Intercell AG said it has received EUR 80 million of the upfront license and option fee from Novartis under the strategic alliance entered in July 2007.

Together with the EUR 150 m equity investment made in September 2007, this payment brings the cash received to date by Intercell under this strategic alliance with Novartis to EUR 230 m. Another unconditional and committed payment out of this alliance of EUR 40 m is due in 2008.

"Only about half of this fee received from Novartis will be booked as revenue in 2007, nevertheless we expect this year to become the first profitable full year of Intercell," said Werner Lanthaler, chief financial officer, Intercell. "Our research and development teams have completed the kick-off for the first key products within this alliance, including a novel Influenza vaccine adjuvanted with IC31 and the co-development for a therapeutic Hepatitis C Virus vaccine."

Intercell's cash position is now more than EUR 290 m, which secures the optimal speed of development programmes and the strategic growth of the company.

In July 2007 Intercell and Novartis signed a major strategic partnership to accelerate innovation in vaccines development in infectious diseases. The partnership includes a co-development and profit-sharing arrangement to bring together both companies' programs in the field of therapeutic Hepatitis C Virus vaccines with the aim of expanding their combined leadership in this field. Intercell's adjuvant IC31 will be exclusively licensed to Novartis for the development of improved Influenza vaccines. IC31 will also be non-exclusively licensed to Novartis in other areas. Intercell retains the right to continue to enter into partnerships for IC31 with third parties in infectious diseases, cancer, allergies, and other indications.

Intercell AG is a growing biotechnology company which focuses on the design and development of novel vaccines for the prevention and treatment of infectious diseases with substantial unmet medical need. The Company develops antigens and adjuvants which are derived from its proprietary technology platforms, and has inhouse GMP manufacturing capability. Based on these technologies, Intercell has strategic partnerships with a number of global pharmaceutical companies, including Novartis, Merck & Co., Inc., Wyeth, sanofi pasteur, Kirin and the Statens Serum Institute.

The company's leading product, a prophylactic vaccine against Japanese Encephalitis, successfully concluded pivotal phase III clinical trials in 2006. The regulatory process toward a Biologics License Application (BLA) to the US Food and Drug Administration (FDA) has been initiated.