Biotech Values

[DewDiligence]

GSK, Intercell Ink Deal for Needle-Free Vaccine Delivery

[This is the technology Intercell acquired in the 2008 buyout of Iomai (#msg-29232165). Despite paying a large premium to the market price, it now looks like Intercell’s buyout of Iomai was a steal. GSK is taking a 5% equity stake in Intercell, but NVS remains the largest Intercell shareholder with a 15% stake.]

http://online.wsj.com/article/SB10001424052748704517504574589952804137702.html

›DECEMBER 12, 2009
By JEANNE WHALEN

GlaxoSmithKline PLC struck a deal with an Austrian firm to develop needle-free vaccines delivered through a patch, a technology that could broaden vaccine use by eliminating irksome needle jabs and the need for vaccine to be refrigerated.

Glaxo, based in Brentford, England, said it will make an initial payment of €33.6 million ($46 million) to Vienna-based Intercell AG to gain access to both the patch technology and the marketing rights to experimental patch vaccines for traveler's diarrhoea and pandemic flu.

Glaxo will also spend up to €84 million over time to buy up to 5% of Intercell's stock. The companies said they would share profits from the sale of any vaccines that reach the market.

Finding ways to deliver vaccines without a needle and syringe has been a goal of public-health officials and drug companies for some time. In developed countries, this type of vaccine could convince more needle-shy consumers to get vaccinated.

In the developing world, needle-free vaccines could have even greater advantages. They wouldn't need the refrigeration that most needle-and-syringe shots do—something that limits vaccine use in countries where electricity isn't always available. Theoretically, a patient could even apply the patch by himself, which could be useful in places where there are few doctors or nurses, Thomas Lingelbach, chief operating officer of Intercell, said in a phone interview.

The first two vaccines Glaxo and Intercell have prioritized are meant for the developed world. Jean-Paul Prieels, senior vice president of vaccine research and development at Glaxo, said the companies will seek to develop other patch vaccines, but aren't yet sure where else the technology will work.

Intercell's patch technology is still experimental and could ultimately fail in further testing. Its vaccine for traveler's diarrhoea, which protects against a type of E. coli often found in contaminated food and water— is now in late-stage human testing. Militaries and travelers to Africa, Asia and Latin America could potentially be interested in the vaccine, Mr. Lingelbach said.

The company's pandemic flu vaccine involves a shot and a patch, and is in mid-stage human testing. A vaccine against the H5N1 virus that causes bird flu is delivered through a shot, and then a patch containing a booster ingredient is placed on the skin for six hours. The booster, called an adjuvant, is meant to make the shot more effective. The U.S. Department of Health and Human Services has helped fund development of this product.

To make a patch product, the vaccine or adjuvant is first formulated as a liquid and then applied to a patch and dried. The substance seeps into the skin and travels to the lymph nodes, where it induces an immune response.

Intercell is developing needle-and-syringe vaccines, as well, and has licensed the marketing rights to some of its experimental shots to big drug makers including Novartis AG, Merck & Co. and Sanofi-Aventis SA. Novartis owns 14.9% of Intercell, and is sometimes named by analysts as a potential acquirer of Intercell.

But Intercell has always expressed a desire to stay independent. Intercell management says this is partly why the company has licensed its products to a variety of partners—to make itself a less-attractive acquisition target.‹