Intercell Reaches Commercial Stage In US: Japanese Encephalitis Vaccine Gets FDA Okay

First vaccine approval for Intercell in US brings a new player fully into the vaccine business; Austrian company has key partnerships pending with Merck, Novartis and Sanofi.

FDA's March 30 approval of Ixiaro is a milestone event for Intercell: demonstrating it can navigate the FDA approval process, kicking off a marketing/distribution agreement with Novartis, and triggering a $13 million further payment from Novartis for achieving the approval.

Novartis will help market and distribute the Japanese Encephalitis vaccine to the traveler market in the U.S. Intercell will sell the product directly to the U.S. military.

Intercell has a strong partner also in Australia for the vaccine, where CSL launched the product in mid-February after an approval at the beginning of the year. Novartis also has rights to market in the EU, Japan and Korea. European marketing approval is expected soon.

An Indian company, Biological E., will manufacture and distribute the product in India and Asian countries not covered by Novartis and the rest of world. Intercell sees potential for the product in the large Asian markets as a premium vaccine.

An Untapped Market

There is a lot of untapped market for the product. One analyst firm, Bryan, Garnier & Co., estimates the annual traveler population to Asia at 17.5 million with about 0.5 percent to 2.2 percent of travelers receiving vaccinations currently. The firm projects 164,000 travelers would be vaccinated in 2009, growing to 451,000 by 2012, when 2.2 percent of Asia travelers would receive the JE vaccine. Intercell says it hopes to double the travelers' vaccination rates. "Our strategic goal is to increase the traveler vaccination rate to 4 percent," CEO Gerd Zettlmeissl said on a March 31 conference call.

Zettlmeissl projected peak sales potential for the travelers' market at $265 million. The vaccine will cost $300 per treat in the U.S. with a 25 percent reduction for the military use. The product is approved for use in people above age 17.

Intercell has received about $350 million from Novartis under the partners' 2007 agreement on the product. It expects to receive another $13 million in light of the approval. Novartis books all receipts and pays Intercell 60 percent. Intercell also must pay VaccGen, from whom it in-licensed the vaccine, a 6 percent royalty on sales.

Intercell had been working for more than a decade to develop the second-generation, tissue culture based vaccine with the Walter Reed Army Institute of Research (¹ InvivoBlog, Feb. 8, 2008). The firm says it spent about $130 million on development costs.

The U.S. Department of Defense was responsible for development of the first vaccine, JE-VAX. Use of that vaccine, produced by Connaught Labs in the U.S. and Biken in Japan, had dwindled because of adverse reactions and limited efficacy, according to Intercell. JE-VAX is no longer being manufactured for the U.S. market and supplies will soon be exhausted.

A head-to-head study published in the December 2007 issue of The Lancet showed Ixiaro's immunogenicity was comparable to JE-VAX and had a more favorable local tolerability profile. Ixiaro's approval was based on clinical studies conducted in more than 800 healthy volunteers in the U.S. and Europe. The studies found that two doses of Ixiaro produced sufficient levels of antibodies in the blood to protect against JE. It was well tolerated with most commonly reported adverse events being headache, muscle pain, swelling and tenderness at the injection site.

Zettlmeissl said the approval came a bit later than expected, due to hammering out details of labeling language. The vaccine has a slightly different label for military use.

Merck, Sanofi Also Partnered With Intercell

Ixiaro is the first of a number of Intercell projects. The company has three projects with Merck, with the primary focus on a staph aureus vaccine (V710) for which efficacy data from Phase II/III trials are expected in the middle of this year.

Novartis also has options on a hepatitis C vaccine and the adjuvant IC31 in development at Intercell. Through the acquisition of Iomai in May 2008, the company has a contract with HHS to develop a pandemic influenza vaccine patch. Intercell is working with Sanofi Pasteur to develop a vaccine in an undisclosed bacterial indication.

The Iomai acquisition also opens up the potential for combining the JEV vaccine with a needle-free traveler's diarrhea vaccine, now in pivotal trials. The pairing would simplify the logistics of travelers' vaccinations, the firm says (² (Also see "Intercell Taking Iomai In $189M Deal" - Pink Sheet, 12 May, 2008.)).

Intercell also gained rights to Iomai's three preclinical and two clinical programs, the most advanced being a Phase II immunostimulant vaccine patch for pandemic influenza.

Ixiaro will be manufactured at an Intercell manufacturing plant in Scotland, which has the capacity to produce 1 million doses annually and can be modified to produce more, Zettlmeissl said.

Acambis had been partnered with Sanofi Pasteur to develop a JE vaccine, ChimeriVax-JE , when Sanofi acquired the firm in July 2008. ChimeriVax-JE is now in Phase III.

Japanese Encephalitis is mosquito borne and strikes about 30,000 to 50,000 people per year in Asia and causes 10,000 to 15,000 deaths, although those numbers may be underreported, according to FDA. It is most common in developing countries in Asia, including India and China.

- Pamela Taulbee ([email protected])