TransVax™ is a first-in-class DNA vaccine designed to prevent reactivation of latent cytomegalovirus (CMV) or introduction of the virus through donor cells or tissues in transplant recipients. The product is in late-stage development; proof-of-concept in achieving CMV viral load reduction has now been shown in susceptible hematopoietic stem cell transplant (HSCT) patients.

In July 2011, Vical entered into license agreements with Astellas Pharma Inc. granting Astellas an exclusive, worldwide, royalty-bearing license to develop and commercialize TransVax™ for the control and prevention of cytomegalovirus infection in immunocompromised patients, including transplant recipients, and transplant donors. Under the agreements, Astellas will be responsible for further development and commercialization, including all costs. Vical will provide assistance to Astellas with TransVax™-related manufacturing, regulatory and certain development activities, for which Astellas will reimburse all of Vical's future costs, including personnel and external expenses. Vical will receive up to $130 million in total upfront and milestone payments through commercial launch, including $25 million upfront and $10 million upon finalization of the Phase 3 trial design. Vical has an option to co-promote TransVax™ in the United States, and potentially will receive double-digit royalties on net sales. The companies expect to begin a multinational Phase 3 registration trial of TransVax™ in HSCT recipients as well as a Phase 2 trial in solid organ transplant (SOT) recipients in the first half of 2012.

Currently there is no marketed CMV vaccine. The only approved antiviral treatment for CMV in HCT patients is Cytovene^® (ganciclovir), although other antivirals (i.e., valganciclovir) are used off-label. A vaccine that enables the patient's immune system to control CMV reactivation, reducing the risk of complications from antiviral therapy and CMV disease, would provide a valuable therapeutic option for HSCT and solid organ transplant (SOT) recipients.

HSCT and SOT recipients represent important populations for the prevention of CMV reactivation and reduction in antiviral therapy. Nearly 60,000 HSCT procedures will be performed annually in the United States and Europe by 2015, along with about the same number of SOT procedures. These populations represent a significant market potential of $500-600M each year for TransVax™.