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Two More Promising Attacks on Flu and Swine Flu (VICL, NVAX)
June 30, 2009
Vical Inc. (NASDAQ: VICL) showed promising swine flu test data in its animal model today and was one of the top rising stocks. A pact from Novavax, Inc. (NASDAQ: NVAX) with the government of Spain and ROVI Pharmaceuticals sent its shares even higher on a percentage basis.

Vical Incorporated (NASDAQ: VICL) said tests in its vaccine against A/H1N1 pandemic influenza, the swine flu, produced robust immune responses that were “well above the accepted protection threshold in 100% of vaccinated mice and rabbits” after a standard two-dose vaccine regimen. The company said that at least 75% of vaccinated animals achieved or exceeded the protection threshold after a single dose of vaccine. Vical went so far as saying that it is ready to advance directly to large-scale cGMP manufacturing of the vaccine for human clinical trials, subject to securing external funding for this program.

Novavax, Inc. (NASDAQ: NVAX) signed a deal with Spain’s health ministry and ROVI Pharma, a specialty drug maker in Spain, to license its genetically engineered technology to produce pandemic and seasonal flu vaccines and build that country’s first vaccine-making plant.

While exact terms are outstanding, this could easily bring in tens of millions of dollars in future royalty and milestone payments if and after the vaccines are approved and marketed. The target here is to get both pandemic flu vaccines and seasonal flu vaccines by 2012.

ROVI has committed to make a $3 million equity investment in Novavax at $2.74, a 10% premium to yesterday’s close. The Spanish government is forming a foundation and will invest in a 60 million facility and a non-profit foundation will be formed will be formed and initially funded with a 25 million euro credit line from the Spanish government.

This was a huge boom for both companies today. Vical Inc. (NASDAQ: VICL) rose over 22% to $2.70, on over 8 million shares. Novavax, Inc. (NASDAQ: NVAX) shares closed up 31% at $3.28, on over 32 million shares. As far as how high that volume is, that is about 14-times average on Vical and nearly 8-times average volume on Novavax.

Jon C. Ogg

Tags: NVAX, VICL