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Regulatory News

15 March 2011

Merrion Pharmaceuticals plc Announces Preliminary Results for the year ended
31 December 2010

Merrion Pharmaceuticals plc, ("Merrion" or the "Company") (ESM: MERR) an international pharmaceutical product development company, announced today its preliminary financial results for the year ended 31 December 2010.

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The Full Results are available to download in PDF format

Operating highlights

  • During November and December 2010, Merrion signed a number of feasibility and option agreements which significantly expanded the Company's partnered pipeline by an additional six compounds. The deals signed were as follows:
    • On 21 December 2010, Merrion signed a collaboration and option agreement and warrant agreement with Novo Nordisk A/S, a world leader in diabetes medicine. Under this agreement, Merrion will evaluate the ability of the GIPET technology to boost the oral bioavailability of an undisclosed proprietary compound. Following the feasibility studies, Novo Nordisk will have the option to enter into a further licensing agreement for Merrion's GIPET technology on agreed terms. As part of the agreement Merrion has granted Novo Nordisk a warrant to acquire ordinary shares of up to €1,500,000 in Merrion at an agreed price following the signing of a license agreement. Merrion can also require Novo Nordisk to acquire up to €500,000 worth of shares in Merrion at the same agreed price following the signing of a license agreement.
    • In November 2010, Merrion entered into a feasibility and option agreement with Rebel Pharmaceuticals LLC on two undisclosed compounds whereby Merrion will evaluate the ability of its patented GIPET technology to enhance the compounds' clinical profile and create a substantially improved product. Key license terms have been agreed, should the programmes progress to license.
    • In December 2010, we signed a feasibility and option agreement for three compounds with an international 'top ten' pharmaceutical company. The agreement will evaluate the ability of Merrion's patented GIPET technology to boost the bioavailablity of three of the 'big pharma' company's compounds.
  • In November 2010, Merrion finalised a Phase III development programme for Orazolâ„¢ under Rule 505b (2) with the Food and Drug Administration (FDA) in the USA. The study will compare Orazol against placebo as an adjuvant breast cancer treatment (a new indication for zoledronic acid) with a primary endpoint of disease free survival of patients with breast cancer. Previous (third party) large scale studies of zoledronic acid have shown its benefits in reducing breast cancer recurrence and death. The Company had previously agreed its Phase III trial design with the European Committee for Medicinal Products for Human Use (CHMP) for Orazol in Europe for bone metastases. It is the Company's intention to license Orazol to a partner to complete trials and file for registration.
  • The Company continues to work with Novo Nordisk on its oral insulin and oral GLP1 product. Novo Nordisk has commenced Phase I clinical trials for oral GLP-1 and oral insulin analogues using Merrion's GIPET technology. The Company expects these clinical trials to continue through 2011.
  • During the year, Merrion was issued two important US GIPET patents covering the GIPET technology and our Orazol product.
  • In July 2010, our new 30,000 sq.ft. state of the art facility in Citywest was granted a license under the EU Clinical Directive for Investigational Medicinal Products, allowing Merrion to manufacture for clinical trials.
  • In addition, during the year, several feasibility studies were conducted on potential new products, new technology development programmes were initiated and Dr. Hing Kin Chan was appointed as Chief Business Officer.

Summary financial results

  • A decrease in revenues to €4,678,000 compared with €6,335,000 in the previous year.
  • Net loss of €2,510,000 compared with a net loss of €1,629,000 in the previous year.
  • Research and development expenses of €4,162,000 (2009: €4,410,000).
  • Administration expenses of €1,982,000 (2009: €2,477,000).
  • Net finance expense of €154,000 compared to finance income of €178,000 in the prior year.
  • Loss per ordinary share of €0.15 (2009: €0.10).
  • Cash and cash equivalents of €3,310,000 compared to cash and cash equivalents of €7,218,000.
  • Trade and other receivables of €1,704,000 (2009: €2,471,000).
  • A 12% decrease in loans and borrowings to €2,851,000 from (2009: €3,258,000).
  • Growth in average headcount to 40 (2009: 35).

Commenting on the results, John Lynch, Chief Executive Officer said: 'The decrease in revenue compared to the prior year is a result of the completion of product development work for Novo Nordisk. We were contracted by Novo Nordisk to manufacture clinical trial supplies for their Phase I trials. We completed this activity during 2010 and the products are now in clinical trials. The additional capacity of our new facility has allowed us to enter 3 recent agreements to work on six new compounds including one for Novo Nordisk. This is providing Merrion with new revenue sources in 2011. Cash was increased just after year end by the receipt of $1.0 million from Novo Nordisk'.

Outlook

Commenting further on the outlook for 2011, John Lynch added: "The hard work carried out in 2010 has set us in good stead for the next year. In the last quarter of 2010, Merrion signed pre-license agreements with two new partners and with Novo Nordisk for a new compound. Work on these programmes is underway and we are pleased with progress to date. There are other license opportunities in the Company's own portfolio and in existing partner programmes. We are hopeful that some of these agreements will become full license agreements following the results of the feasibility work. The Novo Nordisk Phase I clinical trial manufacturing is now complete and while development revenue from Novo Nordisk will decrease going forward; the new agreements are giving Merrion significant prospective development fee revenue and milestone revenue opportunities. Also, under current license agreements with Novo Nordisk, the Company is eligible for revenue on the achievement of certain development, regulatory and sales milestones. Such revenue could be in excess of US$100 million. '

Merrion is focused on completing licensing agreements in 2011, and we strengthened our business development expertise by appointing Dr. Hing Kin Chan as Chief Business Officer in 2010. This is an industry with a very long deal cycle, but we have active negotiations on a number of out-licensing opportunities, which we are aiming to bring to conclusion efficiently. Recent third party clinical trials published on zoledronic acid, the active ingredient in Orazol, have demonstrated significant improvement in disease recurrence and survival in breast cancer. We have used this data to refine the design of our trial and we are currently working to clarify the cost of a Phase III clinical trial in order to bring Orazol to the market.

Our Irish Medicines Board (IMB) licensed facility at Citywest provides much needed capacity to expand our pipeline and to develop our technology base. Studies completed in 2010 have demonstrated additional attributes of our GIPET technology, creating additional product potential. We are currently investigating the application of GIPET to additional products with a focus on drug efficacy, safety and improved quality of life for patients. We expect to add to our portfolio during 2011. "

Company background

Merrion Pharmaceuticals plc (www.merrionpharma.com) is a publicly listed product development company focused on delivering innovation to the market by working on our own products and partnering with pharmaceutical companies to develop patented products. Established in 2003, Merrion is primarily engaged in the development of oral forms (tablets/capsules) of drugs that have suboptimal absorption, many of which can only be given by injection.

Merrion's patented drug delivery technologies increase bioavailability, by improving absorption in the gastrointestinal tract, of drugs that are otherwise poorly absorbed. This can provide substantial benefits in patient convenience and safety, and while also having the potential to enhance drug efficacy. Merrion utilises its technology to develop new oral drugs in two ways; it develops its own proprietary drugs using the GIPET technology and partners with other pharmaceutical companies in developing oral GIPET formulations of their products.

Merrion currently has four internal product development programs and 10 partner programs based on the GIPET technology.

Merrion has agreements with several pharmaceutical companies. Currently there are two ongoing license agreements with Novo Nordisk to develop and commercialise oral forms of Novo Nordisk's Insulin and GLP-1 using Merrion's proprietary GIPET technology. In addition, Merrion has entered into a collaboration and option agreement with Novo Nordisk for an undisclosed compound. Merrion also has an oral drug delivery research collaborative program with Ferring Pharmaceuticals, an undisclosed 'top ten' pharma company, Rebel Pharmaceuticals and another non disclosed pharma company.

Merrion Pharmaceuticals is based in Dublin, in a state of the art, current Good Manufacturing Practice (cGMP) purpose built facility which allows speed of development and reduced risk in taking ideas from conception to final Phase II formulation. Merrion also has operations in Wilmington, North Carolina. Merrion is listed on the Irish Stock Exchange (ESM) under the symbol MERR.

 

Contact Information:

Investor Enquiries: Media Enquiries:
Merrion Pharmaceuticals Plc. Wally Young, Young Communications
Jonathan O'Connell +353 (0)1 668-0530
T +353 1 642 3300 +353 (0)8 7247-1520
www.merrionpharma.com  
   
Davy Corporate Finance Definition Branding & Marketing
Ivan Murphy Daniel O'Connell
T +353 1 679 6363 T: +1 212.660.2555 ext 17
  daniel.oconnell@definitionbam.com

 

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