Intercell seeks drug-patch partners after stock meltdown

Struggling biotech Intercell isn't giving up on its needless patch system for delivering vaccines. After its vax patch flunked multiple trials last year, the Austria-based firm is on the hunt for new partners for the drug-delivery tech in other indications, CEO Thomas Lingelbach told Bloomberg this week. The chief executive mentioned the partnership pursuit in a story about the biotech's talks with a private equity firm concerning the potential sale of a stake in Intercell.

Intercell is currently developing a pandemic flu vaccine patch with GlaxoSmithKline ($GSK). The company picked up the technology in its $189 million buyout of Maryland-based vaccine outfit Iomai in May 2008. The system involves an initial abrasive to prep the skin and then an adhesive that carries a dose of vaccine onto the skin, into which it travels and finds key immune system sites. Despite the early promise of the patch efficiently delivering jabs into the skin without needles, the tech has lately caused lots of setbacks for Intercell.

Intercell's shares took a dive last December when the firm and partner GSK threw in the towel on a traveler's diarrhea vaccine patch, which fell short in mid-stage and late-stage trials. The company took back rights to that patch program from GSK. The trial's failure prompted major cutbacks, including layoffs at the Gaithersburg, MD operation picked up in the Iomai buyout. That followed the failure reported in July 2010 of the mid-stage study of the firm's patch used to deliver a bird flu vaccine.

The R&D woes have contributed to an 89% drop in Intercell's stock price, and the company now has a market value of $125 million, Bloomberg reported. Besides the troubled studies involving the vax patch, the firm and partner Merck ($MRK) parted ways on a vaccine to prevent a lethal hospital infection in June after patient recruitment into a Phase II/III trial was halted.

- here's the article