Excell buyer set for London listing

An Austrian firm that recently snapped up the assets of failed Excell Biotech is set to pursue further acquisitions in Scotland.

Flush with cash from raising (pounds) 35 million last year, Intercell executives said that the local biosciences community was fertile ground for collaborations or outright company takeovers to build its drug development portfolio.

Intercell, develops vaccines to prevent infectious diseases and certain types of cancer, but has yet to turn a profit. It plans to float on a European stock exchange - possibly in London - this year.

Michael Buschle, chief scientific officer and a member of the board of directors, said: "Although we have sufficient money in the bank, we will go public to fill our war chest. It will allow us to push products through the pipeline more quickly and allow us to pursue other acquisitions. We are looking to buy or collaborate with other companies that have good late-stage vaccine products."

Buschle added that its new Scottish operations will play a significant role in future plans. The 43-year-old executive has taken charge of the subsidiary Intercell Biomedica in Scotland and will soon be relocating to Edinburgh with his family.

The company's lead products, a therapeutic hepatitis C vaccine and a jab against Japanese encephalitis (a mosquito-borne virus that can affect the central nervous system), are poised to enter the crucial Phase III trials in 2005.

The process, development and manufacturing of materials for the Japanese encephalitis vaccine will take place in Scotland, as well as research and creation of several other products that are in earlier stages of the pipeline.

If successfully launched on the market in 2007, the encephalitis vaccine could prove to be a financial goldmine. It would be aimed at travellers and military personnel based in southeast Asia, where the disease is prevalent and would compete against an American product currently on the market.

Intercell purchased Excell's manufacturing facility for "a competitive price" last month after the Livingston-based contract drug manufacturer went into receivership.

"The facility in Livingston is very up-to-date. Scotland has a very qualified workforce that can produce biologicals according to good manufacturing practice. You can build a facility anywhere but you can only get the workforce in certain areas."

Buschle said Scotland's biotechnology sector was more developed than in Austria.

Founded by Buschle and four other colleagues in 1998, Intercell has raised more than (euros)100m in financing from top-flight investors such as Global Life Science Ventures and MPM Capital. It is already generating undisclosed revenues through a number of commercial agreements with pharmaceutical firms, but Buschle estimated Intercell will only reach profitability in 2007.

While biotechnology has met a lukewarm response from stock market investors during the past three years, Buschle said the picture looked far more positive for this year. "There have been some successful examples of flotations in the US and Europe recently. But the window may close. We will prepare our prospectus, select a merchant banker and then decide if economic conditions are still favourable."

Copyright 2004 SMG Sunday Newspapers Ltd.
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