ZURICH (Reuters) – Swiss biotech company Addex Pharmaceuticals SA on Monday reported its first profit in the first half of 2008 thanks to a partnership agreement with Merck & Co Inc, lifting its shares.

Geneva-based Addex said it made a net profit of 2.6 million Swiss francs ($2.51 million) mainly due to upfront payments of $22 million from Merck for the license rights for Addex’s ADX63365 drug for treating schizophrenia.

That compared with a net loss of 19.5 million francs in the year-ago period.

“Addex delivered as expected a strong H1 2008,” said Vontobel analyst Andrew Weiss. “We reiterate our Buy recommendation and price target of 70 francs.”

Shares in Addex, which listed on the Zurich stock exchange last year, were up 6.3 percent at 32.00 francs at 1139 GMT.

“Future profitability will be dependent on the timing and structure of additional licensing activities and potential milestones,” Addex Chief Financial Officer Tim Dyer said in a statement.

(Reporting by Sam Cage; Editing by Erica Billingham)

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