Biotech Values

[DewDiligence]

MRK Dumps SRDX Ophthalmic Collaboration

[SRDX is off 18% in AH trading. The writing was on the wall when MRK discontinued patient enrollment in July (#msg-31339576). I’ve long doubted that SRDX’s approach to back-of-the-eye diseases would pan out: #msg-13015155 (also see #msg-16471526, #msg-13263591, #msg-13247093, #msg-13122493). However, until two months ago, MRK—and the stock market—were unqualifiedly bullish on this program.]

http://biz.yahoo.com/bw/080917/20080917006270.html

›Merck & Co., Inc. Discontinues License and Research Collaboration Agreement with SurModics

Wednesday September 17, 4:00 pm ET

No Safety Concerns About I-vation(TM) Platform or I-vation TA; Reflects Merck's Strategic Review of Its Business and Product Development Portfolio

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--SurModics, Inc. (Nasdaq: SRDX ), a leading provider of surface modification and drug delivery technologies to the healthcare industry, announced today that Merck & Co., Inc. has notified the company that it will discontinue the License and Research Collaboration Agreement the companies signed in June 2007. Merck’s decision triggers an additional $9 million payment to SurModics from Merck.

Merck’s decision to discontinue the collaboration was made following a strategic review of its business and product development portfolio. This decision was not based on any concerns about the safety or efficacy of I-vation™ TA, the I-vation platform or any of SurModics’ other sustained drug delivery systems. Clinical data on I-vation TA generated to date has provided strong support for the tolerability profile of I-vation TA, and more generally, that of the I-vation sustained delivery platform.

“We understand and respect that our partners must undertake strategic reviews which on occasion result in a change of focus or even the discontinuation of projects,” said Bruce Barclay, president and CEO of SurModics. “Merck has been an exceptional partner, and we have a great deal of respect for their development capabilities and highly skilled personnel. While we are disappointed by this decision, our diversification strategy has yielded a broad base of customers and development programs within ophthalmology, as well as across our other areas of business.”

“We remain committed to and confident in the promising future of our ophthalmology business. This commitment includes our development partners, clinicians and the patients that will ultimately benefit from our innovative technologies,” continued Barclay. “Today, we have multiple ongoing customer development programs in ophthalmology evaluating several different drug delivery platforms, including I-vation, microparticles and biodegradable implants. We are in advanced licensing discussions on multiple platforms. In addition, our ability to structure agreements with existing and prospective customers in connection with the I-vation platform is now enhanced. We will continue to work in tandem with our partners to meet their required timelines in developing products for the treatment of diseases of the eye, including diabetic macular edema (DME), age-related macular degeneration (AMD), and other indications.”

Live Webcast

SurModics will host a webcast at 5:00 p.m. ET (4:00 p.m. CT) today to discuss this matter in further detail. To access the webcast, go to the investor relations portion of the company’s website at www.surmodics.com, and click on the webcast icon. If you wish to participate in the conference call, dial 800-257-7087. A replay of the conference call will be available by dialing 800-405-2236 and entering conference call ID 11119987. The audio replay will be available beginning at 7:00 p.m. CT on Wednesday, September 17, until 7:00 p.m. CT on Wednesday, September 24.‹