Karo Bio shares jump on Merck milestone payment
Fri Jan 21, 2005 04:35 AM ET
STOCKHOLM, Jan 21 (Reuters) - Shares in biotechnology firm Karo Bio (KARO.ST: Quote, Profile, Research) shot higher on Friday on news it had received a milestone payment from Merck & Co. Inc. (MRK.N: Quote, Profile, Research) after clinical trials began in a joint research project.
Karo Bio shares were up 32 percent at 16.2 crowns at 0902 GMT, outperforming a flat Swedish all-share index.
The firm said the initiation of clinical trials of the compound, aimed at developing new treatments targeting estrogen receptors, had triggered a significant payment from Merck, but would not disclose the amount.
"It is a significant amount which has a financial impact on the company," Karo Bio Chief Executive Bjorn Nilsson said. The firm said it might receive additional milestone payments from Merck.
An analyst who declined to be named estimated the size of the payment received by Karo Bio at around $6.5 million.
The company made a loss in the third quarter of 2004 of 24.9 million crowns, narrowing from a loss of 34.3 million in the same period a year earlier. "This is very positive and inspires confidence," Alfred Berg analyst Mattias Haggblom said. "The size of the payment will be evident in the earnings report, but this is perhaps mainly a boost of confidence in the firm's technology."
Market confidence in Karo Bio was shaken after Abbott Laboratories (ABT.N: Quote, Profile, Research) and Bristol-Myers (BMY.N: Quote, Profile, Research) pulled out of joint projects with the Swedish firm in 2003 and 2004. |
