|
10390
Pacific Center Court, San Diego, CA 92121-4340
858·646·1100,
FAX: 858·646·1150
www.vical.com
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News
Release
|
FOR
IMMEDIATE RELEASE
November
21, 2008
Contact:
|
Alan
R. Engbring
|
Jill
M. Church
|
|
Executive
Director, Investor Relations
|
Vice
President and Chief Financial Officer
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|
(858)
646-1127
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|
|
Website:
www.vical.com
|
|
Vical
Announces Strategic Restructuring and Staff Reduction
SAN
DIEGO—November 21, 2008—Vical Incorporated (Nasdaq:VICL) today announced a
strategic restructuring including a staff reduction of 29 employees,
approximately 20% of the company’s total workforce, and accelerated closure of a
research facility. Following the restructuring, the company will have
approximately 120 employees and expects to reduce future net losses and cash
burn by approximately $4 million annually.
The
restructuring is designed to preserve capital and focus the company’s efforts on
its most advanced product development programs: its Allovectin-7®
immunotherapeutic currently in a pivotal Phase 3 trial in patients with advanced
metastatic melanoma, and its DNA vaccine for cytomegalovirus
(CMV),
currently in a Phase 2 trial in stem cell transplant recipients. The company
is
exploring partnering opportunities for the congenital disease application of
its
CMV vaccine and for its pandemic
influenza DNA vaccines.
“Vical
is
fortunate to have sufficient capital for its near-term needs,” said Vijay
Samant, Vical’s President and Chief Executive Officer, “but in the current
economic climate, we needed to reduce spending and focus our efforts on
advancing our two late-stage product development programs toward the achievement
of key milestones. We regret the impact this unavoidable decision will have
on
our departing employees, whose past dedication and efforts have supported
Vical’s significant progress. We wish them and their families all the best
through this difficult period of transition.”
The
company expects to incur restructuring charges of approximately $0.8 million
in
the fourth quarter of 2008, associated with personnel-related termination costs,
and another $0.5 million in the first quarter of 2009 related to the facility
closure. The
company will provide additional details on the impact of this restructuring
with
the issuance of its 2008 year-end results and 2009 financial guidance in
February 2009.
About
Vical
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 immunotherapeutics for cancer, in which the expressed
protein is an immune system stimulant; DNA vaccines for infectious diseases,
in
which the expressed protein is an immunogen; 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 serve significant unmet medical needs. Additional information on Vical
is
available at www.vical.com.
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 statements about specific
restructuring activities; future
cash expenditures and operating expenditures;
development of Allovectin-7®,
the CMV
vaccine and the pandemic influenza vaccine; and strategic partnerships. Risks
and uncertainties include: whether we will be successful in securing partnering
opportunities for the congenital disease application of our CMV vaccine or
for
our pandemic influenza DNA vaccines; whether our
costs
will decline after the restructuring to the levels we expect; whether
Vical or others will continue development of Allovectin-7®,
the
CMV
vaccine, the pandemic influenza vaccine or any other product candidates; 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; whether
we
will achieve key milestones in either our Allovectin-7®
or CMV
vaccine programs; the dependence of the company on its collaborative partners;
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.