Austria’s Intercell is to acquire the USA’s Iomai Corp, which specialises in needle-free vaccine technology.

The cash-and-stock deal is valued at around $189 million and will see the Vienna-based firm pay $6.60 per share for the privately-owned Gaithersburg-headquartered group. Intercell added that it will finance the cash component of the transaction ($119 million) “comfortably from existing reserves” and it expects to maintain profitability in 2008.

The principal attraction of Iomai is its needle-free patch delivery travellers' diarrhoea vaccine, which is expected to enter Phase III trials in the first half of 2009. If approved, it will be “highly complementary” with Intercell's Japanese Encephalitis vaccine for which a Biologics License Application was submitted to the US Food and Drug Administration in December last year.

Intercell expects market approvals in the USA, Europe and Australia in 2008 for its jab and says that both vaccines create an “extremely attractive traveller's vaccine franchise which will target a combined market opportunity of over $1 billion in sales per year”. The company will also gain full rights to two additional clinical and three preclinical programmes, the most advanced being an immunostimulant vaccine patch in Phase II for pandemic influenza.

The vaccine patch has recently generated positive interim immunogenicity data in a 500-subject Phase I/II study with a one-dose application, the firms stated. The programme is funded by a grant from the US Department of Health and Human Services.

Gerd Zettlmeissl, Intercell’s chief executive, said the transaction “expands our leadership in vaccine innovation, greatly enhances Intercell's R&D technology base and further strengthens our late-stage vaccine portfolio”. He added that the deal shows Intercell “is fully committed to becoming the leading pure play vaccine company globally”. The transaction has been unanimously approved by the boards of directors of both companies and is expected to close before the end of the third quarter.

Intercell also announced that its net loss was 4.6 million euros, down 35.2% while revenues shot up 473.3% to 8.6 million euros, due to payments from partner Novartis. The company made its first annual net profit last year and expect a similarly profitable year in 2008.