For a lesson in surviving tough times, look no further than San Diego’s Vical. (NASDAQ: VICL) The vaccine developer has endured two decades of red ink and by any sort of business logic should have folded its tent long ago. Instead, Vical is slowly but steadily advancing its “naked DNA” technology for use as a cancer vaccine (and with much fanfare against swine flu.) Last month, the company received a fresh $20 million infusion from investors, providing enough added cash for Vical to continue operations though the end of 2011.
By then, Vical will know the results of two key clinical studies. One is a late-stage trial of a therapeutic vaccine for metastatic melanoma to be completed in 2010. The second is a mid-stage test of a vaccine to prevent life-threatening cytomegalovirus infections in bone marrow transplant patients; interim results are expected this month. Positive outcomes from either trial would bring Vical a giant step closer to delivering a product while validating its faith in a pioneering technology.
When I recently asked CEO Vijay Samant for insight into Vical’s staying power, he first informed me that 20 years isn’t a long time to spend on something entirely new. He reminded me that one of San Diego’s most successful biotechnology companies, Idec – now Biogen Idec – worked on its first drug, a cancer medicine called Rituxan, for nearly 18 years.
“It takes time to understand the applications of the technology; it takes time to optimize the technology; it takes time to for regulatory agencies to understand the technology so they are comfortable with it; it takes time for clinicians and physicians to feel comfortable enough with the technology to inject people with it,” he said.
Traditional vaccines, such as those for flu, use actual virus to trigger an immune response. Vical instead uses genetic engineering techniques to produce sequences of virus DNA, which are injected into the body. Muscle cells take up the DNA and use it to produce virus proteins that stimulate the immune system. In essence, the body’s own muscle cells become vaccine mini-factories.
The beauty of Vical’s approach is that it can also be used for therapeutic cancer vaccines. Instead of virus DNA, the company’s experimental melanoma vaccine uses a genetic sequence that rarely occurs in Caucasians, who have a high incidence of skin cancer. Development partner AnGes of Japan wants to test the vaccine in head and neck cancer because the gene sequence is seldom seen in native Japanese, Samant said.
The early promise of Vical’s technology made it a biotech darling. The company’s market cap hovered around $1.5 billion in early 2000 — during what Samant calls the “rah-rah days” before the dot-com crash in April of that year. Vical’s current market cap approaches … Next Page »
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