Vical Inc. shares (NASDAQ:VICL) fell 43.6 percent to 80 cents after the firm shared top-line data showing that two forms of herpes simplex virus type 2 (HSV-2) vaccines formulated with its lipid-based adjuvant, Vaxfectin, missed the primary endpoint in a phase I/II study.

Vical President and CEO Vijay Samant called the results disappointing and confounding in a Monday evening call. Shares briefly fell to a record low of 72 cents Tuesday in the announcement's wake, a hard knock for a company that shouldered significant cutbacks about two years after another program, its intratumoral cancer immunotherapy Allovectin, failed to meet its endpoints in a phase III melanoma study. (See BioWorld Today, Aug. 26, 2013.)

Though analysts tracking Vical had assigned little value to the HSV-2 program, the upset caused Roth Capital Partners to cut its target price and rating for company shares to "neutral" from "buy." Roth analyst Debjit Chattopadhyay, who had suggested Vical represented a "second coming" for DNA vaccines at the start of June, called the ongoing HSV-2 trial an "abject failure," noting that Roth "would be surprised if this program moves forward."

Vical tested both a monovalent (gD) vaccine and a bivalent (gD + UL46) vaccine in the randomized, double-blind, placebo-controlled trial. Each was formulated with its Vaxfectin adjuvant, a cationic, lipid-based formulation designed to enhance plasmid DNA-based vaccines, as well as protein- and peptide-based vaccines. Both vaccines failed to meet the study's primary endpoint of reducing viral shedding.

To measure shedding, investigators compared pre-vaccination measurements of viral load in each arm of the study with those taken during the swab-based tests two and three months following subjects' last dose of vaccine.

While viral shedding fell by 12 percent for patients given the monovalent vaccine (p = 0.3862) and for 19 percent for patients given the bivalent vaccine (p = 0.1561), neither result was statistically significant. Furthermore, patients in the study's placebo arm beat both vaccines with a statistically significant 45 percent reduction in viral shedding (p = 0.0144). Both the monovalent and bivalent vaccines were generally well tolerated.

On prospectively defined secondary endpoints, the bivalent vaccine achieved statistically significant reductions in the rate of genital lesions (-51 percent, p = 0.0037) and viral load from positive swabs (-0.39 log10, p = 0.0008) vs. baseline.

Patients enrolled in the trial are now being followed for safety for 12 months and efficacy for nine months after their final vaccine dose. During that nine-month period, Vical plans to collect additional efficacy data, including recurrence rate and lesion rate, which will help it determine the next steps for the program, it said.

"We expected today's results would have been more conclusive. Unfortunately, they're not," said Samant.

Samant suggested that it's possible that the clincal trial model Vical used in the study had "brought to the forefront some of the inherent weaknesses in the trial design, in terms of catching patients at the right cycles" of viral shedding, but it sounded unlikely from the call that the company would seek to run a redesigned trial unless it could do so with great confidence in the potential outcome and for relatively little money.

Despite the setback, Samant said the company is continuing to move ahead with other work, including advancing ASP0113 (formerly Transvax), the company's Astellas Pharma Inc.-partnered DNA vaccine designed to prevent reactivation of latent cytomegalovirus (CMV) or introduction of the virus through donor cells or tissues in transplant recipients. The company has completed enrollment in a phase II solid organ transplant trial, it said, with data on track to read out in the second half of 2016. A phase III pivotal trial in hematopoietic stem cell transplant recipients is also under way.

Vical is also moving ASP2397, an antifungal compound it in-licensed from Astellas toward a phase I trial initiation during the first half of 2016, it said.

Between Astellas' funding of the CMV program and other operational efficiencies, Samant said he expects his company's current cash position – it had $46.3 million as of March 31 – to carry it into 2017.