http://seekingalpha.com/article/353861-10-biotech-stocks-with-big-potential-upside-in-2012-part-one http://seekingalpha.com/article/361341-10-biotech-stocks-with-big-potential-upside-in-2012-part-two Vical Incorporated (VICL) Vical Incorporated is a popular investment in the class of immunotherapy with a very promising candidate. The company's lead candidate, Allovectin, is currently in its phase III trial and could hit the market sometime in 2013, if approved. All evidence suggests that Allovectin will be approved with results that show the drug successfully increases the survival rate of patients with melanoma. Melanoma is a form of skin cancer with approximately 70,000 new cases per year, and 9,000 deaths. If approved, the company projects between $500 million and $1 billion in annual sales from Allovectin. Some investors have shown concern regarding Allovectin's likelihood for approval and its ability to successfully capitalize on its large market because of high costs associated with the manufacturing and sale of the drug. These concerns are appropriate, because there are several other pipeline drugs from various biotechnology companies that treat the same disease; and it will cost a significant amount to manufacture the drug. However, Allovectin, like most immunotherapy drugs, has shown very strong results in early testing, and if its phase III trial is successful then it could become the leading product in treating melanoma. Investors should rest assured that the company has the ability to successfully market, manufacture, and sell the drug with remarkable facilities, $50 million in cash, and a very large and diversified pipeline to promote future growth beyond Allovectin. Vical trades with a market cap of $251 million and has posted a one-year gain of 75%. However, the stock has traded with a YTD loss of 25%, which was initiated when the company proposed a public offering. And for a company that's running two phase three trials, with early testing that's been successful, the stock is trading considerably cheap; especially since it could hit the market in just one year. I am surprised that VICL isn't trading as a momentum stock, because Allovectin will be a first-line treatment for Stage III & IV melanoma. It's already shown advantages over current first-line treatments, which include: improved efficiency, better safety profile, and it can be administered as a simple outpatient procedure. At this point I see limited downside but substantial upside as 2012 should be a big year for investors of VICL. |