UPDATE 1-Crucell says it not to blame for Merck's HIV flop

(Recasts and adds background, shares, CEO, analyst comment)

AMSTERDAM, Sept 25 (Reuters) - Dutch biotech firm Crucell (CRCL.AS)(CRXL.O) said on Tuesday that the discontinuation of Merck & Co's (MRK.N) experimental HIV vaccine was not related to the use of Crucell's PER.C6 technology, and kept its 2007 outlook.

Crucell shares have fallen as much as 11 percent since U.S. pharmaceutical giant Merck said on Friday it had discontinued testing of the vaccine V520.

On Tuesday Crucell shares were down 4.6 percent at 13.64 euros by 1313 GMT, underperforming an 1.9 percent lower Amsterdam Midkap Index .AMX.

An independent safety monitoring board determined that the drug was ineffective and would fail to meet the goals of a mid-stage clinical study.

Crucell said it reiterated its revenue outlook of 220-225 million euros ($310-317 million) for 2007 and to be operational cash break even in 2007.

"We had not incorporated any income from the Merck HIV program in our guidance for 2007. As the program was in a phase II study it was not at all expected to enter the market within the next couple of years to generate royalty-based income for Crucell. We therefore wish to emphasise that our guidance for 2007 has not changed as a result of this event," said Crucell's Chief Executive Ronald Brus in a statement.

The drug was not expected to hit the market before 2012, with potential milestone payments from 2009, analysts said.

"V520 utilised Crucell's AdVac technology in PER.C6 and contributed 0.9 euro, or nearly 5 percent, of our sum-of-the-parts valuation," said Lehman Brothers analyst Peter Welford in a client note on Monday.

He added that he did not expect future prospects of this specific technology to be hurt by Merck's cancellation.

Crucell's PER.C6 gene technology uses human cells as a platform to produce drugs. Researchers are also using the technology in hopes of developing vaccines against illnesses such as HIV and cancer.