Emisphere Technologies, Inc. has received $10 million from Novartis Pharma AG in exchange for a convertible note. The investment is in conjunction with an option and license agreement between Novartis and Emisphere entered for the development and commercialization of an oral form of parathyroid hormone (PTH) by Novartis using Emisphere's eligen delivery technology.

Emisphere is currently engaged in litigation with Eli Lilly and Company concerning the termination of the existing oral PTH collaboration between the two companies.

Novartis has acquired an option to license Emisphere's eligen technology for the development of an oral PTH that is dependent upon, amongst other things, Emisphere being in a position to grant such a license to Novartis without infringing a third party's rights. In addition to the $10 million investment from Novartis, if Novartis exercises its option to the license, Emisphere is eligible for milestone payments totalling up to a maximum of $30 million, plus royalties on sales of the product. The repayment of the note is not contingent on the outcome of the litigation with Lilly. Repayment is at Emisphere's option in cash or stock. The stock price is set at the time of conversion, according to an Emisphere release.

"Emisphere owns significant intellectual property rights around oral PTH compositions and oral dosage forms," commented Michael Goldberg, chairman and chief executive of Emisphere. "Historically we have invested heavily in securing intellectual property rights around our eligen technology. This financing allows Emisphere to increase its cash position without near-term dilution," he added.

In 2000, Emisphere and Novartis had entered into a license agreement for the development of oral salmon calcitonin for the treatment of osteoporosis; in 2004 the two companies entered into an agreement for the development of oral human growth hormone.

Recombinant Parathyroid Hormone (PTH 1-34) is a bone anabolic/formation compound, within a new class of drugs called bone-formation agents that not only reduce bone loss but also stimulate new bone formation.

Emisphere's broad-based oral drug delivery technology platform-eligen technology-is based on the use of proprietary, synthetic chemical compounds, known as Emisphere delivery agents, or "carriers". These molecules facilitate or enable the transport of the therapeutic macromolecules across biological membranes such as those of the gastrointestinal tract, and exert their desired pharmacological effect.