Following the restructuring, the company will have approximately 120 employees and expects to reduce future net losses and cash burn by approximately $4 million annually.
The company expects to incur restructuring charges of approximately $0.8 million in the fourth quarter of 2008, associated with personnel-related termination costs, and another $0.5 million in the first quarter of 2009 related to the facility closure.
The restructuring is designed to preserve capital and focus the company’s efforts on its most advanced product development programs: its Allovectin- 7 immunotherapeutic currently in a pivotal Phase III trial in patients with advanced metastatic melanoma, and its DNA vaccine for cytomegalovirus (CMV), currently in a Phase II trial in stem cell transplant recipients. The company is exploring partnering opportunities for the congenital disease application of its CMV vaccine and for its pandemic influenza DNA vaccines.
Vijay Samant, Vical’s president and CEO, said: Vical is fortunate to have sufficient capital for its near-term needs but in the current economic climate, we needed to reduce spending and focus our efforts on advancing our two late-stage product development programs toward the achievement of key milestones.
We regret the impact this unavoidable decision will have on our departing employees, whose past dedication and efforts have supported Vical’s significant progress. We wish them and their families all the best through this difficult period of transition.