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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 8/10

vs
industry
vs
history
Cash to Debt No Debt
VICL's Cash to Debt is ranked higher than
94% of the 896 Companies
in the Global Biotechnology industry.

( Industry Median: 171.30 vs. VICL: No Debt )
VICL' s 10-Year Cash to Debt Range
Min: 2.56   Max: No Debt
Current: No Debt

Equity to Asset 0.93
VICL's Equity to Asset is ranked higher than
95% of the 759 Companies
in the Global Biotechnology industry.

( Industry Median: 0.67 vs. VICL: 0.93 )
VICL' s 10-Year Equity to Asset Range
Min: 0.81   Max: 0.97
Current: 0.93

0.81
0.97
Interest Coverage No Debt
VICL's Interest Coverage is ranked higher than
95% of the 425 Companies
in the Global Biotechnology industry.

( Industry Median: 10000.00 vs. VICL: No Debt )
VICL' s 10-Year Interest Coverage Range
Min: 9999.99   Max: 9999.99
Current: No Debt

F-Score: 3
Z-Score: 4.20
M-Score: -0.46
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 2/10

vs
industry
vs
history
Operating margin (%) -406.22
VICL's Operating margin (%) is ranked higher than
59% of the 781 Companies
in the Global Biotechnology industry.

( Industry Median: -66.98 vs. VICL: -406.22 )
VICL' s 10-Year Operating margin (%) Range
Min: -730.44   Max: -26.06
Current: -406.22

-730.44
-26.06
Net-margin (%) -404.74
VICL's Net-margin (%) is ranked higher than
58% of the 781 Companies
in the Global Biotechnology industry.

( Industry Median: -56.37 vs. VICL: -404.74 )
VICL' s 10-Year Net-margin (%) Range
Min: -651.2   Max: -24.26
Current: -404.74

-651.2
-24.26
ROE (%) -50.87
VICL's ROE (%) is ranked higher than
62% of the 808 Companies
in the Global Biotechnology industry.

( Industry Median: -21.52 vs. VICL: -50.87 )
VICL' s 10-Year ROE (%) Range
Min: -75.9   Max: -5.65
Current: -50.87

-75.9
-5.65
ROA (%) -47.08
VICL's ROA (%) is ranked higher than
61% of the 890 Companies
in the Global Biotechnology industry.

( Industry Median: -18.90 vs. VICL: -47.08 )
VICL' s 10-Year ROA (%) Range
Min: -62.48   Max: -5.23
Current: -47.08

-62.48
-5.23
ROC (Joel Greenblatt) (%) -392.34
VICL's ROC (Joel Greenblatt) (%) is ranked higher than
67% of the 868 Companies
in the Global Biotechnology industry.

( Industry Median: -189.80 vs. VICL: -392.34 )
VICL' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -639.85   Max: -12.33
Current: -392.34

-639.85
-12.33
Revenue Growth (%) -13.70
VICL's Revenue Growth (%) is ranked higher than
67% of the 589 Companies
in the Global Biotechnology industry.

( Industry Median: -0.40 vs. VICL: -13.70 )
VICL' s 10-Year Revenue Growth (%) Range
Min: -39.7   Max: 28.1
Current: -13.7

-39.7
28.1
EBITDA Growth (%) -10.20
VICL's EBITDA Growth (%) is ranked higher than
74% of the 597 Companies
in the Global Biotechnology industry.

( Industry Median: -10.60 vs. VICL: -10.20 )
VICL' s 10-Year EBITDA Growth (%) Range
Min: -54.7   Max: 42.3
Current: -10.2

-54.7
42.3
EPS Growth (%) -11.00
VICL's EPS Growth (%) is ranked higher than
76% of the 617 Companies
in the Global Biotechnology industry.

( Industry Median: -12.60 vs. VICL: -11.00 )
VICL' s 10-Year EPS Growth (%) Range
Min: -52.4   Max: 50.2
Current: -11

-52.4
50.2
» VICL's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

VICL Guru Trades in Q1 2013

John Rogers 2,656,967 sh (+71.6%)
Murray Stahl 82,500 sh (unchged)
» More
Q2 2013

VICL Guru Trades in Q2 2013

John Rogers 5,134,817 sh (+93.26%)
Murray Stahl 84,500 sh (+2.42%)
» More
Q3 2013

VICL Guru Trades in Q3 2013

Paul Tudor Jones 355,000 sh (New)
Jim Simons 212,100 sh (New)
Murray Stahl 84,500 sh (unchged)
John Rogers 5,069,238 sh (-1.28%)
» More
Q4 2013

VICL Guru Trades in Q4 2013

Jim Simons 338,204 sh (+59.45%)
John Rogers 7,062,104 sh (+39.31%)
Murray Stahl 84,500 sh (unchged)
Paul Tudor Jones 105,500 sh (-70.28%)
» More
» Details

Insider Trades

Latest Guru Trades with VICL

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
John Burbank 2012-12-31 Sold Out 0.05%$2.74 - $4.32 $ 1.27-62%0
John Burbank 2012-09-30 New Buy0.05%$3.3 - $4.58 $ 1.27-66%250000
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Vical Inc

John Rogers Comments on Vical - Feb 26, 2014

Vical (VICL)

We typically use these letters to discuss our approach to deep value investing, to outline the case for our favorite stocks, or to comment on trends in the market which we believe will affect our portfolio holdings. This quarter, however, we will share the story of a stock we have held for more than a decade which, at first glance, appears to have "blown up." We want to explain why we have owned it, how our valuation work continues to indicate a bargain within our long-term discipline, and how we will evaluate the company going forward. Most importantly, we want to demonstrate why we think the company is on solid footing and continues to provide a great long-term investment opportunity. On Monday, August 12 th , after announcing that the Phase III trial of its Allovectin compound, a metastatic melanoma therapy, had failed, Vical stock dropped by 57%. Specifically, it did not meet either the primary endpoint of objective response rate or the secondary goal of overall survival. This result obviously disappointed the company, shareholders, and, most of all, cancer patients. Many had hoped this immunotherapy compound would revolutionize treatment for those battling this terrible disease. Although we would have preferred a better outcome on Allovectin, our thesis for Vical was not a simple bet on its success. In our analysis, the company's infectious disease platform – with multiple promising products – was worth well more than the $240 million enterprise value of Vical just prior to the announcement. We continue to believe that is the case. All along, we knew a Phase III failure for Allovectin would lead to a s h or t- term hit to the stock, but we believed in the long-term, Vical was an undervalued infectious disease company. To us, Allovectin represented a free option on a cancer treatment with enormous upside potential. This option proved to be of no value, but our view on the rest of the company has not changed.

Due to the impending binary event surrounding Allovectin, we limited our position size. Indeed, we frequently reduced our weighting in the stock over the years when it traded higher. Just prior to the Allovectin announcement we had a weighting of roughly 3.5%, reflecting our view of extreme long-term undervaluation combined with near-term uncertainty. By comparison, our larger positions tend to be in the range of 5.0% to 6.0%, when we find severe dislocations but greater clarity.

Some History

We first bought Vical shares in late 2002 in our Ariel Micro-Cap Value Product as part of a "basket" of eight micro-cap biotechnology stocks combined to equal one normal position. A sustained market decline had left the industry in shambles, and we were able to buy the small positions in emerging companies for roughly half their net cash. True, we had limited insight into any specific early-stage compound's approval, but we were able to own cheap assets—cash—and invest in science (difficult to value, but potentially quite valuable). As the market recovered in 2003, the stocks moved sharply higher, and we sold all except for Vical. We held Vical and later built it into a normal-sized position in both our Ariel Micro-Cap Value Product and eventually Ariel Discovery Fund. We realized its shares were priced like a one-product, early-stage biotech company.

In reality, Vical's DNA delivery technology platform allowed it to build a deep, well- advanced pipeline of compounds whose potential outcomes are related but not identical. In addition, management did an outstanding job over time of partnering with larger pharmaceutical companies, enabling Vical to conserve cash and minimize dilution.

Products

Success with Allovectin would have led to significant upside, but its failure has no bearing on the likelihood of success for Vical's infectious disease candidates:

ASP00113 (formerly TransVax) – This is a therapeutic vaccine for cytomegalovirus (CMV) in transplant patients. Vical has partnered with Astellas, granting an exclusive license in exchange for up to $130 million in payments and double-digit royalties. Astellas recently launched a Phase III for stem cell transplant, and is expected to begin a Phase II for solid organ transplant later this year.

CyM Vectin – CMV vaccine for prevention of congenital infection. This could potentially be an opportunity of more than $2 billion for adolescent females. Vical is exploring partnerships for development of this promising compound.

Vaxfectin Adjuvant – This mixture is designed to increase immune responses when added to a vaccine. It has value either in Vical programs or as a technology for license or sale.

Herpes Simplex Program – This early stage program uses a Vaxfectin-formulated vaccine against HSV-2. The company expects to initiate a Phase I/II trial in late 2013.

Other

– Vical also has a pandemic influenza rapid response technology, collaborations with Sanofi and Anges in angiogenesis, and two approved animal vaccines.

Given its current price of $1.25/share, the company's enterprise value is a meager $38 million. To value Vical, we look at the company as a collection of assets held in cash ($70 million), product candidates, approved animal vaccines, and intellectual property in the form of its DNA technology platform. The company has one Phase III candidate being fully funded by a major global firm plus a number of potentially valuable assets. Thus we believe the valuation is extraordinarily low; in our opinion the market's reaction to the Allovectin failure was wildly overdone.

For each of the prospective compounds, we estimate the following: market potential, Vical's likely share upon approval, and the probability of success. We then calculate the probability-weighted revenues for each candidate, apply an appropriate price/sales multiple, and discount these values back to the present. Each compound then has a probabilistic present value. To err on the side of conservatism, we do not add in any value for the animal vaccines or for the DNA technology platform itself – thereby assigning no value to any potential future discoveries. Finally, to be extremely conservative, we assume that all cash including any raised from equity offerings or from Astellas will be spent, and we assume a doubling of the share count.

potentially even the sale of the company. Such actions should eliminate the need to raise capital at dilutive prices and therefore preserve and potentially enhance the value we believe exists in Vical. The duration and size of our ownership will depend greatly on how we view these issues. The company has already made significant cost reductions in recent weeks, and we believe that Vijay Samant and the Board of Directors will be focused on proper capital allocation.

Again, we were truly disappointed in the Allovectin results and never enjoy reporting news that hurts your returns. That said, we believe there is a great deal of value in Vical stock, and if correct, we expect to be rewarded for our patience. We will continue to monitor the actions of management and the Board closely and as a major shareholder we will strongly encourage them to act in owners' interests.



From John Rogers (Trades, Portfolio)' Ariel Discovery Fund fourth quarter 2013 commentary.

Check out John Rogers latest stock trades

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Ratios

vs
industry
vs
history
P/B 1.70
VICL's P/B is ranked higher than
90% of the 787 Companies
in the Global Biotechnology industry.

( Industry Median: 4.51 vs. VICL: 1.70 )
VICL' s 10-Year P/B Range
Min: 0.77   Max: 7.65
Current: 1.7

0.77
7.65
P/S 14.20
VICL's P/S is ranked lower than
53% of the 785 Companies
in the Global Biotechnology industry.

( Industry Median: 10.38 vs. VICL: 14.20 )
VICL' s 10-Year P/S Range
Min: 5.19   Max: 52
Current: 14.2

5.19
52
EV-to-EBIT 55.60
VICL's EV-to-EBIT is ranked lower than
73% of the 478 Companies
in the Global Biotechnology industry.

( Industry Median: 20.00 vs. VICL: 55.60 )
VICL' s 10-Year EV-to-EBIT Range
Min: 118   Max: 267
Current: 55.6

118
267

Valuation & Return

vs
industry
vs
history
Price/Net Cash 2.40
VICL's Price/Net Cash is ranked higher than
90% of the 476 Companies
in the Global Biotechnology industry.

( Industry Median: 9.10 vs. VICL: 2.40 )
VICL' s 10-Year Price/Net Cash Range
Min: 0.72   Max: 34.64
Current: 2.4

0.72
34.64
Price/Net Current Asset Value 2.30
VICL's Price/Net Current Asset Value is ranked higher than
92% of the 520 Companies
in the Global Biotechnology industry.

( Industry Median: 9.30 vs. VICL: 2.30 )
VICL' s 10-Year Price/Net Current Asset Value Range
Min: 0.69   Max: 275
Current: 2.3

0.69
275
Price/Tangible Book 1.90
VICL's Price/Tangible Book is ranked higher than
89% of the 727 Companies
in the Global Biotechnology industry.

( Industry Median: 6.00 vs. VICL: 1.90 )
VICL' s 10-Year Price/Tangible Book Range
Min: 0.64   Max: 12.96
Current: 1.9

0.64
12.96
Price/Median PS Value 1.00
VICL's Price/Median PS Value is ranked higher than
75% of the 717 Companies
in the Global Biotechnology industry.

( Industry Median: 1.10 vs. VICL: 1.00 )
VICL' s 10-Year Price/Median PS Value Range
Min: 0.54   Max: 3.83
Current: 1

0.54
3.83
Earnings Yield (Greenblatt) 1.80
VICL's Earnings Yield (Greenblatt) is ranked lower than
62% of the 379 Companies
in the Global Biotechnology industry.

( Industry Median: 4.40 vs. VICL: 1.80 )
VICL' s 10-Year Earnings Yield (Greenblatt) Range
Min: 0.4   Max: 1.8
Current: 1.8

0.4
1.8
Forward Rate of Return (Yacktman) -28.33
VICL's Forward Rate of Return (Yacktman) is ranked higher than
66% of the 669 Companies
in the Global Biotechnology industry.

( Industry Median: -9.87 vs. VICL: -28.33 )
VICL' s 10-Year Forward Rate of Return (Yacktman) Range
Min: -19.9   Max: -15.2
Current: -28.33

-19.9
-15.2

Business Description

Industry: Biotechnology » Biotechnology
Compare:NVO, AMGN, GILD, BIIB, CELG » details
Traded in other countries:VCC.Germany
Vical Incorporated, a Delaware corporation, was incorporated in April 1987 and has devoted all of its resources since that time to its research and development programs. The Company researches and develops biopharmaceutical products based on its patented DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. The Company currently has five active independent clinical and preclinical development programs in the areas of infectious disease and cancer including: A fully enrolled Phase 3 clinical trial using its Allovectin-7(r) immunotherapeutic in patients with metastatic melanoma which has been funded, up to certain limits, by AnGes MG, Inc., or AnGes, through cash payments and equity investments under a research and development agreement; A fully enrolled Phase 2 clinical trial using TransVax(tm), its cytomegalovirus, or CMV, therapeutic DNA vaccine, in patients undergoing hematopoietic cell transplants; Completed Phase 1 clinical trials using H5N1 pandemic influenza DNA vaccine formulated with its proprietary Vaxfectin(r) adjuvant; A preclinical program using H1N1 pandemic influenza DNA vaccine formulated with proprietary Vaxfectin(r) adjuvant; and A preclinical program using CyMVectin(tm) prophylactic vaccine formulated with the proprietary Vaxfectin(r) adjuvant to prevent CMV infection before and during pregnancy to preclude fetal transmission. The Company is subject to various federal, state and local laws, regulations, and recommendations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with its research.

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