Intercell AG, the leading Austrian biotech firm signed a deal with US drug company Merck & Co to supply antigens for use in bacterial vaccines.

Intercell, which is considering listing on a European stock market this year, said that it would receive "significant" upfront, licence, and milestone payments for a vaccine product which Merck will develop using Intercell's antigens.

Merck also has options for an antibody product Intercell is developing and the Austrian firm said it would receive additional payments if Merck exercised that option.

Intercell chief financial officer Werner Lanthaler said, as per the agreement Merck was allowed to explore the technology for over two years. However, he declined to give a value for the deal but said it was bigger than another agreement with Aventis Pasteur. He said there was no talk of Merck picking up equity in Intercell as part of the deal.

Lanthaler said in March that Intercell believed an initial public offering was possible this year, and it could look at a listing in Vienna, Frankfurt, London or Zurich.