Mumbai: Austrian vaccine maker Intercell AG has agreed to acquire US-based Iomai Corporation for a total of $189 million (Euro 122 million).

Intercell will pay $6.60 for each Iomai share to expand its late-stage production pipeline, Vienna-based Intercell said in a statement.

Intercell AG works with Novartis AG and Merck & Co.

The acquisition will be made through a stock-for-stock exchange for approximately 41 per cent of Iomai's current shares outstanding held by major shareholders for approximately 1.7 million Intercell shares (representing approximately four per cent of Intercell's total outstanding shares), and an all-cash merger for the remaining fully diluted outstanding shares of Iomai's common stock for  approximately $119 million (Euro77 million), the company said in the statement.
 
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 Travelers' Diarrhea vaccine, based on the needle-free vaccine patch technology, is planned to enter phase III trials in the first half of 2009.

The transaction will give Intercell access to a further product generating technology platform, helping to expand its pipeline, leveraging Intercell's late stage product development and industrialisation expertise.

Two further programmes are in clinical development, including a vaccine patch for pandemic influenza in Phase II.

Intercell will finance the cash component of the transaction of approximately $119 million from existing reserves and expects to maintain profitability in 2008.

The transaction has been unanimously approved by the boards of both the companies and is subject to customary closing conditions, including antitrust clearances, clearance by the Committee on Foreign Investment in the United States and the approval of the holders of a majority of Iomai's shares.

Shareholders holding over 50 per cent of Iomai's total shares outstanding have entered into agreements to vote in favour of the combination.