Martek Biosciences, Merck sign 1-year pact

September 13, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

Martek Biosciences Corp. of Columbia said yesterday that it signed an agreement with drug giant Merck & Co. Inc. to allow Merck to use Martek's "library" of microalgae in a one-year search for organisms that can be made into new drugs.

The deal has an initial value "in the low six figures," Martek spokeswoman Mona Hoff said.

Its long-term value will depend on payments that Merck would make at later stages of research on specific drugs, and in royalties on those drugs that reach the market.

"It could be tons of money, but it's so far down the road it doesn't mean much now," Ms. Hoff said.

Ms. Hoff said there were about 100,000 species of microalgae, and Martek has only identified about 1,600 well enough to know their individual properties.

Merck agreed not to use Martek's inventory of algae to develop products that compete with Martek's existing drug and food-additive businesses, she said.

"Basically this serves as a further validation of Martek's technology that a company like Merck would want to use their library," said Meirav Chovav, an analyst for Salomon Bros.

"It's not an immediate big financial impact.

But, she said, "it could be a significant upside potential development" after royalties begin to arrive.

Martek's stock, traded on the Nasdaq stock market, closed unchanged at $10 a share in heavy trading yesterday.

Kevin Colgan, a spokesman for Merck in Whitehouse Station, N.J., said the deal was a tiny part of the company's $1.3 billion 1994 research and development budget.

Mr. Colgan said Merck hopes to gain leads from the Martek deal, but was not looking for a specific advancement in treating a specific disease.

He said it can take up to 12 years to turn a research project like the Martek deal into a federally approved drug.

"We look at all kinds of natural products," Mr. Colgan of Merck & Co. said.

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