Cardiome shares soar on $700M Merck deal

Cardiome Pharma is joining up with Merck to develop a new atrial fibrillation therapy, pocketing $60 million upfront and lining up as much as $640 million more in milestones. Its stock soared 38 percent on the news.

The pact covers the development of an oral version of vernakalant, which is in development to maintain heart rhythm. Merck's Swiss subsidiary has ex-North American rights to the intravenous form of the drug. An injectable version of the drug in development with Japan's Astellas was delayed by the FDA last summer as regulators sought additional information on the therapy.

Cardiome, a Canadian biotech which currently does not have any drugs approved for marketing, will get up to $200 million for achieving development and regulatory goals and another $100 million for approvals related to other heart conditions. And there's $340 million available in sales milestones. Cardiome retains U.S. co-marketing rights in the deal and gets a $100 million credit facility from Merck that it can begin to tap in 2010.

"Given Merck's long-established leadership in the cardiovascular space, we believe there is no company better suited to advance vernakalant," said Bob Rieder, chairman and chief executive officer of Cardiome. "This collaboration places Cardiome in a strong financial position as we conclude our strategic review, and moves the Company closer to providing doctors with an important tool to address this critical unmet medical need."

- read the press release
- read the AP story