Merrion Pharmaceuticals says its survival is dependent on Declan Ryan's Irelandia Investments not calling in an overdue loan as it reported a doubling of half-year losses.
The Dublin-listed group, whose Irish revenue comes through two licence agreements with Danish diabetes specialist Novo Nordisk, reported a net loss of €1.02 million or €5.58 cent per share for the six months to the end of June. This compares to a loss of €507,000 or €2.76 cents for the same period a year earlier.
The decline was largely due to a €705,000 drop in revenue from €955,793 to €250,000.
For the same period last year, Merrion’s revenues were boosted by a €727,000 milestone payment from Novo Nordisk on completion of a single dose Phase 1 trial with a novel oral insulin.
Administrative and research and development declined by €440,000 from €1 million to €561,000 from June 2014 to the same month this year. Net finance expenses rose by €276,000 from €454,000 to €716,000 over the same period, due in part to foreign exchange losses.
Established in 2003, Merrion is engaged in developing oral forms of drugs that typically have poor absorption and are generally given by injection.
In its interim statement the group said its ability to generate sufficient cash to repay a €4.8 million loan to Irelandia “cast significant doubt on the ability of the group to continue as a going concern for the foreseeable future.”
Repayment of the loan was originally due to be made in December. At the end of March Irelandia agreed to extend the principal repayment term by 18 months to the end of September with the deferred interest of €167,569 remaining payable aby June 30th. It has since said though that it has no intention of calling in repayment of the laon before the end of this year.
Merrion said that notwithstanding the uncertainty over the loan repayment its directors had a “reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.”
Chairman Michael McKenna said the company continues to be encouraged by the success of Novo Nordisk in employing Merrion’s technology in the development of treatment of diabetes using oral medication.
