Merrion pretax losses fall as revenues surge

Listed Irish drug-maker Merrion Pharmaceuticals has reported a pre-tax loss of €5 million for 2008, down from a loss of €12 million reported in the previous 12 months.

Revenues rose by 186 per cent to €1.34 million on the back of its alliance with Novo Nordisk, the world’s largest insulin maker which has resulted in two development and licensing agreements for new products, including oral insulin.

Merrion signed its first agreement, worth $58 million (€44.5m) with Novo Nordisk in November 2008 and a second partnership for the same amount last January.

Research and development spending rose 17 per cent to €3.9 million while administration costs declined 15 per cent to €2.42 million, the company said in its full-year results.

Merrion is a specialist pharmaceutical firm that develops oral forms of drugs that are currently given by injection. At 2pm its share price was unchanged at €4.40 giving the company a market share of €73 million. Merrion’s share price is up over 7 per cent over the last year.

The company was formed in 2003 to commercialise technology acquired from Elan.

John Lynch chief executive said he was pleased with how its partner programs with Novo Nordisk had progressed.

He said the company was concentrating on completing its Orazol phase 2 clinical trial and was hoping to release data in the second quarter. Orazol is being developed as a treatment for cancer patients with tumours that have metastasised to bone.

The management said it was “satisfied” with its 2008 results. The company had cash reserves of €8.14 million at December 31st, down from €10.8 million a year earlier.

Among the downside risks identified by Merrion is that it “may be unable to generate sufficient revenues” if its clinical trials are unsuccessful, or if it does not obtain the required regulatory approvals.

The diluted net loss per ordinary share was 30 cent, down from €1.60.

Goodbody analyst Ian Hunter said the results were in line with expectations and said having “met and surpassed its pre-flotation goals and with cash reserves to fund development” the company was well placed to progress this year.

There were a number of senior personnel changes at the company last year with Pat Wall, a partner with PwC, resigning as a director due to other work commitments.

Beacon Hospital board chairman Patrick O’Sullivan was appointed a director of Merrion in May last year and was appointed chairman last month.

Executive chairman of Stratford Healthcare Harry Stratford joined the Merrion board in December 2008.