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Biotech / Medical : ARADIGM CORP. ARDM

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From: Tadsamillionaire7/12/2006 10:01:59 PM
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Aradigm shares jump on inhaled-insulin deal
Associated Press
NEW YORK - Aradigm Corp. shares surged 29 percent Wednesday after the developer of drug-delivery systems negotiated a restructured deal with Danish drug maker Novo Nordisk to develop inhaled insulin.

Aradigm, based in Hayward, Calif., said it will receive a cash infusion of $27.5 million from Novo Nordisk, a leading maker of diabetes-care products.

Aradigm's stock rose 40 cents to close at $1.80 on the Nasdaq Stock Market.

Novo Nordisk will pay Aradigm $12 million to assume ownership of a group of patents related to inhaled insulin, which is in late-stage clinical testing. Aradigm, in turn, will receive royalties on any inhaled insulin sold by Novo Nordisk.

Aradigm, in turn, agreed to a 1 percent reduction in its average royalty rate inhaled insulin product, in exchange for $8 million. The transaction will result in Aradigm having an average royalty rate of 5 percent or higher, five years after the product's launch.

In addition, Novo Nordisk has paid Aradigm $7.5 million in the form of a 5 percent, eight-year note. The note is secured by future royalty payments.

Aradigm Chief Executive Bryan Lawlis said the company now has more than $35 million in cash.

Earlier this year, the Food and Drug Administration approved the first inhaled insulin product in the U.S., Exubera. Co-developed by Pfizer Inc. and Nektar Therapeutics, it will be launched mid-July.

Diabetes-drug heavyweight Eli Lilly & Co. and partner Alkermes Inc. also are working on inhaled insulin, as is Mannkind Corp.
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