Austrian vaccine maker Intercell buys Iomai

WASHINGTON (Reuters) - Austrian vaccine maker Intercell (ICEL.VI: Quote, Profile, Research, Stock Buzz) said on Monday it was acquiring Maryland- based Iomai Corp (IOMI.O: Quote, Profile, Research, Stock Buzz), a small biotechnology company trying to develop needle-free vaccines.

"The deal creates a leading traveler's vaccine portfolio by combining Intercell's Japanese encephalitis vaccine with Iomai's needle-free travelers' diarrhea vaccine," the company said in a statement.

"The Travelers' diarrhea vaccine is planned to enter pivotal Phase III trials in the first half of 2009 and is based on the only advanced needle-free vaccine patch technology in the industry. Through the transaction Intercell gains access to a further product generating technology platform."

Intercell said it would accomplish the deal through a share/cash transaction for $6.60 per share of Iomai's common stock representing a fully diluted equity value of Iomai of $189 million (EUR 122 million).

The Austrian company said it would make a stock-for-stock exchange for about 41 percent of Iomai's current shares -- which closed at $2.92 on Nasdaq on Monday -- for about 1.7 million Intercell shares. Intercell closed at 28.15 euros on Monday.

It said there would be an all-cash merger for the remaining fully diluted outstanding shares of Iomai's common stock for $119 million, or 77 million euros.

"This strategic combination with Intercell will create a stronger, more diversified vaccine company and will accelerate the development of Iomai's vaccine programs and fully leverage our innovative TCI technology," Dr. Stanley Erck, President and chief executive officer of Iomai, said in a statement.

The Maryland company complained it had been short of cash to push forward its research.

Last August, Iomai reported some success with vaccine patch for preventing travelers' diarrhea caused by enterotoxigenic E. coli or ETEC. It has also won contracts to develop an anthrax vaccine for the U.S. government and U.S. government approval to test a bird flu skin patch on more people.