Intercell receives Milestone Payment from Merck & Co. Inc.

Phase II Clinical Trial of Investigational Vaccine to Prevent S. aureus Infection Initiates

VIENNA, Austria | December 16, 2007 |
Intercell AG (VSE: ICLL) today announced progress in its collaboration with Merck & Co., Inc. to develop a vaccine to prevent Staphylococcus aureus, (S. aureus), infection. Merck has initiated a Phase II clinical trial designed to evaluate the efficacy and safety of a single dose of the candidate vaccine in patients undergoing elective surgery. The start of this Phase II trial triggers a milestone payment of USD 4 million to Intercell.

Gerd Zettlmeissel, CEO of Intercell, commented "We are extremely pleased that Merck has started Phase II studies, using a S. aureus vaccine discovered using our proprietary Antigen Identification Platform (AIP®) technology. This serves as further validation of the ability of our AIP® to deliver novel bacterial vaccine candidates."

The S. aureus vaccine candidate is based on a conserved protein antigen discovered by Intercell and licensed to Merck & Co., Inc. in 2004 on an exclusive world wide basis. Merck is responsible for clinical development, manufacturing and marketing. Intercell is eligible to receive milestone payments and royalties on future net sales. In Phase I clinical trials the S. aureus candidate vaccine was shown to be immunogenic, safe and generally well tolerated.

Hospital-acquired Infections

Hospital-acquired infections caused by bacteria are one of the major causes of death and serious illness. Intercell has embarked on a large scale, comprehensive and multi-target antigen identification program to contribute to vaccine efforts in this field. Besides Merck´s S. aureus vaccine, based on an antigen identified by Intercell, Intercell is developing a vaccine against hospital-acquired infections caused by Pseudomonas aeruginosa - a clinical Phase II/III trial is expected to be initiated in 2008 - and has ongoing pre-clinical programs for Enterococcus and Klebsiella vaccine discovery.

About S. aureus

S. aureus is the most frequent cause of hospital-acquired infections. In addition to bloodstream infections with a mortality rate of up to 35%, infections of bone, heart and other inner organs are leading to serious health complications, death and economic burden. Today, approximately 50% of S. aureus strains isolated in hospitals worldwide are resistant to multiple antibiotics, rendering staphylococcal disease management increasingly difficult and challenging. Hospital-acquired infections are one of the major causes of death and serious illness worldwide, resulting in an annual burden of more than USD 20 billion in the developed world. In the United States alone, about two million patients become infected annually while receiving health care in hospitals.



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