Merrion grows alliance with Novo through share deal
Published 23/12/2010 | 05:00
DUBLIN-Based Merrion Pharmaceuticals has expanded its relationship with Novo Nordisk, the world's largest maker of insulin, by agreeing to sell shares in the Irish drug delivery company and allowing the Danish company further access to its technology.
Novo would evaluate whether Merrion's method of improving pills' absorption in the gut can be applied to an undisclosed product, Merrion said yesterday.
It granted Novo a warrant to buy €1.5m worth of shares at Tuesday's closing price of €3 as part of the deal. Merrion, which was started in Trinity College, has a market value of about €45m.
The shares dipped to a 52-week low of €2.60 during trading but later closed at €2.70.
The announcement is the third collaboration agreement between Merrion and another company within a month as the Dublin company's proprietary drug delivery platform attracts attention from other pharmaceutical firms.
It is also the third collaboration between Merrion and Novo, which suggests the first two agreements are progressing well.
Merrion gave few details about the financial arrangements or the type of medicines involved.
Novo will have the option of entering into a third licensing agreement for Merrion's technology on pre-agreed, but not disclosed, terms.
The companies already have two $85m (€65m) agreements in place for the development of two other drugs.
No financial details were given other than details on the warrant to acquire the €1.5m worth of shares and another €500,000 shares at a later date. Under the terms of the deal, Novo Nordisk receives a 20-day warrant to acquire the stock.
Goodbody Stockbrokers analyst Ian Hunter speculated that "this third, undisclosed compound could be in Novo's other range of products, including haemophilia drugs, human growth hormones and HRT compounds".
Denmark-based Novo wants to boost sales by making tablet versions of its products, most of which now must be injected, including diabetes drug Victoza and a blood-clotting treatment.
Novo agreed to pay US-based Emisphere Technologies as much as $57.5m earlier this week to help make insulin pills that treat diabetes.
There are at present no insulin tablets on the market and patients with diabetes who need insulin, a naturally occurring protein that controls blood sugar levels, must inject several times a day.
Peter Kurtzhals, head of Novo's diabetes research, said it would probably be 10 years before the company could start marketing such pills, assuming the research was successful.