Novo Nordisk has signed a pact with Emisphere which will see the US firm develop oral formulations for the Danish firm's investigational glucagon-like peptide-1 (GLP-1) analogues for diabetes.

Specifically, the companies entered into an exclusive agreement to develop and market these oral formulations of GLP-1 receptor agonists using Emisphere's eligen technology. Novo is currently developing the injectable GLP-1 treatment liraglutide.

Under the terms of the pact, the latter could receive at least $87 million in milestone payments, plus royalties. Novo will also have an option to develop oral compounds other than GLP-1 inhibitors using Emisphere's technology as part of the collaboration. Emisphere is getting a minimum payment of $10 million in the first year but further financial terms were not disclosed.

Peter Kurtzhals, senior vice president at Novo's Diabetes Research Unit, said the deal is "an encouraging agreement on a promising technology for oral administration of proteins". Emisphere was perhaps even more excited by the agreement and its chief executive Michael Novinski said the partnership is important as it is a major thumbs-up for the eligen technology and couples Emisphere with Novo, "the worldwide leader in the field of diabetes research".

Emisphere stockholders certainly approve of the deal and the firm's shares ended the day up 17.7% at $2.32.