Vical Incorporated announced a contract to manufacture bulk DNA vaccines for the Vaccine Research Center (VRC), part of the National Institute of Allergy and Infectious Diseases of the National Institutes of Health.

In support of this contract, the VRC will underwrite the capital for a 500-liter fermenter and related purification equipment in Vical's new manufacturing facility. Under this agreement, Vical is guaranteed minimum annual production orders beginning in 2004, subject to annual extension of the agreement. Vical continues to manufacture Ebola DNA vaccines for the VRC in its existing manufacturing facility under a separate contract awarded in July 2002.

"We are delighted to broaden our relationship with the Vaccine Research Center," said Vijay B. Samant, Vical's President and Chief Executive Officer, "and pleased with the opportunities provided under this new agreement to extend our DNA manufacturing expertise, expand our production capacity, and secure an ongoing source of revenues."

This agreement does not change the company's forecast for a net loss between $24 million and $28 million for 2003.