Georgi Kamburov

Emisphere Technologies, Inc. (OTCMKTS:EMIS) Expands Partnership With Novo Nordisk

by Georgi Kamburov October 16, 2015

After six weeks of seeing barely any trading yesterday Emisphere Technologies, Inc. (OTCMKTS:EMIS, EMIS message board) once again caught the attention of the market. Investors shifted over 335 thousand shares during the session while the 30-day average for the stock stands at 20 thousand shares. Although the ticker finished the trading day with a sizable gain of 9.3% as a whole the performance wasn't entirely positive. EMIS opened with a gap up at $0.66 per share and even moved to a high of the day of $0.70 but quickly dropped down and by the time of the closing bell they were trading at $0.585.

The reason for all the excitement around the company was the PR they published a couple of hours before the start of the session. In it EMIS announced that they have signed new license agreements with Novo Nordisk A/S (NYSE:NVO). Under the terms of the agreements Novo Nordisk will have the exclusive rights to use Emisphere's Eligen Technology to develop potential product candidates in three molecule classes and non-exclusive rights to develop product candidates in one molecule class.

This new agreement has provided EMIS with a $5 million licensing fee and potential milestone payments of $207 million. The company received additional $9 million from Novo Nordisk thanks to an amendment of the terms of their previous GLP-1 (semaglutide) license agreement. EMIS received the sum in exchange for a reduction in future royalty payments.

The $14 million boost to the balance sheet of the company is extremely important because as of June 30 EMIS reported the following financials:

• $3.25 million cash
• $7.3 million total current assets
• $15.4 million total current liabilities
• $88 thousand revenue
• $4.5 million operating loss

With the revenues from the sales of the Eligen B12 product, the second quarter of the year marked the first full quarter of sales, still quite underwhelming and EMIS drawing the last $2 million under its $20 million secured credit facility at the start of July the company had enough funds to last them till the end of the year. With the newly received capital they won't be forced to look for new external sources of capital for quite a while.

EMIS is definitely not one of the typical pennystocks but using caution when dealing with its stock is still required. The next quarterly report will show if the company has been able to ramp-up the sales of the Eligen B12. Do your own research and adjust your trades accordingly.

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