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Company

Vical (Nasdaq: VICL)
Submitted by: zzlangerhans
Member Rating: 99.00
Submitted on: 7/7/2011
Stock Price at Recommendation: $4.32

Vical Profile

Star Rating

***
Headquarters San Diego, Calif.
Industry Biotechnology
Market Cap $311 million
Industry Peers CEL-SCI (AMEX: CVM)
Oncolytics Biotech (Nasdaq: ONCY)
GlaxoSmithKline (NYSE: GSK)

Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.

This Week's Pitch
 

I won't get too deeply into statistical analysis of Allovectin phase 2 data and the phase 3 performance of comparators. The reason for that is people will never see eye to eye regarding the utility of comparing survival in single-arm trials to historical data. I personally don't feel the comparison is valid, but if you do believe in it then the Allovectin phase 2 data looks pretty good.

The real reason behind my red thumb here is the high rate of failure of phase 3 trials of immunotherapeutics, and the high rate of failure in phase 3 trials in melanoma. Yes, there are just enough candidates that squeak by, such as [Dendreon's (Nasdaq: DNDN)] Provenge and [Bristol-Myers Squibb's (NYSE: BMY)] Yervoy to keep life interesting. But the historical odds against Allovectin are high.

The timing of phase 3 data release has been pushed back indefinitely because of a lower-than-expected death rate in the trial. I've seen this same issue touted as a guarantee of trial success in many other cases, only for those hopes to be squashed when the real reason turned out to be better-than-expected comparator numbers. I'm expecting the phase 3 trial to reveal no statistically significant survival benefit of Allovectin, attributed to survival with dacarbazine better than historical performance. 24-week response rates could be higher with Allovectin, but without the survival benefit that has been shown with Yervoy and Roche's (OTC BB: RHHBY.PK) vemurafenib the drug is likely dead in the water commercially.

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