CORRECTED – (OFFICIAL)-UPDATE 5-Merck, Intercell stop enrollment for vaccine

(Deletes Merck statement that the companies were not informed
of the reason for the committee’s recommendation; adds in 8th
paragraph that a small group of Merck scientists was briefed.)

* Independent panel recommends suspension of enrollment

* Companies to provide update once analyses completed

* Intercell CEO says news not necessarily negative

* Intercell shares down 28 pct, Merck unchanged
(Rewrites first paragraph, adds Merck comments, share moves)

By Katie Reid

ZURICH, April 11 (Reuters) – Merck & Co (MRK.N: Quote, Profile, Research) and
Intercell (ICEL.VI: Quote, Profile, Research) halted patient enrollment in a clinical
trial of a experimental vaccine to protect against potentially
serious hospital infections, sending shares of Intercell
tumbling.

The decision came at the recommendation of the study’s
independent data monitoring committee (DMC), which said no more
patients should be enrolled while experts assess the vaccine’s
benefits against its risks.

A Merck spokesman told Reuters the enrollment was not
halted for efficacy, as sometimes happens when an experimental
drug shows exception benefits. Investors interpreted the
development as a major setback for the vaccine.

Shares in Austrian biotech group Intercell fell 28 percent
on Monday. Shares of Merck, a large U.S. drugmaker, were little
changed in midday trading on the New York Stock Exchange.

Intercell Chief Executive Gerd Zettlmeissl told Reuters he
was waiting for more information about the study, which has so
far involved 7,700 patients.

“The recommendation to stop to make further analysis of the
benefit-risk can mean a broad spectrum of things,” Zettlmeissl
said.

Intercell is developing the V710 vaccine, which could have
sales of more than 1 billion euros, with partner Merck, which
is leading the Phase II/III clinical trial.

A small group of senior Merck scientists, not involved in
the study, has been briefed by the DMC and is going to
investigate further, Merck spokesman Ian McConnell said. He
said there was no timetable for an additional response.

V710 is being developed to prevent the Staphylococcus
aureus (S. aureus) infection, which can cause serious health
complications and death.

These infections are difficult to treat as many strains are
resistant to antibiotics, making them a real public health
concern.

About 50 percent of S. aureus strains isolated in hospitals
worldwide are resistant to multiple antibiotics, and
methicillin-resistant S. aureus (MRSA) is a serious health
problem in many countries. [ID:nLDE72S204]

USE BEFORE SURGERY

Analysts see considerable potential for a vaccine like
V710, which could be used before elective surgery, or even more
broadly on hospital admission or in care homes for the
elderly.

Analysts at Jefferies said in a note that the vaccine still
had a chance of success but its prospects would remain
uncertain pending further details. The market was likely to
largely remove all hopes for V710 for the time being, although
Jefferies is maintaining its base case assumptions for now, the
analysts said.

Intercell has cautioned it does not expect to make a profit
for two more years. It had to scrap plans for a travelers’
diarrhea vaccine in December after it failed in clinical
trials. [ID:nLDE7270FN]
(Additional reporting by Lewis Krauskopf in New York, Editing
by Erica Billingham, Ben Hirschler and John Wallace)

CORRECTED – (OFFICIAL)-UPDATE 5-Merck, Intercell stop enrollment for vaccine