For more information be invited to: www.intercell.com

Europe's Biotech deficit – consequences and hopes

ALEXANDER VON GABAIN

“ We cannot be a strong nation unless we are a healthy nation“

President Franklin D. Roosevelt

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Thread of infectious diseases - high death toll, only part of the story

» Every fourth human life terminated by microbial infections

» 13 million deaths per year in developing countries only

» 6 million children thereof

» Multi-drug resistant microbes in hospitals and communities

» Novel pathogens emerge

» Bioterrorism

» Pandemic flu, as seen 1918, with estimated 50 million deaths

» Approx. 100 million people disabled by infectious diseases

» 10 millions of children kept away from school due to infections

» Infectious diseases deform, mutilate and disable children for life

» DALY* is the greatest burden of infectious diseases

» Economic burden cannot be calculated

AT ANY TIME

* disability adjusted life years

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Chronic infectious diseases - a new paradigm in medicine

Are bacteria and viruses the cause of non- inhered diseases?

Autoimmune-diseases

Bacterial infections

Neurodegenerative diseases

Arteriosclerosis diseases

HPV, HCV, HBV, Helicobacter infections

Cancer

Viral infections

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Vaccines - a cost - efficient success story

Deaths prevented by Vaccines

Ye

llo

w F

ev

He

p B

Me

as

les

Po

lio

Dia

rrh

ea

0

20

40

60

80

100

120S

ma

llp

ox

Dip

hth

eri

a

Te

tan

us

TB

Ru

be

lla

AR

I

Disease

% P

rev

en

ted

0

1

2

3

4

5

6%Prevented

Deaths

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The vaccine field: challenges ahead and new paradigms

No efficacious vaccines against many infectious diseases

FORCES AT WORK

Many existing vaccines do not protect important

population cohorts (e.g. influenza for elderly)

New vaccines open a wide field to prevent and to treat diseases with unmet need; e.g. HPV-induced cervix car-cinome, nicotine-dependence

Combination of therapeutic vaccines and other

treatments open new therapeutics against chronic

viral diseases and cancer

"Come back of vaccines"

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Sources:Frost & Sullivan, Datamonitor, Theta Reports, Genesis, Company Information

Growing market with a restricted number of mostly US-prone vaccine players

US$ bnGLOBAL VACCINE MARKETTraditional and

combinations

Novel and therapeutic vaccines

6.66.66.66.66.0

15.3

10.0

5.12.2

0.8

1990 2001 2003 2005E 2007E 2009E

6.88.8

11.7

16.6

21.9

2.0

24.3

22.6

21.3

17.8

8.15.9

» Global vaccine market 16%

» Novel and therapeutic vaccines 38%

» Traditional and combination 0% vaccines

Expected CAGR 2003 - 2009

Novartis/Chiron*

GSK

WyethMerck**

Sanofi-Aventis**

Other

Industry Landscape% of market share

Other: Acambis, Bavarian Nordic, Baxter, Intercell,Berna Biotech*, Corixa*, ID Biomedical*, Solvay

* recently acquired** strategic partners of Intercell

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The innovation gap of the established pharma and vaccine industry - a fact

Source: Phar-maceutical Research and Manu-factures of America, FDA, Burill & Co.

26 2522

28

53

39

30

35

2724

17

0

5

10

15

20

25

30

35

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

bn US$

Number of new FDA approved drugs

Pharma R&D spending

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Biotech industry provides hope: majority of product pipeline comes from smaller biotech

0

200

400

600

800

1000

1200

1400

1600

1800

Phase I Phase II Phase III Filed

Others (mainly biotech)

Top 100 Pharma players

COMPOUNDS IN DEVELOPMENT BY COMPANY SIZE

Source: PharmaProjects, BCG

Nu

mb

er o

f co

mp

ou

nd

s

68%

69%

67%

55%32%31%

33% 45%

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"In the following 10 years the Soviet Union will out-compete the capitalist economy of the USA in terms of per capita income, economic welfare,

growth and high tech"

President Nikita Krushchev, 1963

Europe’s biotech vision or does history repeat?

"Until 2010 Europe will overtake the US in growth of Biotech industry“

EU Lisbon Summit, 2000

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Sobering facts speak another language

» Public listed biotech companiesin percent

» Private equity investment in biotechin % of GDP

» Origin of patents used by European biotechin percent

<10

~0.38

~28

Europe

>30

~1.50

~52

US

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Market cap (2005)

Biotech Companies USA

In US$ bn

Revenue (2004)

Biotech Companies Europe

» Amgen

» Genentech

» Genzyme

Total

88.78

87.86

17.74

194.38

10.55

4.62

2.20

17.37

» Serono*

» Actelion*

» Quiagen*

Total

7.88

1.98

1.94

11.80

2.46

0.22

0.96

3.64

Europe versus USA – state of being behind

* not truly considered as Biotechs

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Underdeveloped biotech - consequences for Biomedical Research and Health Care

» Health care quality will drop: European hospitals become less and less R&D drivers (e.g. compare ratio of phase I/II to phase III/IV trials Europe versus USA)

» Lack of job opportunities for MDs and PhDs in Europe

» Brain drain – exodus of biomedical scientists (nearly 50% of European MD/Ph.D. scientists decide to stay in the USA 1990, today more than 70%!)

» Biomedical research obtains less overflow from charities

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People:» Management board: G. Zettlmeissl (CEO), A. v. Gabain (CSO and founder)

& W. Lanthaler (CFO)» Supervisory board: E.G. Afting, D. Ebsworth, M. Gréco, H. Küpper, H. Schühsler & J. Sulat» SAB: R. Ahmed, H. Blum, S. Cohen, F.X. Heinz,

S. Kaufmann, S. Normark, H. Wigzell

History:Spin off from the Campus Vienna Biocenter, IMP and University 1999. Today 160 employees from 16 nations in Vienna, Edinburgh & North Carolina, USA

Partners:Merck (USA), Sanofi Aventis, SSI, Boehringer Ingelheim, SciGen, Biological E, EC, NIH, CDC, WRAIR, Karolinska, MPI, AERAS foundation

Products: Therapeutic & prophylactic vaccines based on the latest stage immunology and vaccine technology

Funding:Investors include Apax, Nomura, TVM, MPM Capital, GLSV, Sal. Oppenheim & K&W. Since 2005 listed at the ATX (ICLL): Today’s Market cap: approx. € 300m

Intercell, an international biotech vaccine player, a spin off from a Viennese University Chair

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Advanced clinical programs – promising product pipeline and strategic partnerships

Phase I

Phase II FilingPre-

clinical

» Bacterial vaccine **** 2006/07

Strategic partner-

ships

Phase III

Advanced clinical product

candidates

2006/07» S. pneumoniae

» Group A Streptococcus 2006/07

» Therapeutic AntibodiesS. pneumoniae; GBS

2006

ProductPipeline

» Travelers diarrhea 2007

» Hepatitis B therapeutic** 2006

PRODUCT CANDIDATES OVERVIEW

» Japanese Encephalitis(JEV) (IC51)

2006

» Hepatitis C therapeutic (IC41)

20112008

» Tuberculosis* 2006/07

» S. aureus*** 2006/07

Clinical progressin last 12 month

*

**

***

****

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European assets to build a robust biotech industry

» High level of education

» Solid academic base

» Competent and good quality research at many Universities

» Historical power-houses of research; Pasteur, Karolinska, Cambridge, Oxford, EMBO, Max Plank Institute, Basle Biozentrum, Campus Vienna Biocenter (Max Perutz lab., IMP IMBA) etc.

» Growing number of Centers of Excellence

» Long tradition of Pharma development

» Excellent clinical institutions with the potential to carry out clinical research-driven studies

» Growing interaction between the national biomedical scenes

» Scientific output in the field of biotech is still significant

still European biotech hasn’t hit the street

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Thank you for your attention

If you think research isexpensive, try disease

Mary Lasker (1901-1994)

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PAGE 17 For more information be invited to: www.intercell.com

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328

289

218

204

203

195

187

186

181

171

170

170

168

164

154

148

145

136

136

133

Canada

United States

Rep. of Korea

Australia

Spain

Belgium

The Netherlands

United Kingdom

Germany

New Zealand

Italy

Iceland

France

Japan

Switzerland

Greece

Finland

Ireland

Russia

Hungary

INFLUENZA VACCINE DISTRIBUTION (40 COUNTRIES, 2002)

Source: Journal of Public Health Policy

Doses of influenza vaccine distributed per 1,000 population

129

120

113

106

102

95

92

89

82

76

71

56

54

50

45

43

34

22

16

1

Portugal

Sweden

Denmark

Austria

Luxembourg

Slovak Republic

Slovenia

Norway

Argentina

Brazil

Poland

Latvia

Czech Republic

Romania

Lithuania

Bulgaria

South Africa

Mexico

Turkey

Egypt