Intercell AG's revenues for full year 2009 increase 10.6%

Mar 2 2010

Today, the biotech-vaccine company Intercell AG (Pink Sheets: INRLY) (VSE: ICLL) announced its financial results for Q4 and the preliminary results for the full financial year 2009, and presented an update on the Company's development programs.

Intercell's revenues in Q4 2009 increased to EUR 32.2m including product sales from IXIARO®/JESPECT® of EUR 2.2m. The net profit for Q4 was EUR 7.5m. For the full year 2009, Intercell's revenues increased by 10.6% to EUR 61.7m, including product sales revenues of EUR 7.7m. Costs of goods sold of EUR 12.5m, exceeding revenues from product sales in the launch year, and increased research and development expenses of EUR 62.5m, reflecting Intercell's commitment to value creation through innovation, resulted in a net loss of EUR 18.4m for the full year 2009, compared to a net profit of EUR 17.2m in 2008. With EUR 180.0m in cash and marketable securities at year-end, Intercell has a strong financial position to enable the progression of late-stage product candidates and its advanced clinical pipeline. For 2010, the Company's management expects growing revenues from product sales, further increases in R&D spending and a resulting net loss comparable to 2009.

IXIARO®/JESPECT® - Foundation for further growth

In 2009, Intercell gained approvals for IXIARO®/JESPECT®, a vaccine protecting travelers against Japanese Encephalitis, in Australia, the U.S., Europe, and Canada, totaling 32 countries. Novartis, Intercell's marketing partner in the majority of these territories, is building awareness and optimizing product uptake in all relevant countries. Intercell entered into an exclusive long-term supply contract with the U.S. military, with first sales of IXIARO® to the U.S. military in September 2009.

Global marketing and sales efforts for IXIARO®/JESPECT® by Intercell's partners to increase awareness and vaccination recommendations are the basis for growing product uptake in 2010. According to current plans, product sales are expected to increase as of Q2 2010. Product supplies to marketing and distribution partners for the main travel season are expected to partially shift from Q1 to Q2 2010 due to lot release timing for European markets.

To increase the product's global reach, Intercell has initiated a Phase III study for pediatric label extension of IXIARO®/JESPECT®. In addition, the Company is pursuing further regulatory approvals and continues the product development for endemic countries through its partner, Biological E. Following discussion with regulatory authorities in India, the start of Phase III pediatric trials by Biological E. is now planned by the end of 2010.

TD Vaccine Patch - First-ever patch vaccine in Phase III and basis for patch collaboration with GSK

In December 2009, Intercell signed a key collaboration agreement with GlaxoSmithKline Biologicals SA (GSK) for the development and commercialization of needle-free, patch-based vaccines. Under the terms of the agreement, GSK made an up-front cash contribution of EUR 33.6m (USD 49.4m), in addition to an equity investment of up to EUR 84.0m (USD 123.5m) through staggered share purchases of up to 5% of Intercell, of which 900,000 shares, or 1.9%, have been purchased in December 2009 at a price of EUR 31.21 per share.

With GSK as its future marketing partner, Intercell is pushing its development efforts for the investigational Travelers' Diarrhea (TD) Vaccine Patch towards licensure. The vaccine candidate targets an indication that affects approximately 20 million international travelers annually and for which no vaccine is currently available. The TD Vaccine Patch is presently being investigated in a randomized, placebo-controlled Phase III pivotal efficacy study of 1,800 travelers from Europe to Mexico and Guatemala. In addition, a Phase II placebo-controlled pilot-efficacy trial was launched in 800 subjects from the UK and Germany traveling to India as well as a recently initiated Phase II supportive safety study in healthy U.S. volunteers.

Vaccine Enhancement (VE) Patch - Pandemic Influenza partnership with GSK validates technology

Intercell and GSK will continue developing the single application Pandemic Influenza Vaccine Patch system that consists of the VE Patch administered in conjunction with GSK's injected Pandemic Influenza vaccine. Intercell's VE Patch contains the heat-labile enterotoxin (LT) from E. coli, a potent stimulator of the immune system. Because LT is able to boost the effectiveness of an injectable vaccine, Intercell believes that the VE Patch may improve the efficacy of numerous vaccines for which increased immunogenicity, decreased antigen doses or fewer immunizations are desired.

The VE Patch is currently being studied in a Phase II trial in combination with an injectable H5N1 (commonly called Avian Flu) Pandemic Influenza vaccine (manufactured by Solvay Biologicals, B.V.) in 500 subjects in the USA. The trial is fully funded by the U.S. Department of Health and Human Services.

Enrollment in this study has concluded and the serological analysis is under way. The availability of data has shifted to Q2 2010 due to broader than expected validation activities related to this analysis.

A leading position in vaccines against hospital-acquired infections

Intercell expects important data from two ongoing late-stage vaccine candidates against hospital-acquired infections during 2010. If successful, we expect the Staphylococcus aureus vaccine candidate (partnered with Merck & Co., Inc.) and our Pseudomonas aeruginosa vaccine candidate to significantly contribute to the prevention of these conditions if adults and children are vaccinated on, or before, admittance to hospital.

Staphylococcus aureus vaccine (V710): Merck & Co., Inc. is developing a vaccine against S. aureus based on Intercell's antigen. Two clinical trials are ongoing in high-risk patient populations: one evaluating vaccine efficacy in patients undergoing elective cardiothoracic surgery (adaptive Phase II/III trial), and one testing immunogenicity in patients with end-stage kidney disease and receiving hemodialysis (Phase II). Intercell anticipates that interim data from the Phase II/III trial in cardiothoracic surgery patients will be available in 2010.

Pseudomonas aeruginosa vaccine: Intercell's vaccine candidate against the nosocomial infection, Pseudomonas aeruginosa, is currently being investigated in a 400-patient Phase II clinical trial. Immunogenicity and safety are being examined and first indications for the vaccine's efficacy are expected.

In December 2009, the interim analysis from 225 patients has shown good safety, tolerability and immunogenicity of the vaccine, with final data expected in Q3 2010.

Additional candidate vaccines with high medical need progressing in development

Streptococcus pneumoniae vaccine: Results were reported in February 2010 from a first Phase I clinical trial of the Company's investigational prophylactic Streptococcus pneumoniae vaccine candidate. Intercell's Streptococcus pneumoniae vaccine candidate demonstrated a good safety and tolerability profile in all study groups. In addition, the vaccine was shown to be immunogenic, and antigen dose-dependent induction of antibodies was confirmed for all three proteins of the vaccine.

The development of Intercell's Streptococcus pneumoniae vaccine is supported by PATH (Program for Appropriate Technology in Health), a U.S.-based non-profit organization dedicated to finding solutions for global health.

Therapeutic Hepatitis C Virus (HCV) vaccine: Results from a Phase II study of Intercell's HCV vaccine candidate were reported in 2008, and demonstrated a statistically significant viral load reduction at 2 weeks (0.2 log) and 6 months (0.46 log) after the last vaccination. Currently, no vaccine against HCV is available and the present standard therapy of Interferon and Ribavirin has limited efficacy and severe side effects, leading to high dropout rates. Intercell anticipates that a partnership to conduct combination studies with its vaccine will be identified in 2010. Consequently, Intercell and Novartis terminated their partnership in this field in February 2010. Intercell received a non-exclusive, worldwide license from Novartis to further develop and commercialize its therapeutic HCV vaccine under Novartis' strong genomic patent portfolio in HCV.

Tuberculosis vaccine: Phase I clinical programs are proceeding according to plan. These programs are based on a partnership between Intercell, Statens Serum Institut, sanofi-aventis, and the AERAS Global Tuberculosis Foundation. Further clinical data is expected during 2010.