Troubled Intercell throws in the towel, signs off on merger deal with Vivalis

With its only approved product floundering on the vaccine market, Austria's Intercell ($ICLL) has signed off on a plan to be acquired by the French biotech Vivalis ($VLS), creating a new public company dubbed Valneva that plans to immediately raise fresh cash to back its combined operations.

The deal values Intercell at $174 million, a significant premium for a biotech company that has seen its share price blasted over the past two years by clinical trial failures and poor results for the Japanese encephalitis vaccine Ixiaro, which has disappointed investors with weak sales. At the end of the third quarter, Intercell projected an annual loss of €24 million, significantly higher than the €20 million loss that had been projected earlier. A €40 million rights offering has been committed to after the merger closes.

Intercell's woes date back to the 2008 acquisition of Iomai, which had a promising needle-free patch for vaccine delivery in development. A patch for traveler's diarrhea failed in 2010, triggering a meltdown in its share price.

Together, the two companies will boast of "a pandemic Influenza vaccine in Phase III, a Pseudomonas vaccine in Phase II/III and a tuberculosis vaccine in Phase II, a portfolio of validated and commercialized technology platforms including the EB66 cell line for human and veterinary product development which is becoming the industry standard, the VIVA|Screen antibody discovery platform and the IC31 novel adjuvant."

In a joint statement, Franck Grimaud, CEO and Majid Mehtali, CSO, co-managers of Vivalis, said: "The merger with Intercell is an important step towards Vivalis' strategic goal of building a profitable, product-based biopharmaceutical company and laying the foundations for rapid revenue and profit growth going forward. The merger will significantly complement our core capabilities, in particular towards product development, while also adding strength and breadth to our R&D portfolio. As a result of multiple revenue streams, Valneva will also enjoy enhanced financial strength to fund its future growth."

- read the press release
- here's the report from The Economic Times