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Vical Incorporated Message Board

  • johnodod johnodod Jan 10, 2013 4:10 PM Flag

    "Lot's of Traction"

    To me the news of the day was Vijay's statement that Vical has lots of traction on partnership discussions for CyMVectin. Given that the U.S. Department of Health & Human Services and the Food & Drug Administration met with a combined group on Cytomeglavirus that consisted of Merck, Glaxo Smith Kline, Sanofi, Novartis and Vical, I think we can make some educated guesses about who has interest in teaming with Vical on the $2 billion annual opportunity.

    I also thought Vijay did a good job putting the Herpes work in market context. 1.) the T-cell recruitment strategy is singular and has produced by far the best results. 2.) The trial they start second half this year can be filled in 2 days because of the huge selection pool and vast interest in the project.

    On A-7 the notion that it would next to impossible for a similar group of elderly people with stage 4 cancer to tolerate 2 years of chemo while the current Phase 3 shows it is quite possible for this group to take A-7 continuously was strong and a new argument. Moreover, the idea that this strongly sold tolerability advantage will cause A-7 to be the starting point for all synergistic treatments caused lightbulbs in investor minds to calculate the financial benefits of this positioning.

    Finally I liked the reference to seeing many of the investors from before and many new faces too. Keeping the existing and adding new investors will pay a reward soon.

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    • Just re-read this highly rated Vical MB post. Good work Johno.....9 weeks ago!!! Since your post Vical has moved up 25% as Vijay continues beating the drums. On Allovectin love your point about "tolerability advantage". Couple that with solid efficacy in the Phase 3 trial and Vical will move into a brighter spotlight.

      Sentiment: Hold

    • johnodad,
      Thanks for reporting something new. Got my blood stirring there. You make it sound that there is next-to-zero probability that A7 will fail. That's something new too.

      Keep up the good work.

      • 1 Reply to chipper4747
      • Chipper, think of the metrics for Transvax...$500 million annual market, Vical upfront $20 million on deal signing with Astellas, $10 million for first milestone on the way to $130 million in milestones and double digit royalities on approval.

        CyMVectin (Traction Action Device) targets $2 billion annual market, moreover a market that will give the large pharma partner a halo effect for the Cervical cancer vaccine already in the market for the same population. This causes me to tick the metric up a conservative one knotch.

        Upfront on signing....$100 million.....first milestone, $50 million, total milestone payouts $600 million, double digit royalties, at least $200 million annual revenue. This could be low, but I think this is very much in the ball park of likely from partnership talks with lots of traction.

        Vical has always taken longer than we would like to show progress but it has attracted partnerships that have paid for a lot of the benefits we hope to reap. A deal on a target this big changes all the metrics because the upfront alone will swing the company to profitability. It also sets up valuations on a multiple of revenue because the revenue starts to become predictable.

        By my reasoning, even very conservative biotech valuations of 10 times revenue would make Vical a $1 billion market cap company and about $13 a share. Throw in the halo a pre A-7 deal gives that brewing development and the market takes the stock to $20 waiting for A-7 results.

        I eagerly await news of traction turning to movement on the CyMVectin partnership!

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