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Why Vical Incorporated is Down 58 Percent Monday (VICL)

Shares of Vical Incorporated (NASDAQ: VICL) are down 58 percent today. 19 million shares of this $131 million company have changed hands as of 11:30 a.m. EDT Monday compared to an average of 1 million.

Traders bailed on the stock when the company reported that a Phase 3 trial of its drug Allovectin failed to demonstrate better results than traditional first-line chemotherapy. The drug, for treatment of patients with metastatic melanoma, will not be investigated further:

“We are disappointed that the trial did not meet either the primary or secondary efficacy endpoints, even though we believe it was well-designed and well-executed,” said Vijay B. Samant, President and Chief Executive Officer of Vical. “Based on this outcome, we are terminating the Allovectin® program and focusing our resources on our infectious disease vaccine programs.” Mr. Samant added, “We would like to recognize all of the patients and their families, trial investigators and employees who participated in the conduct of this trial and thank them for their efforts.”

Related: Why Galectin Therapeutics is Down 20 Percent Monday

On the conference call related to this announcement, Samant said,

The path forward for Vical is clear. Our immediate goal is to focus on our infectious disease vaccine programs and reduce expenses to conserve resources. These resources are substantial, as a reminder, we reported cash and investments of $70 million at mid-year which we believe is adequate for our anticipated need at least through the end of 2014. We have a proven platform technology that the Phase 3 CMV vaccine programs totally funded by licensee Astellas in an independent programs for HSV-2 and CMV ready to advance into clinical testing and a solid track record of preclinical and clinical infectious disease vaccine results the two approved products.

 

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Disclosure: At the time of this writing, the author had no position in the company mentioned.

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