UPDATE 2-Intercell shares tumble after product failure

* Shares fall 41 pct, hit lowest level in nearly 5 yrs

* Travelers’ Diarrhea vaccine didn’t meet endpoints

* Sees substantially wider-than-expected year-end loss

(Adds analyst comment, updates shares)

By Katie Reid

ZURICH, Dec 13 (BestGrowthStock) – Intercell (ICEL.VI: ) shares
slumped to their lowest level in nearly five years after the
Austrian biotech group warned failure of its Travelers’ Diarrhea
vaccine candidate would cause a wider-than-expected 2010 loss.

At 0946 GMT shares in the group, which had already lost 35
percent of their value so far this year, were trading 41 percent
lower at 9.94 euros, having earlier fallen to 8.9 euros, their
lowest level since early 2006.

“This was one of the most important products at Intercell,
with considerable market potential. Today’s share reaction is
totally understandable,” Daniel Damaska at Raiffeisen Centrobank
said.

Intercell said on Sunday the patch-based Travelers’ Diarrhea
vaccine candidate failed to meet efficacy endpoints to protect
against enterotoxigenic E. coli mediated diarrhoeal infections
in pivotal, randomized and placebo-controlled efficacy studies.
[ID:nN12171447]

The group, which said it would discontinue development of
the product, now expects its loss for 2010 to be “substantially
higher” than its previous forecast of 40 million euros ($52.8
million) because it will not receive milestone payments in
connection with the Travelers’ Diarrhea programme.

The results on this vaccine, which it had been developing
with GlaxoSmithKline (GSK.L: ), had been keenly awaited by
investors for clues as to the strength of its vaccine pipeline.

Intercell, which is the only major independent vaccine maker
left in Europe apart from Dutch company Crucell NV (CRCL.AS: ),
brought its first product to market last year, the Ixiaro
vaccine against Japanese Encephalitis, distributed by Novartis
AG (NOVN.VX: ).

Crucell is being pursued by U.S. healthcare group Johnson &
Johnson (JNJ.N: ). [ID:nLDE6B91E4]
(Additional reporting by Christian Gutlederer; Editing by David
Holmes and Will Waterman)
($1=.7580 Euro)

UPDATE 2-Intercell shares tumble after product failure