Sunday 19 November 2017

Merrion came close to finding partner, reveals CEO Fox

Merrion Pharmaceuticals chief executive John Fox
Merrion Pharmaceuticals chief executive John Fox
Gavin McLoughlin

Gavin McLoughlin

Merrion Pharmaceuticals chief executive John Fox has revealed that the company - which announced last week that it is to seek shareholder approval to be wound up - came close to finding a partner to progress its treatment for early-stage breast cancer patients.

"We'd been working with US bank Ladenburg Thalmann to try and find partners and a number of people got to the due diligence phase. But just one thing and another... it's one of these things - sometimes the window's open, sometimes it's closed," Fox told the Sunday Independent.

"We had two or three companies that took a very close look at it. We even had one US company that said it would license it, but it was going to give us $600,000, which was almost derisory - you get that sort of thing.

"So we did come close on a couple of occasions, but not with people who were willing to engage at any sort of pharma-standard level."

Eventually, the company was forced to sell certain intellectual property (IP) assets in order to pay off a loan, which was due to aviation tycoon Declan Ryan's Irelandia.

Irelandia had previously taken over the loan from Hercules Technology Growth Capital, giving Merrion more favourable terms in the process.

The company was due on Friday to send letters to shareholders, advising them of the next steps in the process. It will seek approval for a member's voluntary liquidation, involving the distribution of around €4.5m in cash - more than the company's market capitalisation.

Ryan - son of the late Tony Ryan - has been a significant supporter of the company, holding a 16.7pc stake after the company's 2007 IPO at €4.05 a share. As of December 31 last, Ryan held a 13pc stake. The shares were trading at 19c each on Friday.

After selling the intellectual property, the company became an investing company under ISE rules, meaning it had to complete a deal or deals in the healthcare sector (or a reverse takeover) within 12 months or the shares would be suspended.

"There was a mixture really of us having a look to see what was around and whenever you make an announcement like that, people will come to you. So we had two or three approaches, some of them very tenuously in the healthcare space; not in pharma but in sort of nutrition, on the edges of the pharma space.

"We had a couple of approaches from US companies, neither of whom, to be honest, were able to convince us that there was a strong value proposition there," Fox said.

He said the prospect of a reverse merger "wasn't really a major feature of the process".

An EGM seeking approval for the liquidation plan will likely be held at the end of next month, Fox said.

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