Danish drugmaker Novo Nordisk and US group Emisphere Technologies have formed a pact to develop and commercialise oral insulins for the management of diabetes, marking the second alliance between the two firms.

The companies said yesterday they will work together with Novo's insulins and Emisphere's Eligen Technology - which uses proprietary, synthetic chemical compounds to deliver therapeutic molecules without altering their chemical or biological nature - to develop an oral formulation of the drug, a prime target of diabetes research.

Side-stepping the need for needles to deliver insulin has become somewhat of a holy grail in diabetes research, and yet the successful encapsulation of insulin into a daily pill is yet to be achieved. And the market is certainly a potentially lucrative one; currently more than 240 million people around the globe have diabetes, and rates are rising fast, highlighting the urgent need for new therapies and approaches to help better tackle the disease.

While specific financial details of the pairing have not been revealed, it is known that Emisphere stands to receive an upfront fee of $5 million as well as $52.5 million in potential product development and sales milestone payments and royalties on future revenues of any products that make it to market.

Commenting on the deal, Peter Kurtzhals, senior vice president of the Diabetes Research Unit at Novo, said it is "an encouraging agreement on a promising technology for oral administration of proteins," which "fits very well" with the company's strategy within diabetes research.

And according to Michael Novinski, president and chief executive of Emisphere, the alliance has "the potential to offer significant new solutions to millions of people with diabetes worldwide" and also further validates the company's Eligen Technology.

Novo and Emisphere first hooked up in 2008 under an agreement to develop oral formulations of GLP-1 receptor agonists, and their partnering has generated a potential new drug that is currently being tested in a Phase I clinical trial.