Vijay B. Samant President and Chief Executive Officer UBS Global Life Sciences Conference September 24, 2003 UBS Global Life Sciences Conference September.

Vijay B. SamantPresident and Chief Executive OfficerVijay B. SamantPresident and Chief Executive Officer

UBS Global Life Sciences ConferenceSeptember 24, 2003

UBS Global Life Sciences ConferenceSeptember 24, 2003

Safe HarborSafe HarborThis presentation contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including whether any product candidates will be shown to be safe and efficacious in clinical trials and the risks set forth in the company’s filings with the Securities and Exchange Commission. Actual results may differ materially from those projected. These forward-looking statements represent the company’s judgment as of the date of this presentation. The company disclaims, however, any intent or obligation to update these forward-looking statements.

Vical Investment HighlightsVical Investment Highlights

• Vaccine company – patented non-viral DNA delivery technology

• Broad product pipeline: 3 independent, 7 partnered programs• Phase II product: melanoma

• Infectious disease vaccine programs: CMV, anthrax

• Key partnerships: Merck, Merial, Aventis, Corautus Genetics, NIH

• Extensive vaccine expertise

• Strong cash position - $98 million

Vical’s StrategyVical’s Strategy

• Develop new vaccines using patented non-viral DNA delivery technology

• Focus in-house on infectious disease targets• No current vaccine

• Obtain proof of efficacy in small trials

• Outlicense targets requiring major resources

• Advance Allovectin-7® lead cancer product

• Leverage vaccine manufacturing expertise

UNDISCLOSED

Product PipelineProduct Pipeline

Allovectin-7® MELANOMA

Malaria Vaccine MALARIA

HIV Vaccine AIDS

VEGF-2 ANGIOGENESIS (CAD)

Growth Factor

PRECLINICAL PHASE I PHASE II

OT

HE

RIN

FE

CT

IOU

S D

ISE

AS

ES

Vical

Animal Health Merial

ANTHRAXDNA Vaccine Vical

CMVDNA Vaccine Vical

ANGIOGENESIS (PAD)

WEST NILEDNA Vaccine

EBOLADNA Vaccine

Aventis Pharma

Corautus

Merck

Vical / US Navy

Vical / VRC

Vical / VRC

Allovectin-7Allovectin-7®® for Melanoma for Melanoma

• Plasmid DNA containing two genes• HLA-B7 and 2-microglobulin

• Triggers rejection of tumor

• Restores immune recognition of tumors

• Formulated with DMRIE/DOPE• Pro-inflammatory

• Stage III or IV melanoma• Potential use for earlier-stage disease

• Potential application for other solid tumors

Allovectin-7Allovectin-7®®

High-Dose Phase II TrialHigh-Dose Phase II Trial

• Multi-center, single arm study• Completed enrollment of 127 high-dose patients• Similar patient population to low-dose (10 µg)

Phase II trial

• Dose escalation (up to 2000 µg)

• Multi-tumor injections (up to 5 lesions/patient)

• Interim results from March 2003• First 91 high-dose patients

• Response rate: 13%

• Excellent safety and tolerability

• Encouraging survival

Allovectin-7Allovectin-7®® Status Status• Data maturing for high-dose trial

• 60 of first 91 patients: still alive in March

• 11 of 12 responders: still alive in July

• 7 of 12 responders: disease had not progressed in July

• Median duration of response: 6.4 months in July

• Continued excellent safety and tolerability• <2% of patients with Grade 3 adverse events

• Review mature data with FDA in 7-9 months

Infectious Disease VaccineInfectious Disease VaccineDevelopment TimelinesDevelopment Timelines

Conventional vaccines Approval yearsChicken pox vaccine – Varivax 33 (1962-1995)HPV 14 (1992-2006)Rotavirus 15 (1992-2007)MMRV “combination vaccines” 18 (1989-2007)Pentavalent “combination vaccines” 12 (1991-2003)FluMist 27 (1976-2003)

DNA vaccines Potential years saved

Rapid synthesis/preclinical testing of vaccine 4-6Simpler process scale-up issues 3-5Streamlined bio-analytical testing plan 3-5No advantage in clinical timelines 0Integration of clinical/mfg. consistency lots 2-4Potential reduction in size of safety database 1-3Construction/startup of mfg. facilities 3-5

NIH Vaccine Research CenterNIH Vaccine Research CenterKey Partner in DNA VaccinesKey Partner in DNA Vaccines

• Established production orders• Ebola

• West Nile Virus

• HIV

• New large-scale manufacturing agreement• Option for additional vaccine targets

• Investment in infrastructure

CMV Vaccine ProgramCMV Vaccine Program• About CMV

• Herpes virus – infects 50-85% in the US by age 40

• High risk groups

• Current therapy inadequate

• NO vaccine available

• Advantages of Vical’s vaccine• Ability to harness antibody and T-cell responses

• Non-infective - a MUST for immunosuppressed patients

• Proof of efficacy in transplant patients

• Small clinical trials

CMV Vaccine StrategyCMV Vaccine Strategy

• Tiered approach for clinical development• Rapid advancement - transplant indication

• Substantial downstream commercial potential - universal indication

• Focus on transplant patients

• Trial Design• Vaccinate donor to boost immunity

• 4 and 2 weeks prior to transplant

• Vaccinate recipient to provide further boost• 4 - 6 weeks after transplant

• Monitor for signs of disease

CMV Vaccine StatusCMV Vaccine Status

• Expert advisory panel in place

• Development pathway defined• Consensus with FDA

• IP freedom to operate

• Basic constructs defined and manufactured

• Preclinical trials started

• Phase I by year-end

• Proof of efficacy trial size defined

• Key clinical centers selected

Anthrax Vaccine ProgramAnthrax Vaccine Program

• About anthrax• Caused by toxins from spore-forming Bacillus anthracis

• Treated with antibiotics (i.e. Cipro)

• Vaccine is antibody-mediated

• Bivalent plasmid DNA vaccine

• Animal Rule: opportunity for rapid approval

• Concept to clinic in 24 months

Anthrax Vaccine StrategyAnthrax Vaccine Strategy

• Target effectiveness equivalent tolicensed vaccine

• Potential to improve cross-protection

• Reduced number of doses vs. licensed vaccine• Shorter time to protection

• Manufacturing well-characterized product

• Stockpiling advantage due to stability

Rabbit Challenge ResultsRabbit Challenge ResultsAnthrax Vaccine ProgramAnthrax Vaccine Program

Group # Alive/

# Challenged

Letx Neut Titer (Range)

Mortality Range (Days)

PA DNA - 3 injections 8/8 2,560-20,480 All Alive

PA DNA - 2 injections 8/8 640-1,280 All Alive

PA DNA - 3 injectionsDMRIE/DOPE

8/8 1,280-10,240 All Alive

PA + LF DNA - 3 injections 8/8 2,560-5,120 All Alive

LF DNA - 3 injections 5/9 320-1,280 Days 4-7

AVA - 2 injections 4/4 640-2,560 All Alive

Vector Controls 0/5 0 Days 2-3

Naïve Rabbits 0/12 ND Days 2-4

All DNA vaccines formulated with Vaxfectin except for one DMRIE/DOPE group.

Anthrax Spore Challenge Dose: 50-250 LD50.

Anthrax Vaccine StatusAnthrax Vaccine Status

• Proof of concept completed in mice

• Challenge study completed in rabbits• Demonstrated 100% protection

• Pre-IND meeting with FDA in December 2002

• Manufactured initial clinical vaccine supplies

• Phase I by year-end

• Government funding of development

• Agreement - approval based on Animal Rule

External CollaborationsExternal Collaborations

• Merck• HIV, cancer

• $23 million received to date

• Merial• Animal health vaccines

• $7 million received to date

• NIH• Ebola, West Nile Virus, HIV

• $7 million in grants to date

External CollaborationsExternal Collaborations

• Aventis Pharma• Angiogenesis - PAD

• $1.5 million received to date

• Corautus Genetics• Angiogenesis - CAD

• Minority ownership

• U.S. Navy• Malaria

• $5 million received to date

Nearly $40million inrevenues

to date fromcollaborations

Financial InformationFinancial Information

(in millions, except per share data) 2Q03 2Q02 1H03 1H02Revenues $ 0.6 $ 2.4 $ 1.5 $ 4.0Expenses 8.1 8.4 16.2 16.1Write-down of investment 0.5 - 0.5 -Loss from operations (7.5) (6.0) (15.2) (12.2)Net investment income1 0.5 1.0 1.2 1.9Net loss $ (6.9) $ (5.0) (13.9) $ (10.2)Net loss per share $ (0.34) $ (0.25) $ (0.69) $ (0.51)Cash, cash equivalents and marketable securities $ 98 $ 123

ManagementManagementDepth of Vaccine ExpertiseDepth of Vaccine Expertise

Vijay Samant Merck

President and CEO

David Kaslow, M.D. Merck, NIH

Chief Scientific Officer

Alain Rolland, Pharm.D., Ph.D. Valentis, Ciba-Geigy

Product Development

Tom Evans, M.D. UC - Davis

Clinical Development

MilestonesMilestonesLaunch CMV and anthrax vaccine development programsManufacturing agreement with NIHEncouraging Allovectin-7® interim data at ASCO$5.7 million SBIR grant for anthrax vaccine programExtension of Merck agreement to cancerMultiple patent issuances - U.S. and Europe• Presentations at scientific conferences

ICAAC• World Vaccine Congress

• Start Phase I study of anthrax vaccine (4Q03)• Start Phase I study of CMV vaccine (4Q03)• Startup of new manufacturing facility (1Q04)• Full Allovectin-7® high-dose cohort data (2Q04)

Vical Investment SummaryVical Investment Summary

• Vaccine company – patented non-viral DNA delivery technology

• Broad product pipeline: 3 independent, 7 partnered programs• Phase II product: melanoma

• Infectious disease vaccine programs: CMV, anthrax

• Key partnerships: Merck, Merial, Aventis, Corautus Genetics, NIH

• Extensive vaccine expertise

• Strong cash position - $98 million