Vical has eliminated almost 40% of its total workforce to conserve cash after the failure of its Allovectin immunotherapy for advanced melanoma.
The company is letting 47 of its employees, paring staff numbers down to around 74, and reducing its cash burn from $17 million in the first half of the year to $13 to $15 million in the second half.
The reductions should help Vical eke out its cash reserves of around $70 million as it refocuses its efforts on its infectious disease vaccine programmes, although it will incur restructuring charges of $2.2 million in the third quarter. The company now says it has enough cash on hand to last through 2015, having said earlier this risked running out of money in 2014.
Vical was rocked by the failure of its Allovectin (velimogene aliplasmid) programme earlier this month, which hit the buffers after it missed both efficacy objectives in a Phase III trial.
The treatment involved delivering a plasmid expressing two immune-stimulating genes – HLA-B7 and _2 microglobulin – directly into a tumour in the hope of activating the patient’s own immune system to attach the cancer cells.
The “restructuring [will] ensure that our promising infectious disease vaccine programs are adequately resourced to create maximum shareholder value,” said Vijay Samant, Vical’s chief executive.
“This has been a very difficult process and we regret the impact this business decision has on our departing employees,” he added.
Vical’s most advanced programme is now ASP0113, a vaccine against cytomegalovirus (CMV) licensed to Astellas which recently started a Phase III trial in 500 bone marrow transplant patients and is due to begin Phase II testing in solid organ transplant patients later this year.
Following behind is a vaccine against Herpes simplex virus type 2 (HSV-2) called Vaxfectin, which is in Phase I/II testing, a prophylactic vaccine for CMV infection before and during pregnancy and an early-stage programme looking at DNA-based gene delivery.
