Vical Incorporated (NASDAQ: VICL) is having an overwhelmingly rough start to the trading session in the pre-market hours this morning, and for good reason. The company announced top-line results from a clinical trial that failed to meet its primary endpoint. Of course, the news struck fear among investors, sending the stock tumbling down. Today, we’ll talk about:
- The data;
- what we’re seeing from VICL as a result;
- and what we’ll be watching with regard to the stock ahead.
VICL Spirals Down On Data
As mentioned above, Vical is having an overwhelmingly rough start to th trading session in the pre-market hours after announcing the results of a failed clinical trial. In a press release issued early this morning, the company announced top-line results from its Phase 2 clinical study of bivalent. Bivalent was designed as a candidate for the treatment of herpes simplex virus type 2 (HSV-2). Unfortunately, the study did not meet its primary enpdoint of annualized lesion recurrence rate. This endpoint was calculated based on those genital recurrences that were both clincially- and virologically-confirmed during a minimum of nine months of surveillance. In a statement, Vijay Samant, President and CEO at VICL, had the following to offer:
We took careful measures to recruit patients with self-reported history of 4 to 9 recurrences annually. Despite that, the annualized recurrence rate during the trial in the placebo group was far less than what was expected based on their self-reported history. As a result, there was significantly less power to show a vaccine effect in this trial… We are extremely disappointed with the outcome and based upon these results, we will be terminating the HSV-2 program. We are indebted to our patients for their participation and our investigators for their steadfast support. The study protocol requires that patients be followed for 12 months after their last dose, and as a result we will continue to follow the active patients until July 2018.
In the meantime, we remain focused on our novel antifungal VL‑2397, which we licensed from Astellas and has the potential to be the first in a new class of antifungal drugs. Our Phase 2 trial is underway, comparing VL-2397 with standard first-line treatment for invasive aspergillosis in immunocompromised adults, which would be eligible for a Limited Use Indication assuming a successful outcome of the trial. In addition, we will continue the preclinical development of a novel treatment for chronic HBV infection based on our DNA and lipid-delivery technologies. The initial aim of our HBV program is to demonstrate proof of concept for inhibiting HBV infection in an in vivo model.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Vical, the news proved to be overwhelmingly negative. After all, the failed clinical trial means that the company’s HSV-2 program is now off the table, at least for the time being. So, it’s no surprise to see that upset investors are sending the stock spiraling down. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (9:08), VICL is trading at $1.11 per share after a loss of $0.52 per share or 31.90% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on VICL. In particular, we’re interested in following the story surrounding the company’s ongoing work wtih regard to VL-2397 as this candidate is now the company’s flagship after the failure of the HSV-2 program. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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