Vical Inc. is refocusing its R&D direction to infectious disease after its flagship DNA-based vaccine, Allovectin, failed in a Phase III trial in melanoma, the disappointing end of 20 years of research.

Vical has a DNA-based technology platform for vaccines that has been targeted at cancer and infectious disease. The lead candidate was Allovectin (velimogene aliplasmid), an intratumoral, or intralesional, therapeutic cancer vaccine partnered in Asia with Japan’s AnGes MG Inc. Also see "Vical To Retain Marketing Rights To Allovection-7 In Deal With AnGes" - Pink Sheet, 30 May, 2006..

On Aug. 12, Vical announced that in a Phase III first-line metastatic melanoma study of 390 patients against temozolomide or dacarbazine chemotherapy, the drug failed on the primary endpoint of improvement in objective response rate at 24 weeks, as well as on the secondary endpoint of overall survival. The company released no additional details about the study, which was funded by AnGes.

Vical’s share price took a beating on the news, falling by more than 55% to close at $1.53.

There doesn’t appear to be any silver lining in the announcement.

“We believe our trial was well-designed to demonstrate a response rate and survival benefit for Allovectin compared with chemotherapy. We believe the results are clear and conclusive with no margin for alternative interpretation. Allovectin simply did not provide the expected benefit. We do not see a feasible path forward for Allovectin,” CEO Vijay Samant said during an Aug. 12 investor call.

Asked about its partner’s plans, Samant said that AnGes would be looking at the data with a different set of eyes.

“Our path forward for Vical is clear,” he said. “Our immediate goal is to focus on our infectious disease vaccine programs.”

The company’s most advanced infectious disease candidate is the TransVax therapeutic vaccine for controlling cytomegalovirus (CMV), a therapy partnered with Astellas Pharma Inc. since 2011 Also see "Vical Joins Forces With Astellas On CMV Vaccine" - Pink Sheet, 15 July, 2011.. In June, the two companies announced the start of a Phase III study of the vaccine in 500 hematopoietic stem cell transplant recipients. Vical and Astellas are also partnered on the ASP0113 vaccine for preventing CMV in solid organ transplant recipients and plan to start a Phase II study of that candidate later in 2013.

Vical had $70 million in cash at mid-year, which the company says is enough to take it through the end of 2014.

Large Loss In Resources, Small Market Opportunity

During the call, Samant noted the substantial resources devoted to Allovectin development over 20 years and said that the company was “deeply disappointed” with the outcome of the Phase III study.

But the product would have faced a difficult market, especially given the approvals of Bristol-Myers Squibb Co.’s immunotherapy Yervoy (ipilimumab), Roche’s BRAF inhibitor Zelboraf (vemurafenib) and more recently, GlaxoSmithKline PLC’s BRAF inhibitor Tafinlar (dabrafenib) and MEK inhibitor Mekinist (trametinib) Also see "GSK Prices Tafinlar At $7,600/month, Undercutting Roche’s Zelboraf" - Pink Sheet, 3 June, 2013..

Cowen & Company estimated in its Therapeutic Categories Outlook report that only 5% to 10% of inoperable melanoma patients might be eligible for treatment with the intratumoral vaccine.

Tim Turnham, executive director of the Melanoma Research Foundation, commented that therapeutic vaccine approaches have not been successful in melanoma.

“The melanoma community has been kind of skeptical about intralesional approaches in general. People who work in the field seem optimistic and yet we keep hitting barriers like these,” Turnham said.

It’s unclear whether there are implications from the Allovectin failure for other intralesional therapies.

“Is there a bigger lesson? Maybe, maybe not. We’ll have to dig into the data,” Turnham said.

Vical declined to provide timing on the release of additional data from the study.

Amgen Inc. reported an improved response rate for its intralesional vaccine T-Vec at the American Society of Clinical Oncology meeting in May/June, with a trend toward overall survival Also see "Amgen Plays Diversity Card In Approach To Cancer; Immunotherapy Could Be Its Ace" - Pink Sheet, 17 June, 2013..

CEO Defends Tech Platform

During the call, Samant said that Allovectin’s failure does not diminish the potential for success for the remaining programs.

In addition to TransVax, Vical’s pipeline also includes the Vaxfectin adjuvant to boost immune response. Bristol-Myers Squibb Co. licensed the adjuvant and the company’s DNA-platform technology for use in making antibodies in September 2012 ([See Deal]).

Vical also has a Vaxfectin-formulated Dengue fever DNA vaccine in Phase I, in collaboration with the Naval Medical Research Center.

The company is independently developing a Vaxfectin-formulated vaccine for herpes simplex virus type 2 vaccine and plans to start a Phase I/II trial in this indication by the end of 2013.

Vical has also been developing a Vaxfectin-formulated CyMVectin prophylactic vaccine for CMV infection before and during pregnancy. This candidate is ready to move into clinical trials.

In response to analyst questions during the call suggesting loss of faith in the company’s development so far, Samant said that the failure had nothing to do with the technology platform.

“We are committed to this platform and we are committed to advancing programs in the pipeline and we are open to other opportunities,” he said.

Vical Shifts To Infectious Disease After Allovectin Fails In Melanoma

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