Shares in US biotech Vical fell through the floor yesterday after it announced the demise of its Allovectin immunotherapy for advanced melanoma.

Investors in Vical have been waiting for the results of the 390-patient trial of Allovectin (velimogene aliplasmid) for months, and were devastated to learn that the drug did not meet either of two efficacy objectives in the study.

Shares in the company ended the day down 57% at $1.56 as Vical chief executive Vijay Samant started the process of conserving cash and redirecting investment into other pipeline projects. The company has around $70 million in cash and investments which should cover its costs through to the end of 2014.

First-line treatment with Allovectin failed to either reduce the size of tumours or improve survival in the melanoma patients compared to chemotherapy, said Samant. Moreover, as the trial was well-designed and well-executed - with guidance from the US Food and Drug Administration (FDA) - the outcome is not in doubt.

"The results are clear and conclusive, with no margin for alternative interpretation," said Samant on a conference call with investors yesterday. Analyst Eric Schmidt from Cowen & Co criticised the company however for not carrying out an interim look at the data that could have allowed it to drop the programme sooner.

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.  

Vical's most advanced programme is now ASP0113 (formely TransVax), a vaccine against cytomegalovirus licensed to Astellas which recently started a Phase III trial in bone marrow transplant patients.

During the recovery period after transplant, before the immune systems are fully functional these patients are at high risk for CMV and other opportunistic infections. Astellas said recently it expects to complete enrolment for the trial by the end of 2015 with trial completion scheduled for the end of 2016.

A Phase II trial in solid organ transplant recipients is due to start by the end of 2013, while a Phase I/II trial of its Vaxfectin vaccine for Herpes simplex virus (HSV) type 2 is due to start in the coming months.

Vical also has a DNA-based gene delivery platform, although Schmidt said the company faces "frustration" with the slow pace of development of this project.