Irish drug development firm Merrion Pharmaceuticals has inked a second deal with Denmark-based medicine supplier Novo Nordisk that could be worth up to $58m (€44m) for the Dublin-headquartered company.
The agreement will see the two firms develop and commercialise oral formulations of a proprietary Novo Nordisk drug using Merrion's GIPET technology.
The formulations will be used to treat diabetes. The GIPET platform enables the oral delivery of drugs that may traditionally have had to be administered via injections.
The new oral drugs being developed by the two companies are aimed at treating patients with Type 2 diabetes.
The advantages of the new drugs are that users can't overdose on the product, while they do not cause weight gain -- a side effect of insulin use.
Novo Nordisk has also agreed to subscribe to 300,000 shares in Merrion at €3 each.
The money raised will be used to expand the Irish firm's facilities to cope with the additional work that will be undertaken in relation to the latest Novo deal.
Merrion and Novo Nordisk signed their first deal last November, to develop oral insulin treatments. That agreement could ultimately be worth up to €350m to Merrion.
Under the terms of the latest deal, Merrion will receive up to $58m for the first product developed under the agreement that reaches the market.
The income generated for Merrion will be dependent on certain development, regulatory and sales milestones, as well as royalties on sales.
Merrion Pharmaceuticals chief executive John Lynch said the agreement demonstrates the potential for "long-term partnership" between the two companies.
Goodbody Stockbrokers analyst Ian Hunter said that the new deal struck between the two companies represents a "very strong positive" for Merrion, "further validating its drug deliver technology and putting the company on a strong cash footing".
Shares in the pharmaceutical company rose over 19pc yesterday in Dublin to €4.05 on very low volume.