UPDATE 2-Intercell posts wider than expected Q1 loss

* Intercell posts Q1 loss of 14.7 mln euros

* Misses poll average of 9.3 mln euros loss

* Expects Ixiaro product sales to pick up in Q2

* Shares trade 5.5 percent lower, underperform sector index

(Adds analyst comment, shares)

By Katie Reid

ZURICH, May 11 (BestGrowthStock) – Austrian biotech company
Intercell (ICEL.VI: ) is eyeing a significant pick up in sales of
its Ixiaro vaccine against Japanese Encephalitis after posting a
wider-than-expected first-quarter net loss.

The group posted a net loss of 14.7 million euros ($19.72
million), trailing the average estimate in a Reuters poll after
sales of Ixiaro were weaker than expected in the first-quarter
and research and development expenses jumped 19.1 percent.

“Product sales are expected to increase significantly in Q2
2010 driven by both the traveller and the military market
segments,” the group said in a statement.

At 0859 GMT, shares in the group were trading 5.5 percent
lower at 17.25 euros, underperforming a 0.5 percent rise in the
European pharmaceuticals sector (.SXDP: ).

“Despite a slow initial launch, we continue to forecast
$300m peak sales forecast for Ixiaro, including $200m from US/EU
travellers’ and $50m US military sales,” analysts at Jefferies
said in a note.

Intercell, the only major independent vaccine maker left in
Europe aside from Dutch company Crucell (CRCL.AS: ), last year
started to sell its first product on the market, Ixiaro, which
is distributed with Swiss group Novartis (NOVN.VX: ).

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.

Analysts are now looking for results from late stage trials
for Intercell’s S.aureus vaccine, which it is developing with
Merck KGaA (MRCG.DE: ), and the vaccine patch against Traveller’s
Diarrhea (TD), in development with GlaxoSmithKline (GSK.L: ) and
due later this year.

Intercell said it expected the first data from a late-stage
trial of its TD vaccine patch by the end of 2010 or at the
beginning of 2011, while results from the late-stage trial of
the S.aureus vaccine are likely to come this year.

Investment Basics

(Reporting by Katie Reid)
($1=.7453 Euro)

UPDATE 2-Intercell posts wider than expected Q1 loss