Shares of Intercell were fired up by news that GlaxoSmithKline is backing the company with a sizeable upfront and a hefty equity payment as it takes a stake in the Austrian biotech's needle-free vaccine patch technology.
Intercell is gaining a $49.4 million upfront payment and a tiered equity investment of up to $123.5 million to claim up to 5 percent of the company. That's a big plus for Intercell, which has a vaccine patch in a late-stage trial for traveler's diarrhea and a pandemic flu vaccine in mid-stage trials. Intercell's patch relies on a protein to trigger a strong immune reaction.
"This new partnership is combining the forces of Intercell's innovative needle-free vaccination program and technologies with a vaccine leader's strength in development and commercialization. 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 Intercell CEO Gerd Zettlmeissl in a statement. Analysts also gave the news a big thumbs up. Intercell has projected that the diarrhea patch could gain up to $500 million a year, and the ongoing H1N1 pandemic has inspired a host of new development pacts related to new vaccine technology.
The deal marks a significant payback for Intercell, which bought up the patch technology developed by the little Maryland biotech Iomai back in 2008 for $189 million. Iomai's big shareholders traded their stock for Intercell shares.
- here's the Intercell release
- here's the story from Reuters