Emisphere Scores on Novo Nordisk Pact (EMIS, NVO)
Emisphere Technologies, Inc. (NASDAQ: EMIS) is seeing a major surge in pre-market trading this morning after the company was designated a pact with Novo Nordisk A/S (NYSE: NVO). The companies enetered into an exclusive development and license agreement to develop and commercialize oral formulations of Novo Nordisk’s GLP-1 receptor agonists for the potential of treating Type 2 diabetes.
This pact will use Emisphere’s eligen technology and will generate payments to Emisphere by Novo Nordisk. This will include at least $87 million in product development and sales milestone payments to Emisphere. Of this amount, some $10 million will be the minimum first year payment, as well as royalties on sales.
This signed agreement will also give Novo Nordisk the option to develop oral formulations of Novo Nordisk compounds other than GLP-1 receptor agonists using Emisphere’s proprietary carrier technology.
Further financial details of the agreement were not made public. We might be much more questionable since this all depends on commercialization of the new sales. But Novo Nordisk is the key leader in diabetes treatment and has the best reputation for the entire sector.
To put this in perspective Emishpsphere’s market cap was a mere $60 million before this morning’s news. Emisphere is also a pre-revenue stage company. Shares are very thinly traded this morning with a huge illiquid spread. But the last trade was at $2.80, up some 41%. We’ve only seen 4,8000 shares change hands as of 9:02 AM EST and the average volume is only about 66,000 shares per day. Its 52-week trading range is $1.28 to $5.17.
Jon Ogg
June 23, 2008
