By Karen Pihl-Carey

Staff Writer

Vical Inc. plans to offer 2.5 million shares in a public offering of stock that could raise the company gross proceeds of more than $46 million.

All shares are to be sold by the company, and the offering includes an option for underwriters to purchase an additional 375,000 shares to cover overallotments. Managing the offering are Goldman, Sachs & Co., of New York; BancBoston Robertson Stephens Inc., of New York; SG Cowen Securities Corp., of Boston; and First Union Securities Inc., of Chicago.

The company’s stock (NASDAQ:VICL) closed Friday at $18.25, down 1.187 cents. At that price, the public offering would gross $45.6 million.

The company was in an SEC-imposed quiet period Friday and could not comment, a spokesman said.

Vical plans to use net proceeds for research and development programs, including preclinical and clinical studies. Proceeds also will go toward general corporate purposes and may be used to acquire businesses, technology or products that complement Vical’s business. The company said, however, it has no plans in place to make any such acquisitions.

As of Sept. 30, Vical had cash, cash equivalents and marketable securities of $38.9 million. Before the offering the company had 16.2 million shares outstanding.

Vical was incorporated in 1987 and has focused its resources on the development of its direct gene transfer and related technologies. All of the company’s products are in the clinic or in preclinical stages, and Vical does not expect revenues from sales for at least the next several years.

With a number of partners, Vical is developing therapeutic and vaccine product candidates to treat cancer, infectious diseases and metabolic disorders.

In January, the company signed a deal potentially worth $40 million with Pfizer Inc., of New York, to deliver therapeutic proteins via naked DNA technology for animal applications. (See BioWorld Today, Jan. 27, 1999, p. 1.)

The deal was Vical’s third such collaboration. The company already had a deal with Merck & Co. Inc., of Whitehouse Station, N.J., for delivering growth factors for cardiovascular applications, and with Aventis Pharma (formerly Rhone-Poulenc Rorer Inc.), of Collegeville, Pa., in the area of neurodegenerative diseases. A joint venture of Rhone-Poulenc and Merck, called Merial Animal Health, also is applying Vical’s technology to vaccines.

Other partners include Aventis Pasteur (formerly Pasteur Merieux Connaught), of Lyon, France, in malaria DNA vaccines; Centocor Inc., of Malvern, Pa., in cancer vaccines; and Boston Scientific Corp., of Boston, in vascular gene therapy.

Vical’s lead product, Allovectin-7, which uses a lipid-DNA complex to help the immune system recognize and attack cancer cells, is in pivotal Phase II and III trials in metastatic melanoma and in a Phase II trial in unresectable head and neck cancer.

The company has three other products in the clinic.

Leuvectin, which uses a lipid-DNA complex to stimulate an immune response, entered into two Phase II trials in May in kidney and prostate cancer, based on promising results from a Phase I/II trial. (See BioWorld Today, May 4, 1999, p. 1.)

Vaxid, a naked DNA vaccine to prevent relapse of B-cell lymphoma, is in a Phase I/II trial. And another naked DNA vaccine to treat metastatic melanoma is in a Phase I/II trial in collaboration with the National Cancer Institute.