CORRECTED – UPDATE 2-Intercell sees H2 sales growth after Q2 picks up

(Corrects to make clear Intercell working with Merck & Co
(MRK.N: ), not Germany’s Merck KGaA (MRCG.DE: ) on the S.aureus
vaccine)

* Intercell posts Q2 loss of 8.346 million euros

* Beats poll for loss of 10.7 million euros

* Sees continued growth of net product sales in H2

* Expects FY loss of between 20 and 40 million euros

* Shares largely unchanged

(Adds analyst comment, share price)

By Katie Reid

ZURICH, Aug 17 (BestGrowthStock) – Austrian biotech company
Intercell AG (ICEL.VI: ) expects product sales to grow in the
second half of the year after sales for its Ixiaro vaccine
against Japanese Encephalitis picked up in the second quarter.

The group posted a second-quarter net loss of 8.346 million
euros ($10.69 million), narrower than the average estimate in a
Reuters poll. [ID:nLDE67C17G]

“Intercell expects enhanced vaccination recommendations and
increasing global marketing and sales efforts by its partners
Novartis and CSL Ltd., fostering disease and product awareness,”
the group said in a statement on Tuesday.

“Besides the traveller’s market the focus remains on the
U.S. military,” the group said.

At 0701 GMT, shares in the group, which have come under
pressure so far this year, were trading near flat at 14.975
euros.

“Intercell’s 2Q JE vaccine Ixiaro sales are in-line and the
late-stage pipeline is on-track, which should provide some
relief for the stock given recent underperformance,” analysts at
Jefferies said in a note, adding its stock remained very
attractive in the longer term.

“We believe Intercell is in a transformational period with
the launch of its first vaccine, significant late-stage clinical
news, a broad pipeline, and potential alliance(s) to crystallise
value. Furthermore, it is well-funded with a validated vaccines
platform technology,” the analysts said.

Intercell started to sell the vaccine, its first product on
the market, last year and it is distributed by Novartis AG
(NOVN.VX: ).

Revenues from product sales rose to 5.2 million euros in the
second quarter, up from the 2.4 million euros in the year-ago
period and recovering from a weak first quarter.

Japanese Encephalitis can be a serious illness causing
inflammation of the brain. It is caused by a virus and passed to
humans by the bite of infected mosquitoes.

Intercell, which is the only major independent vaccine maker
left in Europe beside Dutch company Crucell NV (CRCL.AS: ), is due
to disclose study results for its S.aureus vaccine, which it is
developing with Merck & Co (MRK.N: ), in 2011.

Investors are also looking out for study results on its
vaccine patch against Traveller’s Diarrhea (TD), in development
with GlaxoSmithKline (GSK.L: ), which are due at the end of 2010
or early 2011.
($1=.7804 Euro)
(Editing by David Cowell)

CORRECTED – UPDATE 2-Intercell sees H2 sales growth after Q2 picks up