12:00 AM
 | 
May 25, 2009
 |  BioCentury  |  Strategy

Wait and see deal

After pulling a proposed IPO in March 2008, metabolic company Elixir Pharmaceuticals Inc. now has a clear path to an exit. But the company's investors will have to wait until late in 2011 to see if their best laid plans play out as hoped.

Last week, Elixir gave Novartis AG an exclusive option to acquire the biotech after it completes Phase IIa testing of its preclinical oral ghrelin antagonist to treat Type II diabetes and obesity.

Under a takeout scenario, the deal could be worth in excess of $500 million, including an initial acquisition payment and milestones. But the deal also gives the pharma the option to take an exclusive, worldwide license to the ghrelin program, which means the takeout may never take place.

While the pharma is really only interested in the ghrelin antagonist, Elixir President and CEO Paul Martha...

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