UPDATE 3-Novo Nordisk, Emisphere sign insulin tablet deal

* Includes $57.5 mln in development and sales milestones

* Novo says probably 10 years before diabetes pill on market

* Hopes to start Phase I trial with Emisphere within a year

* New deal no reflection of performance in ongoing study

* Emisphere shares jump 13 percent

(Adds further company comment, background, latest shares)

By Anna Ringstrom

COPENHAGEN, Dec 21 (BestGrowthStock) – Danish drugmaker Novo Nordisk
(NOVOb.CO: ) said on Tuesday it had signed a deal with Emisphere
Technologies (EMIS.OB: ) to use the biotech firm’s technology in
the development of oral versions of its insulins.

There are no insulin tablets on the market and patients with
diabetes who need insulin — a naturally occurring protein that
controls blood sugar — must inject several times a day.

Peter Kurtzhals, head of Novo’s diabetes research, said it
would probably be 10 years before the company could start
marketing such pills, assuming the research is successful.

“We hope to see an expansion of the insulin market by making
oral insulin but it’s too early to estimate what the market
potential is,” he said.

The world’s biggest insulin maker said the new development
and licensing deal includes $57.5 million in potential product
development and sales milestone payments to Emisphere, including
$5 million on signing, as well as royalties from sales.

Kurtzhals said he hoped to start Phase I studies with a
candidate oral form based on Emisphere technology within a year.

Novo last year signed a similar deal with Irish firm Merrion
Pharmaceuticals. A potential oral insulin based on Merrion’s
technology is already in clinical Phase I studies.

“What we access (in these deals) is technology that can
facilitate absorption of insulin or other proteins,” Kurtzhals
said.

HEDGING BETS

Most people with diabetes would prefer to take insulin in
tablet form rather than injecting it.

The challenge for drugmakers is to find a way to get insulin
through the stomach without it being destroyed or degraded
before it can affect blood sugar levels.

Novo’s decision to try another technology is a case of
hedging its bets, Kurtzhals said. “It’s not based on any data
from the ongoing Phase I trial.”

He said Novo would receive data from that trial relatively
soon and publish it next year.

Shares in Emisphere were 13 percent higher by 1500 GMT while
Novo was virtually unchanged, in line with the STOXX 600
European healthcare index (.SXDP: ).

An inhalable insulin — once seen as a potential bestseller
among needle-wary diabetics — was dropped by Pfizer (PFE.N: ) in
2007. Soon after that, Novo and Eli Lilly (LLY.N: ) abandoned
similar plans for an inhaled product.

The World Health Organisation’s website projects 366 million
people worldwide will have diabetes in 2030, against 220 million
in 2009.

(Reporting by Anna Ringstrom; Editing by Hans Peters and
David Hulmes)

UPDATE 3-Novo Nordisk, Emisphere sign insulin tablet deal