Shares of Nastech Pharmaceutical Co. Inc. jumped as much as 43 percent on Monday after it said it formed an alliance with Merck & Co. to develop its appetite-regulating treatment for obesity.
The treatment, based on a naturally occurring hormone that helps determine when the body feels full, is being developed as a nasal spray. The treatment, known as Peptide YY 3-36, is currently in early stage clinical trials.Nastech, which develops drug delivery technology, will receive an initial cash payment of $5 million and will receive up to $131 million if all development and regulatory milestones are met. It will receive as much as $210 million in sales-related milestones, the companies said.Merck will assume primary responsibility for clinical studies and the regulatory process. Nastech will be responsible for manufacturing the product. However, Merck will reimburse Nastech for manufacturing-related development costs and will buy finished product from Nastech if and when it is commercialized.The alliance is one of dozens being made by Merck as it seeks to fill up its pipeline of experimental new drugs.Nastech shares rose $2.59, or 33.5 percent, to $10.33 in midday trading on Nasdaq after hitting $11.04. Shares of Merck were up 30 cents to $44.40 on the New York Stock Exchange. (Source: Reuters, Sept 2004)