UPDATE 2-Intercell shares down on Q3 sales miss

* Q3 net loss of 27.8 mln euros vs poll of 14.7 mln euros

* 2010 losses expected to hit high end of estimated range

* Flagship product sales rising, pipeline strong

* Shares fall 5.3 pct, underperform European peers

(Adds shares, further details, analyst comments)

ZURICH, Nov 9 (BestGrowthStock) – Intercell (ICEL.VI: ) reported a
much higher than expected third-quarter loss, hitting shares,
even as the Austrian biotech company signalled improving sales
for its flagship product and a strengthening vaccine pipeline.

Losses for the period almost doubled from a year earlier to
27.8 million euros ($38.65 million), while sales fell 27 percent
to 6.7 million euros, well below the average estimate for 12.9
million in a Reuters poll.

Intercell said it expected net losses for 2010 to reach 40
million euros — at the high end of a previously communicated
range — provided the company achieved upcoming milestones.

Shares traded 5.3 percent lower at 0953 GMT, underperforming
a 0.2 percent dip in the European healthcare sector index
(.SXDP: ).

Intercell highlighted the results, announced on Oct. 25,
from a Phase II clinical trial of a vaccine to combat infections
from Pseudomonas aeruginosa, which the company said was a
leading cause of hospital-acquired infections with increasing
antibiotic resistance and high unmet medical need.

“This is a positive result not thoroughly reflected in the
share price. There is potential for a blockbuster vaccine, all
primary endpoints were met and the company observed a
significant reduction in mortality well beyond expectations,”
said Erste Bank analyst Vladimira Urbankova, referring to the
promising trial results.

“A product in advanced Phase II could have a meaningful
impact on target prices,” Urbankova said.

Intercell brought its first product to market last year, the
Ixiaro vaccine against Japanese Encephalitis, distributed by
Novartis AG (NOVN.VX: ).

The company reported a positive sales trend for this key
product in the third quarter.

“This is encouraging given that delayed Q1 deliveries were
recorded in Q2 and reflects increasing global marketing and
sales efforts by Intercell and its partners Novartis and CSL
Ltd,” Intercell said in a statement.

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.

The company is the only major independent vaccine maker left
in Europe apart from Dutch company Crucell NV (CRCL.AS: ), the
subject of a takeover offer from Johnson & Johnson (JNJ.N: )
[ID:nLDE6A12J2].

The company 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=.7193 Euro)
(Reporting by Martin de Sa’Pinto; Editing by Jon Loades-Carter)

UPDATE 2-Intercell shares down on Q3 sales miss