EANS-Adhoc: Intercell AG / Intercell renews strategy and provides initial update on S. aureus

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08.06.2011

» Renewal strategy is to strive towards financial self-sustainability in the
mid term through a combination of the following four key pillars: 1) Revenue
growth, 2) Pipeline investments, 3) Operational and financial discipline, and
4) Leverage partnerships

» Strategy based on creating shareholder value by balancing pipeline
investments with financial performance objectives

» Revenue growth strategy for IXIARO®/JESPECT® is given key priority - aiming
for positive product cash flow in 2012

» R&D focus on most promising core programs and technologies will deliver an
attractive risk-return profile

» Intercell´s partner Merck & Co., Inc. has informed the company about its
decision to discontinue the investigational S. aureus vaccine candidate trial

Vienna (Austria), June 8, 2011 - Today, Intercell´s new CEO Thomas Lingelbach
announced the key elements of Intercell´s renewal strategy, aiming at creating
shareholder value by balancing pipeline investments with financial performance
objectives.

The strategy is based on four pillars:
1) Revenue growth,
2) Pipeline investments,
3) Operational and financial discipline, and
4) Leverage partnerships

Revenue growth will be primarily achieved by maximizing the value of
IXIARO®/JESPECT®
Two years after the global launch of Intercell´s vaccine against Japanese
Encephalitis, the product is showing strong year-on-year revenue growth.
Together with its global distribution partner Novartis, Intercell will expand
its direct selling resources to increase penetration in the key markets.
Leveraging the product into the Asian endemic markets and pediatric licensure
will complement the global territory expansion. Increased manufacturing
efficiency and capacity utilization are expected to contribute to margin
improvement and a positive product cash flow in 2012.

Pipeline investments: Focus on the most promising core R&D programs and revision
of their execution play a key role in the scope of Intercell´s renewal strategy.

The next development steps for the Company´s vaccine candidates against
Pseudomonas (Phase II/III with Novartis) and C. difficile (Phase I) as well as
the Pandemic Flu vaccine patch system (Phase I with GSK vaccine) have been
designed to balance risks and benefits as these candidates progress toward the
next value inflection points.
As part of the pipeline prioritization, development of other clinical stage
programs such as the Pneumococcus vaccine candidate have been put on hold.
Intercell´s new research strategy will leverage technologies (patches,
antibodies) with the most potential to create new partnerships while the
existing platforms (IC31®, AIP®) will be maintained in response to ongoing
partnerships. One lead candidate will be managed towards clinical entry in the
next two years evolving from Intercell´s pipeline or external incubator
collaborations.

Operational and financial discipline focusing on an optimized R&D pipeline
management and further cost-cutting measures
While maintaining its commitment to investing in R&D, Intercell intends to
strive for mid-term financial self-sustainability by continuation of recent cost
containment and financial discipline. The Company intends to further continue
cost reductions leading to above 50% compared to 2010 by being a lean and
consolidated organization, focusing on the most promising programs, which are
best positioned to deliver value inflection points in the next three years, as
well as cost- and risk sharing collaboration agreements with partners.

Leveraging the value of partnerships
Strategic focus will be put on maximizing the value from partnered development
programs under the existing alliance agreements and on creating new partnerships
from un-partnered programs or technologies, cleaning up and monetizing
unexplored Company assets.

CEO Thomas Lingelbach emphasizes that the Company is in a difficult, but highly
promising stage: "The past year has been a tough year with high losses and a
significant setback for us and our share-holders. However, with our further
IXIARO®/JESPECT® growth, the Company´s extensive scientific basis and by
executing on our presented strategy I am convinced that we are well positioned
for positive renewal."

Intercell received an update from Partner Merck & Co., Inc. that, following a
recommendation by the independent Data Monitoring Committee (DMC) after the
benefit/risk analysis previously announced, they intend to discontinue the Phase
II/III clinical trial evaluating V710, an investigational vaccine for the
prevention of Staphylococcus aureus (S.aureus) infection. Details explaining
this decision will be provided in a joint press release later today.

Further inquiry note:
Intercell AG
Nina Waibel
Corporate Communications
Tel. +43 1 20620-1222
[email protected]
end of announcement euro adhoc
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issuer: Intercell AG
Campus Vienna Biocenter 3
A-1030 Wien
phone: +43 1 20620-0
FAX: +43 1 20620-800
mail: [email protected]
WWW: www.intercell.com
sector: Biotechnology
ISIN: AT0000612601
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English

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