Pharma-Biotech Deal | July 9, 2007 Issue - Vol. 85 Issue 28 | Chemical & Engineering News
Volume 85 Issue 28 | p. 9 | News of The Week
Issue Date: July 9, 2007

Pharma-Biotech Deal

Novartis expands its vaccines portfolio through a sweeping $366 million deal with Intercell
Department: Business

Novartis is expanding its vaccines portfolio through a $366 million agreement with Austrian biotechnology firm Intercell. The move underscores a revival in vaccines research at big pharma companies, which no longer eschew vaccines as a low-margin business.

The broad pact gives Novartis an exclusive option to license any unpartnered vaccine in Intercell's pipeline, which includes more than 10 potential candidates for the prevention and treatment of infectious diseases. Joerg Reinhardt, CEO of Novartis Vaccines & Diagnostics, claims that Intercell "is widely regarded as having one of the most innovative pipelines."

The nearest term candidate is a vaccine in Phase II trials for patients with hospital-acquired Pseudomonas infection. Other perks of the deal include opt-in rights on future vaccines developed during the collaboration as well as a nonexclusive license to Intercell's next-generation adjuvant, which Novartis can use to enhance the effectiveness of its flu vaccines.

The deal builds on a relationship the two companies forged in 2006, when Novartis licensed an Intercell vaccine in Phase III trials for preventing the Japanese encephalitis virus. The $366 million up-front payment includes the purchase of 4.8 million Intercell shares, upping Novartis' stake in the company from 6.1% to 16.1%.

Major drug companies have been pushing into the vaccines business recently. In the past two years, Novartis bought the portion of flu vaccines supplier Chiron that it didn't already own; AstraZeneca paid $15 billion for MedImmune, which makes an inhaled flu vaccine; and Pfizer bought DNA-based vaccine maker PowderMed. Merck and GlaxoSmithKline, meanwhile, are seeing earlier efforts pay off; both companies launched a slew of new vaccines in the past year.

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