Investopedia: Vical Gets Some Validation

Investors in small-cap vaccine biotech Vical (Nasdaq:VICL) received some good news late on Thursday, as the company announced a licensing deal with a major Japanese pharmaceutical company. While this is a solid deal that will bring some more cash into the business, the real question for investors these days is whether Vical's candidate for metastatic melanoma can ultimately obtain FDA approval and then stand with the likes of Bristol-Myers' (NYSE:BMY) Yervoy in the market.

Astellas Steps Up  
While Vical's Allovectin-7 therapy for melanoma gets a lot of the press, Thursday's deal concerns the company's experimental TransVax product for cytomegalovirus (CMV) in transplant patients. Astellas Pharma (OTCBB:ALPMY.PK) has acquired worldwide rights to TransVax and will assume responsibility for its clinical development. In exchange, Vical gets a staggered up-front payment of $35 million in total, future potential milestones, royalty payments (if the drug makes it to market) and the option to co-promote the drug in the United States.

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