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Vical Receives $6.3 Million Payment for Continued Funding of Allovectin-7(R) Phase 3 Trial

Thursday, June 12, 2008 General News
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SAN DIEGO, June 12 Vical Incorporated(Nasdaq: VICL) today announced the receipt of $6.3 million of cash paymentsand equity investments from AnGes MG, Inc., under a previously announcedcollaborative agreement for continued funding of the company's ongoingAllovectin-7(R) Phase 3 metastatic melanoma trial. Through a series of cashpayments and equity investments, Vical has received $15.3 million to date ofthe $22.6 million total committed by AnGes.
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Vical is conducting the Allovectin-7(R) Immunotherapeutic for MetastaticMelanoma, or AIMM trial, a Phase 3 pivotal trial of the company'sAllovectin-7(R) cancer immunotherapeutic as first-line therapy inchemotherapy-naive patients with Stage III or IV metastatic melanoma inaccordance with a Special Protocol Assessment (SPA) agreement completed withthe U.S. Food and Drug Administration (FDA). The SPA specifies the trialobjectives and design, clinical endpoints, and planned analyses expected to beneeded for product approval.
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The AIMM trial calls for enrollment of approximately 375 patients withStage III or IV metastatic melanoma, and is currently enrolling patients atclinical sites in the United States, Canada and Europe. A patientself-screening tool for trial eligibility is available online athttp://www.melanomaclinicaltrial.com.

In exchange for funding the trial, AnGes received exclusive marketingrights in Japan and other key Asian countries, and also will receive certainroyalties for sales in the United States and European countries. AnGes isobligated to pay Vical royalties on product sales in the specified Asiancountries, plus certain sales-based milestone payments if defined sales levelsare achieved. Vical is obligated to pay AnGes tiered royalties based ondefined sales levels in the United States, and fixed royalties onrest-of-world sales. Each company will be responsible for obtaining regulatoryapprovals in any countries where it plans to market Allovectin-7(R).

About Allovectin-7(R)

Allovectin-7(R) is a plasmid/lipid complex containing the DNA sequencesencoding HLA-B7 and Beta 2 microglobulin, which together form a Class I MajorHistocompatibility Complex, or MHC-I antigen. Injection of Allovectin-7(R)directly into tumors is designed to stimulate an immune response against bothlocal and distant metastatic tumors. Vical conducted a large Phase 2 trialevaluating Allovectin-7(R) immunotherapeutic as a single agent for patientswith Stage III or IV metastatic melanoma. Based on advice from clinicalexperts and detailed guidance received from the FDA in an End-of-Phase 2meeting, Vical designed the current Phase 3 trial.

Allovectin-7(R) has been granted orphan drug designation for the treatmentof invasive and metastatic melanoma by the FDA's Office of Orphan ProductsDevelopment. Orphan drug designation provides U.S. marketing exclusivity forseven years if marketing approval is received from the FDA, in addition tocertain tax benefits for qualifying expenses.

About Metastatic Melanoma

The American Cancer Society has estimated that more than 62,000 newdiagnoses of, and approximately 8,400 deaths from, melanoma will occur in 2008in the United States. Currently, there are no consistently effective therapiesfor advanced cases of metastatic melanoma where the cancer has spread to otherparts of the body. The toxicity associated with FDA-approved treatments suchas dacarbazine or interleukin-2 is often significant, resulting in serious orlife-threatening side effects in many of the patients treated. Patients withmetastatic melanoma often are treated off-label with drugs such astemozolomide, which has been approved by the FDA for the treatment of certaintypes of brain cancer but not for the treatment of metastatic melanoma.Temozolomide is an orally-delivered pro-drug that converts in the body intothe same active compound as dacarbazine.

About Vical

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