LONDON and SAN FRANCISCO, 11 July, 2007 – Morrison & Foerster advised long-term client Intercell AG on a major vaccines partnership with Novartis under which Novartis will receive opt in rights to Intercell's non-partnered vaccines and exclusive, worldwide rights to Intercell's IC31 adjuvant for influenza vaccines.

Intercell will receive €120 million up front and a €150 million equity investment from Novartis.  In exchange for the IC31 license, Intercell is eligible for €100 million in milestones, plus double-digit royalties tied to sales performance. Intercell also granted Novartis non-exclusive rights to the adjuvant for non-influenza indications, with Intercell eligible for €30-€60 million in upfront payments and milestones, plus up to high single digit royalties for each license tied to sales performance.

Novartis also received an option to develop, manufacture and commercialise any existing unpartnered vaccines or any future vaccines from Intercell's Antigen Identification Program. For each licensed program, Intercell can choose to share profits with Novartis or to be eligible for €120 million in milestones, plus double-digit royalties. Intercell's lead non-partnered program is IC43, which is in Phase II trials to prevent pseudomonas infection.

Additionally, Intercell and Novartis will co-develop therapeutic HCV vaccines, for which the partners will share profits. Intercell has an HCV vaccine in Phase II testing, while Novartis has a vaccine in Phase I/II studies.

An international life sciences team from Morrison & Foerster led by Laura Spiegelman and including Julian Thurston, James Ryan, Tara Sherbrooke and Charlene Kon, worked on the transaction, which signed in Basel on July 2.  Consummation of the transaction is subject to Hart-Scott Rodino clearance under U.S. law.

The Intercell deal closed hot on the heels of another major transaction for members of the London team.  They also advised London Stock Exchange-listed Renovo on an exclusive licensing agreement with Shire plc.  The Renovo/Shire agreement covers every country throughout the world except Member States of the European Union and has a potential value of $825 million.