Merrion Pharmaceuticals has blamed foreign exchange weakness for a 4 per cent fall in revenues in the first half of the year.
The Irish group's revenue comes through two licence agreements with Danish diabetes specialist Novo Nordisk, which is using Merrion's technology in trials to deliver an oral form of insulin.*
Having successfully completed a phase I trial, Novo Nordisk made a $1 million “milestone” payment in March. That translated as €727,000 because of euro weakness at the time. A more recent $1 milestone payment relating to a separate phase 1 trial paid after the period under review, translated as €763,000.
Overall, Merrion reported revenue of €955,793 in the six months to the end of June last.
A €200,000 impairment charge related to the writedown of the value of its Citywest premises and a further €122,000 in foreign exchange related impairments saw the company's net loss jump to €507,361 from €131,432 in the year ago period. Merrion says it is looking to sell the Citywest plant for which it paid €3.75 million in 2009. It is now valued at €1.6 million.
Auditors KPMG said Merrion was dependent on realising the value of its drug technologies if it is to repay a $5 million loan to Irelandia, the investment vehicle of Declan Ryan who is a major shareholder in the company.
Apart from the second milestone payment, Merrion has also signed an agreement with contract manufacturer Hovione since the accounting period ended, which it hopes will deliver new licence revenue.
* This article was amended on September 30th
