Intercell receives Euro 80 million milestone from Novartis

Viennese vaccines specialist, Intercell AG reached the first milestone in the alliance agreed with Novartis AG in July 2007, triggering a Euro 80 million payment.

With the Euro 150 million equity investment made in September 2007, this brings the cash received to date by Intercell to Euro 230 million with another unconditional and committed payment of Euro 40 million due in 2008.

“Only about half of this fee will be booked as revenue in 2007, nevertheless we expect this year to become the first profitable full year of Intercell,” said Werner Lanthaler, Chief Financial Officer of Intercell.

“Our research and development teams have completed the kick-off of the first key products within this alliance, including a novel influenza vaccine and the codevelopment of a therapeutic Hepatitis C Virus vaccine.”

Intercell now has more than Euro 290 million cash, securing the optimal speed of development programmes and the strategic growth of the company.

The deal between Intercell and Novartis aims to accelerate development of vaccines against infectious diseases. The partnership includes a co-development and profit-sharing arrangement to bring together Hepatitis C vaccines under development by both companies.

Intercell’s adjuvant IC31 will be exclusively licensed to Novartis for the development of an improved influenza vaccine and for other vaccines, with Intercell retaining the right to continue to partner IC31 with third parties in infectious diseases, cancer, allergies, and other indications.

The Viennese company’s leading product, a prophylactic vaccine against Japanese Encephalitis completed pivotal Phase III clinical trials in 2006 and has been filed for approval with the US Food and Drug Administration. Other products in development include a Pseudomonas vaccine in Phase II, a therapeutic vaccine for Hepatitis C in Phase II, vaccines for tuberculosis and Staphylococcus aureus which are in Phase I, and five products in preclinical development.