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Intercell, Merck Advised Not to Add Patients to Study

April 11 (Bloomberg) -- Merck & Co. and Intercell AG said a safety panel advised halting patient enrollment in a test of an experimental vaccine against a deadly hospital infection. Intercell slid 28 percent.

The vaccine, known as V710, aims to prevent infection caused by the Staphylococcus aureus bacteria. The independent data monitoring committee recommended the suspension while it weighs the benefits to the patients against the product’s risk, the companies said in a statement.

Intercell Chief Executive Officer Gerd Zettlmeissl said the product benefited some patients and the panel’s advice “doesn’t mean this vaccine has failed and doesn’t mean that this program will be stopped.” The decision is the second research disappointment for Vienna-based Intercell in four months and the stock sank to its lowest level in more than five years.

“This is a significant setback,” Peter Welford, an analyst at Jefferies International Ltd. in London, wrote in a report today. The vaccine was designed with Intercell’s technology to identify antigens that trigger bacteria-fighting antibodies, and the trial’s halt may “dent the perceived long-term value of this platform,” he wrote.

Intercell administered the vaccine to patients about two weeks before they were scheduled to undergo heart surgery, Zettlmeissl said in a telephone interview. They were monitored for 90 days afterwards. About 7,700 people took part in the trial, which combined the two most advanced stages of clinical testing, with some receiving the medicine and some a placebo.

‘Some Benefit’

The test “showed some benefit,” according to Zettlmeissl. Merck and Intercell said they plan to provide an update on the product once the risk-benefit analysis has been completed. The data monitoring committee has sent recommendations to Merck, which is reviewing them, said Nina Waibel, an Intercell spokeswoman. There’s no timetable for the review to be completed, she said.

Staphylococcus aureus is the most common cause of hospital-acquired infections and accounts for about 40 percent of all such cases, according to Intercell’s website. Hospital-acquired infections result in an “annual cost burden of more than $20 billion in the developed world.”

Intercell sank 2.32 euros, or 28 percent, to 5.88 euros at the close of Vienna trading, cutting the company’s market value to 285.6 million euros ($412.4 million). The drop was the biggest since Dec. 13.

The stock has lost two-thirds of its value since that day, when the company said that a vaccine patch to prevent diarrhea in travelers failed in two patient studies.

Merck, based in Whitehouse Station, New Jersey, is responsible for clinical development, marketing and manufacturing of the vaccine. Intercell is eligible for payments tied to development goals and royalties on sales.

Results from the trial were due in the second quarter and would have triggered a payment by Merck to Intercell in the single-digit millions of euros, an analyst at Exane BNP Paribas said last month.

To contact the reporters on this story: Phil Serafino in Paris at pserafino@bloomberg.net Allison Connolly in Frankfurt at aconnolly4@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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