from Briefing.com
VICAL INC (VICL) 14 1/2 +1 3/16. Biotech concern's shares are benefitting from news the company signed an agreement with Merck that grants the drug
company license and options to license Vical's "naked" DNA technology to deliver growth factors as potential treatments for a range of applications
including revascularization. The deal resulted in an initial payment to Vical of $2 million. If products are successfully developed by Merck using the Vical technology,
the value of the agreement could reach more than $35 million plus royalties. Unfortunately, for shareholders, the general market is considerably less bullish
on the deal (at least at this time) than Cowen & Co. While Cowen sees the relationship as an excellent endorsement of Vical's technology, VICL shares have
failed to muster much of a rally. Nevertheless, Cowen expects the revenues generated from the arrangement to bolster Vical's top-line, while simultaneously leading
the stock to $30 a share (107%) over the next twelve months. The firm continues to rate VICL a "strong buy" and sees FY97, FY98, and FY99 losses of
$0.65, $0.75, and $1.00 a share. The agreement marks the first license of Vical's naked DNA technology for potential delivery of a therapeutic protein, and is the
first such agreement since the issuance of Vical's broad patents covering the technology. Vical had previously licensed the technology to Merck and others for use in vaccines against a total of 13 infectious diseases. |
