Friday, December 3, 2010

Good Analysis Of Merck's SmartCell Deal -- In InVivo's "Deals Of The Week" Blogspace

Here is a pretty solid follow-on piece, from InVivo, offering more detail on the level of NIH and JDRF funding that thus far sustained SmartCell -- giving both the angels and Dr. Todd C. Zion (and his merry band) a very nice payday, already -- in all likelihood. See here -- and do go read it all:

. . . .In its seven-year lifespan, SmartCells. . . has raised less than $20 million, relying heavily on grants from the Juvenile Diabetes Research Association, National Institutes of Health, and angels. (Hint: without traditional VCs in the picture, the company's founders seem likely to make a pretty penny even if the upfront is in the tens of millions.) The acquisition moves Merck into a new area of research since it doesn't currently offer: insulin therapy. . . .

While some have speculated Merck is interested in building smart insulin for the Type 1 market, Merck's interest is likely in solidifying its stance in the all important (and much bigger) Type 2 population. This is an arena where Merck already has significant share of voice thanks to its juggernaut DPP IV inhibitor Januvia, and SmartCells' insulin seems uniquely positioned to take on long acting insulins like Sanofi's Lantus or Novo's late stage Degludec. Being preclinical, the company will have to show the compound has the commercial chops to survive the rise of long-acting GLP-1s, another reason an earn-out deal was a smart move. . . .

Add to that, as I noted on Wednesday night/Thursday morning, and one anonymous commenter rather adriotly echoed -- SmartInsulin also must show that using the modified version of a jack-bean lectin called Concanavalin A (a potent toxin, in its natural, wild state) for the nano-transport vehicle won't cause the FDA to simply issue a dramatic long-blink, and wryly offer a "Um. . . gee, no thanks. . ."

As ever, we shall see.

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