Irish firm Merrion Pharmaceuticals Ltd. filed to go public, with hopes of raising about $46 million to fund its clinical pipeline of drugs designed with improved bioavailability.

The company has not yet determined the number of shares - American depositary shares to trade on Nasdaq and ordinary shares to trade in a secondary listing on the Irish Enterprise Exchange - or the share price. Upon completion of the initial public offering, Merrion's stock would be listed on both exchanges under the ticker "MERR."

In its prospectus, the company said it expects to use the majority of net proceeds to fund clinical trials, along with preclinical and other research and development work, with remaining money for working capital and other general corporate purposes.

Merrion had cash of $3.2 million as of Sept. 30, 2006, and added an additional $10.6 million through a convertible loan financing in November. Those funds, plus money raised in the anticipated IPO, should sustain operations for at least a year.

Merrion was founded in 2004 by Growcorp, an Irish life sciences venture capital group, and began its operations by licensing drug delivery technology from Elan Corp. plc, of Dublin, Ireland, aimed at improving oral dosage forms of drugs with poor bioavailability, including injectable drugs, existing oral drugs and large molecule candidates.

The company has two technology platforms: GIPET (Gastrointestinal Permeation Enhancement Technology), which works to increase the GI tract of drugs with limited permeability, and GIRES (Gastrointestinal Retention System), a sustained-release technology designed to prolong a drug's retention in the stomach to enhance bioavailability and pharmacokinetics.

Its product pipeline leads with two compounds emerging from the GIPET platform. MER 103, a dosage form of alendronate, the active ingredient in Whitehouse Station, N.J.-based Merck & Co. Inc.'s once-weekly osteoporosis drug Fosamax.

Unlike Fosamax, however, which must be taken at least half an hour before patients eat their first meals of the day and carries a risk of esophageal irritation, Merrion's candidate is designed to be released into the small intestine to avoid GI complications. MER 103, which recently completed Phase II trials, also could offer the same benefit at a reduced dose and potentially less frequent administration.

Merrion intends to license that compound for further clinical development and commercialization.

The second clinical-stage product, MER 101, an oral bisphosphonate for treating metastatic bone disease, is in ongoing Phase II studies. Existing bisphosphonates generally are administered via intravenous infusion, and Merrion believes its product would be more convenient for patients and cut down on administration costs associated with the drug.

In its preclinical pipeline, the company has MER 104 for prostate cancer, and MER 102, an oral anticoagulant. Merrion also has separate collaborations with Gloucester Pharmaceuticals Inc., Hunter-Fleming Ltd. and Sanofi-Aventis aimed at developing oral dosage forms of those companies' products.

As of last month, the company had 18 employees, with 15 working out of its Dublin facility and three working at a second facility in Wilmington, N.C.

For the six months ending Sept. 30, Merrion reported a net loss of $3.2 million.

Prior to the offering, European Bioscience Fund I Limited Partnership represents the company's largest shareholder, holding 7.6 million shares, or 45.7 percent. Growcorp Group Ltd. holds 6 million shares, or 36 percent, and Elan has 994,612 shares, or 5.9 percent. As of March 15, Merrion had 16.6 million shares outstanding.

New York-based Punk, Ziegel & Co. is acting as the lead book-running manager for the offering, with Goodbody Stockbrokers, of Dublin, and Stanford Group Co., of Houston, serving as co-managers.

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