12:00 AM
 | 
Jun 19, 2006
 |  BioCentury  |  Finance

Ebb & Flow

Investors gave a cool response to Intercell’s news that it had signed a deal covering its Japanese encephalitis vaccine with Novartis (NVS; SWX:NOVN). The agreement includes milestones up to E37 million ($46.7 million) split almost equally between final Phase III data and securing U.S. and EU regulatory approvals. The first milestone is expected this year, while the approvals are anticipated in 2007 and 2008, respectively.

NVS’s rights cover the U.S., Europe and markets in Asia and Latin America not covered by other agreements. ICLL retained the right to market JEV to military markets. The pharma also received first negotiation rights to four ICLL programs, including a therapeutic hepatitis C vaccine.

ICLL also announced that it plans an offering of 4.7 million new shares through a 1 for 7 rights issue, plus a secondary placement of up to 2.5 million shares owned by MPM Capital; TVM Capital; Star Ventures; and Alpinvest, as well as placing 0.6 million shares on behalf of management and employees to cover taxes and the excerise of employee stock options.

NVS agreed to invest E30 million ($37.93 million) in the offering. Based on Friday’s close, ICLL would raise E56.4 million ($71.3 million) in new money and NVS would end up with about a 5% stake. Between E10-E20 million of the funds will be earmarked for increasing the company’s JEV production capacity from 1 million to 2-3 million doses a year.

At one stage the stock was down 10% from the week’s opening of E12.80 before recovering slightly to finish the week down E0.80 (6%) at E12.

Neither the company nor analysts could explain why the stock lost ground, as the NVS deal provides early rewards and a share of the upside. Moreover, the rights issue is at market price and doesn’t involve a discount.

Hit where it hurts

ExonHit’s proposed secondary offering also isn’t going over terribly well, as the stock fell E3.05 (27%) to E8.09 the week before last. Last week, the company (Euronext:ALEHT) opted to trim the number of shares that selling shareholders are offering to 1 million from the previously proposed 2-2.5 million (see BioCentury, June 12). Other terms of the deal, including the E6.50 price, are unchanged.

Last week, the stock fell a further E0.93 (11%) to E7.16.

One of the main goals of the offering is to provide certain existing investors with an orderly exit in front of the Aug. 17 expiration of their lockup. About 13% of the alternative splicing company’s shares are traded publicly. If 1 million shares are sold in the secondary, that figure will increase to 16.2%.

Selling shareholders include Banexi; Béarnaise de Participation; Natio-Vie Développement; Dresdner Kleinwort Wasserstein; Danske Bank; AGF Innovation; and Sofinnova Partners.

ALEHT went public on Euronext’s Alternext market last November at E2.89.

What’s next

Speaking of Euronext, the exchange last week announced the formation of the Alternext Index. When it comes on line on Sept. 4, the market cap-weighted index will include all companies listed on Alternext. Alternext currently includes 39 companies listed in Paris. On Thursday, Alternext Brussels...

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