Astellas License Agreements

9 Months Ended

Sep. 30, 2015

Astellas Out-License Agreements [Member]

8.	ASTELLAS OUT-LICENSE AGREEMENTS

In July 2011, the Company entered into license agreements with Astellas Pharma Inc., or Astellas, granting Astellas exclusive, worldwide, royalty-bearing licenses under certain of the Company's know-how and intellectual property to develop and commercialize certain products containing plasmids encoding certain forms of cytomegalovirus, glycoprotein B and/or phosphoprotein 65, including ASP0113 (TransVax™) but excluding CyMVectin™.

Under the terms of the agreements, the Company is performing research and development services and manufacturing services which are being paid for by Astellas. During the three months ended September 30, 2015 and 2014, the Company recognized $4.4 million and $3.0 million, respectively, of revenue related to these contract services. During the nine months ended September 30, 2015 and 2014, the Company recognized $12.4 million and $9.1 million, respectively, of revenue related to these contract services. The Company also recognized $1.5 million and $1.1 million in license revenue under the Astellas agreements during the nine months ended September 30, 2015 and 2014, respectively.

Astellas In-License Agreements [Member]

Astellas License Agreements

9.	ASTELLAS IN-LICENSE AGREEMENTS

In March 2015, the Company entered into license and stock purchase agreements with Astellas, granting Vical exclusive worldwide license to develop and commercialize a novel antifungal, VL-2397, formally known as ASP2397. VL-2397 is a potential therapeutic for invasive fungal infections, including invasive aspergillosis. Astellas received 861,216 shares of unregistered Vical common stock and $250,000 in cash. The $250,000 cash payment and the fair value of the common stock issued of $775,094 were included in research and development expenses during the nine months ending September 30, 2015. Astellas will also be eligible to receive up to $100 million in aggregate milestone payments, the vast majority of which are commercial and sales milestones, and single-digit royalties on net sales of commercial products.