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Vical Receives NIH Grant for an Immunotherapeutic Herpes DNA Vaccine; Herpes Experts at University of Washington and University of Texas to Conduct Preclinical Development

Friday, April 4, 2008 General News J E 4
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SAN DIEGO, April 3, 2008 Vical Incorporated(Nasdaq: VICL) today announced that it has been awarded a two-year,$2.0 million Phase II Small Business Technology Transfer (STTR) grant from theU.S. National Institute of Allergy and Infectious Diseases (NIAID) of theNational Institutes of Health (NIH), an agency of the U.S. Department ofHealth and Human Services. The grant will fund the ongoing development ofVical's immunotherapeutic plasmid DNA (pDNA) vaccine against herpes simplexvirus type 2 (HSV-2), a sexually transmitted virus which is the leading causeof genital herpes. The HSV-2 vaccine will also be evaluated with Vical's novelVaxfectin(R) adjuvant.

The initial preclinical development activities covered by the grant willbe conducted at the University of Washington School of Medicine and theUniversity of Texas Medical Branch, both centers of excellence in herpes virusresearch. The vaccine will be designed for use in people already infected withHSV-2, with the goal of reducing or eliminating periodic viral flare-ups andthe associated viral shedding and transmission.

"HSV-2 infection is an important medical need affecting quality of lifefor tens of millions of people worldwide," said Vijay B. Samant, Vical'sPresident and Chief Executive Officer. "Chronic antiviral treatment carries asignificant healthcare cost and contributes to the emergence of drug-resistantstrains and increasing infection rates. A therapeutic vaccine that couldcontrol disease symptoms and transmission would be a welcome addition to theHSV-2 treatment arsenal. We are pleased to collaborate with leading academicresearch centers in addressing this critical public health need."

David Koelle, M.D., professor of medicine in the Division of Allergy andInfectious Diseases at the University of Washington School of Medicine, willlead the mouse research phase of the grant. He said, "I believe thattechnologies such as pDNA vaccines, which can contribute to priming andboosting CD8 T-cell responses to HSV-2, have the best chance of changing thenatural history of established HSV-2 infection, potentially improvingsymptoms, lesions, shedding, and perhaps even transmission."

The $2.0 million Phase II STTR grant supplements the $0.3 million awardedto Vical in 2005 for the HSV-2 vaccine program under a Phase I STTR grant fromthe NIAID, which partially funded Vical's initial development of the HSV-2vaccine.

About HSV-2

HSV-2 is a member of the herpesvirus family, and is the leading cause ofgenital herpes worldwide. In the United States, HSV-2 infects some 1.6 millionpeople per year, with approximately 500,000 of those suffering from diseasesymptoms. At least 40 million people in the United States are infected withHSV-2. Even higher infection rates are evident in developing countries, withfurther complications in people also infected with HIV. All HSV-2 infectionsare permanent and result in periodic virus shedding.

There is currently no approved vaccine for HSV-2. Although antiviralregimens have become a standard of care, their inconvenience, cumulative costover the years and potential for drug resistance further underscore the needfor safe, new approaches to reducing HSV-2 lesions, shedding, andtransmission.

Estimated costs of treating HSV-2 in the United States alone are close to$1 billion, primarily for drugs and outpatient medical care. Additionalindirect costs from HSV-2 infection, such as lost work hours, are more than$200 million annually in the United States.

About Vical

Vical researches and develops biopharmaceutical products based on itspatented DNA delivery technologies for the prevention and treatment of seriousor life-threatening diseases. Potential applications of the company's DNAdelivery technology include DNA vaccines for infectious diseases or cancer, inwhich the expressed protein is an immunogen; cancer immunotherape
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