Vical has stopped a phase 2 trial of antifungal VL-2397 and outlined plans to lay off employees. The cost-cutting actions come as Vical tries to eke out its cash while looking into strategic alternatives.
San Diego-based Vical began a strategic review in July in the wake of the back-to-back failures of two of its other clinical assets. At that stage, Vical thought it had enough cash to reach the 2020 readout from its VL-2397 trial, meaning it could limp to a potentially business-saving inflection point if it was unable to attract a buyer.
That option is now off the table. Facing a slower-than-expected enrollment rate in the 200-subject study, Vical has stopped the phase 2 trial. Vical had hoped data from the single phase 2 trial would support FDA approval of VL-2397 in a limited population.
The action ends the near-term prospects of VL-2397 coming to market as a first-line treatment for invasive aspergillosis in immunocompromised adults with acute leukemia and recipients of allogeneic hematopoietic cell transplants. And it leaves Vical without an active clinical trial to occupy it while it weighs up strategic alternatives.
Vical is cutting its headcount in conjunction with the cessation of the phase 2 trial to further reduce its already diminished staffing costs. The biotech halved its headcount following the first of its two 2018 clinical trial failures, leaving it with a 34-person team at that point.
Further reducing the size of the team will result in a restructuring charge but generate savings over the longer term. Vical ended 2018 with $50.5 million in cash having burned through $12.4 million over the course of the year. That cash and its Nasdaq listing may now be Vical’s strongest cards as it seeks to conclude the strategic review process.
Vical shares climbed 9% in after-hours trading following news of the trial discontinuation and cuts.