UPDATE: Credit Suisse Downgrades Vical Following Allovectin Program Termination
In a report published Tuesday, Credit Suisse analyst L. Kalowski downgraded Vical (NASDAQ: VICL) from Outperform to Neutral, and lowered the price target $5.00 to $2.00.
In the report, Credit Suisse noted, “VICL announced that Allovectin (Phase III, melanoma) missed both its primary endpoint (response) and secondary endpoint (survival). The program has been terminated and we are removing it from our model accordingly. We have added royalties from ASP0113 (Phase III, cytomegalovirus vaccine), which has been licensed to Astellas, and we have cut operating expense forecasts. Our target price goes from $5 to $2, and our rating from Outperform to Neutral. We have added ASP0113 to the model. We forecast a 2017 launch and $304M in 2025 net sales across both the HCT and SOT indications, in both the US and EU, putting us on the lower-end of the $300-$500M range outlined by the company. From this, we model 15% annual royalties from Astellas to VICL. With Astellas funding the entirety of the ASP0113 program and with Allovectin winding down, we have cut our forecasts for VICL's R&D, SG&A and manufacturing expenses.”
Vical closed on Monday at $1.53.
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