Austrian biotech company Intercell said it won’t develop its Travelers’ Diarrhea vaccine candidate and will post a much wider than expected 2010 loss, because the drug failed in clinical trials.

The company said on Sunday that the patch-based Travelers’ Diarrhea vaccine candidate failed to meet efficacy endpoints to protect against enterotoxigenic E. coli mediated diarrheal infections in pivotal, randomized and placebo-controlled efficacy studies.

While it doesn’t plan to develop the vaccine anymore, Intercell said the studies support the continued investigation of its patch technology for future vaccines.

It expects its loss for 2010 to be “substantially higher” than its previous forecast of 40 million euros because it will not receive milestone payments in connection with the Travelers’ Diarrhea program.

The company said the intangible assets from the vaccine program had a book value of 167 million euros as of September

30. It plans to take a charge to write-down the value of all or a most of those assets that will also hurt the company’s 2010 results.

Intercell said it has decided to cut research and development spending by about 40 percent in 2011. It said the company will focus its resources on the other projects in its clinical stage portfolio.

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(Reuters)