Vical Secondary, More Than Meets The Eye (VICL)

Vical Incorporated (NASDAQ: VICL) may have reversed the order of a capital raise and good news, or maybe there is nothing more to the story than meets the eye.  The company’s announcement last night that it was going to raise capital sent shares down the drain and the deal priced this morning as a spot secondary offering.  With firms such as Citigroup, Credit Suisse, and Leerink Swann as the book-runners and co-manager Rodman & Renshaw in the offering, Vical will very likely be taking on some new analyst coverage in February from new and larger brokerage firms.

Vical sold 13,333,334 shares of common stock at $3.75 per share and that raised roughly $50 million in capital on a gross basis before fees.  Vical also granted the underwriters a 30-day option to purchase up to 2,000,000 additional shares of common stock for overallotments.

All of the shares were sold by the company rather than this going to line the pockets of corporate insiders or prior venture backers.  The use of proceeds: general corporate purposes, including clinical trial expenses, research and development expenses and other working capital.

For whatever it is worth, CNBC’s Herb Greenberg brought up a question about this last night on his Twitter feed.

Vical shares are down 11.9% at $3.76 on more than 3.3 million shares in just the first hour, more than 4-times its average trading volume.  The 52-week trading range is $1.70 to $5.30 and the consensus price target is said to be above $6.00 per share from the few analysts which cover the stock.  For whatever it is worth, a boutique named Global Hunter Securities initiated coverage of Vical with a Buy rating and a $9.00 price target in the first week of December.

JON C. OGG