Intercell readies deep R&D cuts after scrapping vax patch program

Shares of Intercell AG, the last of the independent vaccine makers, cratered after the company announced that it was forced to toss its late-stage vaccine patch project for travelers' diarrhea on the scrap heap after a pair of clinical trials flunked their primary endpoints.

Investigators determined that the travelers' diarrhea vaccine candidate--nabbed from tiny Iomai in a $189 million buyout back in 2008--failed to meet efficacy endpoints to protect against enterotoxigenic E. coli. Its shares quickly skidded down 47 percent as investors digested the news about the program, which some analysts had pegged as a €500 million annual earner.

In response to the setback, the Austrian biotech said it would slash R&D expenses a hefty 40 percent and "realign its organizational structures accordingly." The developer quickly pivoted to more promising programs and notes that the vaccine patch technology it owns still shows promise as an improved, needle-free method for vaccinations.

"We are extremely disappointed with these unexpected Phase II and III outcomes for our TD Vaccine Patch; however, we believe that we have a clear strategy to further develop our strong product portfolio in a balanced way," said CEO Gerd Zettlmeissl. "Our Japanese Encephalitis vaccine is on the market, and we have a world leading and highly attractive nosocomial vaccine franchise in advanced development and a series of promising vaccine and antibody pre-clinical candidates."

- read the Intercell release
- here's the report from Bloomberg
- get the Reuters report