So the answer is we are open to financing, but there is no pressing need for financing at this stage. We have opportunities for partnerships on some of our programs, which could lead to cash coming into the company that would prevent dilution caused by selling more shares. We are hopeful that one or two such partnerships will happen in the next twelve months. We are in a strong position, and we have no debt. We have no personal or professional lawsuits within the company. We are a well-managed company from a financial perspective.
CEOCFO: What would you like to say to readers in closing?
technology has taken a long time to develop, we are on the cusp of
breakthroughs and this is the year for Vical. We have a number of programs
going on. We have three programs in Phase 3, one program in Phase 2, this
technology platform for dealing with emerging pathogens and of course don’t
forget our Vaxfectin® adjuvant could be an independent value
driver for the company. So look out; this is Vical’s year.
This technology has taken a long time to develop, we are on the cusp of breakthroughs and this is the year for Vical. We have a number of programs going on. We have three programs in Phase 3, one program in Phase 2, this technology platform for dealing with emerging pathogens and of course don’t forget our Vaxfectin® adjuvant could be an independent value driver for the company. So look out; this is Vical’s year. - Vijay B. Samant
ceocfointerviews.com does not purchase or
recommendation on stocks based on the interviews published.