UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): August 5, 2008
 
VICAL INCORPORATED
(Exact name of registrant as specified in charter)

 
Delaware
(State or other
jurisdiction of
incorporation)	 	000-21088
(Commission File
Number)	 	93-0948554
(I.R.S. Employer
Identification No.)	
 	 	 	 	 	
10390 Pacific Center Court
San Diego, California
(Address of principal executive offices)	 	92121-4340
(Zip Code)	
 
Registrant’s telephone number, including area code:  (858) 646-1100
 
Not Applicable.
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
Item 2.02   Results of Operations and Financial Condition.
 
On August 5, 2008, Vical Incorporated issued a press release announcing, among other things, its unaudited financial results for the three months and six months ended June 30, 2008. A copy of the press release is attached as Exhibit 99.1 to this Current Report.

The information in this Item 2.02, and Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.
 
Item 9.01   Financial Statements and Exhibits.
 
(d) Exhibits.

 	99.1	Press release issued by Vical Incorporated on August 5, 2008.	

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	VICAL INCORPORATED	
 	 	 	
Date: August 5, 2008	By:	/s/ JILL M. CHURCH	
 	 	Jill M. Church	
 	 	Vice President, Chief Financial Officer	
 	 	and Secretary	

 
INDEX TO EXHIBITS
 
Exhibit No.	 	Description	
 	 	 	
99.1	 	Press release issued by Vical Incorporated on August 5, 2008.	

	   10390 Pacific Center Court, San Diego, CA 92121-4340 
   858 · 646 · 1100, FAX: 858 · 646 · 1150 
   www.vical.com	  News Release	
 
FOR IMMEDIATE RELEASE
August 5, 2008

Contacts:	Alan R. Engbring	Jill M. Church	
 	Executive Director,
Investor Relations	Vice President and
Chief Financial Officer	
 	(858) 646-1127	 	
 	Website: www.vical.com	 	
 
Vical Reports Second Quarter and First Six Months 2008 Financial Results
And Highlights in Product Development Programs

SAN DIEGO—August 5, 2008—Vical Incorporated (Nasdaq:VICL) today reported financial results for the quarter and six months ended June 30, 2008. Revenues for the second quarter of 2008 were $2.5 million, compared with revenues of $3.1 million for the second quarter of 2007. The net loss for the second quarter of 2008 was $8.5 million, or $0.21 per share, compared with a net loss of $8.2 million, or $0.21 per share, for the second quarter of 2007.

Revenues for the first six months of 2008 were $4.5 million, compared with revenues of $4.4 million for the first six months of 2007. The net loss for the first six months of 2008 was $18.0 million, or $0.46 per share, compared with a net loss of $17.8 million, or $0.45 per share, for the first six months of 2007.

Vical had cash and investments of $58 million at June 30, 2008. The company’s second quarter 2008 financial results were consistent with its projection for a full year net loss of $32 million to $37 million and a net cash burn of $27 million to $32 million.

Independent Development Program Highlights
	·	Preliminary data from a Phase 1 trial of the company's Vexfectin ® -formulated H5N1 pandemic influenza DNA vaccines   demonstrated for the first time that DNA vaccines have achieved potentially protective levels of antibody responses in humans with no significant safety issues. These results support further development of pandemic influenza DNA vaccines and advancement of additional Vaxfectin ® -formulated DNA vaccines. The Vaxfectin ® adjuvant is currently being evaluated by potential partners for a variety of additional vaccine applications.	

 	·	In June, Vical received $6.3 million of cash payments and equity investments from AnGes MG, Inc., for continued funding of the company's ongoing Allovectin-7 ® Phase 3 metastatic melanoma trial. Vical is conducting the Phase 3 pivotal trial multinationally at nearly 50 sites to evaluate Allovectin-7 ® as first-line therapy in chemotherapy-naïve patients with Stage III or IV metastatic melanoma.	

 	·	In an editorial commentary in the June 15 issue of The Journal of Infectious Diseases, independent experts on cytomegalovirus ( CMV ) said the vaccine under development by Vical, at the optimal dose and regimen tested, “holds promise” based on its ability to elicit persistent immune responses in a majority of CMV-seronegative subjects, and warrants further evaluation for its potential to prevent infection and disease. The commentary accompanied the issue's lead article, which expanded on previously reported immunogenicity data from a Phase 1 study of Vical’s DNA vaccine. The company’s Phase 2 trial of the CMV vaccine in patients undergoing hematopoietic cell transplants is on schedule for release of interim efficacy data in the second half of 2008.	

 	·	The company successfully completed first-year milestones under a three-year, $6.0 million grant awarded in 2007, and is advancing with the development of the RapidResponse™ DNA vaccine manufacturing process, which is designed to allow extremely rapid and large-scale production of DNA vaccines with low capital requirements.	

Partnered Development Program Highlights
 	·	In July, Vical received a $1.0 million cash payment from its Japanese partner, the biotechnology company AnGes MG, Inc. , reflecting continued progress of its Collategene™ angiogenesis program. Vical received an initial upfront payment of $1.0 million under an exclusive license agreement in 2005, and further advancement may lead to additional milestones and royalty payments. In March 2008, AnGes filed for marketing approval with the Japanese Ministry of Health, Labor and Welfare for the use of Collategene™ as a treatment for critical limb ischemia, an advanced form of peripheral arterial disease, and for Buerger’s disease. The Collategene™ application in Japan is the first for an angiogenesis product based on Vical’s patented DNA delivery technology.	
 
 	·	The company’s European partner sanofi-aventis is conducting a 500-patient Phase 3 pivotal trial of its fibroblast growth factor 1 (FGF-1) angiogenesis product candidate in key global markets and anticipates filing for marketing approvals in 2010.	

Conference Call
Vical will conduct a conference call and webcast to discuss the financial results and program updates with invited analysts and institutional investors today, August 5, at noon Eastern Time. The call and webcast are open on a listen-only basis to any interested parties. To listen to the conference call, dial in approximately ten minutes before the scheduled call to (888) 600-4883, or (913) 312-6683 for international participants, and reference confirmation code 4962317. A replay of the call will be available for 48 hours beginning about two hours after the call. To listen to the replay, dial (888) 203-1112, or (719) 457-0820 for international participants, and enter replay passcode 4962317. The call also will be available live and archived through the events page at www.vical.com . For further information, contact Vical’s Investor Relations department by phone at (858) 646-1127 or by e-mail at info@vical.com .

About Vical
Vical researches and develops biopharmaceutical products based on its patented DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. Potential applications of the company’s DNA delivery technology include DNA vaccines for infectious diseases or cancer, in which the expressed protein is an immunogen; cancer immunotherapeutics, in which the expressed protein is an immune system stimulant; and cardiovascular therapies, in which the expressed protein is an angiogenic growth factor. The company is developing certain infectious disease vaccines and cancer therapeutics internally. In addition, the company collaborates with major pharmaceutical companies and biotechnology companies that give it access to complementary technologies or greater resources. These strategic partnerships provide the company with mutually beneficial opportunities to expand its product pipeline and address significant unmet medical needs. Additional information on Vical is available at www.vical.com .

Forward-Looking Statements
This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected, including: whether Vical or others will continue development of the company’s Vaxfectin ® adjuvant, the company’s H5N1 pandemic influenza or CMV vaccine candidates, Allovectin-7 ® , the RapidResponse™ DNA vaccine platform, Collategene™, the FGF-1 angiogenesis product candidate, or any other product candidates being developed by Vical, its collaborators or licensees; whether Vical or others will pursue further development of pandemic influenza DNA vaccines, advancement of additional Vaxfectin ® -formulated DNA vaccines, or additional Vaxfectin ® applications; whether any product candidates being developed by Vical, its collaborators or licensees will be shown to be safe and effective in clinical trials; whether Vical will release interim efficacy data from the Phase 2 CMV vaccine trial in the second half of 2008, if at all; whether AnGes will provide all, if any, additional funding for the Allovectin-7 ® Phase 3 trial; whether the RapidResponse™ platform will allow extremely rapid and large-scale production of DNA vaccines with low capital requirements; whether the company will receive all, if any additional RapidResponse™ grant funding; whether AnGes will receive marketing approval of Collategene™ in Japan; whether AnGes will initiate a Phase 3 registration trial of Collategene™ in the United States; whether sanofi-aventis will successfully complete its Phase 3 pivotal trial of ist FGF-1 angiogenesis product candidate and file for marketing approvals in 2010, if at all; the timing, nature and cost of clinical trials; whether the company will achieve levels of revenues and control expenses to meet projected financial performance; and additional risks set forth in the company’s filings with the Securities and Exchange Commission. These forward-looking statements represent the company’s judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.

VICAL INCORPORATED
Selected Condensed Financial Information (Unaudited)

Statements of Operations	 	Three Months Ended June 30,	 	Six Months Ended June 30,	 	
(in thousands, except per share amounts)	 	2008	 	2007	 	2008	 	2007	 	
 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contract and grant revenue	 	$	433	 	$	2,980	 	$	893	 	$	3,830	 	
License and royalty revenue	 	 	2,114	 	 	131	 	 	3,594	 	 	536	 	
Total revenues	 	 	2,547	 	 	3,111	 	 	4,487	 	 	4,366	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	6,464	 	 	5,859	 	 	13,058	 	 	11,734	 	
Manufacturing and production	 	 	2,950	 	 	4,216	 	 	6,056	 	 	8,163	 	
General and administrative	 	 	2,017	 	 	2,340	 	 	4,352	 	 	4,633	 	
Total operating expenses	 	 	11,431	 	 	12,415	 	 	23,466	 	 	24,530	 	
Loss from operations	 	 	(8,884	)	 	(9,304	)	 	(18,979	)	 	(20,164	)	
Net investment income	 	 	402	 	 	1,107	 	 	932	 	 	2,370	 	
Net loss	 	$	(8,482	)	$	(8,197	)	$	(18,047	)	$	(17,794	)	
Basic and diluted	 	 	 	 	 	 	 	 	 	 	 	 	 	
net loss per share	 	$	(0.21	)	$	(0.21	)	$	(0.46	)	$	(0.45	)	
Shares used to calculate basic	 	 	 	 	 	 	 	 	 	 	 	 	 	
and diluted net loss per share	 	 	39,488	 	 	39,191	 	 	39,353	 	 	39,186	 	

Balance Sheets	 	June 30,	 	December 31,	 	
(in thousands)	 	2008	 	2007	 	
Assets:	 	 	 	 	 	 	 	
Cash, cash equivalents, and marketable securities	 	$	51,323	 	$	71,489	 	
Other current assets	 	 	2,271	 	 	1,261	 	
Total current assets	 	 	53,594	 	 	72,750	 	
Marketable securities	 	 	6,208	 	 	-	 	
Property and equipment, net	 	 	11,494	 	 	12,287	 	
Other assets	 	 	5,143	 	 	5,548	 	
Total assets	 	$	76,439	 	$	90,585	 	
 	 	 	 	 	 	 	 	
Liabilities and stockholders' equity:	 	 	 	 	 	 	 	
Current liabilities	 	$	7,573	 	$	8,108	 	
Long-term obligations	 	 	2,494	 	 	2,565	 	
Stockholders' equity	 	 	66,372	 	 	79,912	 	
Total liabilities and stockholders' equity	 	$	76,439	 	$	90,585	 	
 
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