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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Scott H. Davis who wrote (1293)	7/31/1998 1:53:00 PM
From: Scott H. Davis	Respond to of 1720

[rest of incomplete analyst report] Sorry, SI would not let me insert the rest (false 15 minute problem) The Lehman bros report concludes.. Using the gene therapy technology of Vical in this trial is a expansion of the immunotherapy work previously done by Dr. Rosenberg. We highlighted the results of this study in a First call note on March 4th. Briefly in that trial, 13 of 31 patients (42%) had an objective cancer response when given a vaccine using peptides (fragments from MART-1 & gp100 antigen) in combination therapy with IL-2. We believe that the delivery of these cancer antigens by gene therapy could have several important advantages over direct injection. First, the delivery of antigens using gene therapy could provide a universal treatment for patients whereas the prior study was limited to patients with a specific haplotype. Second, gene therapy offers the possibility of sustained expression of the cancer antigen versus the bolus injection that was performed in the original study. Similarly, the administration of IL-2 by gene therapy in future studies could provide a method for getting around its toxicities. NEWS FLOW We believe that Vical is now likely to announce the initiation of a Phase I vaccine trial by Pasteur Merieux Connaught in 2H98 where previously we had expected this announcement in 1H98. We believe that the following table summarizes mews flow items that might impact the share price of Vical. 2H98 Initiation of a Phase I trial - vaccine (Pasteur Merieux Connaught). 2H98 Complete Phase II data from Allovectin-7 for head and neck cancer. 2H98 Initiation of a Phase I trial - vaccine (Merck). 2H98 Additional corporate collaboration(s). 2H99 Phase II Alovectin-7 data from refractory, non-invasive melanoma patients (<70 patients). 1H00 Phase III Alovectin-7 data from chemo-nave melanoma patients (280 patients). ----------------------------------------------------------------------------- BUSINESS DESCRIPTION: Vical is a biotechnology company that is developing nonviral gene therapy products in a number of disease areas. ------------------------------------------------------------------------------ Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities.

To: Scott H. Davis who wrote (1293)	8/3/1998 1:30:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

[ VICL ] Scott, VICL is indeed in oversold territory, but even by the shortest term indicators I follow, the recommended course of action is to stay aside until the distribution subsides. The decline has not come on high volume. I do not concur with your views with regard to the decline being on low volume. The most recent decline has occurred on five times greater than average volume. The ascending trend line boundary was violated in concurrence with the violation of the 89 day moving average, which took place on 7/21/98. By then, a majority of my indicators had turned bearish, and has not looked back since. Despite the bleakness of the picture, there does appear to be some support at $11.00 (we managed to catch the stated peak of $19.00 on 6/2/98--let's see if the opposite can occur). A quick snap-back to $12.60 would appear to be a possibility, but in any case, I would not approve of any accumulation until the selling subsides and/or the price action first stabilizes, or reaches the above stated support level. Good luck. Regards, Rainier

To: Scott H. Davis who wrote (1293)	8/7/1998 8:16:00 AM
From: Susan Saline	Respond to of 1720

Hi Scott sorry to be so long in answering ... I was on a bad roll ... and was not feeling good about giving any calls in this down market. Usually have good calls, but lately they have been very poor....so I did not post back to you. I am still leery ... not quite confident that the market has bottomed ... T/A has not been working, and neither has F/A ... need another few days of gains and good personal calls to get my faith in my trading back. that's why I did not reply :o)