Why Vical Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Vical (NASDAQ: VICL  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Vical and see what CAPS investors are saying about the stock right now.

Vical facts

Headquarters (founded)

San Diego, Calif. (1987)

Market Cap

$312.1 million

Industry

Biotechnology

Trailing-12-Month Revenue

$7.6 million

Management

CEO Vijay Samant (since 1990)
Chief Accounting Officer Anthony Ramos (since 2010)

Return on Equity (average, past 3 years)

(29.5%)

Cash/Debt

$72.4 million / $0

Competitors

GlaxoSmithKline
Novartis
Sanofi

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 14% of the 37 All-Star members who have rated Vical believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, zzlangerhans, showed skepticism over Vical's near-term prospects:

Topline data from the phase III trial of Allovectin-7 in melanoma is expected to be released this quarter. This is the closest we've come to topline data without a delay being announced since the trial began six and a half years ago. For those who believe that delays in topline data are a good thing in oncology trials because "somebody is living longer and it can't be the placebo patients", I point you to the outcomes of the Celsion and Oncothyreon trials among others. Delayed phase III topline data from small biopharma companies suggests to me that management knows results will be negative and they're dragging their heels to maintain their smoothly salaried lives as long as possible before the earthquake. ...

Allovectin-7 failure won't destroy Vical. They'll have about [$70M] in cash at the end of Q2, and clinical trials of CMV and HSV vaccines are in progress or about to kick off. I expect Vical's cap won't drop below [$150M] and could quickly rebound to [$200M], which corresponds to a share price of [$2.32].

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Read/Post Comments (9) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 08, 2013, at 10:20 AM, tscohen wrote:

    "Delayed phase III topline data from small biopharma companies suggests to me that management knows results will be negative and they're dragging their heels to maintain their smoothly salaried lives as long as possible before the earthquake."

    Management has repeatedly stated the trial is blinded. Don't you think it would be rather foolish (no pun intended) for them to drag their heels after making such statements, which only would serve to invite the Mother of all Lawsuits.

    Surely you can come up with a better reason than this to further your agenda.

  • Report this Comment On July 08, 2013, at 10:49 AM, jabel5 wrote:

    So, if 14% of your all-stars say 'underperform', then obviously 86% say VICL will match or outperform the S&P 500. For all that I know from this article, 86% of your all-stars are raging bulls on VICL. That 14% bearish sentiment is not in line with the quote that you selected. Maybe the little program that churns out these formula releases is buggy?

  • Report this Comment On July 08, 2013, at 11:09 AM, MAS88 wrote:

    Yeah I really do love the agenda based articles on Vical. A whopping 5 "all star" members believe that Vical will underperform, and the remaining 32 of them believe Vical will perform just fine or better. Yet here's an "article" on one of the 5 naysayers, just out of curiousity sake why isn't there any articles on the 86% of all stars that actually believe in Vical - or at the very least you could have just posted one of them to show that this isn't a biased article. You did say "let's take a closer look at what Caps INVESTORS are saying about the stock" yet you only posted one opinion which is an opinion of the minority. Why is that? Oh I know because it wouldn't suit the purpose/agenda of this article.

  • Report this Comment On July 08, 2013, at 1:31 PM, RHMASS wrote:

    While I don't mind individual FOOLS to post the negative sentiments reflecting their investment objective (shorts for negative and longs for positive comments), but I do find it disconcerting for the a staff member of the FOOLS to post an article based on distorted "collective" sentiment of the minority of the "community". So FOOLS is in the business of manipulating the market, just like Mad Money Cramer, AF of the Street as well as a group of "financial experts advising investors what to do. Very disappointing. Corruption always follows the money!

  • Report this Comment On July 08, 2013, at 6:53 PM, WTF2 wrote:

    Agree that the article is oddly tilted. For comment and analysis of VICL from investors and scientists who really know what they are taking about, check Seeking Alpha.

  • Report this Comment On July 09, 2013, at 11:29 PM, lsr18 wrote:

    Although the writer has an interesting take on this, and may possibly be right, he actually makes an argument for buying vical. If the trial fails, it falls about $1 (and I would argue that, at some point in the following year or two, it will hit 3+ for some reason to recover any losses). What if it succeeds? - will it go to 8? 10? 15? 20? It seems that tripling is in order. If there is a 50/50 chance of success, a buy is indicated. even at 33% or 20%, its worth the gamble.

  • Report this Comment On July 18, 2013, at 2:10 AM, QQ007 wrote:

    Brian Pacampara obviously doesn't understand momentum. Tesla is poised to go keep going up. The only reason Tesla pulled back yesterday was because Goldman Sachs came out and said the stock was worth $85. Of course the stock then went down only for one day, just enough for the little guy to panic and jump ship, and the big boys to plunge in and buy it for cheap the next morning. Then it bounced right back up to $120 that day. Sounds like stock manipulation to me, which is what GS is famous for.

  • Report this Comment On July 18, 2013, at 2:13 AM, QQ007 wrote:

    Ooops, I posted the above comment on the wrong article. Will post again on the more recent Tesla article, for which it was meant!

  • Report this Comment On August 12, 2013, at 10:17 PM, usubanas wrote:

    Funniest quote ever from WFT2:

    "For comment and analysis of VICL from investors and scientists who really know what they are taking about, check Seeking Alpha."

    Sorry WTF2, I would say 1% of SA writers know what they are talking about (or at least don't have an agenda). If you can't recognize the good ones, biotech is not for you.

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