MERRION PHARMACEUTICALS is to cease its own drug-development programme and focus on its partnership with Novo Nordisk after talks on the sale of the company ended without agreement.
According to the company, expressions of interest “did not result in an offer consistent with the board’s long-term view of the intrinsic value of Merrion”.
The company, which employs 10 people having reduced its workforce by 20 last September, is to begin a redundancy programme. It also plans to sell its premises at CityWest. Merrion has been undergoing a “strategic review” since the middle of last year.
Last month the Declan Ryan-controlled entity Irelandia bought $5 million (€3.8 million) of debt owed by Merrion to US company Hercules Technology Growth Capital. Merrion had secured that debt last July.
John Lynch resigned from Merrion as chief executive in May, and was replaced by then chief financial officer Jonathan O’Connell. Company chairman Paddy O’Sullivan, has also resigned from the board.
Results for the 2011 financial year show that revenue at the listed company dropped to €1.24 million last year from €4.68 million in 2010. This was due to the transfer of some work from Merrion to Novo Nordisk, the company said.
Net losses increased to €6.53 million compared to €2.51 million the previous year. The loss per ordinary share last year was €0.38.
Merrion said the new redundancy and restructuring programme would reduce its operating costs from around €275,000 to €100,000 per month, and would allow it to keep its listing on the esm index.
The company has signed an agreement with Irelandia which provides for an overdraft facility of up to €1 million if required.
Merrion Pharmaceuticals was founded in 2003 and listed on the Irish stock exchange in late 2007. Its technology is used by Novo Nordisk to develop oral insulin drugs.
Merrion’s patented Gipet technology allows the company to make drugs which are typically delivered by injections, in tablet or capsule form.
