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MDRNA Gets $1M Milestone as It Ekes Value from Non-RNAi Programs

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MDRNA announced this week that it has received a $1 million milestone payment from Amylin Pharmaceuticals related to a 2006 deal between the companies to develop a nasal-spray formulation of the diabetes drug exenatide.

According to MDRNA, the payment was made on an accelerated basis after the companies amended their original 2006 agreement. Under the amended arrangement, MDRNA could receive up to $79 million in additional milestones, the company added.

Although officials from MDRNA were not available to comment in detail, the payment is expected to provide a small measure of much-needed breathing room for the company as it struggles under a severe cash crunch.

“We appreciate the confidence Amylin has shown in the potential of intranasal exenatide through their commitment to advancing the program,” MDNRA President and CEO Michael French said in a statement. “We continue to believe that our legacy intranasal assets have significant value and we remain committed to monetizing them for the benefit of the company and its shareholders.”

MDRNA was established in June when intranasal-delivery technology developer Nastech Pharmaceutical scuttled plans to spin out its RNAi drug assets into a new company and opted to become a pure-play RNAi therapeutics firm itself (see RNAi News, 6/12/2008). As part of that move, the company dropped development of all non-RNAi efforts that had not been partnered and replaced long-time President and CEO Steven Quay with French.

Despite the promise of MDRNA’s RNAi portfolio, which includes certain rights to the Dicer-substrate technology developed at City of Hope (see RNAi News, 11/9/2006), the company has been unable to get traction in the field as it continues to deal with the financial woes inherited from Nastech.

When the company reported its third-quarter financial results last year, MDRNA CFO Bruce York disclosed that the firm’s cash position of $10.9 million would be sufficient only to fund operations into the first quarter of 2009 (see RNAi News, 11/20/2008). Meanwhile, in its third-quarter filing with the US Securities and Exchange Commission, MDRNA noted that as of Sept. 30 it had an “accumulated deficit of approximately $241.8 million.”

On top of this, MDRNA said just days after announcing its third-quarter results that it had been notified by the Nasdaq Stock Market that it did not comply with the exchange’s minimum stockholders’ equity requirement of $10 million for continued listing.

At the same time, the firm’s shares continue to take a beating in an overall difficult economy; by midday Thursday, the stock was trading around $0.27 a share, down from a 52-week high of $3 and well off the roughly $19 it was trading at just two years ago when MDRNA was operating as Nastech.

When MDRNA reported its third-quarter results, French said during a conference call that the company was on track to raising the money necessary to reach its goal of beginning in late 2009 a phase I study of its lead RNAi drug candidate, the apolipoprotein B-targeting hypercholesterolemia therapy MDR-04227.

Still, he was short on specifics, only saying that MDRNA is pursuing “multiple options for improving our balance sheet, including non-dilutive financing through partnerships.” He indicated that the company was in “active” discussions with undisclosed potential partners, but did not indicate when a deal may be consummated.

MDRNA has remained tightlipped ever since. In response to multiple requests for additional comment, an MDRNA spokesman said in an e-mail only that “we are continuing to pursue our RNAi efforts and are working toward further monetization our intranasal assets in a difficult economic environment.”

The company’s financial situation, the spokesman added, would be discussed during its upcoming fourth-quarter conference call, which has not yet been scheduled.

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