Disappointing Study Results Crush The Stock of Vical Incorporated (NASDAQ:VICL)

[[tagnumber 0]][[tagnumber 1]]It has been quite a turbulent time for the stock of Vical Incorporated (NASDAQ:VICL). Having been given a positive “Buy“ rating by analysts earlier this month, VICL quickly ascended to a 52–week high in less than two weeks, only to get its value cut in half in the twinkling of an eye. Now, VICL is on the negative end of the spectrum and the downgrades have started pouring in.[[tagnumber 2]] [[tagnumber 0]]By the end of last week, Vical‘s shares had been experiencing one of their finest moments ever on the charts. It all started on June 2 when analysts at ROTH Capital gave the stock a “Buy“ rating. As a result, VICL shares shot up 50 per cent from $0.98 (on June 2) to $1.48 (on June 12) in what turned out to be the stock‘s highest raid on the charts for the last 52 weeks at least. Then followed a few days of calm before the storm.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]The latter struck last Monday after the Nasdaq halted trading in VICL in anticipation of major news concerning Vical‘s ongoing Phase 1/2 clinical study of its genital herpes vaccine. The disappointing results of the study hit the stock so hard that it lost 44% on the very next day and an additional 1.3% yesterday. Is the study over, though, and what‘s left for Vical in the mid–to–long term?[[tagnumber 2]] [[tagnumber 0]]The failure to meet its primary endpoint has doomed the trial to a large extent and even though the company will have to monitor the participating patients for the next 9–12 months for efficacy and safety, things will need to take an unexpected turn to keep the study going. However, it doesn‘t necessarily mean that the prospects lying ahead of the company are grim, either.[[tagnumber 2]] [[tagnumber 0]]Vical Incorporated is currently engaged in a few more trials, as well. Until proven otherwise, there is no ground to assume that they will fail just like the one mentioned above. The main challenge here is the average net loss of $19 million incurred by VICL for each of the last four fiscal years. At this stage, it is not clear how many more years will come to pass before Vical turns profitable.[[tagnumber 2]] [[tagnumber 0]]To wrap it up, it‘s not like VICL is not making any money. On the contrary. Yet, a prolonged time of generating insufficient revenue could eventually limit financing opportunities. Positive developments in VICL‘s ongoing trials, however, could provide the incentive outside investors need to provide the needed capital.[[tagnumber 2]]