SurModics Inc (SRDX)

[Democritus_of_Abdera]

Dew, regarding Merck

I was listening carefully to the CC for any hints as to nature of the Merck collaboration, but could not find any of substance. The non-commital response to Suraj’s open question concerning MK-0140, was characteristic. I did notice, however, that both Phil and Bruce talked in the plural when discussing Merck’s development programs. For example:

Phil Ankeny: “...and other expenses that we incur on behalf of Merck to carry the development forward of the various I-vation platforms that they are developing...”

Bruce Barclay: “I can tell you that our teams here are incredibly busy, and Merck is completely engaged in the project on multiple fronts, not only with the I-vation product but with other compounds of interest as well.”

It could be that Bruce was refering to triamcinolone acetate as the “I-vation product” and that the “other compounds” refer to those in Merck’s inventory which will be put on the I-vation platform. Or, it could be that Merck is also using SRDX products that are not related to I-vation. I think that the first interpretation is most likely because it is consistant with Phil’s statement. But the second supports your speculation that there is more to the Merck relationship than we know and that SRDX is volunarily taking an accounting earnings hit for the sake of secrecy.