Biopharma Firm Crushed by Merck Deal Cancellation (CRME, MRK)

Canadian-based drug company Cardiome Pharma Corp. (NASDAQ: CRME) announced this morning that Merck & Co. Inc. (NYSE: MRK) has cancelled further development of an oral version of a Cardiome drug being reviewed as a maintenance treatment for long-term prevention of atrial fibrillation recurrence. Merck will continue distribution of the intravenous version of the product, which has been approved for use in 37 countries according to the Cardiome press release.

Cardiome said it plans to adopt a more austere budget for 2012:

… Cardiome will reduce its annual operating cash burn going forward to a target of approximately $11M before interest expense, roughly half of the current cash burn. The company ended 2011 with over $53M of cash and cash equivalents and received an additional $25M from the available line of credit from Merck in January 2012. Cardiome expects to release its 2011 year-end financial results on March 28th, 2012 which will allow time to make the necessary changes to its annual filings following this news.

Cardiome’s shares are down more than -53% at $0.91 after posting a new 52-week low this morning of $0.86. The 52-week high is $5.86.