Kernel Capital Investee Merrion Pharmaceuticals signs second $58m contract with Novo Nordisk
January 21, 2009: Following the major deal announced in November Merrion Pharmaceuticals (IEX: MERR) confirms it has signed a
second Development and Licensing Agreement with the world’s largest insulin producer Novo Nordisk A/S (NYSE:
NVO). The Denmark-based Market leader has selected Merrion’s proprietary GIPET® technology to develop and
bring to the market oral forms of Novo Nordisk’s proprietary GLP-1 treatment. Novo Nordisk has the broadest
diabetes product portfolio in the industry and this new venture will see the companies focus on manufacturing a pill
variant of the Novo treatment that stimulates insulin production. At present, the class of drugs must be administered
via injections restricting their convenience for patients.
Under the terms of the latest investment, Merrion will receive up to $58m when the first product developed under the
agreement reaches the market. In reality, this partnership could ultimately be worth considerably more. Datamonitor
forecasts that the value of injectable Novo Nordisk and Eli Lilly GLP-1 products alone will be $4Bn by 2017.
Therefore royalties on sales of an oral version of these products could be very substantial. As Merrion are solely
responsible for development they will also receive substantial development fees, this will be significant to the short
term cash flow of the company. Novo is also subscribing for 300,000 shares in the Dublin-headquartered company at
a price of €3 per share.
CEO of Merrion Pharmaceuticals John Lynch said, “We believe that this development further demonstrates the
potential for long term partnership between our two companies and also enhances our capacity to develop our other
products and technologies”.
Commenting on the deal, Dr Daniel O’ Mahony, Partner and Head of Life Science at Kernel Capital said, “This
second Development and License Agreement between Merrion Pharmaceuticals and Novo Nordisk is further
validation of Merrion's GIPET® technology. It also highlights the broad application of this oral drug delivery
technology across a range of different drug classes, allowing for an increase in oral drug bioavailability, improvement
in drug absorption in the gastro-intestinal tract of drugs that are otherwise given by injection or for drugs which are
poorly absorbed. For patients hopefully it will also lead to new medicines allowing for new drug treatment regiments
as well as improvement in patient convenience and compliance.”
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