Intercell and Novartis Form World-leading Strategic Partnership to Drive Vaccines Innovation
• Alliance creates opportunity for two strong innovators to
combine development efforts in attractive areas
• Intercell to receive upfront payment of € 270 ($ 360)
million in upfront payments and equity investment granting Novartis
option to non-partnered vaccine candidates and 4.8 million new
shares
• Pipeline to benefit from Novartis Vaccines’ phase III
development capabilities and commercial strength
• Exclusive Partnership for IC31® in influenza
vaccines
VIENNA/BASEL, July 2, 2007- Today, Intercell and Novartis announced
that they have agreed to form a major strategic partnership to
accelerate innovation in vaccines development in infectious
diseases. This partnership is the first of its kind in the vaccines
sector and provides both companies with a strong base for mutual
value creation. An upfront total cash contribution of € 270 ($
360) million will further expand resources behind Intercell’s
key value drivers and secures the company’s ability to
independently achieve sustained aggressive growth. The total
potential milestone and royalty payments under the agreement could
result in multi-billion revenues for Intercell in the future.
“This new partnership will enable us to further unlock the
proven value existing in our vaccine technologies. In addition, we
can pursue our business strategy of creating significant
shareholder value as an independent company whilst continuing to
develop one of the most innovative product pipelines in the
industry,” says Gerd Zettlmeissl, CEO of Intercell.
Strengthening market presence while accelerating independent growth
strategies of both companies:
The partnership is centered around the shared vision of science in
vaccines research, development and commercialization. It will focus
on the development of bacterial vaccine products derived from
Intercell’s Antigen Identification Program (AIP®) as well
as the use of Intercell’s adjuvant technology (IC31®) in
selected new vaccines.
IC31® Partnership in influenza:
Intercell’s adjuvant IC31® will be exclusively licensed
to Novartis for the development of improved Influenza vaccines.
Novartis is a leader in the field of adjuvanted influenza vaccines
as well as in the development of novel cell culture-derived
influenza vaccines. IC31® will also
be non-exclusively licensed to Novartis in other areas. Intercell
retains the right to continue to enter into partnerships for
IC31® with third parties in infectious diseases, cancer,
allergies, and other indications.
AIP® Derived Vaccine Partnership allows Co-Development or
Licensing
As a result of this partnership, Novartis obtains opt-in rights for
the development, manufacturing and commercialization of
Intercell’s non-partnered novel vaccine targets after the
completion of Phase II clinical trials (or earlier at
Novartis’s election). Intercell retains the right to choose
between a co-development/profit sharing or a licensing arrangement
on predefined milestone and royalty payments for products that
Novartis takes forward. The alliance does not affect
Intercell’s products and product candidates currently
partnered with
other companies.
Leading HCV Vaccine franchise:
The partnership includes a co-development and profit sharing
arrangement to bring together both companies’ programs in the
field of therapeutic Hepatitis C vaccines with the aim to expand
their combined leadership in this field.
Summary of Transaction Highlights:
• € 120 ($160) million upfront license and option
fees
• € 150 million ($200) cash contribution through
subscription of of 4.8 million new shares, allowing Intercell to
maintain full strategic flexibility. This will increase
Novartis’ equity stake from 6.1% current to 16.2% ? without
any controlling rights. The new shares will be issued at a price of
€ 31.25 ($ 41,8) per share. This represents a 30% premium to
the last closing price.
• An exclusive license for development of Intercell’s
IC31® adjuvant in novel influenza vaccines with milestones up
to approx. € 100 ($ 134) million during the development period
and double-digit royalty rates tied to sales performance. In
addition, Intercell will receive € 30 to € 60 ($ 40 -$
80) million during the development period in upfront and milestones
plus up to high single-digit royalties, tied to sales performance
for each future license for IC31® in selected areas.
• Intercell retains the right at its election either to
profit-share with Novartis on, or to receive potential milestones
of € 120 ($ 150) million after Phase II for the remaining
development period and solid double-digit royalties tied to
sales-performance, for each product for which Novartis opts
in.
“We are pleased to be partnering with a company such as
Intercell which shares our vision of science in vaccines R&D,
and is widely viewed as having one of the most innovative pipelines
in the industry” said Joerg Reinhardt, CEO of Novartis
Vaccines and Diagnostics. “We look
forward to leveraging the Novartis development, manufacturing and
commercialization expertise to help realize the full market
potential of Intercell’s vaccine candidates.”
Consummation of the transaction is subject to Hart?Scott?Rodino Act
clearance under U.S. law.
About Intercell’s Antigen Identification Program
(AIP®)
Intercell’s Antigen Identification Program® identifies
novel antigens from a variety of pathogens. Intercell focuses on
those antigens that are believed to induce the strongest response
from the human immune system, thus providing a viable basis for the
further potential development of novel and more powerful
prophylactic and therapeutic vaccines and antibody treatments.
Through the AIP®, a large number of novel antigens relating to
a wide variety of infectious diseases have been successfully
identified. In addition, certain product candidates identified are
currently partnered with either sanofi pasteur, or Merck & Co.,
Inc., while others form the basis for development projects that are
planned to be either developed in-house or partnered with third
parties.
About IC31®
Adjuvants enhance the effectiveness of vaccines. Existing adjuvants
on the market induce antibodies but no or little T-cell
immunity.
IC31® is an adjuvant inducing both T-cell and B-cell responses
with a unique synthetic formulation which combines the
immunostimulating properties of an anti-microbial peptide, KLK, and
an immunostimulatory oligodeoxynucleotide, ODN1a. The two-component
solution
can be simply mixed with antigens, no conjugation is required.
Intercell currently has IC31® collaborations with a number of
global vaccine companies, as well as small biotechs. These
collaborations include - amongst others - a Tuberculosis
vaccine partnered with the Danish Statens Serum Institut, which has
successfully concluded Phase I clinical trials. As has already been
previously seen in a variety of animal models, IC31®
demonstrated an outstanding profile to stimulate a strong T-cell
immune response in humans in this clinical trial.
About Influenza
The flu is a contagious respiratory illness caused by influenza
viruses. The infection usually lasts for about a week. It is
characterized by the sudden onset of high fever, myalgia, headache
and severe malaise, non?productive cough, sore throat, and
rhinitis. Between 1918 and 1919,
the “Spanish Flu” killed more people in the world-wide
pandemic than the First World War did.
Influenza viruses cause disease among all age groups. Rates of
infection are highest among children, but rates of serious illness
and death are highest among persons aged >65 years and children
aged <2 years. Influenza rapidly spreads around the world in
seasonal epidemics and
imposes a considerable economic burden in the form of hospital and
other health care costs, as well as a loss of productivity.
In annual influenza epidemics 5-15% of the population are affected
with upper respiratory tract infections. Hospitalization and deaths
mainly occur in high-risk groups. Although difficult to assess,
these annual epidemics are thought to result in between three to
five million cases of severe illness and between 250,000 and
500,000 deaths every year around the world. Vaccination is the
principal measure for preventing influenza and reducing the impact
of epidemics. The currently available, mostly not adjuvanted
vaccine products have a suboptimal
efficacy profile, especially in the population groups with the
highest disease burden (elderly and infants). Furthermore, these
vaccines only offer limited cross-protection against other
influenza strains, with no or low T-cell responses. Due to these
limitations, novel vaccines withimproved efficacy and T-cell
immunity are needed.
About Hepatitis C:
HCV is a major cause of chronic liver disease, including cirrhosis
and liver cancer. According to the World Health Organization (WHO),
approximately 170 million people are chronic HCV carriers (3% of
the world’s population) worldwide, including about 10 million
Europeans, 3.9 million Americans and 2 million Japanese. 35,000 new
infections occur in the United States alone each year. The
substantial unmet medical need is underscored by the fact that each
year 8,000 to 10,000 deaths and 1,000 liver transplantations in the
United States are due to HCV.
Currently, there is no vaccine or immunotherapy against Hepatitis C
and the infection can only be treated with a combination of
Interferon and Ribavirin – a long-term therapy with limited
efficacy and substantial side effects. It also gives rise to high
treatment costs for patients. In 2002, worldwide sales of HCV drugs
totaled at around EUR 2.8 billion, and demand has since grown
significantly.
About Intercell AG:
Intercell AG is a growing biotechnology company which focuses on
the design and development of novel vaccines for the prevention and
treatment of infectious diseases with substantial unmet medical
need. The Company develops antigens and immunizers
(adjuvants)
which are derived from its proprietary technology platforms, and
has in-house GMP manufacturing capability. Based on these
technologies, Intercell has strategic partnerships with a number of
global pharmaceutical companies, including Novartis, Merck &
Co., Inc,
sanofi pasteur, Kirin, Wyeth, and the Statens Serum Institut.
The company’s leading product, a prophylactic vaccine against
Japanese Encephalitis has successfully concluded pivotal Phase III
clinical trials. The regulatory process towards a Biologics License
Application (BLA) to the U.S. Food and Drug Administration (FDA)
has been initiated. The broad development pipeline includes a
therapeutic vaccine for Hepatitis C in Phase II, a Pseudomonas
vaccine in Phase II, partnered vaccines for Tuberculosis and S.
aureus in Phase I, and five products focused on infectious diseases
in pre-clinical development. Intercell is listed on the Vienna
stock exchange under the symbol “ICLL”.
For more information, please visit: www.intercell.com
Contact Intercell AG:
Intercell AG
Dr. Werner Lanthaler
CFO
Campus Vienna Biocenter 2, A?1030 Vienna
Phone: +43-1-20620-120
Mail to: wlanthaler@intercellcom
Posted: July 2007
