Vical Incorporated (VICL) shares jumped approximately 8.3% after the company announced that it has entered into an agreement with a Japanese biopharmaceutical company, AnGes MG, to develop and commercialize an equine polyclonal antibody therapy for patients afflicted with Ebola virus disease.
As per the terms of the agreement, Vical will develop and provide AnGes a DNA vaccine encoding the glycoprotein antigen of the 2014 Zaire strain of Ebola virus. AnGes will gain exclusive development and commercialization rights to the equine polyclonal antibody therapy in Japan. AnGes will also fund all development costs.
In exchange, Vical will receive an upfront payment and will be entitled to royalties on net sales. Vical will also get a percentage of payments received by AnGes, if the latter enters into sub-licensing agreements.
As per a report by World Health Organization, as of Dec 31, 2014, over 20,000 cases of Ebola virus disease have been reported. The current Ebola epidemic has a high fatality rate of almost 40%.
We note that currently no treatment or vaccines are currently approved for Ebola. Several companies including Tekmira Pharmaceuticals (TKMR) and GlaxoSmithKline (GSK) are developing Ebola vaccines and treatments. We expect investor interest to remain on Ebola vaccine/treatment related updates. The companies working on Ebola therapies stand to make the most of it.
Vical currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector includes AMAG Pharmaceuticals, Inc. (AMAG). The stock carries a Zacks Rank #1 (Strong Buy).
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