Vical's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Vical Incorporated ( VICL)

Q4 2011 Earnings Conference Call

February 8, 2012 12:00 PM ET


Vijay Samant – President and Chief Executive Officer

Alan Engbring – Executive Director IR


Stephen Willey – Stifel Nicolaus

Jason Kantor – RBC Capital Markets

Eric Schmidt – Cowen and Company

Ren Benjamin – Rodman & Renshaw

George Farmer – Canaccord Capital

Adam Cutler – Credit Suisse

Howard Liang – Leerink Swann



Please standby, we’re about to begin. Good day, and welcome ladies and gentlemen to the Vical Incorporated Financial Results Conference Call. At this time, I’d like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers from invited participants after the presentation.

I’ll now turn the conference over to Mr. Alan Engbring, Executive director of investor relations, please go ahead sir.

Alan Engbring

Hello, everyone. Welcome to our 2011 Financial Results Conference Call. Participating on the call today, our Vice Sales President and Chief Executive Officer, Mr. Vijay Samant, and Vical’s Chief Financial Officer, Ms. Jill Broadfoot. I will begin with a brief notice concerning projections and forecast.

This call includes forward-looking statements including financial expectations, and projections of progress in our research clinical development program that are subject to risks and uncertainties that could cause actual results to differ materially from those projections, including the risks set forth in Vical annual report on form 10K, and quarterly reports on form 10Q filed with the Securities and Exchange Commission, as well as the specific risks and uncertainties noted in Vical’s news release on 2011 financial results.

These forward-looking statements represent the companies judgments as of today. The company disclaims however, any intent or obligations to update these forward-looking statements.

Now I would like to introduce Vical’s President and Chief Executive Officer, Mr. Vijay Samant.

Vijay Samant

Thank you, Alan, and welcome everyone, we had a productive fourth quarter, a productive full year in 2011, and we are poised for an exciting 2012. We have met steady progress in our key development programs. I’ll provide the dates in each of these programs on the call today, but before doing that, let me pass on to CFO, Jill Broadfoot to start the call with a review of our latest financial results. Jill?

Jill Broadfoot

Thank you, Vijay. Our revenues for 2011 were $30 million as compared to $8.7 million in 2010. 2011 revenues included $28 million from the upfront payment, an initial contract services under our transact license agreement with Astellas. We are eligible to receive another $10 million milestones payment from Astellas as we advance for initiation of the upcoming transact – and continuing reimbursements for contract services including development and regulatory support as well as manufacturing of clinical trial materials.

The increase in revenues decrease our net loss for 2011 to $7.3 million or $0.10 per share, compared with a net loss for 2010 of $30.4 million or $0.51 per share. As a result, our net cash burn for the year was $4 million, and we ended the year with cash and equivalent of $56 million which was at the high end of our guidance.

On January 6th we completed a $50 million follow-on offering [ph] that generated net proceeds of $46.6 million. Today, the underwriters exercise a portion of the over allotment for an additional $2 million in net proceeds, per total net proceeds of $49 million, combined with our year-end cash balance, we believe we have sufficient capital to support our on-going operations, and plan development and pre commercialization activities through at least the end of 2013.

We are projecting a net cash burn for 2012 of $17 million to $22 million, this includes the $10 million milestone payment from Astellas, along with contract services, revenues offset by plans pre-commercialization, preparations for (inaudible). It also includes pre-clinical studies and manufacturing of our HSB2 vaccine in preparation for a phase one slash two clinical trial.

Vijay will describe these efforts in more detail. With that, I’ll turn the call back to Vijay.

Vijay Samant

Thank you, Jill. I will start today with our Phase III Allovectin Program and the timing guidance we updated this morning. As a reminder, this physical trial for patients with metastatic melanoma was scattered out in – on SBA. It enrolled 390 subjects from Jan 2007 to Feb 2010, and the enrollment is not complete.

They were randomized two to one to receive either Allovectin or the physician choice of (inaudible) or tyrosinamide which are the standard chemotheraphy drugs used for melanoma.

We enrolled subjects with Stage III or Stage IV disease up to M1b, excluding lower and (inaudible) with no prior chemotherapy, and normal levels of LDH. These factors reflect the fair – experience gained from our Phase II study.

We have two efficacy end-points of this trial, the primary end-point is object response rate at 24 weeks or more after randomization, and the secondary end-point if overall survival.

The databases for these two-end points can be processed separately, but wide [ph] will remain unblended until both are finished, this is a very important point, will reach the end of the maximum two-year period later this month for the last subjects enrolled in the study.

After the last subjects go off the study, they’ll complete the side audits and log the data base for the primary end-point which is overall survival which is our object response rate. An independent committee of radiologists and oncologists will then review the data in a blinded fashion with no enrolment or access by Vical.

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